RUSHING TO SAVE TAXES THIS FISCAL?
REMEMBER TO SAVE ON TAXES BEFORE MARCH ENDS
HERE ARE SOME LAST MINUTE TAX SAVING OPTIONS UNDER INCOME TAX LAWS
Just two weeks are left for people who pay income tax to invest in some of the approved financial products to save up to Rs 1.5 lakh under section 80C of the Income Tax Act and some more under other laws. Ideally people should plan it at the start of the financial year, in April of every year, and space out the investments through the next 12 months to avoid any last minute rush. However, a large number of people don’t do that. So here are some of the popular financial instruments to invest to save some extra taxes.
Equity linked savings schemes (ELSS) are those approved mutual fund products which invest at least 65% of the corpus in equities and the balance in other assets. A salaried person could invest the whole Rs 1.5 lakh in these schemes every year to save on taxes under section 80C.
An ELSS comes with a three-year lock in, which is the shortest among all the approved tax saving products. Also given this three-year lock-in for these schemes, the fund managers usually have a better leeway than regular equity schemes to stay invested in the stocks he selects. Historically most of these schemes have given slightly better return than comparable equity schemes.
Other tax saving products are pension and retirement funds by mutual fund houses, National Pension Scheme, public provident fund, tax saving bank fixed deposits, post office saving products, life insurance etc.