Here’s How You Can Save Rs 1.5 Lakh In Savings Under Section 80C Of Income Tax News24 –

Tax-Saving Investments: With the new tax season beginning on April 1, it’s a great opportunity for smart investors to strategically reduce their tax burden. Staying informed about tax-saving options can help you make the most of available deductions and exemptions.

According to experts, Section 80C of the Income Tax Act, 1961, provides various investment options that help individuals save on taxes. Those who prefer low-risk investments can choose PPF (Public Provident Fund) and SCSS (Senior Citizen Savings Scheme), both of which offer stable and tax-free returns. On the other hand, ELSS (Equity Linked Savings Schemes) and NPS (National Pension Scheme) cater to investors looking for higher growth potential by combining tax benefits with equity exposure. Given the recent market downturn, now could be a favorable time to invest in equity-based options for long-term gains.

Public Provident Fund (PPF)

The Public Provident Fund (PPF) is a long-term, government-backed investment scheme. Public Provident Fund (PPF) is a savings scheme that helps people save for retirement and diversify their investments. You can open a PPF account at a bank or post office. As of now, the PPF interest rate stands at 7.1% per annum.

Benefits of PPF

Guaranteed returns
Tax benefits under Section 80C of the Income Tax Act
Open to all individuals, including those who are employed or self-employed
Parents or guardians can open a PPF account for minors

National Pension System (NPS)

The National Pension System (NPS) is a government-regulated pension and investment scheme designed to provide financial security during retirement. After retirement, individuals can withdraw a portion of the accumulated amount in a lump sum, which is capped at 60%. The rest of such amounts are used to invest in an annuity plan. Thereby, the beneficiary will receive a fixed monthly pension. NPS returns have generally ranged between 9% and 12% per annum, although it’s important to remember that these are market-linked returns and can fluctuate.

NPS Tax Benefit: Investing in the National Pension System (NPS) not only helps secure your retirement but also offers significant tax savings. You can claim deductions of up to ₹1.5 lakh under Section 80C, plus an extra ₹50,000 under Section 80CCD(1B). That’s a total tax benefit of ₹2 lakh, making NPS one of the smartest ways to reduce your taxable income while building a retirement corpus.

National Savings Certificate (NSC)

National Savings Certificates, popularly known as NSC, is an Indian Government savings bond, primarily used for small savings and income tax saving investments in India. It is part of the postal savings system of India Post. The current interest rate is 7.7% per year. For instance, if you invest Rs 15 lakh in NSC, you could earn Rs 6.50 lakh in interest. Here’s how it breaks down: the current interest rate is 7.7% per year, compounded annually, which means you earn interest on your interest each year. Keep in mind that the interest is paid out only after the maturity period of 5 years.

Insurance Benefits

Health Insurance: You can claim a tax deduction on health insurance premiums under Section 80D. If you’re paying for a policy that covers yourself, your spouse, and children, you can deduct up to ₹25,000. If you’re also covering your parents, the limit goes up to ₹50,000 if they are senior citizens. This not only helps secure your family’s health but also reduces your tax burden.

Life Insurance: If you have a term life insurance policy, the premiums you pay can help you save on taxes. Under Section 80C, you can claim a deduction of up to ₹1.5 lakh per year. This means while securing your family’s future, you’re also reducing your taxable income—making it a win-win investment.

(This article is for informational purposes only and not an investment advice. Prior to making an investment, conduct thorough research and consult with your financial advisor.)