Tax
saving is important to save tax on annual income. Person can invest money in
any saving schemes so as to save tax. Under section 80C if a person invests up
to 1 lakh in any saving scheme then person can save tax on income. Apart from
the investments option, investors can get an added advantage of investing in
infrastructure bond and can enjoy the benefit of tax saving under section 80C.
There
are several Tax
Saving Schemes available in India. People choose saving schemes
according to their choice. Various Tax Saving Schemes provide high interest
rates, tax savings and guarantee returns to the people.
Bank Savings:
1. Bank Fixed
Deposits
In
a fixed deposit scheme, a certain amount of money is deposited into the bank
for a specific time with fixed rates. It is the best option for those who wants
to invest their funds for a long time. Loan/overdraft facility is also
available in bank’s fixed deposits. Several bank does not charge for early
withdraw.
2. Recurring Deposits
In
Recurring deposit scheme, consumer invests a certain amount in the bank on a
monthly basis for fixed rates. It has a fixed tenure in which person can earn
principal sum as well as the interest during that period. Person can save high
rate of interest that is also applicable to term deposit.
Government Tax Savings:
Government
tax savings bonds provide the special offer that allows the person to save on
tax. These bonds are issued by the RBI(Reserve Bank of India).
The maturity period of RBI bonds is for 5 years. The rate of interest received
is tax free.
Post Office Savings:
1.
National Savings Scheme
2.
Post Office Monthly Income Scheme
3.
Public Provident Funds
4.
Post Office Recurring Deposits
5.
Post Office Time Deposits
6.
National Savings Certificates
7.
Kisan Vikas Patra
Other Savings:
1. Infrastructure
Bonds
Infrastructure
bonds are accessible through ICICI and IDBI. Person can reduce their tax upto
Rs 16,000 per annum.
2. Company Fixed
Deposits
Company
Fixed Deposits means a person can earn a fixed rate of return over a specific
period. Lending institutions and NBFCs also accept such deposits.
3. Life Insurance
Life Insurance is another way to save tax on
annual income. Person can avail any life insurance policy from insurance
companies like SBI Life Insurance, Birla Sun Life Insurance, HDFC Life
Insurance and ICICI Prudential and more.
Various Investment
Schemes under section 80C:
1.
Senior Citizens Savings Scheme
2.
Unit Linked Insurance Plan
3.
Public Provident Fund
4.
National Saving Certificates including accrued interest
5.
National Pension Scheme
6.
Life insurance premium payments
7.
Contributions to Employees Provident Fund
8.
Repayment of Housing Loan
9.
Equity Linked Savings Scheme
