In today’s time savings are one of the most important elements of a persons life. Savings are people’s backbone in needy times and in times of uncertainty .Therefore, the government has been coming up with various investment schemes that help an individual to meet their financial goal they also refer various tax benefits. The tax benefits help people to increase their net income and they also save money from taxes . This also helps people to potentially increase their overall returns.
Public provident fund : The PPF is a long term saving scheme offered by the government of India and is very popular because of its combination of tax saving returns and safety . The PPF scheme was launched in 1968 by the Finance Ministry National Savings Institute. The main objective of this scheme is to facilitate small savings and provide returns on savings. There is an attractive rate of interest and no tax is required to be paid on returns that are generated from the interest rates.
The person should be the citizen of india.
A person can open only one ppf account unless the second account is in the name of a minor .
The application form must be submitted.
Id proof is needed.
Address proof with the current address mentioned on it should be submitted.
After the submission of the above documents, the amount that is required to open a PPF account can be deposited.
National Pension System (NPS)
This scheme is offered by the government of India . The contributions to an NPS account are made with pre-tax dollars, reducing the individuals taxable income in the current year. Additionally, the contributions to an NPS account are eligible for a tax deduction under section 80C of the income tax act . The maximum annual contribution to an NPS account is Rs 2 lakhs.
Equity- linked savings scheme (ELSS)
ELSS is a type of mutual fund that invests in equities.Ccontributions to the ELSS are done with after tax dollars, but the investments are eligible for a tax deduction under section 80C of the income tax act . Additionally , the tax benefits received from a life insurance policy are tax free.
Home loan interest
Interest on home loan is eligible for a tax deduction under section 24 of the income tax act .