Tax saving instrument

Save your tax, In smart way" !

Tax Saving Instrument

  • best tax exemption
  • Investors seeking higher returns
  • Inbuilt life insurance given to the nominee

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"Tax Saving Instruments"

It takes a lot of efforts to earn a single penny and it’s very painful to see a part of it taken away as tax. To help this out our Indian government has provided some tax saving options which eligible person can always avail. 

Most of the investors are aware of the benefits available under section 80C, however, there are many other investment options that need to be taken care of while planning your taxes. There are multiple tax saving instruments available apart from section 80 C as in section 80D and 80CCD of Income Tax Act, 1961. Income tax Planning will not be possible unless and until you are aware of these three sections of the Income-tax Act.        

Benefits of tax savings instruments: -

Tax Savings

The money you save on taxes gives you an advantage for the future. And along with this, it gives the investments you have more time to start earning returns at the point in time when you need those returns the most.

Retirement Planning

Retirement-focused tax saving instruments like the National Pension Scheme (NPS) provide individuals with a systematic way to save for their retirement. It ensures a regular income during their post-retirement years.

Flexibility

Tax-saving instruments provide flexibility in terms of investment, the period of the investment, and the level of risk appetite. Individuals are able to select products that are suitable for their financial objectives and comfort with risk.
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Diversification

Tax saving instruments provide individuals with a range of investment options, allowing them to diversify their portfolio. This helps in spreading the risk and potentially increasing overall returns.

Why you should invest with us: -

Investment strategy

We provide solution-oriented instruments based on needs and risks.

Investment ideas

Timely guidance to switch if needed.

Flexible portfolio

We allocate a dedicated relationship manager to cater your needs.

Risk-reward balance

We have a single portal to manage all your tax saving and non- tax saving investment.

Who should invest in tax-saving solution?

volt_money_checkIcon  High-income individuals seeking tax relief
 
volt_money_checkIcon  Investors seeking higher returns
 
volt_money_checkIcon  Investors planning to invest for long-term objectives(retirement, children's education, higher education)
 
volt_money_checkIcon  Individuals willing to bear a minimum 3-year investment period
 

Now the government has given two options for the tax payers. One option- old tax regime (practiced since long) and now New Tax Regime (introduced with alterations in 2020). Tax payers can choose any one of the two.

Old tax regime : -

Income Slab New Tax Regime
0 – 3 lakh Nill
3 – 6 lakh 5%
6 – 9 lakh 10%
9 – 12 lakh 15%
12 – 15 lakh 20%
Above 15 lakh 30%

Note: 1) if the gross income of any individual is less than 5 Lakh per annum, then no taxation is applicable on him under section 87A.

2) as soon as annual income crosses 5 lakh limit, above tax slabs are applicable.

3) he can invest in various instruments to save further taxation.

New tax regime : -

Income Slab New Tax Regime
0 – 3 lakh Nill
3 – 6 lakh 5%
6 – 9 lakh 10%
9 – 12 lakh 15%
12 – 15 lakh 20%
Above 15 lakh 30%

Note: 1) According to new tax regime up to 7 lakh is exempted.

2) According to new tax regime up to 7 lakh is exempted.

Some Best Tax Saving Instruments in India you should know : -

Tax Saving Instruments Tax Benefits Under Section Total Tax Deduction
Life Insurance Section 80c (Premium) & Section 10 (D) (Death/Maturity) Up to Rs. 150,000
Health Insurance Section 80 D Up to Rs. 75,000
ULIPs 80 CCC Up to Rs. 150,000
New Pension Scheme (NPS) Section 80CCE/ Section 80 CCD (1B) Up to Rs. 150,000 + Additional Rs. 50,000
Equity-Linked Tax Saving Scheme(ELSS) Section 80 C Up to Rs. 150,000
Public Provident Fund (PPF) Section 80 C Up to Rs. 150,000
National Saving Certificates(NSC) Section 80 C Up to Rs. 150,000
Infrastucture Bonds Section 80 CCF Up to Rs. 20,000
Sukanya Samriddhi Yojana Section 80 C Up to Rs. 150,000
Fixed Deposit Section 80 C Up to Rs. 150,000

Now let’s get to know these tax saving instruments with their returns in greater detail.

Tax Saving - Plan1

Section 80C

Here are some well-known
tax-savings plans:

.

80c is a provision under the Income Tax Act of India that offers individuals tax benefits for specific investments and expenses.

Under Section 80C, individuals can avail deductions up to a specified limit (currently Rs. 1.5 lakh) for investments in various eligible financial instruments. Some popular investments and expenses that qualify for deductions under Section 80C include:

EPF is a retirement savings scheme in which both employees and employers contribute a portion of the employee's salary. Contributions made towards EPF are eligible for tax deductions under Section 80C of the Income Tax Act. This investment is non voluntary investment.

PPF is a long-term savings scheme offered by the government of India. Contributions made towards PPF are eligible for tax deductions under Section 80C. The interest earned and the maturity amount are also tax-free.

Some banks offer fixed deposit schemes with a lock-in period of five years that offer tax benefits. The invested amount can be claimed as a deduction under Section 80C.

ELSS is a type of mutual fund that invests primarily in equity and equity-related instruments. Investments in ELSS qualify for tax deductions under Section 80C, subject to a maximum limit.

NSC is a savings bond scheme offered by the government. The investment made in NSC qualifies for tax deductions under Section 80C. The interest earned is taxable, but it is considered reinvested and eligible for tax benefits under Section 80C.

ULIPs are investment-cum-insurance products that offer tax benefits on both premiums paid and the maturity amount. The premiums paid towards ULIPs are eligible for tax deductions under Section 80C, subject to certain conditions.

Tax Saving - Plan 2

Section 80CCD

Under Section 80 CCD of the Income Tax Act, there are tax-saving instruments available for individuals to encourage investments in the National Pension Scheme (NPS) and other pension schemes. These instruments offer deductions on contributions made towards the pension scheme, providing tax benefits to the taxpayers.

Tax Saving - Plan 3

Section 80 CCC

You can avail benefit under this section up to rupees 1.5 lakh by investing in an annuity or a Pension plan.

Note:   According to Section 80CCE, the maximum tax benefit that is allowed under section 80 C, 80 CCC and section 80 CCD inclusively is rupees 1.5 Lakhs.

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National Pension system (NPS):

NPS is a voluntary retirement savings scheme that allows individuals to contribute towards their retirement. Contributions made towards NPS are eligible for tax deductions under Section 80CCD(1B) in addition to the regular Section 80C limit.

Note:   This section allows an additional deduction of up to ₹50,000 for contributions made to the National Pension System (NPS). This deduction is available over and above the limit of section 80C. It is specifically for contributions made to the NPS and does not apply to other pension schemes.

Tax Saving - Plan 4

Section 80D

You can also invest in Health Insurance / Medical Insurance to avail tax benefit under secti0on 80D of Income Tax Act, 1961.

Note:  Health Insurance Premium Deduction: Individuals below 60 years of age can claim a deduction of up to ₹25,000 for the premium paid towards health insurance policies covering themselves, their spouse, children, and parents. For senior citizens (individuals above 60 years), the maximum deduction limit is increased to ₹50,000 for health insurance premiums paid for themselves, their spouse, and/or dependent parents.

"Swaraj Finpro: Your Ideal
Investment Partner and Advisor"

At Swaraj Finpro, we are dedicated to being the investment company that is best suited for your financial needs. Our expert team of advisors strives to provide you with the best advice and guidance to help you make informed investment decisions.

With our extensive experience and in-depth market knowledge, we offer personalized investment solutions tailored to your unique goals and risk appetite. Whether you are a seasoned investor or just beginner, we are here to support you every step of the way.

When you choose Swaraj Finpro, you can trust that you are partnering with a company that prioritizes your financial well-being. We prioritize transparency, integrity, and client satisfaction, and we strive to build long-term relationships based on trust and mutual success.

Start your journey towards financial success with Swaraj Finpro today.

FAQ

For choosing the right tax-saving instrument first decided your financial goals, risk tolerance, and investment horizon. Consider factors such as returns, liquidity, lock-in periods, and tax implications. And still confused, for the best guidance contact a financial advisor like Swaraj Finpro.

Yes, you can invest in multiple tax-saving instruments to maximize your tax benefits, and diversify investments. But remember the max limit under each section you choose.

The tax deduction amount varies depending on the instrument and the applicable section of the Income Tax Act. For example, under Section 80C, you can claim deductions of up to Rs. 1,50,000, while under Section 80D, you can claim deductions of up to Rs. 75,000 for health insurance premiums.

Investing in tax-saving instruments not only helps you save taxes but also allows you to grow your wealth. These instruments provide a dual benefit of tax savings and potential returns on your investments.