Top Income Tax Saving Investment Options
Mini Balakrishnan
If you want to reduce your tax liability while achieving your financial goals, there are various investment options available to help you. Some of the most popular investment options for enhancing tax savings include:
Employee Provident Fund (EPF)
EPF is a retirement scheme that allows employees to contribute a part of their salary towards the fund. The contributions made towards EPF are eligible for tax deductions under section 80C of the Income Tax Act.
Public Provident Fund (PPF)
PPF is a long-term investment scheme that provides tax-free returns. The contributions made towards PPF are eligible for tax deductions under section 80C of the Income Tax Act.
Equity Linked Saving Scheme (ELSS)
ELSS is a type of mutual fund that primarily invests in equities. The investments made towards ELSS are eligible for tax deductions under section 80C of the Income Tax Act.
National Pension Scheme (NPS)
NPS is a retirement scheme that allows individuals to invest in a combination of equity, debt, and government securities. The contributions made towards NPS are eligible for tax deductions under section 80CCD of the Income Tax Act.
Tax-Saving Fixed Deposits (FDs)
Tax-saving FDs are fixed deposits that come with a lock-in period of 5 years and provide tax deductions under section 80C of the Income Tax Act.
It is crucial to remember that while these investment options are suitable for enhancing tax savings, they come with various benefits and risks. Therefore, it is advisable to consider your financial goals and risk appetite before investing in any of these options. Additionally, tax laws can change frequently, so it is always wise to consult with a tax professional or financial advisor before making any investment decisions.
