Tax Saving Schemes
Posted by ayushioberoi on January 7th, 2020
Every Indian citizen is under the obligation to pay taxes to the government on the basis of their income. But not all Indians earning the same amount pay the same taxes - because it’s possible to save a large amount of income from the taxman just by following a few easy steps.
The amount of income on which tax is levied can be reduced drastically through the right investments. These reductions in the total taxable amount come in the form of “Sections” of the Income Tax Act, 1961. For example, under Section 80C, an amount of Rs.1,50,000 can be made totally tax free by investing it in certain specified avenues - one of these avenues is ELSS.
The biggest benefit of ELSS over regular equity mutual fund schemes is the fact that to Rs.1,50,000 can be saved from taxation in a particular financial year if it’s invested in ELSS. There is a mandatory lock-in period of 3 years for all ELSS schemes. While it is a Tax Saving Scheme, it does have certain taxes that apply in certain cases.
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Tax saving investments under Section 80C of the Income Tax Act, 1961 :There are many tax-saving investments possible under Section 80C, and the maximum that can be invested in any of them singularly or together is Rs.1,50,000. Even if an individual chooses multiple Section 80C investment opportunities at different amounts, only Rs.1,50,000 of the total investment will be considered as a tax-saving investment.
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