Tax planning is very important no matter which country you live in. Investors always seek for various ways to save on their taxes. While some end up paying more in the desire to save more tax, some just invest in the wrong financial product altogether. In today’s competitive age, it is important to plan your finances effectively, thus you should save yourselves from making any last minute investment decisions. There are various tax saving plan available for investors. These are very essential in financial planning. A number of tax benefits and discounts are also offered by the Government of India. Tax saving mutual funds are also known as Equity Linked Savings Schemes (ELSS). Other than that, there are also a number of alternatives such as insurance plans, PPF, NSC (National Savings Certificate), etc.
ELSS is a mutual fund which lets the policy holder save on tax. There are equity liquid saving schemes which are locked in for a period of three years. The investments can begin from as low as INR 500 per month to even Rs. 1 lakh a year. There are other diversified equity mutual funds under the ELSS which offer relief from income tax, offer tax benefits and capital growth. These plans help you save around INR 100, 000. These types of funds are subject to both dividend options and growth. This type of tax saver funds allows the borrower to invest in equity as well as equity related securities. The funds get locked for a period of 3 years and cannot be used during this tenure.
PPF abbreviated as public provident funds are known to be the most trusted plans amongst all the other tax saving plan. These schemes are government based and offer attractive benefits to the policyholder. Those investing in PPF are sure to get good returns and are not entitled to pay any tax on the earned interest amount. PPF accounts enable the recipient to keep on adding funds in their respective account at any given point of time. However, there is a minimum and maximum limit specified to the amount that can be added. The policy remains valid for 15 years, after which the individual receives the matured amount. It is like a fixed deposit account, but here you do not have to pay the entire amount all at once.
NSC (National Savings Certificate) plans are a combination of tax benefits, safe investments and attractive interest rates. You buy an NSC of a particular amount. The interest rates depend on the type of certificate purchased. The maturity period of these certificates is usually between 5 to 10 years from the date of investment. The interest rates are, however calculated on a yearly basis, which are given to the policyholder only after the maturity period of the policy. The interest amount earned on NSC can be reinvested in the same plan itself. There are various types of Best Tax Saving Investments under the NSC, which you can better understand by seeking assistance from a financial expert. The internet should also provide adequate information regarding the same.
ELSS is a mutual fund which lets the policy holder save on tax. There are equity liquid saving schemes which are locked in for a period of three years. The investments can begin from as low as INR 500 per month to even Rs. 1 lakh a year. There are other diversified equity mutual funds under the ELSS which offer relief from income tax, offer tax benefits and capital growth. These plans help you save around INR 100, 000. These types of funds are subject to both dividend options and growth. This type of tax saver funds allows the borrower to invest in equity as well as equity related securities. The funds get locked for a period of 3 years and cannot be used during this tenure.
PPF abbreviated as public provident funds are known to be the most trusted plans amongst all the other tax saving plan. These schemes are government based and offer attractive benefits to the policyholder. Those investing in PPF are sure to get good returns and are not entitled to pay any tax on the earned interest amount. PPF accounts enable the recipient to keep on adding funds in their respective account at any given point of time. However, there is a minimum and maximum limit specified to the amount that can be added. The policy remains valid for 15 years, after which the individual receives the matured amount. It is like a fixed deposit account, but here you do not have to pay the entire amount all at once.
NSC (National Savings Certificate) plans are a combination of tax benefits, safe investments and attractive interest rates. You buy an NSC of a particular amount. The interest rates depend on the type of certificate purchased. The maturity period of these certificates is usually between 5 to 10 years from the date of investment. The interest rates are, however calculated on a yearly basis, which are given to the policyholder only after the maturity period of the policy. The interest amount earned on NSC can be reinvested in the same plan itself. There are various types of Best Tax Saving Investments under the NSC, which you can better understand by seeking assistance from a financial expert. The internet should also provide adequate information regarding the same.
