Skip to main content

Save Tax under Section 80C for 2016

Invest Online and Save Tax
 

The last quarter of the current fiscal year has arrived and this is the time when most people look for tax deductions and investments through which they can save their hard earned money from tax.

Needless to say, this is not the right approach to save tax as it only leads to last-moment chaos. This not only leads to less savings but also in an inability to save what you actually would have if you had planned earlier.

Here is a quick guide on how you can invest in instruments listed under section 80C of Income Tax Act 1961. Check your eligibility for various options and invest right all through the fiscal year.

If the government is charging for tax, it is also providing the options to save tax. Most effective tax-saving instruments defined under section 80C are listed below.

Traditional life insurance: If you invest some of your amount in a life insurance policy, it provides you life coverage as well as it lets you exempt that amount from tax, if it is limited to Rs 1,50,000. The limit was Rs 100,000 till previous year and it has been revised in the Budget 2014 to Rs 1,50,000.

Unit-linked insurance plans: Unit-linked insurance plan gives you protection as well as lets you invest some of the amount in equity or debt instruments, which depends on your risk-appetite. The good news is that the maturity amount received by you or the nominee is tax-free.

EPF/PPF: EPF stands for Employee Provident Fund and PPF stands for Public Provident Fund. Investing in EPF/PPF lets you save for retirement. Similar to life insurance premium, the amount saved in these schemes as well, lets you avail tax exemption and the limit should not exceed Rs 1.5 lakh.

NSC: NSC or National Saving Certificate is the investment in government savings bond. You gather interest when you buy them for a specific duration that is, 8.5 per cent per annum for 5 years investment and 8.8 per cent per annum for 10 years investment. These saving instruments can be purchased from post office. To get the exemption on accrued interest as well, you need to re-invest it. However, if the exempted amount exceeds Rs 1.5 lakhs, it would be taxable.

Fixed deposits: Fixed deposits with banks and post offices also offer tax exemption but the lock-in period for these deposits should be 5 years. The banks have been demanding to decrease the lock-in period to 3 years so that people prefer bank deposit as well, as a viable option to invest.

Senior Citizens Savings Scheme: An individual with the age of 60 or above can only apply for this scheme. It is one of the most profitable schemes as it offers the interest rate of 9.2 per cent per annum but again this interest is payable quarterly and is not compounded if it is not claimed. The interest accrued is taxable.

National Pension Scheme (NPS): NPS is compulsory for government employees. Other individuals can apply for this scheme voluntarily if they belong to age range of 18 to 55 years. The government contributes equal amount to that of the contributed by the government employee, which is 10 per cent of basic pay. No amount is contributed for other individuals.

Equity-linked Savings Schemes: Equity-linked savings schemes, in short ELSS, are the 100-per cent diversified equity funds. These schemes are also called as mutual fund schemes or tax-saving mutual funds. They come in with lock-in period of 3 years. You can direct your savings, which should be at least Rs. 500 on a monthly basis, towards ELSS through systematic investment plan (SIP). There is no eligibility criterion to invest in ELSS.

Tuition fees: You can get tax-exemption if you are paying tuition fees for maximum of two children. The exemption is specifically limited to institutional tuition fee. That is, it does not cover fees paid towards coaching or private tuitions. The school, college or university should be within the country itself. Hindu Undivided Family (HUF) is not allowed to take exemption through tuition fees.

Housing loan: If you are paying instalment for house loan, you are eligible to get tax exemptions under section 80C for the payment of principal amount. The exemption on the interest paid by you can be claimed through Section 24 under Income Tax Act. If there is second house loan as well, the exemption would be allowed on the principal amount paid back for the house you are occupying.

You can plan your investment in the above-listed instruments as per your need and age. The point to be noted is- in which ever option or combination of instruments you choose to invest, the amount invested should not exceed Rs 1.5 lakhs. Otherwise the difference is taxable.

-----------------------------------------------
Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds

Top 10 Tax Saving Mutual Funds to invest in India for 2016

Best 10 ELSS Mutual Funds in india for 2016

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. Franklin India TaxShield

4. ICICI Prudential Long Term Equity Fund

5. IDFC Tax Advantage (ELSS) Fund

6. Birla Sun Life Tax Relief 96

7. DSP BlackRock Tax Saver Fund

8. Reliance Tax Saver (ELSS) Fund

9. Religare Tax Plan

10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 Tax Saver Mutual Funds Online

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

---------------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Leave a missed Call on 94 8300 8300

-----------------------------------------------

Popular posts from this blog

Birla SunLife Manufacturing Equity Fund

The Make in India program was launched by Prime Minister Naredra Modi in September 2014 as part of a wider set of nation-building initiatives. It was devised to transform India into a global design and manufacturing hub. The primary motive of the campaign is to encourage multinational as well domestic companies to manufacture their products in India. This would create more job opportunities, bring high-quality standards and attract capital along with technological investment to bring more foreign direct investment (FDI) in the country.   Why India as the next manufacturing destination?   The rising demand in India along with the multinational's desire to diversify their production to include low-cost plants in countries other than China, can help India's manufacturing sector to grow and create millions of jobs. In the words of our Honourable Prime Minister- Mr. Narendra Modi, India offers the 3 'Ds' for business to thrive— democracy,...

Kisan Vikas Patra - KVP

  Kisan Vikas Patra (KVP) First launched in 1988, the Kisan Vikas Patra (KVP) is one of the premier and popular saving scheme offering from the Indian Postal Department. This product has had a very chequered history- initially successful, deemed a product that could be misused and thus terminated in 2011, followed by a triumphant return to prominence and popular consumption in 2014. The salient features of KVP are as follows- The grand USP- Money invested by the applicant doubles in 100 months (8 years, 4 months). KVPs are available in the following denominations- Rs.1000, Rs.5000, Rs.10,000 and Rs.50,000. The minimum purchase value for the KVP is Rs.1000. There is no maximum limit. KVPs are available at all departmental post offices across India. These certificates can be prematurely encashed after 2 ½ years from the point of issue. KVPs can be transferred from one individual to another and from one post office to another. ----------------------------------------------------- Inve...

Mutual Fund Review: Reliance Regular Savings Equity

    Despite high churn, Reliance Regular Savings Equity has managed to fetch good returns   In its short history, this one has made its mark. Though its annual and trailing returns are amazing, the fund started off on a lousy note (last two quarters of 2005). It managed to impress in 2006 and was turning out to be pretty average in 2007, till Omprakash Kuckian took over in November 2007 and wasted no time in changing the complexion of the portfolio. Exposure to Construction shot up to 28 per cent with almost 21 per cent cornered by Pratibha Industries and Madhucon Projects . Exposure to Engineering was yanked up (18.50%) while Financial Services lost its prime slot (dropped to 6.69%) and Auto was dumped. That quarter (December 2007), he delivered 54.66 per cent (category average: 25.70%).   When the market collapsed in 2008, thankfully the fund did not plummet abysmally. But even its high cash allocations could not cushion the fall which hovered around the category average. ...

Total Returns Index brings out real Equity Funds Performers

From February, equity mutual funds have to change their benchmarks to account for dividend payments. Until now, funds used price-based benchmarks alone. TRI or total return indices assume that dividend payouts are reinvested back into the index. What this does is lift the overall index returns, because dividends get compounded. For example, the Sensex TRI index will consider dividend payouts of its constituent companies while the Nifty50 TRI index will consider dividends of its constituents. Using TRI indices as benchmarks comes on the argument that an equity funds earn dividends on the stocks in its portfolio, which they use to buy more stocks. Therefore, using an index that also considers dividend reinvestment would be a more appropriate benchmark. Shrinking outperformance With a stiffer benchmark, it is obvious that the margin by which an equity fund outperforms the benchmark would shrink. Rolling one-year returns from 2013 onwards, the average margin by which largecap funds out...

How to generate a UAN Online

Best SIP Funds Online   In order to make Employees' Provident Fund (EPF) accounts portable, the Employees' Provident Fund Organisation (EPFO) had launched the facility of Universal Account Number (UAN ) in 2014. Having a UAN is now mandatory if you have an EPF account and are contributing to it. So far, you got this number from your employer and every time you changed jobs, you had to furnish this number to the new employer.  However, in order to make it easier for you to get a UAN , and without your employer's intervention, the EPFO now allows you to go online and generate a UAN on your own. This facility can be used by freshers, or new employees, who are joining the workforce as well as by employees who have older EPF accounts but do not have a UAN as yet. As a new employee, you can simply generate a UAN and provide the number to your employer at the time of joining, when you need to fill up forms for your EPF contribution. As per a circula...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now