How to Save on Income Tax in India: Explore These Schemes Before It's Too Late

Hey all, plan ahead to save for your future and also to save on your taxes. Here are a few schemes that help in saving tax in India:

Public Provident Fund (PPF)

The Public Provident Fund, generally called PPF, is a saving scheme for employees in various government, public, and private sector organizations for income tax saving in India. The government has set a limit for saving ranging from a minimum of Rs. 500 to a maximum of Rs. 70,000. The government pays an interest rate of 8%. This can be opened in any public sector bank like SBI and others. For employees, the company deposits in the PPF.

National Savings Certificates (NSC)

National Savings Certificates, or NSC, is another saving scheme for tax saving on income in India. The investment in this scheme starts from a minimum of Rs. 100 at a rate of interest of 8%. A person investing in this scheme can avail of income tax benefits under the Income Tax Act, 1961, section 88 for the amount invested.

Post Office Scheme (POS)

This is one of the best and most used schemes in India for income tax saving. A person can join this scheme any time of the year, and the account can be operated either singly or jointly.

Kisan Vikas Patra (KVP)

Kisan Vikas Patra, or KVP, is a scheme for income tax saving in India where a person's investment gets doubled in 8 years; earlier, it was 5 years. A person can invest a minimum of Rs. 100, and under the Income Tax Act, 1961, the person gets a tax benefit for the amount invested.

Dividend

As per the Income Tax Act, 1961, any person can claim an income tax benefit from the income earned from dividends, which come from UTI, shares, and mutual funds.

Hope this will be of help. There is still a month left, so plan, invest, and stay happy.

Regards,
Archna

Infrastructure Bonds for Tax Saving

Another tax-saving instrument is Infrastructure Bonds, which allow investments up to Rs. 20,000 under Section 80 CCF. These bonds carry an interest rate of 8%.

Good job on the nice posting about Income Tax Saving. However, three important things that one needs to consider before investing in any of the mentioned fixed income instruments are the taxability of percentage income, frequency of income, and term of investment. Even if the interest rate on the Senior Citizens' Savings Scheme (SCSS) is 9 percent per annum, the income is fully taxable. This means that for someone in the highest tax bracket, the actual post-tax return will be only 6.22 percent.