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 your tax....here are few schemes which helps in saving tax in India..........

1. Public Provident Fund (PPF)

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

2. National Savings Certificates (NSC)

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

3. Post Office Scheme (POS)

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

4. Kisan Vikas Patra (KVP)

Kisan Vikas Patra or KVP as known is a scheme which is 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 Income Tax Act, 1961 the person gets tax benefit for the amount invested.

5. Dividend

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

Hope it 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.