Benefits of Income Tax Deduction

Tax saving is essential for the people who want to save their tax. Section 80c provides the best options to save the tax by saving up to 1 lakh. These refunds allow for reduction of the tax compulsory on the salary or income of the investor. These solutions are beneficial for investors who would like to manage their wealth along with tax saving. There are several ways through person can avail tax benefits and get profit from them.

Under Section 80C, investor can save their tax in annual income. There are several options are available to save tax like Public Provident Fund, Life Insurance, Post Office Deposits, Equity Linked Savings Scheme (ELSS), Employee Provident Fund, National Savings Certificate, Senior Citizens Saving Scheme and Tax Saving Bank FDS. Investor can use any option to reduce the tax. Besides from the regular investment options in Section 80C, investors can also invest in infrastructure bonds and enjoy an additional benefit in tax under section 80CCF.

Investor can use any Tax Savings to reduce tax on income. There are several schemes are available in India are as follows:

Senior Citizens Saving Scheme: Senior citizens who have reached 60 years of age, they are eligible to invest in senior citizen saving scheme. They can get attractive offers of 9% interest rates payable on a quarterly basis. It helps the person to invest money for tax deduction under section 80C.

  

Public Provident Fund (PPF) - PPF investment plan is appropriate for reducing the taxes under the limit of 1 lakh. The borrower does not need to pay the entire tax on the maturity of this investment. Central Government started Public Provident Fund for any individual Indian citizen. The individual does not have to be salaried individual or a government employee. The earned interest and invested amount both are tax free and hence, the individual can get tax compensation in PPF investment. 

Life Insurance - The individual can get tax refund under Section 80C of Income Tax Act, by investing in the life insurance.  Several life insurance companies provide several plans and policies to their customers such as Child plans, Investment plans, savings plan and retirement plans. 

Post Office Deposits - There are some of the common post office based tools of tax benefits:

A)                PPF (Public Provident Funds)

B)                 KVP (Kisan Vikas Patra)

C)                 NSS (National Savings Scheme)

D)                Post Office Time Deposits

E)                 Post Office MIS (Monthly Income Scheme)

F)                  Post Office Recurring Deposits