Tax Saving Schemes & Investment Plans

Tax-saving schemes are essential in one's life since they provide tax deductions under sections 80C and 80CCC and various other sections. People typically desire to invest, given the significance of these assets. As a wise investor, it is essential that you seek out tax-saving schemes that not only save your money but also allow you to make tax-free income.

Tax preparation is important, and so are tax-saving schemes. With the ideal tax-saving schemes in India, you may save money and make money. The beginning of the fiscal year is the preferred time to prepare for tax-saving investments. This will guarantee that you do not pay any more taxes and that you save taxes in India, as well as provide year-long profits on your tax-saving investment.

• Term Insurance – Term insurance is a kind of life insurance offering pure protection with no links to the market. It offers your family cost-effective financial safety. The premiums you pay for term insurance might help you save money now by providing a tax advantage under section 80C. Premiums paid for term plans with a critical illness cover option are eligible for a deduction of up to Rs 25,000 under Section 80D.


• Unit Linked Insurance Plan – A ULIP is a kind of insurance that combines investment and life insurance to provide financial protection for you and your family. Part of the premium paid is invested in the market, and the other part is kept for the premium for your protection. The amount paid on the maturity of your ULIP is eligible for tax benefits³ subject to section 10(10D)⁴ of the Income Tax Act, 1961.


• Health Insurance – Medical insurance premiums are eligible for a tax deduction of up to Rs 25,000 every financial year under Section 80D. This restriction applies to health insurance premiums paid for yourself, your spouse, and your dependent children. If your age is 60 years or above the limit shall be extended to Rs. 50,000 every financial year. Also, you are eligible to claim deduction separately on the premiums paid to cover your parents under a health insurance scheme.


• ELSS Mutual Funds – These are funds that contain a pool of various asset classes and can be traded like other stocks during trading hours. You may receive a tax credit of up to Rs 1,50,000 per year and save up to Rs 46,800 per year by investing in ELSS. The only kind of mutual fund eligible for tax advantages under Section 80C is an ELSS.


• PPF – The amount invested during the financial year may be deducted up to Rs 1.5 lakh under Section 80C of the Income Tax Act. The interest and maturity amounts are tax-free since PPF is within the exempt category. PPF accounts typically have a 15-year lock-in term.


• Sukanya Samriddhi Yojana – Section 80C of the Income Tax Act allows you to deduct your contributions to SSY. There are deductions of up to Rs 1.5 lakhs available. The full amount is tax-deductible if you invest a total of Rs 1.5 lakh in the plan in a given financial year.


• National Pension Scheme – NPS subscribers may remove up to 10% of their pay from their NPS contributions (Basic + Dearness Allowance). NPS self-employed members may claim a tax deduction of up to 20% of their gross income or Rs 1,50,000, whichever is less.


• Critical Illness Insurance Cover – Medical costs such as critical illness insurance, health examinations, and other medical expenses are eligible for the deduction. You may claim an Income Tax deduction of up to Rs 60,000 under this clause.


• Endowment Plans – An endowment plan has tax advantages because the payable premiums, as well as the principal plan benefits, are qualified for tax exemption under Sections 80C and 10D of the Income Tax Act of 1961.

To file returns online, go to the Income Tax Department's website. Your PAN will function as your user ID when you register. Go to e-filing for the applicable assessment year under 'Download' and choose the appropriate ITR form. Ensure your details are correct and you disclose all your income and investment amounts before submitting to get the maximum benefit and refund if applicable.