Tax Saving Tips For Financial Year Ending
Tax planning is one of the most vital things you can engage in to ensure a pitch-perfect financial plan and a burden-free financial future. Paying taxes is inevitable if you have an income, but it doesn’t mean that you cannot strategize to save as much taxes as possible. There are numerous options available that can allow you to invest, earn and save tax on the investment along the way. These investment tools can offer financial benefits with the added feature of cutting tax and increasing savings in the long term.
Tax-Saving Tips: How you can save maximum tax savings this year
An extensive research-based strategy is needed to maximize tax savings through various investment products. Depending on your current financial situation and the prior investments, you can consider these tax-saving tips to save maximum tax in the financial year ending.
Invest In Pension Plans:Pension Plans or retirement funds are a great way to lower tax liability as most pension plans offer tax deductions up to Rs 1 lakh on the investment under 80C of the Income Tax Act, 1961. You can choose to invest in products such as the National Pension Scheme, mutual funds or unit-linked pension plans.
Get Insured:One of the best ways to save tax is through comprehensive insurance policies. Under section 80C of the Income Tax Act, 1961, a policyholder can get an exemption on the premium amount up to Rs 1.5 lakh annually. Choosing an experienced insurance broker like PINC Insurance can prove beneficial in saving the highest amount of tax. With the help of PINC Insurance’s experts, you can maximize your tax savings to the highest potential.
Public Provident Funds:Public Provident Funds are another ideal option to save tax on your investment. PPFs are government-established savings schemes that allow an investor to save tax up to Rs 1.5 lakh annually under section 80C of the Income Tax Act, 1961. Furthermore, the returns and the interest earned are also not taxed for a PPF investment.
National Savings Certificate:One of the safest debt options to save tax is through investing in a National Savings Certificate. The latest issue of NSCs allows an investor to choose from two products having five years and ten years as maturity period. Investments up to Rs 1 lakh are deductible under section 80C of the Income Tax Act, 1961. However, the semi-annual interest is taxable under the same.
Donations:Donors to notified charities can avail up to 50-100% of the amount donated to NGOs and charitable organizations under section 80G of the Income Tax Act, 1961. However, the deduction for the amount of donation made cannot exceed 10% of a donor’s gross annual income. Other contributions made for rural development and scientific research also qualify for tax rebate under section 80GGA of the Income Tax Act, 1961.
What Should Investors Do?
With so many avenues to invest and save tax in 2021, you must choose an ideal option that goes with your financial condition, save tax and complement your lifestyle most effectively. The first step towards tax saving is to buy the most comprehensive tax-saving insurance policies to offer financial protection and fulfill tax-saving goals. Insurance policies make up for the best way to achieve financial goals and protect you and your loved ones against any eventuality. You can also add other investment products to increase the tax savings and ensure a good return on the invested amount.
As long as tax savings through Insurance policies are concerned, an insurance broker can help make you choose ideal insurance products that can maximize your tax savings. PINC Insurance is one such insurance broker that hosts numerous insurance products that focus on tax saving along with providing you with all the standard insurance features. You can visit PINC Insurance to start your journey of unmatched tax benefits.