People always try to escape or reduce income tax payments, though it’s the responsibility of every citizen. In order to avoid taxes people opt for illegitimate ways that further lead to corruption and crimes.
The income tax Act of 1962 has helped citizens to save income tax in several legal ways hence having proper knowledge of tax payment is important.
The pension regularity fund authority of India manages the national pension system, that benefits retired individuals or who have applied for voluntary retirement. Under section 80C of income tax act, an investment of 1.5 lakh per year can be made annually and Rs. 50000 is added to it. Investments under this scheme is tax exempt hence you can gain a total of Rs. 2 lakh with full income tax exemption.
National Savings Certificates is a fixed income investment offered by the Indian Government. One can visit a nearby post office and avail this scheme, the lock in is five years and the minimum amount required to buy an NSC certificate is hundred Rupees. The scheme is safe and ensures protection of your investments and only the interest earned in final year is taxed.
Public Provident Fund (PPF) is another government scheme at a rate of 7.1%. Investment of 1.5 lakh Rupees has to be done in PPF every year for at least 15 years. PPF security is guaranteed by the government and you don’t have to pay taxes neither on the deposit or interest at the time of withdrawal.
Sukanya Samriddhi Yojana investment is for daughters. On the money invested an interest rate of 7.6% is paid. The plan was earlier applicable for 2 daughters but later the government made changes and the new rule states that twin daughters born after first born girl can also get benefit of the scheme. This scheme also helps in tax exemption .