Everyone who pays taxes does so at the end of the financial year. The amount of income tax that each individual pays varies depending on their income and gains from other sources. Similar to this, there are different tax rates for individuals, senior citizens, and companies. The government offers benefits in the form of tax deductions on specific investment mechanisms that may be claimed to save on taxes at the same time that salaried individuals pay their taxes and file ITR on time. Additionally, you may deduct taxes paid under Sections 80, 80CC, and 80CCD up to a maximum of Rs. 1.5 lakhs under the following headings:
Public Provident Fund (PPF):
This fantastic tax-saving scheme is available at the majority of Indian banks and post offices for a 15-year period at a tax-free interest rate of 7.10%. The interest rate is variable and fluctuates every three months.
Employee’s Provident Fund (EPF):
You can lower your tax burden with EPF. The limit of Rs. 1.5 lakh under Section 80C is increased by the 12% of salary paid to the EPF scheme.
Fixed Deposit (FD):
Taxpayers can also reduce their tax responsibilities by making investments in tax-saving Fixed Deposits, which qualify for deductions under Section 80C of the Indian Income Tax Act of 1961. By making investments in tax saver fixed deposits, taxpayers can further deduct up to Rs. 1.5 lakh from their taxes.
Unit Linked Insurance Plan:
You can also reduce your tax burden in this way. The long-term investment products, or ULIPs, give taxpayers the option of selecting equity funds, debt funds, or both. Additionally, the ULIPs provide you the freedom to switch between funds in accordance with your financial objectives. You can reduce your tax burden under sections 80C and 10(10D) of the Income Tax Act, 1961, by investing in ULIPs.
