Tax-saving investment options for 2023: Investing wisely has two advantages: it helps build wealth for the future and reduces taxable income to a certain extent. There are numerous investment opportunities available that can also reduce taxes. The PPF, NPS, ELSS funds, etc. are some of these choices.
In many cases, people begin saving as soon as they get their first paycheck. Utilizing the power of compounding in long-term investments, which helps in emphasizing small amounts invested at maturity, is another benefit of tax-saving investment options. Learn about some of the best tax-saving investment strategies you can use to start your portfolio.
Tax saving fixed deposits
Tax saving fixed deposits is a special category of fixed deposit that allows investors to claim deduction under Section 80C of the Income Tax Act. Investors can claim a tax deduction of a maximum of ₹1.5 lakh by saving in this option. The tax-saving FDs have a minimum lock-in period of five years. The account can be opened online or by visiting a bank branch. Interest on tax saving FDs differ from bank to bank. Senior citizens and bank staff members are offered higher interest rates.
Senior Citizens’ Saving Scheme
Senior Citizens’ Saving Scheme provide is another lucrative option of investment that can also help in saving from taxes. The minimum deposit amount in SCSS scheme is ₹1,000. The maximum saving amount is ₹15 lakh. However, the option to open account is available only for senior citizens. Only retired persons and senior citizens can take the benefit of the scheme. There is age exemption for retired defence personnel as well.
Health insurance policy
Just like several saving schemes, there are ample of tax benefits on health insurance policieis as well. Under Section 80D, people can claim their tax deduction against healthcare related expenses and also on payment of health insurance premiums. The amount of tax saved under the section against life insurance cover is determined by the number and age of the people covered under health insurance.
Sukanya Samridhi Yojana Benefits
Sukanya Samridhi Yojana was launched by the government under its flagship program of ‘Beti Bachao, Beti Padhao’. People can open a SSY account of their girl child in their nearby banks. The account can be opened any time after her birth till the time she attains the age of 10. The guardians can handle the account and attain it till their daughter turns 18. The minimum deposit amount of the account is ₹250 and the maximum deposit amount is ₹1,50,000. Investments under the SSY account are eligible for tax deductions under Section 80 C. THe maximum cap of investment is ₹1.5 lakh. There is also no tax on the interest earned.
