Top 11 Tax Saving Investment for 2023-24.

We analysed the top 11  Tax Saving investment Scheme available and here’s the list of the top 11 one could consider the flexibility of investing to the amount of tax exemption it allows.

1. Investment in Sukanya Samriddhi Yojana (SSY)
2. Investment in Post Office Savings Account
3. Investment in Post Office Fixed Deposit (FD) Account
4. Investment in Post Office Time Deposit Account (POTD)
5. Investment in Senior Citizen Savings Scheme (SCSS)
6. Investment in Public Provident Fund (PPF)
7. Investment in Kisan Vikas Patra Yojana (KVPY)
8. Investment in National Pension Scheme (NPS)
9. Investment in TERM LIFE INSURANCE
10. Investment in National Saving Certificate (NSC)
11. Investment in Post Office Monthly Income Scheme (POMIS)

For more details….Click the Link https://incometaxmanagement.in/tag/tax-saving-investment/ Disclaimer : This Video is only for Education purpose. Please read Investment Guide, Income Tax Act. & Rules and all the Terms and Conditions governed by the Govt. of India.

1.  Investment in Sukanya Samriddhi Yojana (SSY)

About SSY :

Sukanya Samriddhi Account is a Government of India backed saving scheme targeted at the parents of girl children.

Eligibility for SSY Account :

• Only a Girl Child with maximum age of 10 years can avail the benefits of SSY Saving Scheme.
• Only biological parents or legal guardians of a girl child can open the account on the child’s behalf.
• An account under this Scheme may be opened for a maximum of two girl children in one family

Investment Amount

• Minimum – ` 250
• Maximum – ` 5 Lakh

Tenure of SSY Account

The payment period for SSY accounts is 15 years, while the maturity period of the account is a minimum of 21 years.

Tax Benefits of SSY Scheme

SSY is a completely Exempt (EEE) Investment. The interest earned as well as the maturity amount are all Tax-Exempt. IT is eligible for Tax Deductions U/s 80C, subject to a maximum cap of  ` 1.5 lakh.

Transfer of SSY

This SSY Account can be transfer form a Post Office to a Bank or from a Bank to a Post Office.

2.  Investment in Post Office Savings Account

• A Post Office Savings Account is one of the most popular and accessible savings accounts in India with the minimum opening amount as well as maximum balance that can be retained is `
• It can also be opened by a minor above the age of 10 in their own name.
• There is no limit on the maximum amount that can be deposited in a post office savings account.
• It is also eligible for tax exemption for interest of up to `10,000 earned in a financial year (for all savings accounts combined) under the Income Tax Act. 80TTA.

3.  Investment in Post Office Fixed Deposit (FD) Account

• Minimum amount is Rs. 1,000.
• There is no maximum limit to the deposit.
• Any number of accounts can be opened in any post office anywhere in the country.
• The tenure can he extended by making an application.
• Interest is payable annually.
• Interest is credited into the holder’s savings account.
• A minor who is above 10 years of age can open a Post Office FD A/c.
• You can avail a Tax Deduction under Section 80C of the Income-tax Act, 1961. for deposits with a tenure of 5 years.

4.  Investment in Post Office Time Deposit Account (POTD)

• A minor aged 10 years or more can open and also operate this account.
• This POTD schemes can have tenure of 1, 2, 3 or 5 years, and only one deposit can be made in one account.
• Minimum deposit required to invest in POTD Scheme is Rs. 200 and the amount to be deposited should be in multiples of Rs. 200 only.
• Income tax benefits are available only for a 5-year post office time deposit account.
• Depositors will be able to claim income tax exemptions of up to Rs. 1.5 lakh under Section 80C of the Income Tax Act, 1961.

5.  Investment in Senior Citizen Savings Scheme (SCSS)

SCSS is a savings product available for senior citizens aged 60 or above. With the SCSS account, senior citizens can receive quarterly interest on deposits up to Rs. 15 lakhs. The deposit / Investment made in an SCSS account qualify for deduction under Section 80C of the Income Tax. The interest is taxable if the total interest in all SCSS accounts is more than 50,000 in a financial year. In such cases, TDS is deducted from the total interest paid. However, no TDS is deducted if the account holder submits form 15G / 15H. The account can be prematurely closed at any time, after the date of opening. The account may be extended for a Further period for 3 years from the date of maturity.

6.  Investment in Public Provident Fund (PPF)

You can invest in the PPF if you meet these criteria:

1. You are a citizen of Indian
2. You can open only one PPF account unless your second PPF account is in the name of a minor.

• You cannot invest in PPF is you are an NRI or HUF.

For a PPF, you should have a minimum investment of Rs.500 and your maximum investment is Rs. 1.5 lakh for every financial year. The minimum tenure of a PPF is 15 years. This can he extended in sets of 5 years. You can open a PPF account with Rs. 100 and annual investments over Rs. 1.5 lakh will not earn any interest. The PPF is backed by the Indian Government, and so, it is risk-free and offers guaranteed returns.

Tax Benefits :

• Public Provident Fund is an investment which comes under the Exempt-Exempt-Exempt (EEE) category.
• This means that the deposits that you make in the Public Provident Fund will be deductible (Section 80C of the income Tax Act).
• The amount that you accumulate and the interest will be exempt from tax when you withdraw the money.
• You should note that you cannot close a Public Provident Fund account before maturity.
• You cannot close a Public Provident Fund account prematurely.

7. Investment in Kisan Vikas Patra Yojana (KVPY)

The following are the Kisan Vikas Patra eligibility:

1. The applicant must be an adult and a resident Indian.
2. The applicant can apply for Kisan Vikas Patra in their own name or on behalf of a minor.

• Trusts are eligible to invest in Kisan Vikas Patra. HUFs (Hindu Undivided Family) and NRIs are not eligible to invest in KVP.

All the Returns doesn’t come under the 80C deductions, and are completely taxable. However, Tax Deducted at Source (TDS) is exempt from withdrawals after the maturity period. Minimum Investment amount is Rs. 1,000. There is No Maximum Upper Limit for Investment. You can avail Tax benefits under Section 80C of the Income-tax Act, 1961

8.  Investment in National Pension Scheme (NPS)

National Pension System (NPS) is a retirement benefit Scheme introduced by the Government of India PFRDA (Pension Fund Regulatory anti-Development Authority) is the governing body for NPS. Earlier, the NPS scheme covered only the Central Government employees. Now, however, the PFRDA has made it open to all Indian citizens on a voluntary basis. NPS accounts are primarily of two types, Individua NPS account (All Citizens Model) and Corporate NPS account.

Tax benefits for Salaried Individual :

You can claim tax exemption up to Rs. 50,000 under section 80CCD (1B). This benefit is over an above limit of Rs. 1,50,000 under section 80C.

Tax Benefits for Self Employed Individual :

You may invest upto 20% of your gross annual income and claim tax exemption on the invested amount under section 80CCD(1). This tax exemption is subject to a limit of Rs. 1,50,000 under section 80C of Income Tax Act, 1961.

9. Investment in TERM LIFE INSURANCE

Term life insurance is attractive to young people with children. You have many options when choosing how long your term life insurance should last. Typically, you can buy coverage for 1, 5, 10, 15, 20, 25 or 30 years. Because term life covers only a specific period and is generally less expensive than permanent life insurance, it’s a great choice for young families Looking for temporary coverage.

Tax Benefits :

All term insurance policies offer customers tax deductions under Section 80C of the Income-tax Act, 1961. along with further deductions up to an amount of 1.5 lakhs. Policyholders can also avail of exemptions under Section 10(10)D for receiving any amount as part of maturity benefits from their insurance policy.

10. Investment in National Saving Certificate (NSC)

The National Savings Certificate (NSC) is a fixed Income Investment scheme that you can open with any post office branch. The scheme is a Government of India initiative. Minimum Investment amount is Rs. 1,000. However, there is no maximum limit for investment under NSCs. Banks allow loans against NSC certificates. Individuals can use National Savings Certificates as collateral to get loans. You can avail Tax benefits under Section 80C of the Income-tax Act, 1961 5 years and 10 years are the two maturity periods of the scheme that individuals can choose from. Family members including minors can be added as nominees by the investor. In case the investor passes away during the tenure of the scheme. the nominee will be able to inherit the scheme. Upon submitting the required documents, the scheme can be purchased at post offices. Under Section 80C of the Income-tax Act, 1961, tax benefits of up to Rs. 1.5 lakh can be availed by investing towards the NSC. Tax Deducted at Source (TDS) is not applicable under The National Savings Certificate. However, as per the marginal income tax rates, the tax must be paid for the interest that is earned.

11. Investment in Post Office Monthly Income Scheme (POMIS)

Only a resident Indian of 18 years and above can open a POMIS account. You can open an account on the behalf of minor who is aged 10 years and above. They can avail the fund when they become 18 years old. Your money is safe until maturity as this is a Government-backed scheme. The lock-in period for Post Office MIS is 5 years. You can withdraw the invested amount when the scheme matures or reinvest it. You earn income in the form of interest every month. Your investment is not covered under Section 80C; TDS is not applicable either You can open more than one account in your name. But the total deposit amount cannot exceed Rs. 4.5 lakhs in all of them together. The investor can move the funds to a Recurring Deposit (RD) account, which is a feature Post Office has added recently. The investor can nominate a beneficiary (a family member) so that they can claim the benefits and corpus if the investor passes away during the account’s term. You may collect the monthly interest directly from the post office or get it transferred automatically to your savings account. Reinvesting the interest in a SIP is also a lucrative option.