Are you planning to save tax on your income but due to lack of knowledge or poor money management not able to do so ? Don’t worry ! You are not the only one who is facing such situations. There are thousand of people who are facing the same problem. Some people take services of a financial experts to make their investment, others pay a large amount of money in the form of income tax. Both the options consumes your money.
However, many smart people plan their financial needs and make their investment accordingly. You can also set your goals and make an investment from your earning. If you starts looking for investment schemes available in the market, you will found many options. Some of the investment schemes return a good profit on your investment while some other gives you tax benefit along with a good return. Such schemes generally have a lock-in period of 3 to 15 years but the amount earned as return are completely tax free. Different investment schemes are given below:
- Mutual Funds – Tax saving mutual funds helps you to invest money in the market. Investment through mutual funds is one of the safe mode as the money you invest in mutual funds are invested in different shares. With a lock-in period of three years, mutual funds give a good return depends on the market situation. However, you can keep your investment even after the lock-in period. You can invest a minimum of Rs. 500 and there is no limit for maximum investment in the mutual funds. But, you will get tax benefit only upto Rs. 1 Lac invested in the mutual funds.
- Employees Provident Fund – EPF saving scheme is compulsory for all the salaried person. As per the government rule, as a salaried person, you need to contribute 12% of your basic salary in EPF. This contribution is deducted automatically every month from your salary. Your employer contribute another 12% of your basic salary in your EPF account. EPF gives an average return of 9.5% and the amount received from this investment is completely tax free. You can withdraw your money after leaving the job with an employer or after the retirement. You can transfer the money from your previous EPF account to the new EPF account.
- Public Provident Fund – It is a long term investment scheme widely used in the India. You can get your PPF account opened through post office and state bank of india. With an annual compounded interest of 8.6%, PPF account have a maturity period of 15 years, and the amount received on maturity is completely tax free. You can have only one PPF account at a time with your name. You can make a minimum investment of Rs 500 and maximum of Rs 1 Lac under this investment scheme.
You can also invest money in other tax benefit saving schemes such as NSC, ULIP, tax saving fixed deposits and life insurance.