Income Tax: Invest before March 31 in these tax saving instruments to avail exemption.
If you want to save income tax for the investments made in this financial year (2023-24), do not forget to invest before March 31 this year. With only a few days remaining in this financial year, taxpayers are urged to invest as soon as they can.
Meanwhile, RBI has told all agency banks dealing with government business to keep their branches open on March 31. This holds relevance since the last day of the financial year falls on a Sunday.
“The Government of India has made a request to keep all branches of the banks dealing with Government receipts and payments open for transactions on March 31, 2024 (Sunday) so as to account for all the Government transactions relating to receipts and payments in the FY2023-24 itself,” RBI stated in a statement.
These are some tax saving options one can opt for:
1. Life insurance premium: Premium paid towards a life insurance policy is eligible for income tax deduction up to ₹1.5 lakh.
2. National Saving Certificate (NSC): It is a fixed-income investment scheme offered by the Government of India that is meant to encourage small savings among individuals while providing them with a safe and reliable investment option. It is ideal for those who are looking for a guaranteed return.
3. Public Provident Fund (PPF): Investment made in public provident fund (PPF) are exempt under section 80C. And one can invest a minimum of ₹500 and up to ₹1.5 lakh in a financial year.
4. Post office time deposit: These are similar to a bank’s fixed deposit scheme. One can invest in the post office’s five-year time deposits in order to avail tax benefits.
5. Unit linked insurance plan (ULIPs): Unit linked plans offer both insurance and investment benefits. They offer income tax saving under section 80C up to ₹1.5 lakh
6. ELSS (Equity Linked Saving Scheme): ELSS invests at least 80% in stocks in accordance with Equity Linked Saving Scheme, 2005, notified by Ministry of Finance.
These schemes have a lock-in period of three years and are eligible for deduction under Sec 80C of the I-T Act.
7. Principal payment for home loan: The repayment of principal amount of home loan is also eligible for income tax deduction under section 80C.
It is important to note that one can avail of these tax-deduction only under the old tax regime. Under the new tax regime (NTR), taxpayers are entitled to pay a lower tax rate but they have to let go of these deductions.