Taxing Saving Investment Options
“In this world nothing can be said to be certain, except death and taxes”
~Benjamin Franklin
The above quote says it all. Taxes are a permanent factor in our lives. However, if you are well informed about tax matters, there is nothing to worry. Although our government has levied taxes, they have also provided ways to reduce our tax obligations. The best way to save taxes is by making investments. You need to choose the best investment option, considering your tax obligations.
If you are looking to reduce your tax liability, you will find many options under Section 80C, 80D and 80G of the Income Tax Act. A good tax saving investment tool should provide you the following benefits.
1. Maximum tax savings
2. Low cost of investment
3. Minimum risk
4. Substantial returns
Top 4 Tax Saving Investment Options
Here are the best investment options that would help you reduce your tax liability as well.
1. Life Insurance
The premium you pay for your life insurance policy is deductable form your total income, under section 80C of the Income Tax Act. This ultimately lowers your taxable income, which in turn lowers your tax liability. So although it is not an investment which will fetch you sure shot returns, you have a lot to gain from them. Also, under Section 10(10d), the claim amount paid to the beneficiary is exempted from tax.
2. Health Insurance
Although this is not considered as a pure form of investment, it does have its advantages. Under section 80D of the Income Tax Act, the premiums paid towards health insurance are eligible for tax deduction. Moreover, if you choose add riders to your health plan; the lump sum you get in the event of an accident or other illnesses covered by the rider is not taxable.
3. Mutual Funds (ELSS)
Equity Linked Saving Schemes are specifically intended for saving taxes. Although they are high risk products, they offer the likelihood of high returns. The best part is that they enable you save taxes under Section 80C of the Income Tax Act. Moreover, they provide the shortest lock-in period of three years, on an average. This makes them one of the best investment options available today.
4. Loans
Although they are not an investment option, they are a great tax saving tool. Under Section 80E of the Income Tax Act, the interest on the repayment on higher education loans is tax free. Under section 80C of the same Act, home loan EMIs towards the principal are also exempted from tax liabilities.
Most of these options do not provide returns in the form of money. However, they get you the maximum money’s worth in form of insurance or loan. At the same time, they provide you tax benefits. So, you can consider them as some of the best investment options for saving taxes.
“In this world nothing can be said to be certain, except death and taxes”
~Benjamin Franklin
The above quote says it all. Taxes are a permanent factor in our lives. However, if you are well informed about tax matters, there is nothing to worry. Although our government has levied taxes, they have also provided ways to reduce our tax obligations. The best way to save taxes is by making investments. You need to choose the best investment option, considering your tax obligations.
If you are looking to reduce your tax liability, you will find many options under Section 80C, 80D and 80G of the Income Tax Act. A good tax saving investment tool should provide you the following benefits.
1. Maximum tax savings
2. Low cost of investment
3. Minimum risk
4. Substantial returns
Top 4 Tax Saving Investment Options
Here are the best investment options that would help you reduce your tax liability as well.
1. Life Insurance
The premium you pay for your life insurance policy is deductable form your total income, under section 80C of the Income Tax Act. This ultimately lowers your taxable income, which in turn lowers your tax liability. So although it is not an investment which will fetch you sure shot returns, you have a lot to gain from them. Also, under Section 10(10d), the claim amount paid to the beneficiary is exempted from tax.
2. Health Insurance
Although this is not considered as a pure form of investment, it does have its advantages. Under section 80D of the Income Tax Act, the premiums paid towards health insurance are eligible for tax deduction. Moreover, if you choose add riders to your health plan; the lump sum you get in the event of an accident or other illnesses covered by the rider is not taxable.
3. Mutual Funds (ELSS)
Equity Linked Saving Schemes are specifically intended for saving taxes. Although they are high risk products, they offer the likelihood of high returns. The best part is that they enable you save taxes under Section 80C of the Income Tax Act. Moreover, they provide the shortest lock-in period of three years, on an average. This makes them one of the best investment options available today.
4. Loans
Although they are not an investment option, they are a great tax saving tool. Under Section 80E of the Income Tax Act, the interest on the repayment on higher education loans is tax free. Under section 80C of the same Act, home loan EMIs towards the principal are also exempted from tax liabilities.
Most of these options do not provide returns in the form of money. However, they get you the maximum money’s worth in form of insurance or loan. At the same time, they provide you tax benefits. So, you can consider them as some of the best investment options for saving taxes.
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