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The new tax season starts April 1. Save on taxes under Section 80C through investments like PPF, SCSS, ELSS, and NPS. Consider risk appetite and financial goals before investing.
A cartoon-style illustration representing tax-saving investments under Section 80C in a clean and elegant way.
A friendly-looking cartoon character (young professional or taxpayer) sitting at a desk with a laptop, looking at investment options.
Four floating bubbles around the character, each labeled with a key tax-saving investment:
ELSS – A small stock market graph inside the bubble, showing growth.
PPF – A piggy bank with a lock, symbolizing secure long-term savings.
NPS – A small tree growing from coins, representing retirement savings.
SSY – A smiling parent holding a child’s hand, symbolizing future security.
A calendar in the background with “April 1” highlighted, marking the start of the new tax season.
A light, pastel color palette (blue, green, yellow) for a modern and visually appealing look.
The overall tone should be simple, engaging, and informative, making tax planning feel approachable and stress-free.
Tax Saving Investments In India: The new tax season begins April 01, presenting an opportunity for smart investors to reduce their tax burden. Section 80C of the Income Tax Act, 1961, offers several tax-saving investment options. Risk-averse individuals can opt for the stability and tax-free returns of Public Provident Fund (PPF) and Senior Citizen Savings Scheme (SCSS). Growth-oriented investors can consider Equity Linked Savings Schemes (ELSS) and National Pension Scheme (NPS), which offer both tax benefits and equity exposure. The recent market dip makes this an especially attractive entry point for equity investments.
Experts have suggested several investment options for taxpayers to save on taxes under section 80C of the Income Tax Act, 1961.
Equity Linked Savings Scheme (ELSS)
Among the available options, Equity Linked Savings Scheme (ELSS) offers the shortest lock-in period of 3 years and is ideal for investors seeking growth potential through equity markets, suggested CA Foram Naik Sheth, KMP Wealth Management Solutions.
Investments in ELSS are eligible for a deduction of up to Rs. 1.5 lakh per financial year under Section 80C of the Income Tax Act, 1961.
Public Provident Fund (PPF)
The Public Provident Fund (PPF) is a long-term, government-backed investment scheme that falls under the Exempt-Exempt-Exempt (EEE) category, said CA (Dr.) Suresh Surana. He added “This means that contributions, accrued interest, and withdrawals are all tax-free. The interest rate is determined by the government and generally exceeds bank savings rates. As of now, the PPF interest rate stands at 7.1% per annum.”
National Pension System (NPS)
The National Pension System (NPS) is a government-regulated pension and investment scheme designed to provide financial security during retirement, said Surana. “Contributions qualify for tax deductions under Section 80C up to Rs. 1.5 lakh, with an additional deduction of Rs. 50,000 available under Section 80CCD(1B),” he added. Furthermore, partial withdrawals and the final corpus at maturity enjoy tax benefits, making NPS a compelling choice for long-term retirement planning.
Sukanya Samriddhi Yojana (SSY)
CA Foram Naik Sheth said SSY is another good option. It is a dedicated scheme for the welfare of the girl child, offering tax-free returns (currently 8.2% pa) and maturity benefits when the child turns 21, he explained.
National Savings Certificate (NSC)
Another reliable investment is the National Savings Certificate (NSC), which comes with a 5-year lock-in period and offers guaranteed returns, though the accrued interest is taxable, Sheth said.” For those seeking a blend of insurance and investment, Unit Linked Insurance Plans (ULIPs) provide market-linked returns with a 5-year lock-in. Tax-saving Fixed Deposits (FDs) are another secure option with a 5-year lock-in, though the interest earned is taxable,” he added.
Social Security And Insurance Benefits
CA (Dr.) Suresh Surana said that investing in health and life insurance provides financial protection while also offering tax-saving benefits:
• Health Insurance: Premiums paid up to Rs. 25,000 (or Rs. 50,000 for senior citizens) are deductible under Section 80D for policies covering self, spouse, children, and parents.
• Life Insurance: Premiums paid towards term life insurance policies qualify for deductions under Section 80C up to Rs. 1.5 lakh per annum.
In conclusion, CA Sheth said for risk-averse taxpayers looking for secure investment options under Section 80C of the Income Tax Act, 1961, PPF and SCSS are highly recommended. Both these schemes offer stable returns, government backing, and significant tax benefits.
For taxpayers with a higher risk appetite and a longer investment horizon, ELSS and NPS are great options. Both offers the dual benefit of wealth creation through equity exposure and tax saving, he added.
Surana, however, advised that before selecting any investment option, it is crucial for the taxpayers to consider other key factors such as risk appetite, investment horizon, and financial goals.
Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
