Secure Tax Benefits Before the Financial Year Ends
If you're looking to save on taxes, you have until March 31 to invest in schemes such as Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), Equity-Linked Savings Scheme (ELSS), and the National Pension System (NPS). Missing this deadline means losing the opportunity to claim deductions for the current financial year. Those who have already invested should review their contributions and make any necessary additional investments before time runs out.
However, it’s important to note that tax deductions under Section 80C and Section 80D are only available under the old tax regime. If you are following the new tax regime, you won’t be able to claim these benefits.
Under the old tax regime, Section 80C of the Income Tax Act, 1961, allows deductions of up to ₹1.5 lakh in a financial year. Several investment options qualify for this deduction, including PPF, SSY, NPS, and ELSS. You can invest in one or multiple schemes under this section, but the total deduction cannot exceed ₹1.5 lakh per financial year.
If you haven’t purchased health insurance yet, doing so before March 31 can provide additional tax benefits. Under Section 80D, you can claim a deduction on the premium paid for health insurance. This allows you to save tax while ensuring financial security in case of medical emergencies.
If you buy a policy for yourself and your family, you can claim up to ₹25,000 in deductions.
If you are a senior citizen (aged 60 or above), the deduction limit increases to ₹50,000.
Additionally, if you purchase a separate health insurance policy for your elderly parents, you can claim another ₹50,000 deduction.
While tax-saving is an essential aspect of financial planning, it should not be your only motivation for investing. Always align your investment choices with your financial goals and risk tolerance.
For higher returns: If you are open to risk, investing in an ELSS mutual fund can be a great option. ELSS offers the highest returns among tax-saving investments and has a short lock-in period of just three years.
For low-risk investments: If you prefer stability, consider options like tax-saving fixed deposits (FDs) or PPF. While bank tax-saving FDs have a lock-in period of five years, PPF is a long-term investment with a maturity period of 15 years.
If you want to maximize your tax savings and optimize your investment portfolio, make sure to act before March 31. Choose investment options that align with your financial objectives while also helping you claim valuable tax deductions. Plan wisely and secure your financial future while minimizing tax liabilities.
