Top tax-saving investments option to consider before 31 March

As the current financial year inches closer to its end, so is your last opportunity to save tax on your income this year. After 31 March, taxpayers won't be able to use different tax-saving instruments to reduce taxes on their income. So, here is a last moment check to make the optimum use of tax saving tools before 31 March.

Health insurance

Amid rising hospital treatment costs, buying health insurance is a must. However, buying health insurance also helps in saving taxes as it allows people to take an exemption of up to ₹1,00,000 in premiums under Section 80D on health insurance bought for yourself. Apart from health insurance, life insurance also provides tax benefits under Section 80C of the IT Act.

In case you have taken health insurance for yourself but any of your family members is still left for one, this is the right time to take insurance now. Acquiring health insurance for your family can help you save some extra bucks. As per Section 80C of the Income Tax Act, you are eligible for tax benefits of up to ₹1.5 lakh, if you are paying insurance premiums for a medical insurance plan.

Similarly, if you have got your elder parents covered under a health insurance policy, it is possible to claim a tax discount of ₹50,000 per year ( for senior citizens) under Section 80D of the Income Tax Act. You are eligible for a tax discount of ₹25,000 per year for your parents who are younger than 60 years.

Charity

Not an investment option but surely, an option to contribute to the welfare of society and save on taxes at the same time. People can claim a deduction under section 80G for any income donated to charitable organisations. Cash donations are exempted from claiming deductions.

Public Provident Fund

Another long-term investment option is Public Provident Fund, in which one can invest to create a pension plan. It is also a good tool to invest for other long-term goals like buying a house or for a child's education. If you are planning to invest in your child's education and another plan, it would be wise to create a minor PPF account in your child's name. The invested amount will not be taxed. There is a certain condition while managing two PPF accounts. People need to limit their combined contribution to PPF to 1 lakh for a year

National Pension Scheme

Another tax-saving investment option is National Pension System. Under this government-sponsored scheme, taxpayers can invest in this scheme to make systematic savings throughout their lives. People can claim the benefit of their tax under Section 80CCB of the IT Act. They can extend their Tax Deduction benefit to an additional ₹50,000 under the scheme. Under NPS, subscribers can also switch from one fund manager to another. To avail of the benefit of this scheme, people have to open their PRAN account and get an online login id and password. Afterward, they can log in to their account to manage NPS online.

Sukanya samridhi Yojana account

You can earn while saving for your daughter at an early stage with the help of an SSY account. According to the Income Tax Act, the investments made in the SSY scheme are not eligible for deductions till a ceiling of ₹1.5 lakh. SSY interest are eligible for deduction under Section 80C. The interest accrued on the deposit in the account is also exempted from tax under Section 10 of the Income Tax Act. Moreover, the amount withdrawn after maturity is also exempted from income tax deductions.

Fixed Deposits

One of the best tax-saving investment options for long-term gains is fixed deposits. Taxpayers can invest even a small amount in FD to get the benefit of compounding on their investments over the period. The scheme is govt-backed and exempted from tax. Investors won't need to pay any tax on invested amount, interest earned, and maturity amount. Applicants can claim benefit under Section 80C of the IT Act.

Senior Citizen Saving Scheme

Senior citizens who haven't opened their Senior Citizen Saving Scheme account now must do it before 31 March to avail of the tax saving benefits under Section 80C of the IT Act.

With a minimum deposit of ₹1,000 and a maximum deposit of ₹15 lakhs, they can save up to ₹1.5 lakh rupees. Apart from those who have attained 60 years of age, 55-year-old can also open the account if they have retired under Superannuation, VRS, or Special VRS.

Other than this, retired personnel of Defence Services can open their account at the age of fifty years if they fulfil all other specified conditions. The tenure of the SCSS account is 5 years and it can be extended to three more years.

National Savings Certificate

With a maturity of five years, people can think of investing in National Savings Certificate, to save their income under Section 80C of the IT Act. The minimum deposit for a National Savings Certificate is ₹1,000 without any maximum deposit limit. Account holders can also take loans on this account savings. To avail of the benefit, taxpayers need to show the interest as income and then claim an income tax rebate. To avail of the benefit of this investment scheme, people have to make a yearly investment of up to ₹1,00,000 under this scheme.

United Linked Insurance Plan

People can use this investment instrument to attain two goals of long-term investment and life cover in a single move. ULIP provides financial protection to the applicant's family in case of unfortunate events and also provides long-term returns. The ULIP premium is divided into two parts, one is contributed to your life cover, and the other one is invested in the fund of the applicant's choice. It provided tax benefits under Section 80C on its paid premiums and serves as a market-linked investment plan under section 10D of the IT Act.

Equity Linked Saving Scheme

They are equity funds that channelise a major portion of their corpus into equity or equity-related instruments. They also offer tax exemption of up to ₹1,50,000 under Section 80C of the IT Act.