Updates on Rajkot NewsInsurance and Pf FdTax Deductions Tax DeductionsIn 2022, learn about the math of tax relief: With the start of the Income Tax Return (ITR) filing season, the salaried class should start thinking about ways to save money on taxes. Along with depositing money into a salary account, some particular investing considerations are made, which not only saves taxes but also helps to build a decent retirement fund. Let us look at five such tax-saving choices where you may build a retirement fund while also saving money on taxes.
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PPF and LIC premiums are tax-deductible.
Saving on taxes is an excellent way to save on PPF (Public Provident Fund).Along with the maturity amount and interest, this investment is tax-free. This is a better strategy to build huge wealth and a safe investment in the long run. A tax deduction is granted on investments in a PPF account under section 80C. If you have a LIC policy, on the other hand, you can claim a tax deduction on the premium. Tax relief of up to Rs 1.50 lakh is available under section 80C.
EPF Exemption from Tax
The Employees’ Provident Fund (EPF) is one of the simplest ways for salaried people to save money on taxes. Tax relief is also attainable under section 80C in this case. The Central Board of Trustees oversees the EPF. It’s worth noting that interest earned in a PF account is tax-free up to Rs 2.5 lakh each year. This is a better way to save for retirement.
Tax Exemption on ELSS
If you invest in a mutual fund’s equity linked savings scheme (ELSS), you will be eligible for a tax deduction under Section 80C. With better returns on ELSS, there is a tax benefit. This is why, because of the double advantage, ELSS is a better tax-saving alternative for salaried individuals.
FDs with tax savings are exempt from paying taxes.
For salary earners, a tax-saving fixed deposit is also a viable choice. This is a type of FD in which you can save up to Rs 1.5 lakh in taxes. It has a 5-year lock-in duration. For the salaried class, this is a safe tax-saving alternative. It’s important to note that the return on a tax-saving FD is taxable.
The NPS is exempt from paying taxes.
A tax exemption is available under section 80CCE for the National Pension Scheme (NPS) up to a limit of 1.5 lakhs. Aside from that, under section 80 CCD, you get an extra exemption of Rs 50,000 in NPS (1B). For the salaried class, NPS is a good long-term tax-saving solution. It is also a superior retirement plan.
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