Income Tax: 4 best ways to save money, you will get a lot of benefits
This can be a better investment option for senior citizens. Which can beat inflation and provides a regular income. Interest on government-backed, tax-free bonds is tax-free. Due to this, it makes investment risk-free for individuals.
Tax-free fixed deposit for 5 years
This tax-saving fixed deposit is a type of investment. Which comes from the fixed deposit period of 5 years. Withdrawals are not allowed in this scheme. Till the time of fixed deposit is over. As per Section 80C of the Income Tax Act 1961, tax deduction on tax-saving fixed deposits is available up to Rs 1.5 lakh per annum. Tax-saving FDs offer triple benefits including risk-free returns, tax deduction, and deposit protection by DICGC.
Senior Citizen Saving Scheme (SCSS)
This investment option offers tax benefits under section 80C of the Income Tax Act along with higher returns as compared to tax-saving FDs. A person above 60 years of age can open an account with a maximum deposit of Rs 15 lakh and a minimum amount of Rs 1000 thousand from the nearest post office. At present, it fetches an interest of 7.4 percent.
National Pension Scheme (NPS)
NPS is a voluntary retirement savings scheme. This gives the facility to the subscribers to secure their future in the form of a pension. Governed by the Pension Fund Regulatory and Development Authority, this investment scheme gives clients exposure to both equity and debt instruments. It provides income tax exemption on maturity and full pension withdrawal amount to the investor and provides tax saving benefits under sections 80CCD1 and 80CCD(1B) to the subscribers. Customers can contribute a minimum of Rs 6,000 in a financial year. It can be paid in a lump sum or as monthly installments of a minimum of Rs.500. The current interest rate range of NPS is 8-10 percent.