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Tax is the percentage of money charged by the government on a person, product, service and commodity. Income tax is the charge levied on the income of a person. This money paid is then used for the welfare of the people, development of infrastructure and the country. There are many areas that are taxed by the government, as stated earlier that, it becomes difficult to know how much tax one is liable to pay or not. There are many deductions and rebates provided by the government that a first time taxpayer may not be able to comprehend the jargon. There are many people who end up hiring a tax consultant. People, who wish to save tax, can take advantage of the many Tax Saving Schemes that are available in the market and are considered legitimate by the administration. These include various sections specified in the Income Tax Act for tax saving. The application process for income tax filing has now become very easy. One can simply apply for income tax returns online. The Income Tax Act provides Section 80C for tax saving for the general tax payer. It enlists a number of options that one can opt for so as to save tax. Some of these options are: Life Insurance: This is one of the best options for people who wish to save tax. The premium amount paid by the individual is eligible for deduction under this section. Tax saving is an added feature; the main objective of life insurance is to cover the life of a person so that the family does not suffer later. Public Provident Fund: This is a retirement option that provides the most returns. The fund is for the duration of 15 years with an interest rate of 8.6%. This is the most popular means of tax saving. In this, this amount invested in a PPF account is eligible for deduction. National Saving Certificate: These are tax saving schemes that provide interest rate of about 8.4% for 5 years and 8.7% for 10 years. The returns are lower as compared to other schemes, but the amount returned on completion of the term includes the interest and the principal amount. ELSS: Also referred to as Equity Linked Saving Schemes, these are mutual funds that are invested in equity and debt. The option has a lock-in period of 3 years and is subject to market conditions. However, these schemes have been one of the best performing schemes. There are many schemes that are available for deductions under this section. These are beneficial for those who belong to both the risk averse and risk taker investor. These are limited to the Rs. 1 lakh limit though, therefore, a person cannot invest more than this amount in these schemes. One can also apply online or search the web for more information. Most of these can be availed online and are excellent means to obtain a Tax Deduction.
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section 80c, tax saving schemes, tax deduction,
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