To comprehend a tax structure is not a child's play, as it is complicated. But understanding that is important because paying taxes is a must and it should not be ignored at any cost. Ladies, being a woman is hard but tax-saving is easy. There are some tax-saving and investment benefits that are exclusively for women.
You work hard for your earnings, pay your taxes on time, and save for the future because it is unpredictable. You never know when your savings could turn out to be a blessing. So, it is good to be financially safe and secure, as it helps you live a tension-free life.
Generally, people invest their hard-earned money in order to enjoy the investment benefits. In order to get the best out of your investment(s), just investing won't do any good for you. But, if you invest smartly, then you eventually reap the benefits. Along with the investment knowledge, you need a lot of patience. In the universe of investment, instant benefits are not available. You need to give enough time to your money to generate more money out of it. Like many people, if you don't have an investment aptitude or knowledge, you can hire a broker. With his expertise and experience, he/she will help you to accomplish your investment and financial goals.
Below mentioned are the five smart ways to investing wisely and saving on taxes.
Invest in Health Insurance
Making an investment in health insurance offers multiple benefits. Apart from safeguarding the health of your family members and you, it offers you tax benefits of up to Rs. 25,000 every financial year under Section 80 D of the Income Tax Act. The good thing about Section 80 D is that you enjoy the tax benefit based on the premium paid towards the mediclaim of your dependent parents, you along with your spouse and children.
Avail the Benefits Offered by Section 80C
Under Section 80C of the Income Tax Act, an income tax rebate of up to Rs. 1.5 Lakhs is allowed when a person makes an investment in a tax-saving instrument, including like EPF (Employee Provident Fund), PPF (Public Provident Fund), ELSS (Equity-linked Saving Schemes), and payment of insurance premium(s) etc. It also allows benefits for the payment of tuition fees for up to 2 children along with the repayment of principal amount of a housing loan (if any).
Girl Power
In case you have a girl child aged less than 10 years, there are plenty of schemes, such as Sukanya Samridhi Yojna that can benefit you. You can deposit up to Rs. 1.5 Lakhs every year in order to earn fixed returns of 9.2 percent. Under this particular scheme, the maturity amount along with the interest is free from tax liability. The lock-in period lasts till the girl, i.e. account holder turns 21. If she gets married, the total amount can be withdrawn. When the girl turns 18 and she wants to pursue her higher education, it is possible to withdraw up to 50 percent of the amount as a premature withdrawal.
Educate Yourself
Under section 80E, a tax exemption of up to Rs. 1.5 Lakhs is permitted every year if you are paying the interest on your education loan. The education loan can be taken for self, spouse, and children. One thing to keep in mind is that the deduction is applicable for interest repayment and not the principal amount.
National Pension Scheme (NPS)
Investing in National Pension Scheme (NPS) offers dual benefits. It is an excellent way to save tax. This is an excellent option for tax saving and an ideal option for your retirement because of its retirement benefits. The important thing to do is selecting the investment instrument. You get the option of a variety of investment instruments, including corporate debt, equity or index funds, and government securities.
Under Section 80CCD, a tax exemption of Rs. 50,000 is allowed every year. It is above various benefits available of Rs. 1 Lakh 50 Thousand under Section 80C. Apart from that, a contribution of the employer, i.e. up to 10 percent of the Basic plus DA is available for the deduction (under section 80C of ITA).
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