How do I organize my investments to generate the maximum tax free income – in the UK?
Which is best tax saving method?
Here’s a list of popular investment options to save tax under section 80C.
Provisions Under Section 80C:
| Investment | Returns | Lock-in Period |
|---|---|---|
| Public Provident Fund (PPF) | 7% to 8% | 15 years |
| National Savings Certificate | 7% to 8% | 5 years |
| National Pension System (NPS) | 12% to 14% | Till Retirement |
| ELSS Funds | 15% to 18% | 3 years |
What does tax-efficient mean?
Tax efficiency is when an individual or business pays the least amount of taxes required by law. A financial decision is said to be tax-efficient if the tax outcome is lower than an alternative financial structure that achieves the same end.
How can I reduce my taxable income?
How to Reduce Taxable Income
- Contribute significant amounts to retirement savings plans.
- Participate in employer sponsored savings accounts for child care and healthcare.
- Pay attention to tax credits like the child tax credit and the retirement savings contributions credit.
- Tax-loss harvest investments.