How to save tax in India
Tax Saving Schemes
- Public Provident Fund (PPF)
- Sukanya Samriddhi Yojana (SSY)
- National Pension System (NPS)
- Employees’ Provident Fund (EPF)
- Sukanya Samriddhi Yojana Interest Rate.
- National Savings Certificate.
- House Rent Allowance.
- NSC Interest Rate.
How much tax does ELSS save?
An equity-linked savings scheme or ELSS is a tax-saving investment under Section 80C of the Income Tax Act, 1961. By investing in ELSS, you can claim a tax rebate of up to Rs 1,50,000 a year and save up to Rs 46,800 a year in taxes.
Is ELSS taxable after 3 years?
After the 3 year lock-in period, the investor has redeemed the ELSS at Rs 3 lakh where, as per the above criteria, Rs 1.5 lakh will be exempted from tax. Thus, taxable income after deduction of Rs 1.5 lakh from Rs 3 lakh equals Rs 1.5 lakh.
Which ELSS is best for tax saving?
Best ELSS Funds ranked by ET Money on performance consistency & downside protection
- Consistency. …
- Franklin India Taxshield Fund. …
- L&T Tax Advantage Fund. …
- HDFC Taxsaver Fund. …
- Quantum Tax Saving Fund. …
- Aditya Birla Sun Life Tax Relief 96 Fund. …
- Nippon India Tax Saver (ELSS) Fund. Consistency. …
- Parag Parikh Tax Saver Fund. N.A.
Which is better ELSS or PPF?
PPF is suited for individuals who are absolutely risk-averse and can afford a 15-year lock-in period. Whereas those investors who are willing to take a moderate risk to earn higher returns can opt for ELSS. The best way to reduce risk in ELSS to its minimum is by staying invested for the long term.
What are the disadvantages of ELSS?
What are the Disadvantages of ELSS Funds? High risk ELSS Funds: ELSS mutual funds have a huge exposure to equity markets. Equity related instruments are highly susceptible to market volatility. Hence, due to this ELSS mutual funds carry high risk.
Can I claim ELSS every year?
Tax deductions under Section 80C can be only claimed during a financial year, i.e. if an individual invests in an ELSS Fund in July 2015, deductions can be claimed for the financial year 2015-16.
Which ELSS should I invest in 2021?
Table of Best ELSS Funds for 2021:
| Fund Name | Returns (%) | |
|---|---|---|
| ICICI Prudential Long Term Equity | 54.17 | 14.33 |
| Motilal Oswal Long Term Equity | 59.58 | 13.20 |
| Tata India Tax Savings | 46.96 | 13.28 |
| Nippon India Tax Saver | 59.16 | 7.97 |
How much return will I get from ELSS?
ELSS v/s Other Tax-Saving Investment Instruments
| Tax-Saving Investment Options | Lock-in Period | Return |
|---|---|---|
| ELSS | 3 years | 10%-12% |
| Fixed Deposit | 5 years | 6%-7% |
| Public Provident Fund | 15 years | 7%-8% |
| National Savings Certificate | 5 years | 7%-8% |
Can I claim both PPF and ELSS?
With both ELSS and PPF, you can get a maximum deduction of INR 1.5 Lakh under Section 80C of the Income Tax Act, 1961.
Can I invest 1.5 lakh in PPF and ELSS?
Yes, definitely you can have both the investments at a time. PPF and ELSS both offer a tax exemption of up to Rs. 1.5 lakhs under the section 80C of the Income Tax Act. What is Public Provident Fund (PPF)?
Is LIC better than PPF?
While LIC policies serve the purpose of insurance, a PPF serves the purpose of savings. PPF is a Public Provident Fund meant for long-term savings and retirement.
PPF VS LIC.
| Points | LIC | PPF |
|---|---|---|
| Risk | Safe | Safest |
| Target audience | Caters to those who have dependents | Caters to everyone |
| Tenure | Flexible | 15 years |
Which option is better than PPF?
After PPF, ELSS is one of the most tax friendly 80C investment options. ELSS capital gains of up to Rs 1 lakh in a financial year are tax free. Capital gains in excess of Rs 1 lakh are taxed at 10%.
Is SIP is better than PPF?
PPF is less liquid. You can only withdraw the investment amount after the 7th year from the date of opening your PPF account. SIPs are prone to a higher level of risk as they are influenced by equity market performance. PPF offers guaranteed returns and is, therefore, a safer investment option.
Which is the best ELSS to invest in 2020?
Basis this parameter, these are the seven best ELSS mutual funds hand-picked by us:
- Axis Long Term Equity Fund.
- Invesco India Tax Plan.
- DSP Tax Saver.
- Kotak Tax Saver Fund.
- Mirae Tax Saver Fund.
- Canara Robeco Equity Tax Saver Fund.
- Motilal Oswal Long Term Equity Fund.
- The Bottom line:
Can I stop ELSS before 3 years?
Can ELSS be Withdrawn Within 3 years? The simple answer to this question is No. ELSS investments do not provide the option to withdraw the investment amount before the end of the 3-year lock-in period. In ELSS, investors are given fund units against their invested amount.
Is ELSS SIP tax free?
Tax Benefits:
An additional benefit that comes with ELSS schemes is that of tax benefits under section 80C. Under this section, an investor is exempted from tax up to Rs. 1,50,000 and ELSS is one of the many ways you can save tax under section 80 C.
How can I save tax over 10 lakhs?
How to Save Tax for a Salary Above Rs 10 Lakhs?
- Reduce Your Taxable Income by Up To Rs 1.5 Lakhs (Section 80C, 80CCC, 80CCD) …
- Additional Reduction of Up To Rs 50,000 for NPS Investors (Section 80CCD. …
- Reduce Your Taxable Income by Up To Rs 75,000 (Section 80D) …
- Reduce Your Taxable Income by Up To Rs 2 lakhs (Section 24)
Which SIP is tax free under 80C?
equity linked savings scheme
Which SIP is tax free under section 80c? 80C allows deduction upto Rs 1.5 lakh for investment made in ELSS (equity linked savings scheme). You can also start SIP for ELSS mutual funds for which deduction upto Rs 1.5 lakh will be available u/s 80C.
Which ELSS fund is best in 2022?
List of Top ELSS Funds to Invest in 2022
- Mirae Asset Tax Saver Fund.
- Canara Robeco Equity Taxsaver fund.
- DSP Tax Saver Fund.
- Axis Long Term Equity Fund.
- ICICI Prudential Long Term Equity Fund Tax Saving.
- SBI Magnum Long Term Equity Scheme.
- Baroda BNP Paribas Large Cap Fund (G)
How can I reduce my taxable income in India?
Here’s a list of popular investment options to save tax under section 80C.
- Public Provident Fund.
- National Pension Scheme.
- Premium Paid for Life Insurance policy.
- National Savings Certificate.
- Equity Linked Savings Scheme.
- Home loan’s principal amount.
- Fixed deposit for a duration of five years.
- Sukanya Samariddhi account.
Which SBI ELSS is best?
The table below shows the top-performing ELSS mutual funds based on the past five year returns:
| Mutual fund | 5 Yr. Returns | 3 Yr. Returns |
|---|---|---|
| SBI Long Term Advantage Fund Series IV Direct Plan Growth | — | 35.23% |
| SBI Tax Advantage Fund Series II Growth | 25.25% | 34.55% |
| SBI Long Term Advantage Fund Series IV Regular Plan Growth | — | 34.51% |