The Income Tax (IT) Act under Section 80C provides the various products and policies, which help in reducing the tax. These products provide refunds or rebates enable persons to reduce the tax imposed on their income. People can reduce their tax on salary under Section 80C. This is an annual activity or procedure. People buy various products of insurance and investments to get the benefit of tax savings. There are different investment plans with which the individual can get tax benefits and earn a profit from these plans. The various products that involve in tax saving planning and help in reducing the tax are as follows.
Public Provident Fund- Public Provident Fund (PPF) is responsible for reducing the taxes within the limit of 1 Lakh in the Income Tax (IT) Act under Section 80C. The individual does not need to provide the complete tax amount on the maturity period of investment plan. Public Provident Funds (PPF) provides both savings and investment plans, and Central Government activated PPF for the citizen of India. There is no need to be salaried or government employee to get this investment plan. The invested amount and the earned interest both are free from tax. In this way, the person can get the tax saving benefits from this investment plan. The minimum range should be 500 per annual and maximum range 70,000 per Annual under Section 80C. Investors (individuals who invest in this plan) can make withdraw the amount in the 7th financial year.
Life Insurance- The person can get refunds under Section 80C, by investing in one of the various plans of life insurance plan from any Life Insurance Companies. Investment plans, Child plans, retirement plans and savings plans are the different plans of life insurance that help in reducing the tax.
Equity Linked Savings Scheme (ELSS)–
Equity Linked Savings Scheme (ELSS) is an instrument of reducing the tax. Equity Linked Savings Scheme is the mutual fund scheme. Various Mutual Funds Companies run the ELSS. ELSS provides persons to use money only in equity, but not in the debt fund. Only Mutual fund Companies can sell the Equity Linked Savings Scheme. The maximum Look-in period of ELSS is three years.
Post Office Deposits-
The various savings plans of post offices to reduce the taxes are as follows.
Public Provident Fund- Public Provident Fund (PPF) is responsible for reducing the taxes within the limit of 1 Lakh in the Income Tax (IT) Act under Section 80C. The individual does not need to provide the complete tax amount on the maturity period of investment plan. Public Provident Funds (PPF) provides both savings and investment plans, and Central Government activated PPF for the citizen of India. There is no need to be salaried or government employee to get this investment plan. The invested amount and the earned interest both are free from tax. In this way, the person can get the tax saving benefits from this investment plan. The minimum range should be 500 per annual and maximum range 70,000 per Annual under Section 80C. Investors (individuals who invest in this plan) can make withdraw the amount in the 7th financial year.
Life Insurance- The person can get refunds under Section 80C, by investing in one of the various plans of life insurance plan from any Life Insurance Companies. Investment plans, Child plans, retirement plans and savings plans are the different plans of life insurance that help in reducing the tax.
Equity Linked Savings Scheme (ELSS)–
Equity Linked Savings Scheme (ELSS) is an instrument of reducing the tax. Equity Linked Savings Scheme is the mutual fund scheme. Various Mutual Funds Companies run the ELSS. ELSS provides persons to use money only in equity, but not in the debt fund. Only Mutual fund Companies can sell the Equity Linked Savings Scheme. The maximum Look-in period of ELSS is three years.
Post Office Deposits-
The various savings plans of post offices to reduce the taxes are as follows.
- Post Office Time Deposits
- NSS (National Savings Certificates)
- Post Office Recurring Deposits
- NSS (National Savings Scheme)
- Post Office MIS (Monthly Income Scheme)
- KVP (Kisan Vikas Patra)
- PPF (Public Provident Funds)
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