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5 Income tax saving schemes for you to save more

The last quarter of the financial year 2019-20 is going on. The time has come when you disclose about your investment made in this financial year. Everyone wants to save as much tax as possible, besides getting good returns from where he is investing. Keeping in mind tax saving, Economic Times Health has prepared a list of top-5 investment plans.

ELSS Fund is at the top of ET Wealth’s list and NPS at number two which is rated five out of five. At number three is ULIP plans which have got four ratings out of five. The lowest life insurance has a pension plan at number five and number nine in the list, which has got two ratings out of five.

  1. Equity Linked Savings Scheme (ELSS)In the last three years, ELSS has yielded a return of 13.18 percent. The investment under this is under 80C with a scope of up to Rs 1.5 lakh. The lock-in period in this plan is only 3 years old. Returns up to one lakh in this scheme are tax-free.
  2. National Pension Scheme (NPS)The National Pension Scheme has yielded an average return of 9.33 percent in the last five years. It has also received five stars in five. Under this scheme, when the investor retires at the age of 60, 60% of the corpus will be tax-free. The remaining 40 percent will be received as pension and is taxed. With some conditions, the scheme can also be withdrawn in between. Tax saving has its advantage in three different sections. The amount you are investing is under 80C. Apart from this, a rebate of up to 50 thousand rupees is available separately in Sec 80CCD (1b). Apart from this, if a company deposits up to 10% of basic salary under 80CCD (2) in the NPC scheme, then there will be no tax on it.
  3. Ulip Plans number three in the list are ULIP plans which have got four stars out of five. It has got a return of 8.09 percent in the last three years. According to research, profit margins in long-term investments in ULIP plans are declining. Talking about tax benefits, if the insurance cover is 10 times the annual premium under section 10 (10d), then income on ULIP plans will be tax-free.
  4. Public Provident Fund (PPF)PPF is rated four out of five. It has given a return of 7.9 percent in the January-March 2020 quarter. Bond yields have fallen in the last year, despite this, small there is no significant drop in the interest rate available on saving schemes. The interest received on PPF is tax-free. The interest received on FD is taxable. Partial withdrawal is available after the completion of five years.
  5. Senior Citizen Saving Schemes (SCSS)It has got a three-star rating in five and is getting 8.6 percent returns in the current quarter. The return is assured under the scheme. Interest is available every three months and the Finance Ministry revises the interest rate. The lock-in period is five years. This plan is for senior citizens only and interest is free up to 50 thousand. The maximum investment is 15 lakh rupees. SCSS accounts can also be opened online.

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