How to save Income Tax: All of us want to save money as much as we can, provided it is legally correct. How to save Income Tax is probably one of the most searched phrases when it comes to saving money for taxpayers. All of us should always pay our income tax as it goes in nation-building and strengthening the economy. But, intelligent, planned and strategic investments can help us save some money to pave the way for a financially secure future. Ravi Singhal, Vice-Chairman, GCL Securities Limited shares his knowledge tax savings options for FY 2021-22 and lists out ways that every taxpayer must explore in order to save some income tax:-
Avail maximum benefit of 80C: If you are planning to save income tax, then you must avail the maximum benefit under 80C (Rs 1.5 lakhs per annum, as of now). One can freely choose saving instruments of their choice, like people not willing to take financial risk may go for 5-year Tax saver FD, Life insurance policies or other investment products offering fixed returns. Those who don’t shy from taking risks can invest in Mutual funds under ELSS categories. There is no difference in the performance of ELSS and a normal mutual fund, except for the fact that there is a lock-in period of 3 years in ELSS category funds.
Never ever ignore 80CCD: One should also consider utilising maximum limit under 80CCD (Rs 50k as of now) to save Rs 15k by investing in NPS (National