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Government-Approved Legal Ways to Save Income Tax in India

Everybody works hard to earn money and secure their futures. So, there is nothing wrong with you wanting to save tax on that hard-earned income. But the only thing that you need to take care of is to do it legally.

Government-Approved Legal Ways to Save Income Tax in India

According to The Income Tax Act of 1962, the Indian Government has provided its residents with multiple legal techniques to save tax which are easily available to the taxpayers.

If you also want to unload some of your tax burdens, then I suggest you go through this article where I will mention 100% legal schemes you can invest in to save your tax. These mentioned schemes can also be a great addition to your investment plan and future savings. Let us have a look at these:

1. Senior Citizens Savings Scheme

Senior Citizens Savings Scheme is a great investment scheme where you can earn an interest rate of up to 8.6%. Please note that if the interest amount surpasses Rs 10,000, then TDS is applicable on the interest so ensure to take care of that.

In addition to this, in case you choose to close your account 2 years before it was opened, then 1.5% is taken away from the total amount as a penalty for the same.

However, if you choose to go to the end with this plan, then it can guarantee you a consistent income post-retirement.

2. National Pension System

National Pension System is another retirement benefit plan which is run by The Pension Regulatory Fund Authority of India. According to section 80C of the Income Tax Act, whatever money you save here is exempted from tax. You can invest up to 1.5 lakh per year along with another Rs. 50,000 under section 80CCD (1B)

3. Public Provident Fund (PPF)

PPF accounts offer an interest rate of 7.1 per cent on the amount kept in these accounts. According to Section 80C of the Income Tax Act, you can receive a tax exemption if you keep your money in this account. The good thing is that you can invest Rs. 1.5 Lakh in this account every year and put some tax burden off your shoulders. Also, your money in these accounts is under guarantee not losing its value.

4. Sukanya Samriddhi Yojana (SSY)

First off, you can invest in this scheme only if you have a daughter but if you don’t, unfortunately, you will have to rely on the above-mentioned 3 schemes only. You can make an account for two of your daughters which is covered under 80C. The money that you will invest in this account will earn you an interest of 7.6%.

In addition to this, in the case of a twin daughter set born after a single daughter, then tax shall be exempted on all three accounts.

Conclusion

In this article, we learnt the Government-Approved Legal Ways to Save Income Tax in India which can also be a great way to invest money for our future. Please read this article carefully to learn how you can take some load off your tax burden.

Share this article with people who would take great benefit from this article and save tax while saving money for themselves.

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Also Read:

How To Pay Income Tax Via UPI And Credit Card?

Komalpreet

Words help me express the unsaid and we have come a long way while walking hand in hand like that so now I write about anything and everything that ignites the spark of inspiration in me.

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