How much should I invest to save tax?
Table of Contents
- 1 How much should I invest to save tax?
- 2 What is the maximum amount a person can invest under Section 80C to save tax?
- 3 How do I reduce my taxable income?
- 4 How can I save tax over 10 lakhs?
- 5 How to save tax by investing more than Rs 2 lakhs?
- 6 What should I do with 24 lakhs of savings?
- 7 Should you invest in Government of India’s section 54EC bonds 2018?
How much should I invest to save tax?
Investment options under Sec 80C
| Investment | Returns | Lock-in Period |
|---|---|---|
| Public Provident Fund (PPF) | 7\% to 8\% | 15 years |
| National Savings Certificate | 7\% to 8\% | 5 years |
| National Pension System (NPS) | 12\% to 14\% | Till Retirement |
| ELSS Funds | 15\% to 18\% | 3 years |
What is the maximum amount a person can invest under Section 80C to save tax?
Rs 1.5 Lakh
Hence total of deduction including 80C and 80CCD (1b) can be maximum Rs 2 lakh for a single year. Hence for investment in 80C only , the limit is Rs 1.5 Lakh. For investment together in 80C, 80CCD (1) and 80CCD (1b), one may invest upto Rs 2 lakh in total.
What is the maximum amount you can save on income tax?
What is the Maximum Tax Saving That You Can Avail?
| Deductions | Max Amount (Rs.) |
|---|---|
| Standard deduction | 50,000 |
| Section 80C | 150,000 |
| Section 80CCD(1B) NPS | 50,000 |
| Section 80D | 25,000 |
How do I reduce my taxable income?
How to Reduce Taxable Income
- Contribute significant amounts to retirement savings plans.
- Participate in employer sponsored savings accounts for child care and healthcare.
- Pay attention to tax credits like the child tax credit and the retirement savings contributions credit.
- Tax-loss harvest investments.
How can I save tax over 10 lakhs?
Tax exemptions can be availed by investing in the following tools:
- Senior Citizen Savings Scheme (SCSS)
- Sukanya Samriddhi Yojana (SSY)
- National Pension Scheme (NPS)
- Public Provident Fund (PPF)
- National Pension Scheme (NPS)
What if I invest more than 1.5 lakh in PPF?
It is mentioned in Section 80C of the Income Tax Act, 1961 that the interest earned during the PPF tenure is exempted from one’s tax liability. The PPF deposit up to 1.5 lakh is liable to the exemption and the amount to be received on maturity is also tax-free.
How to save tax by investing more than Rs 2 lakhs?
National Pension System (NPS) allows you to invest more than Rs 2 lakh in a financial year which can help you bring down your tax liability. Here’s a look at how you can invest more than Rs 2 lakh in NPS to save tax.
What should I do with 24 lakhs of savings?
Hence, I suggest you invest the balance – Rs 24 lakh -in a fixed deposit in one of the top banks. “Assuming you earn 8\% per annum over 10 years, you could receive Rs 16,000 per month. You could sweep this interest into your savings account every month.
Is Rs50 lakh enough to invest in bonds?
However, in case of jointly held assets like real estate, each owner has a separate limit of up to Rs50 lakh for investing in these bonds. Currently, the bonds enjoying this benefit include only those from the National Highways Authority of India and the Rural Electrification Corporation Ltd.
Should you invest in Government of India’s section 54EC bonds 2018?
If we consider other fixed-return options, there is the Government of India 7.75\% Savings (Taxable) Bonds, 2018. But investment in such bond will not help as—after factoring in the tax implication—the returns from these bonds will not be able to match that of the section 54EC bonds (see the table ‘The other options’).