Tax saving investment: Investing for the bright future of children is as important as it is necessary to choose the right tax-saving scheme. Investors can take tax exemption up to Rs 1.5 lakh annually under Section 80C of Income Tax. There are many schemes like PPF, Sukanya Samriddhi Yojana, NSC, FD, ELSS and ULIPs to take advantage of this exemption. Tax can not only be saved by choosing the right plan, but a strong financial base can be prepared for the future of children. By adopting these smart tips, parents can prepare a big fund for their children.
Sukanya Samriddhi Yojana
Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY) are government schemes with safe and attractive interest rates. Under Section 80C of the Income Tax Act, there is a benefit of a deduction of up to Rs 1.5 lakh on investment made in them. Also, there is no tax on the interest and maturity amount received from these schemes. However, Sukanya Samriddhi Yojana is only for daughters.
National Savings (NSC) and Post Office Saving Scheme
The NSC is a good tax-sending option, in which a deduction of up to Rs 1.5 lakh is available under Section 80C. However, the interest available in it is taxable. On the other hand, the post office saving account gives tax rebate on interest up to Rs 10,000 annually.
Equity-Link Saving Scheme (ELSS)
If you want more returns and also want to save tax together, ELSS mutual funds can be a good option. On investing in this, there is a discount of up to Rs 1.5 lakh under Section 80C. However, the lock-in period in it is three years old and is also associated with market risk.
Unit Linked Insurance Plan (Ulips)
Ulips not only gives investment opportunity, but also gives insurance cover. There is a cut of up to Rs 1.5 lakh under section 80C. Also, maturity and death benefit are also tax free.
Tax Free Bonds & NPS
Tax free bonds give fixed returns. There is no tax liability on these. At the same time, investing in NPS scheme gives an extra discount of Rs 50,000 under Section 80CCD (1B).
Investment and education loans in the name of children
According to the expert, tax can be availed by investing as a gift in the name of children from relatives. Apart from this, taking an educational loan is also beneficial for higher education, as under section 80E, its interest payment is given tax exemption.
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