Most of the investors who invest in order to make sure that their taxes are saved are wise enough to not invest in a single option. There are various tax saving schemes in India,but one must know which one will best suit his or her needs. The primary aim of investing in tax saving schemesis to ensure that the maximum amount of tax is exempted and some profit is made from that investment as well. Thus, it is important to choose the kind of investments that offer the maximum returns.
Also, while investing, one needs to make sure that the profit amount is also exempted from taxes.
In order to become a successful investor, you should make investments that are balanced in nature. You should invest in balanced, conservation and aggressive kinds of investments to ensure an overall balanced profit. You should also make sure that while choosing tax saving schemes,you prefer some of the options that are backed by the government. It should be kept in mind that most of the people, in fear of investment, generally prefer to keep their money in savings accounts where they get an amount of 3.5% interest per year.
In order to help you choose among the various taxsaving schemes, here is a list of the various options where you can invest along with the necessary details.
- You can invest in ELSS (Equity Linked Saving Scheme). This is a type of mutual fund that helps you in investing in various equity markets. The benefits that it offers in terms of tax exemptions come under the Section of 80C. The lock-in period of ELSS is only three years, and that makes it ideal for a short term investment option. Investing in this method can offer you an exemption up to rupees 1, 50, 000.
- Another tax saving investment option is to invest in Rajiv Gandhi Equity Savings Scheme. It helps the investors to invest in the capital market in the domestic regime. The lock-in period of RGESS is also three years, and quite suitable for a short term investment.
- Single Premium Life insurance is also a good investment option that can save you from paying your taxes. It offers the combined benefits of life cover and investment. Here, you only need to pay once, and you will be eligible for the policy benefits for your whole life.
- Heath Insurance is not exactly an investment option, but it helps to build a shield for you and your loved ones at the time high medical emergencies. The primary benefit of getting health insurance done is the payment made towards it is tax-free. One can claim an exemption up to rupees 30, 000 under the Section 80D.
- Investing in Debt-Based Mutual Funds will ensure you a fixed return by investing in treasury bills, corporate bonds and government securities.
Thus, you should study all the available plans carefully before investing in any of the tax saving schemes in India.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.