Beginner’s ways of tax saving 2024.

1. Tax Saving Fixed Deposits

An accessible method to minimize tax liabilities involves investing in bank fixed deposits. with varying tenures and interest rates, these deposits offer tax benefits under Section 80C. They remain a popular choice for individuals aiming for a stable and guaranteed return on their investment. Tax- saving fds come with a lock-in period of 5 years.

 

2. Public Provident Fund (PPF)

The public provident fund (PPF) is a government- backed small savings scheme in India, designed for long-term savings and investment. Renowned for its safety and stability, it stands as one of the most secure investment options in the country. PPF’s have a lock in period on 15 years with facility of partial withdrawal from seventh year.

 

3. National Savings Certificate (NSC)

The national savings certificate (NSC) is a government-backed savings scheme available to Indian citizens. It offers a fixed rate of interest set by the government, making it a stable investment option. NSC qualifies for tax deductions under section 80c of the income tax act of 1961. NSC’s have a lock in period of 5 years.

 

4. Senior Citizens’ Saving Scheme (SCSS)

The senior citizen savings scheme (SCSS), supported by the government, caters to individuals aged 60 and above. Additionally, it’s accessible to those aged 55 who have retired on superannuation or through voluntary or special voluntary schemes, and to retired military personnel aged 50 and above. SCSS have a lock in period of 5 years with extension facility to 3 years.

 

5. Sukanya Samriddhi Yojana (SSY)

Under Section 80c of the income tax act, the sukanya samriddhi yojana allows exemptions of up to Rs. 1.5 lakh. However, opting for the new regime excludes eligibility for 80c deductions. Furthermore, the interest earned upon maturity of the deposit remains tax-free. SSY’s are locked in till the girl reaches age 21 or gets married, whichever lower. Partial withdrawal available when the girl reaches age 18 or passes 10 standard.

 

6. Home Loan or Education Loan

Taking a loan can provide significant tax benefits under section 80c of the income tax act. In home loan, interest paid is viable for tax deduction of maximum 2 lakh and capital paid is viable for 1.5 lakh in a financial year. Interest on education loan is completely viable for tax reduction and can be opted for 8 years or till entire interest is paid.

 

7. Medical or Health Insurance

Medical or health insurance premiums are eligible for tax deductions under section 80d of the income tax act in India. If the person for whom the insurance is taken is less than 60 years, tax reduction is 25000 rupees or lower, otherwise tax reduction is 50000 rupees or lower.