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ELSS_Mutual_Fund |
In this scheme of mutual funds, investment is tax-exempt under Section 80 of the Income Tax Act.
For tax saving, people
who want to invest in mutual funds are advised to invest in equity linked
saving scheme ie ELSS. In this scheme of mutual funds, investment is tax-exempt
under Section 80 of the Income Tax Act. Investors can
avail tax rebate by investing Rs 1.5 lakh in these
schemes.
Investment instruments
in which tax can be exempted from investment under section 80
are all government backed investment schemes. But the returns are quite low.
Therefore, if you want to take advantage of tax rebate with higher returns,
then invest in Equity Linked Savings Scheme ie ELSS.
Three year lock in period
in ELSS
Tax savings mutual
funds have a mandatory lock-in period of three years. But this does not mean
that you invest for three years. Since it invests in equity only, so invest in
ELSS for five to seven years for better returns.
Yes, do not invest in
ELSS just because it can give better returns in the long term. If you can
afford to invest in equity, then you can invest in ELSS. But it is also true
that among the options available under section 80C, the
lock-in period of three years is in ELSS. That's why many mutual fund advisors
consider them the best option for venturing into the world of equity mutual
funds. But in the last 10 years, the ELSS mutual fund
category has given a return of about 8.46 percent.
Therefore, while
investing in ELSS, these facts must be kept in mind. ELSS can be helpful in tax
savings but due to equity class savings, its risks increase. So, invest in ELSS
but also know its risks.
👉Take care of tax at the time of investment; more than 1 lakh tax will be saved from these 4 ways
Taxpayers use section 80C, 80D, 80CCD (1B) and 24 (b) of the highest income tax to save tax.
As soon as the dates
for filing tax returns are announced, the worry of saving tax starts. Taxpayers
use section 80C, 80D, 80CCD
(1B) and 24 (b) of the highest income
tax to save tax. However, under every section, the government has fixed the
investment limit. But by investing under these sections, you can save tax up to
more than one lakh rupees.
Tax savings under 80C
The most popular means
of saving tax are investments made under section 80C of
income tax. To get discounts under this, you can invest up to one and a half
lakhs in some instruments. Under this, premiums of life insurance, equity
linked saving scheme i.e. ELSS, public provident fund i.e. PPF, National
Savings Certificate, five year notified tax-saving bank deposit, post office
five year deposit scheme, senior citizen saving scheme, Sukanya Samriddhi,
Investments come in EPF etc. But it should be remembered that the investment
limit in all these should not exceed one and a half lakh rupees.
Tax savings under 80CCE
The investment limit under
80CCE, under 80C, 80CCC
(Pension Plans of Insurance Companies) and 80CCD (1) (Applicable in investments in NPS), cannot exceed one and a
half lakhs. Actually investment under 80C is not just your
tax. It not only reduces the burden but also helps in investing for your long
term financial goals.
Under 80D,
income tax is deducted on investments made in health insurance premiums. Under
this, deduction up to a maximum of Rs 25,000 is available.
Similarly, 24 (B) gives you tax rebate based on the EMI
given under the item of home loan. Investors should prioritize investing on
such instruments for their long-term financial goals, so that they can also get
tax relief.
👉What is Form 15G and 15H? They can take support to avoid
tax
through
these forms; a person tells that his income does not come under the tax net.
Therefore tax should not be taken from him.
New Delhi: By filling
Form 15G and 15H, you can avoid TDS
deduction on income. Through these forms, a person tells that his income does
not come under the tax net, so tax should not be taken from him. 15H
is for senior citizens of 60 years and above, while 15G can be filled by others. Some banks provide the facility to
fill these forms through their website.
These forms are valid
for one year only
Form 15G
and 15H are valid for the same year, so these forms should
be filled at the beginning of every financial year. With this, banks will not
deduct TDS in your interest income. This time due to coronavirus infection,
taxpayers would not be able to fill these forms on April 1,
2020, so the last date for filling them has now been
extended to June 30, 2020. However,
these forms can be submitted by the first week of July.
They can fill in Form 15 G
-Person
or Hindu undivided family or any trust but not company or firm.
- Any
Indian resident.
-Whose age is below 60 years
-Tax calculation on
total income should be zero.
- Total
income from interest is less than 2.5 lakhs during the
financial year
They can fill in Form
15H
-A person and Indian
resident.
-You are a senior
citizen and the year you fill the form, that year you are turning 60 years old.
- Tax calculation on
your income is zero.
These forms do not have
to be filled with the Income Tax Department. Submit them to your tax deductor
(e.g. your company or employer). At the same time, prepare these forms and
submit them to the Income Tax Department. If your income is more than 2.5 lakh
rupees then do not deliberately submit these forms. Since the PAN number has to
be written in these forms, then action can be taken if you come under the
taxable income.
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