TAX SAVING FOR FREELANCERS, PROFESSIONALS, TRADER & WEB BASED AGENCIES

Why ELSS is best tax saving instrument under section 80C

Why ELSS is best tax saving instrument under section 80C

Section 80C is tax saving option where one can invest and claim tax exemption from income upto Rs 1.5lakhs from your total taxable income.This Section 80C is allowed to Individual or HUF.

 

Investment Options under section 80C. Here is a List

PPF-Public Provident Fund:

  • Rate of interest: 8.70%
  • Lock period: 5 years
  • Tax on returns:Nil for above 1 year
  • Safety:High
  • Tax exemption: Rs 1.5lakhs

NSC-National Savings Certificate

  • Rate of interest: 8.50%
  • Lock period: 5 years
  • Tax on returns:Nil for above 1 year
  • Safety:High
  • Tax exemption: Rs 1.5lakhs

Bank deposits:

  • Rate of interest: 8-9%
  • Lock period: 5 years
  • Tax on returns:Nil for above 1 year
  • Safety:High
  • Tax exemption: Rs 1.5lakhs

 

SCSS-Senior Citizens Savings Scheme

  • Rate of interest: 9.30%
  • Lock period: 5 Years
  • Tax on returns:Nil for above 1 year
  • Safety:High
  • Tax exemption: Rs 1.5lakhs

Life Insurance Premiums

  • Rate of interest: 5-7 %
  • Lock period: 3 Years
  • Tax on returns:Nil for above 1 year
  • Safety:High
  • Tax exemption: Rs 1.5lakhs

ELSS-Equity linked Savings Schemes

  • Rate of interest: Market defined
  • Lock period: 3 years
  • Tax on returns:Nil for above 1 year
  • Safety:High
  • Tax exemption: Rs 1.5lakhs

ULIP-Unit Linked Insurance Plan

  • Rate of interest: Market defined
  • Lock period: variable
  • Tax on returns:Nil for above 1 year
  • Safety:High
  • Tax exemption: Rs 1.5lakhs

Post time deposit (5 years)

  • Rate of interest: 8.50%
  • Lock period: 5 Years
  • Tax on returns:Nil for above 1 year
  • Safety:High
  • Tax exemption: Rs 1.5lakhs

Why ELSS is best tax saving instrument under section 80C:

 

As you can see from the above table,ELSS schemes used to offer higher returns but no guarantee, have shorter lock-ins and all elements including Principal and Capital Gains if any are tax free.

 

If you have not invested in ELSS schemes before, please consider them for tax saving this year. They have proved to be a smart way to save taxes as well as earn returns higher than inflation.

Investors can opt for dividend option and get regular income during lock period.

Investing ELSS funds through SIP monthly would help you to reduce lump sum investment burden and provide higher returns.

 

Tax saving for Freelancers, Professionals, Trader and Web based agencies

10 mins of consultation. Place a request.

Some of the featured articles from our knowledge center

Business2 13a51fd54d37dfeead10bd04c34a46671e69097acf6d8002d2665eb06b5cf58f
What is the income tax payable on partnership firm

As per section 4 of partnership act 1932, partnership means the relationship between the person who are agreed to share the profits of business car...

Business3 1835184f1312bba0b871fddd223a24dd62299180ed03a78d9e4098813c851963
What is business income on presumptive basis under section 44ad and 44ada

As per section 44AA income Tax act 1962, every person who is carrying on business or profession is required to maintain books of accounts. However,...

Business1 8b8cee9b60a38e9df92fb5b897e7c09195532b3d70b7ec28803a600cf2ce60cd
What is GST and different types of GST forms

The Prime Minister approved “The constitution amendment bill for Goods and Service Tax”(GST) in the Parliament Session (Rajya Sabha on 3 August 201...