For the people having taxable income, a huge amount of money has to be paid to the government as tax. This is also known as income tax and one might face legal proceedings and even hefty fines on failing to file income taxes within the deadline. Different types of tax saving investments are available in the country that helps a person to save huge amounts. Here, you will come to know about three convenient ways to save taxes.
8 simple ways to save taxes legally
Legal tax saving is vital as it is a tactic to save money that belongs to the government against your income. If a person defaults filing an income tax and has no means of legal tax saving, he might face an income tax raid. By following the techniques mentioned below, one can save with the help of tax saving investments
- Contribution to the NPS
As per the guidelines of Section 80 CCD(1B), you can avail the tax benefits if you start investing in the National Pension Scheme. It will help you to save a lot of money that you can withdraw after 60 years of age. Before you finalize the contribution, try talking with an expert who can suggest you the proper ways.
- Giving money in Charity
Giving money in a charity is one of the safest ways to avail a legal deduction of tax. You need to find an NGO that has an 80 G certificate. You can easily claim for the tax deduction once you have donated an amount of your income to the charity.
- Go for a tax-saving investment
There are a number of tax-saving investment options that you can opt for to save the taxes. Some types of investments are mentioned below in a nutshell:
- Tax-saving fixed deposits:
There are different tax-saving fixed deposits that are provided by the leading banks. In a five year FD, you can get a tax deduction of 1.5 lakh INR. However, the interest of this fixed deposit is taxable.
- Tax saver funds:
There are many tax saver funds where you can put your money. Nowadays, you can find a lot of fund providers who can keep your money with full security and allow you to save a lot of taxes. Before investing in the tax-saving fund, you should always check the amount that you need to invest.
- ELSS funds:
ELSS funds are one of the best tax saving investments available in the market that helps you to save tax up to Rs. 1 lakh. These are basically mutual funds where you can invest money and gain good returns.
Public Provident Funds are one of the leading types of tax saving investments that you can get from all the major banks and post-offices of the country. The best part of PPFs is that it is totally tax-free.
- National Saving Certificate:
The National Saving Certificate is another means of investment that helps you to save any amount of money for five years and earn interest at the rate of 8% of the total investment. You can save tax about Rs. 1.5 lakhs while investing in the NSC.
Legal tax saving is one of the main things that every person needs to do when it comes to saving money. The primary thing you must consider is visiting the online portals and tax experts as they can suggest you the ways to save your taxes. Always look for tax saving investments as it an earn you a lot of savings.