Nagpur : Ever got the feeling that taxes are eating into your monthly income? If yes, then you are not alone. Many Indians donโt take full advantage of the Governmentโs attractive tax-saving opportunities. For example, Section 80C of the Income Tax Act, one of the easiest ways to save tax, allows you to save up to Rs. 46,800 in tax every year.
How does Section 80C work ?
Under 80C you can reduce your taxable income every year by up to Rs. 1,50,000 by claiming deductions against certain investments and expenses. So, if you are in the 30% tax bracket you can save up to Rs. 46,800 in tax. (Includes saving of 4% Education Cess).
The best investment option under 80C :
80C has many options such as payment towards life insurance premium, PPF contribution, investments in five-year bank FD and investments in NSC. However, investment in Tax Saving Funds (ELSS) is one of the best ways to save tax.
Hereโs why :
1. Tax Saving Funds have the shortest lock-in period of just 3 years compared to 15 years for PPF and 5 years for Bank FD.
2. Your money has the potential to grow at a higher rate. For example, investments in Tax Saving Funds have grown by an average of about 13.28% per year for the last 10 years compared to 8.7% for PPF and 8% for Bank FDs.
3. You can begin investing in Tax Saving Funds with as little as Rs. 500.
When to invest in Tax Saving Funds ?
Most individuals make the mistake of waiting until March to invest in Tax Saving Funds. Unfortunately, by March they end up spending most of their money and either invest too little or donโt invest anything at all. It is best to start investing monthly in small amounts right from the beginning of the year.
How to invest ?
Through PhonePe you can invest in Tax Saving Funds in a few minutes and that too in a completely paperless manner! Hereโs how:
1. In the PhonePe app click โMy Moneyโ at the bottom and then click the โTax Saving Fundsโ icon.
2. Enter the amount that you want to invest and select from the two hand-picked funds.
3. Complete the one-time digital Know Your Customer requirement
4. Make a payment from your UPI-linked bank account and get an instant receipt
โThe Government of India has created many attractive tax-savings opportunities that every Indian citizen should be availing. Yet most of us donโt fully leverage these opportunities. PhonePeโs Tax Saving product is an excellent way for millions of Indians to quickly save thousands of rupees in just a matter of minutes.โ said, Terence Lucien, Head โ Mutual Funds, PhonePe.
So, donโt wait. Start today and join over 1.15 crore Indians who have invested over Rs. 98,000 Crores in Tax Saving Funds.
