What is Best Investment For Tax Saving

For the year 2019 – 20 taxpayers will be looking at the ways to save the tax by investing. So, for saving tax one should look for the investments based on the risk associated and duration of the investment. What are the best tax saving investments available in India for the year 2019 – 20 under the income tax act? Here are some top options available for you to invest and save tax – Public Provident Fund (PPF) – PPF interest has been decreased during the past few years, but the ministry has increased the interest rates during the last 2 quarters. But this doesn’t make it any less of the best option for the tax saving investment. PPF is covered under the section 80C of the income tax act. It has lock in period of 15 years and eligible limit of investment id up to Rs. 1.5 lakh. The limit of minimum investment is Rs. 500. Right now interest offered on PPF investment is 8%. ELSS Tax saving mutual funds – ELSS (Equity Linked Saving Scheme) mutual funds are like other mutual funds but is covered under the section 80C. Like mutual funds, return under ELSS is not permanent and certain. You can get return of maximum 15% and minimum 12%. ELSS mutual funds have a lock in period of just 3 years. The lowest and highest limit of investment in ELSS mutual fund is Rs. 500 and Rs. 1.5 lakh. FD schemes for tax saving – this is the most traditional way of saving money. It is covered under the section 80C. From the past few years interest rates have been increasing. The current interest rate ranges between 4.5% – 7.5%. Interest rate of 8% per annum is offered on the investment in Post Office tax saving FD scheme. Rebate is given on the investment amount; interest received from the scheme is taxable. Sukanya Samridhi Account Scheme – you can invest up to Rs. 1.5 lakh in the Sukanya Samridhi scheme if you are blessed with a girl child. Through investing in this scheme you can earn the highest interest rate. The current interest rate offered in this scheme is 8.5%. Parents or guardian of girl can make deposits in this scheme till she turns 15. The account matures when the girl attains the age of 21. Interest received is tax free. This scheme is covered under the section 80C. Senior scheme saving scheme – this tax saving option provide guarantee of return to the senior citizen of India. The scheme is backed by government of India so there is no risk of losing the principle amount. Individual of the age of 60 years or more can invest in this scheme under section 80C. The interest rate offered in this scheme is 8.7%. The highest limit of invest in this scheme is Rs. 15 lakh. Maturity period of this scheme is 5 years. In the end of every quarter interest is paid to the individual. This is the best option for the senior citizens to save tax by investment. The interest earned is taxable. NPS (New Pension Scheme) – this is another best investment option for saving tax. It is also covered under the section 80C. People who are looking for saving funds for the retirement this is the best option for you. Returns from the NPS scheme fluctuate every year. NPS likely gives returns between 7% – 13%. The maximum and minimum limit of investment in this scheme is Rs. 500 in a month and Rs. 6000 in a year. The amount receivable on the time of maturity is taxable.