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Tax Savings: How working women can save tax and get good returns | Check best options
May, 29th 2024

If you are a working woman, chances are that you would also be looking for tax-saving means. As most working people know, most preferred tax saving ways are to invest your money in various available option. But that requires a basic understanding of which options to invest in. As the first quarter of the financial year is going on, it is better to start investing now. This will not only save your tax but also provide financial support. Let us talk about various schemes which not only give monetary benefits but also help you to save tax. Not to tell, the following schemes are some of the safest investments in the country.

 

Public Provident Fund (PPF)

As the name suggests, PPF is the preparation for future financial security. So, if you are looking for a means to save tax, then PPF is also a better option. On investing in PPF, you get the benefit of income tax exemption under Section 80C of the Income Tax Act. PPF is ideal for those investors who want to invest for a long period. Investment is made in this scheme for 15 years. A minimum of Rs 500 and a maximum of Rs 1.50 lakh can be invested annually. PPF is currently offering an interest rate of 7.1 per cent per annum. It offers a safe way to accumulate substantial wealth over time with attractive interest rates and tax benefits.

National Savings Certificate

The second best investment to save tax is NSC. It is one of the long trusted investment scheme which was launched in 1989. You can invest in National Savings Certificate (NSC), a small savings scheme of the post office. You will also get income tax exemption on investment in this under section 80C of the Income Tax Act. This is a fixed-income scheme. You can start investing in it with a minimum of Rs 1000. Currently, 7.7 per cent interest is being offered on this scheme. You can claim a deduction on any amount paid or deposited for a National Savings Certificate, the maximum limit of which is Rs 1.5 lakh.

Insurance policies

Life insurance is one of the first thing that people consider for their family’s security. The after-life benefits of insurance can protect the insured’s family from a financial inability to sustain a better life. However, the deduction under Section 80U of the Income Tax Act cannot exceed 10% of the sum assured for a normal individual and 15% for a person with certain specified ailments. Insurance is not just a protective measure but also a smart tax saving tool. Premiums paid towards the policy are eligible for a deduction of up to Rs 25,000 from your taxable income. Paying premiums on senior citizen parents' health policies qualifies you for an additional deduction of Rs 30,000 from your taxable income, helping you save more tax.

Sukanya Samriddhi Scheme

Sukanya Samriddhi Yojana is a great tool for working women to save on taxes. This scheme is a government-backed savings scheme specially designed for girl children, which encourages parents to save for their daughter's education and marriage expenses. Sukanya Samriddhi Yojana falls under the EEE (Exempt, Exempt, Exempt) tax category. That is, you will not have to pay tax on investment, income or withdrawal. If you have a daughter, then this scheme is considered quite beneficial and beneficial. Tax exemption is provided under Section 10 (11A) of the Income Tax Act, 1961, and investments made in the SSY scheme are eligible for deduction under Section 80C, with a maximum limit of Rs 1.5 lakh. An interest rate of 8.20 per cent is currently being offered on investments in Sukanya Samriddhi Yojana.

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