Do you wish to save money on taxes in 2022? There are several tax saving investments available to an individual that can help them achieve the same. You can choose from different tax saving investments to cater to your varying investment needs. Let’s look at these different tax saving investments that can help you save money in 2022
Investment schemes that can help to save tax
Do you wish to avail of a tax deduction under Section 80C of the IT Act, 1961 of up to Rs 1,50,000 per annum? Here are a few investment options that can help an investor to save tax on their investments:
- ELSS mutual funds –ELSS (Equity Linked Savings Scheme) funds are a type of diversified equity fund that expose their portfolio majorly to equities, at least 80% of their securities are invested in equity and equity-related securities. These tax saver mutual funds have a lock-in period of three years. An investor can save up to Rs 46,800 every year by investing in these tax saving mutual funds.
- Public Provident Fund – PPF, short for Public Provident Funds are considered one of the best government-sponsored investment schemes that permits an individual to save tax on their investments. The returns on these tax-saving schemes are assured by the Government of India. Currently, PPF schemes offer annual returns of 7% per annum before factoring for taxation.
- National Pension Scheme – NPS is a government-sponsored scheme which is ideal for retired individuals. In addition to the Rs 1.5 lac tax deduction benefits, an investor investing in NPS schemes can further avail of tax benefits of up to Rs 50,000. Any Indian citizen above the age of 18 years old can choose to invest in NPS scheme.
- Sukanya Samridhi Yojana (SSY) –SSY was launched by the Government of India as part of ‘Beti Bachao Beti Padhao’ campaign. The Sukanya Samridhi Yojana aims to offer a secure and bright future to girl child in India by helping the parents or legal guardians of the girl child in building a fund for the expenses of the girl child pertaining to education and marriage after their legal age. To open a SSY account, the girl child should be of less than 10 years of age.
- Senior Citizen Saving Scheme (SCSS) –SCSS is another tax-saving investment for retired individuals. An individual can open an SCSS investment scheme either at a post office or a bank. To open an SCSS account, the minimum investment amount for the same is Rs 1000. The upper limit to invest in SCSS schemes must not exceed more than Rs 15 lakhs.
Tax saving fixed deposits (FD) –Tax saving FD can be a good investment option for an individual looking to save tax. Tax-saving FDs have a lock-in duration of five years. The interest rate on these tax saving investments are predetermined by the government of India and thus subject to change every annum. The returns on these investments are safe and assured by the government.