In order to save tax one can investment in various forms like mutual fund or insurance, PF, PPF, etc. Here are some of the common forms of investment.
Financial Market Investments:
Investments are basically saving money for the future that also helps to achieve long or short term financial goals. But one does not invest as per only benefits but also because it saves tax. Investment can be done in different ways as given below:
Funds: Mutual funds or Equity Linked Schemes helps you save money and gain benefits of saving taxes on income under 80C section of the Income Tax Act. These schemes come with the shortest lock-in tenure as compared to provident fund and fixed deposits. Also, they give you good returns on your amount invested.
ULIPs: Better known as Unit Link Insurance Plans, this scheme is available in market that provides dual benefits of insurance as well financial market trading. So the investments done under this scheme not only help you save tax but also give you a chance of high returns.
By investing in insurance, an individual can not only helps you secure your life for future and also save tax. Insurance investments are mostly done in two ways:
Health: With the increase in the expense of medical treatments, having a health insurance has become important. This health insurance gives dual benefits of medical expense and tax. As per the Income tax rule, you can cut your taxes by Rs. 15,000 -20,000 if you go for health insurance.
Life: This kind of insurance is a good form of investing and securing your life as you keep paying the premium every year. In case of any mishappenings, your immediate family can be financially supported. And all those premiums you pay under life insurance are covered under Section 80C of the Income Tax Act.
Borrowing money in the form of loans can help you save tax. Following are the types of loans that you can get:
Buying house or construction loan: If a person has taken a loan for either purchasing a new home or even for the construction of the old one, it can be shown as a part of investment and can be claimed as tax benefit under 80C starting from Rs.1,00,000 of the principal amount. And Rs.1,50,000 as interest under the section 24 of the Income Tax Act.
Loan for Home Renovations: Not many are aware of the fact that one can take loan for home renovation and save taxes.