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How to save on your taxes in the Year 2023?
Among the obligations a citizen must fulfil each year is the payment of income taxes. Individual income tax rates differ depending on their earnings and profits from other sources. Furthermore, tax rates differ for individuals, senior citizens, and corporations. Income tax returns (ITR) are one of the most important documents that taxpayers must file. While a salaried individual must pay taxes and file ITRs on time, the government also provides benefits in the form of tax deductions on certain investment mechanisms that can be claimed to save on taxes. Here are a few Section 80 C recommendations for 2023:
PPF-
This savings scheme is available at most banks and post offices in India for a period of 15 years at a tax-free rate of interest that changes every quarter. The Provident Fund (PF) is assisting in the development of a long-term goal. Deposits made in PF are tax deductible up to Rs.1,50,000 under Section 80C.
NPS-
Any individual who is a subscriber to an NPS can claim a tax benefit under Section 80 CCD (1) up to a maximum of Rs. 1.5 lac under Section 80 CCE. Under subsection 80CCD, NPS subscribers are eligible for an additional deduction for investments up to Rs. 50,000 in NPS (Tier I accounts) (1B). This is in addition to the Rs. 1.5 lakh deduction available under Section 80C of the Income Tax Act of 1961.
ULIP-
ULIPs provide this benefit extensively, and the payable premiums are tax-free under Section 80C of the Income Tax Act of 1961. Furthermore, there is a tax deduction of up to Rs. 1.5 Lac on payable premiums towards a ULIP under Section 80C of the Act.
Tax-saving MF or ELSS-
ELSS, or tax-saving mutual fund schemes, assist investors (individuals and HUFs) in saving tax under Section 80C of the Income Tax Act of 1961. ELSS investments have a three-year lock-in period and are eligible for a tax deduction of up to Rs 1.5 lakh.
Life Insurance-
Not only does life insurance provide complete life coverage, but it is also the most effective way to save taxes. An annual payment is required for a life insurance policy, which is then repaid in the form of a healthy lump sum. Endowment, ULIP, term life, and annuity life insurance are allowed for tax purposes. A maximum deduction of Rs.1,50,000 is allowed under Section 80C.
Pension Plan-
Section 80CCC of the Income Tax Act of 1961 allows for annual deductions of up to Rs. 1.5 lakhs for contributions made by an individual to specified pension funds offered by a life insurance company. The deduction is limited by section 80C.
Senior citizen saving scheme-
Section 80C of the Income Tax Act of 1961 allows senior citizens to claim a tax deduction for investments in this scheme.
National saving certificate-
The minimum deposit for National Saving Certificates (NSC) is Rs.100. NSC has a 5-year investment horizon. On maturity, you can withdraw the entire amount from their account. If the money is not claimed, it is reinvested in the scheme. Section 80C of the Income Tax Act allows you to claim a tax deduction of Rs.1,50,000.
