Best Tax Saving Schemes By The Government, Those Are Offering assured Returns

Investors put their hard earn money into different equity-linked funds or government schemes for good returns in the long run or short run. However, one must not forget about the tax savings factor before investing, at a time when the inflation rate is already very high which will impact your profitability. For mutual funds, ELSS is a good option, but those will not fetch you assured returns. So, here four such government schemes have been mentioned those offer you the tax-saving feature. You can get the tax-saving benefits by the sections of the Income Tax Act, 1961, like sections 80C, 80D, 80CCF, etc.

Public Provident Fund or PPF

The interest rate offered on a PPF is 7.1 % per annum (compounded yearly). However, the interest will be applicable as notified by the Ministry of Finance every quarter, so the interest rate can be changed if the government decides so. The minimum investment amount can be Rs. 500, while the maximum investment amount can be Rs. 1,50,000 in a financial year. Your deposits can be made in a lump sum or installments. The amount can be deposited in any number of installments in an FY in multiple of Rs. 50. Any single Indian adult or a guardian on behalf of a minor/ person of unsound mind can open a PPF account in a Post Office, or a Bank.

Your deposit amount will qualify for tax deduction under section 80C of the Income Tax Act.

National Pension Scheme or NPS

National Pension System (NPS) is a voluntary, defined contribution retirement savings scheme in India. It will give you an opportunity for systematic savings during your working life. As the government informs, "Under NPS, individual savings are pooled into a pension fund which is invested by PFRDA regulated professional fund managers as per the approved investment guidelines into the diversified portfolios comprising of Government Bonds, Bills, Corporate Debentures and Shares." The invested amounts will grow and accumulate over the years, based on the returns earned

When you exit from the NPS, you can use the accumulated pension to purchase a life annuity from a PFRDA empanelled Life Insurance Company, apart from withdrawing a part of the accumulated pension as a lump sum. This scheme is governed by the Pension Fund Regulatory and Development Authority (PRAN).

You will be able to get the tax savings benefits under the sections 80 CCD (1) and 80CCD(1B).

Sukanya Samriddhi Yojana or SSY

The interest rate offered on Sukanya Samriddhi Yojana is 7.6% per annum which is calculated on yearly basis and compounded yearly. This is a special scheme that can be opened by a guardian in the name of a girl child below the age of 10 years. Only one account can be opened in India either in Post Office or any bank under this scheme. One can open for a maximum of 2 girls in a family, however, in the case of twins/triplets girls birth, more than 2 accounts can be opened.

The minimum investment amount should be Rs. 250, while the maximum investment amount can be Rs. 1,50,000 in a financial year. The subsequent deposit in multiple of Rs. 50. You can deposits in a lump sum, without any upper limit on the number of deposits either in a month or in a financial year.

The deposits will qualify for a tax deduction under section 80C of the Income Tax Act.

Senior Citizens Saving Scheme or SCSS

This scheme is one of the most profitable investment options for senior citizens. This scheme offers an interest rate of 7.4% per annum. You can make only one deposit in the account in multiple Rs. 1000 maximum, not exceeding Rs. 15 lakh. An individual above 60 years of age can open an SCSS account in the banks or post offices. The maturity period of this account is 5 years, so, the account may be closed after 5 years from the date of opening. But, the account can be extended for further 3 years from the date of maturity. Also, the account can be extended within 1 year of maturity.

In case of the death of the investor, the account will earn interest at the rate of the PO Savings Account. Additionally, in case of the spouse is a joint holder or a sole nominee, the account can be continued till maturity if the spouse is eligible to open an SCSS account and does not have another SCSS Account, as the Post Office informs.

Additionally, this investment also offers tax-saving benefits under section 80C of the Income Tax Act, 1961.