As the deadline for payments and investments to claim deduction for Fy2019-20 has now been extended to July 31, 2020 and if you still have not made such an investment, here are suggested 3 best options:
Note even if the investments made until July 31, 2020 have breached the allowed limit of Rs. 1.5 lakh in a fiscal year under section 80C, the excess amount can be claimed for tax deduction in Fy20-21.
For tax saving other than the insurance investment, you can also claim expenses as on tuition fee, medical insurance, donation etc so as to reduce your tax outgo. Nonetheless, given the landscape of falling interest rate, where there is not much choice left to good reasonable return while at the same time make tax-saving investment, you can surely consider post office small savings as one choice. This is as the government despite the earlier reports that given the falling yield will interest rate on these avenues have held rates steady for them for the July-September quarter.
So, here we suggest some of the best tax saving investments:
This is a highly safe investment currently fetching 6.8% return per annum. Though there is no interest pay-out on the monthly basis, the investment is considered to be re-invested and is allowed tax-deduction up to the extent of Rs. 1.5 lakh contribution made in a financial year. With a lock-in of 5 years, the amount of Rs. 10000 invested in the instrument will grow to Rs. 13890 in 5 years.
2. LIC Jeevan Shanti plan:
This is if you are seeking triple benefits of pension, insurance as well as tax benefit. Here the individual get 2 options i.e. his pension can start on an immediate basis by paying a lump sum say Rs. 10 lakh and on it some Rs. 70000 per annuity shall be fixed. Then there is a deffered annuity option, here the minimum allowed deferred period is 1 year while the maximum can be 20 years.
Remember here the minimum investment is Rs. 1.5 lakh and eligibility age is minimum 30 years and the earlier mentioned minimum investment is also the amount that can be claimed for deduction under section 80C.
Here the returns are not as appealing but do remember you get an insurance cover here.
The investment is for senior citizens who can even get a higher return currently set at 7.4% and it is paid quarterly. So, what you get here is tax benefit up to the extent of Rs. 1.5 lakh in a financial year while the maximum that can be invested towards the scheme is Rs. 15 lakh
There are other options such as PPF, SSY among others and you expect to make a better return and can afford some risk you can always go for ELSS or equity linked savings scheme.