Its year end and you're looking for tax saving options💸
PPF is good and stable but the lock-in is up to 15 yrs🔻
Here are some stable tax-saving options if you need money within 5 years. A thread 🧵👇
PPF is good and stable but the lock-in is up to 15 yrs🔻
Here are some stable tax-saving options if you need money within 5 years. A thread 🧵👇
[1] What is 80C?
It is a benefit under the Income-tax Act
Which allows taxpayers to reduce their taxable income through:
🔶Certain expenditures
🔶Investments in certain instruments
Up to a maximum deduction of ₹1.5 Lakh in any year
It is a benefit under the Income-tax Act
Which allows taxpayers to reduce their taxable income through:
🔶Certain expenditures
🔶Investments in certain instruments
Up to a maximum deduction of ₹1.5 Lakh in any year
![[1] What is 80C?
It is a benefit under the Income-tax Act
Which allows taxpayers to reduce their...](https://pbs.twimg.com/media/FrpgSezWYAAOWUN.jpg)
[2] What are my options?
If you’re looking for risk-free and stable investments that will reduce tax,
And have a lower lock-in than PPF
2 popular investments eligible under Section 80C are:
🔶National Savings Certificates (NSC)
🔶Tax Saving Fixed Deposits
If you’re looking for risk-free and stable investments that will reduce tax,
And have a lower lock-in than PPF
2 popular investments eligible under Section 80C are:
🔶National Savings Certificates (NSC)
🔶Tax Saving Fixed Deposits
[3] NSCs?
NSCs are National Savings Certificates
Features:
🔶Govt backed savings scheme
🔶Individuals can invest
🔶Investors must be Indian citizens
🔶Buy it from all public & private sector banks
🔶Minimum investment of ₹1,000
How much interest? keep reading till the end👇
NSCs are National Savings Certificates
Features:
🔶Govt backed savings scheme
🔶Individuals can invest
🔶Investors must be Indian citizens
🔶Buy it from all public & private sector banks
🔶Minimum investment of ₹1,000
How much interest? keep reading till the end👇
![[3] NSCs?
NSCs are National Savings Certificates
Features:
🔶Govt backed savings scheme
🔶Individual...](https://pbs.twimg.com/media/Frpgnz7X0AEYYqj.jpg)
[4] Tax Savings FDs?
🔶Certain fixed deposits with a bank or post office
🔶Investors can be resident individuals/HUFs
🔶Deposit range of ₹100 to ₹1.5 Lakhs
Deposits in each bank of up to ₹5 Lakhs are secured even if the banks under
How much interest? Read till the end👇
🔶Certain fixed deposits with a bank or post office
🔶Investors can be resident individuals/HUFs
🔶Deposit range of ₹100 to ₹1.5 Lakhs
Deposits in each bank of up to ₹5 Lakhs are secured even if the banks under
How much interest? Read till the end👇
![[4] Tax Savings FDs?
🔶Certain fixed deposits with a bank or post office
🔶Investors can be resident...](https://pbs.twimg.com/media/FrpgvVxX0AAp0D4.jpg)
[5] How do these investments save tax?
The investor will get a deduction of up to ₹1.5L for money invested
Say,
🔶Your taxable income is ₹7.5L
🔶You invest ₹1.5L in NSC/Tax saver FD,
🔶The taxable income will now be ₹6L
Thus, saving you ₹30,000 (20% of ₹1.5L) in taxes
The investor will get a deduction of up to ₹1.5L for money invested
Say,
🔶Your taxable income is ₹7.5L
🔶You invest ₹1.5L in NSC/Tax saver FD,
🔶The taxable income will now be ₹6L
Thus, saving you ₹30,000 (20% of ₹1.5L) in taxes
[6] What about the lock-in period?
Lock-in period means the period for which the investor cannot sell the funds and need to keep them invested
What is the lock-in for these instruments?
🔶NSC: 5 years
🔶Tax-Saving FD: 5 years
Lock-in period means the period for which the investor cannot sell the funds and need to keep them invested
What is the lock-in for these instruments?
🔶NSC: 5 years
🔶Tax-Saving FD: 5 years
[7] Why are Tax Saving FDs interesting right now
🔶The RBI has increased the Repo Rate
🔶That is, the rate at which RBI loans money to commercial banks
🔶From 4% to 6.5% in the last year
This has in turn increased interest rates on FDs across India
🔶The RBI has increased the Repo Rate
🔶That is, the rate at which RBI loans money to commercial banks
🔶From 4% to 6.5% in the last year
This has in turn increased interest rates on FDs across India
[8] What are the Interest rates on these right now?
🔶National Savings Certificate: 7% p.a.
🔶Tax Saving FD’s: 6 to 7.6% p.a.*
*A senior citizen may get higher rates
Image Source: Bank Bazaar
🔶National Savings Certificate: 7% p.a.
🔶Tax Saving FD’s: 6 to 7.6% p.a.*
*A senior citizen may get higher rates
Image Source: Bank Bazaar
![[8] What are the Interest rates on these right now?
🔶National Savings Certificate: 7% p.a.
🔶Tax Sav...](https://pbs.twimg.com/media/FrphlKMXwAASby8.jpg)
[9] What about the tax on interest?
🔶Interest on Tax Savings FDs and NSCs are taxable
But for NSCs, in the first 4 years, whatever is accrued can be considered as re-invested u/s 80C.
Thus, you can use the interest as 80C deductions
🔶Interest on Tax Savings FDs and NSCs are taxable
But for NSCs, in the first 4 years, whatever is accrued can be considered as re-invested u/s 80C.
Thus, you can use the interest as 80C deductions
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TL; DR:
[1] What is 80C?
[2] What are my options?
[3] NSCs?
[4] Tax Savings FDs?
[5] How does this me save tax?
[6] Does this have a lock-in period?
[7] Why are these interesting right now?
[8] Interest rates right now?
[9] What about tax on interest?
[1] What is 80C?
[2] What are my options?
[3] NSCs?
[4] Tax Savings FDs?
[5] How does this me save tax?
[6] Does this have a lock-in period?
[7] Why are these interesting right now?
[8] Interest rates right now?
[9] What about tax on interest?
![TL; DR:
[1] What is 80C?
[2] What are my options?
[3] NSCs?
[4] Tax Savings FDs?
[5] How does this...](https://pbs.twimg.com/media/FrpiGCbXoAAaByw.png)
Disclaimer: Please refer SEBI Registered advisor before taking any insurance decision. This thread has been shared for the purpose of spreading awareness. Info has been curtailed for the sake of brevity
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