If you are a working woman, then your focus is also on tax saving instruments. It is important for you to understand which investment option to invest in so that you can save tax. By planning your taxes in the first quarter of the financial year, you can enjoy a smooth, stress-free life. Tax planning is as important for working women as it is for working men. You can also save tax by investing in PPF, NSC, Sukanya Samriddhi Yojana and insurance policies.
Public Provident Fund i.e PPF
If you are looking for a means to save tax, then Public Provident Fund i.e. PPF is also a better option. On investment in this, you get the benefit of income tax exemption under Section 80C of the Income Tax Act. PPF is ideal for those investors who want to invest for a long period. Investment is made in this scheme for 15 years. A minimum of Rs 500 and a maximum of Rs 1.50 lakh can be invested annually. PPF is currently offering an interest rate of 7.1 percent per annum. PPF offers a safe way to accumulate substantial wealth over time with attractive interest rates and tax benefits.
National Savings Certificate
If you are a working woman, you can invest in National Savings Certificate (NSC), a small savings scheme of the post office. You will also get income tax exemption on investment in this under section 80C of the Income Tax Act. This is a fixed income scheme. You can start investing in it with a minimum of Rs 1000. Currently, 7.7 percent interest is being offered on this scheme. You can claim deduction on any amount paid or deposited for National Savings Certificate, the maximum limit of which is Rs 1.5 lakh.
Tax will also be saved on insurance policy
Women can also avail tax exemption on life insurance policies taken for themselves, their spouse or their child. The deduction under Section 80U of the Income Tax Act cannot exceed 10% of the sum assured for a normal individual and 15% for a person with certain specified ailments. This makes insurance not just a protective measure but also a smart tax saving tool. Premiums paid towards the policy are eligible for a deduction of up to Rs 25,000 from your taxable income. Premiums paid on senior citizen parents’ health policies make you eligible for an additional deduction of Rs 30,000 from your taxable income, helping you save more tax.
Sukanya Samriddhi Scheme
Sukanya Samriddhi Yojana is a great tool for working women to save tax. This scheme is a government-backed savings scheme specially designed for girl children, which encourages parents to save for their daughter’s education and marriage expenses. Sukanya Samriddhi Yojana falls under the EEE (Exempt, Exempt, Exempt) tax category. That is, you will not have to pay tax on investment, income or withdrawal. If you have a daughter, then this scheme is considered quite beneficial and beneficial. Tax exemption is provided under Section 10 (11A) of the Income Tax Act, 1961, and investments made in the SSY scheme are eligible for deduction under Section 80C, with a maximum limit of Rs 1.5 lakh. An interest rate of 8.20 percent is currently being offered on investments in Sukanya Samriddhi Yojana.
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