Tax Saving Tips Through Investment In India
In India there are lots of financial schemes available. Many of these schemes offers guaranteed returns, high interest rates, tax savings under various sections of Indian Income Tax Act and much more benefits. In various steps in your life these financial plans provide you money growth as well as financial security. It depends which product suits you best according to your needs. Determine your requirements, how much ris can you afford, risk taking capacity is directly proportional to returns, whether it will be one time savings or regular savings in small amount and knowledge of pros and cons of the investment product you buy.
If you are looking for long term savings you can invest money in public provident fund (PPF), life insurace, long term bank deposits(RDs, FDs) and if you are looking for short term savings then deposit money in post offices, government bonds, mutual funds
(1) Bank Fixed Deposit : A certain some of money is deposited in the bank for a specified time period with a fixed rate of interest In a Fixed Deposit Saving Scheme. Fixed Deposit scheme is safe, liquid, and fetches high returns, and it’s the ideal scheme if you want to invest your hard earned money for a longer period of time and get a regular income.
(2) Recurring Deposits : Investor invests a specific amount in a bank on a monthly basis for a fixed rete of return under a Recurring bank deposit saving scheme. This deposit has a fixed tenure, at the end of which you get your principal sum as well as the interest earned during that period.
Government Tax Savings Bonds
RBI Bonds or RBI Relief Bonds
RBI Bonds are instruments that are issued by the RBI, These are tax saving bonds that have a special provision that allows the investor to save on tax. RBI bonds have a maturity period of five years, and interest received is tax free in the hands of the investor.
(1) Infrastructure Bonds
The Infrastructure bonds provide tax saving benefits under section 88 of the Income Tax Act, 1961, for the investor. These are available through issues of ICICI and IDBI, brought out in the name of ICICI safety bonds and IDBI flexibonds. According to this you can reduce your tax liability by up to Rs 16,000 per annum.
(2) Company Fixed Deposits
Company fixed deposit are Fixed Deposits in companies thar earn a fixed rate of return over a period of time.
(3) Life Insurance
Life insurance saving schemes for government owned life insurance corporation of India and other private life insurance companies like Birla Sun Life Insurance, Bajaj Allianz, HDFC Life Insurace, ICICI Prudential and more.