Tax Saving Plans - A Few Tax Saving Tips to Save the Day

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Tax saving Plans
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A FEW TAX SAVING TIPS TO SAVE THE DAY
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• There are plenty of investment options available
  which would help you in tax saving. Considering
  the current market scenario and the rate of
  returns, we have listed out a few options which
  can be a boon if your objective is tax saving and
  at the same time get good returns on your
  investments.
• Lets have a look at some of the tax saving
  plans.

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ELSS (EQUITY LINKED SAVINGS SCHEME)

• ELSS is an equity fund where more than 65 of its
  funds is invested into equity.
• You can invest as much as you wish in this scheme
  however maximum deduction is allowed up to Rs.
  1,50,000 under the limits of Section 80C, 80CCC
  and 80CCD.
• The lock in period is of 3 years making it more
  liquid as compared to the PPF and NSC
• You can opt for Dividend payout option or
  dividend reinvestment option.
• If your aim is liquidity than you should opt for
  dividend payout option which acts as a
  profit-booking mechanism. The dividend you
  receive would be tax free in your hands.
• Capital gains arising on sale of ELSS funds at
  the end of the 3 years lock in period is
  exempt from tax.
• ELSS is at top of our charts since it gives a
  return of almost 27.30 (Past three years) and is
  not matched by any other investment schemes.

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ULIP (UNIT LINKED INSURANCE PLAN)

• A Unit Linked Insurance Plan (ULIP) is a product
  offered by insurance companies that unlike a pure
  insurance policy gives investors the benefits of
  both insurance and investment under a single
  integrated plan.
• Maximum deduction allowed up to Rs. 1,50,000
  (Subject to overall limit of Rs. 1,50,000
  under Section 80C, 80CCC and 80CCD)
• The investor can use ULIP as rebalancing tool by
  switching between equity and debt.
• Investing in ULIP can be beneficial if you are
  looking for a long term and stable investment
  plan because a short term plan may not be able to
  recover the high fund management charges in the 
  initial years.
• The average return for ULIPs vary from 7.8 to
  9.7 (Past five years)

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PPF (PUBLIC PROVIDENT FUND)

• PPF Is an attractive option if you want maximum
  safety, tax savings and lowest maintenance
  cost however the downside of it is the low
  returns as compared to the rest of the options
  low liquidity.
• Rate of return on PPF is 8.7 as of now, but
  since PPF is linked to the government bond
  yield, the rate could go down in the coming
  years.
• Only an individual can open and invest in a PPF
  account. HUF can not open a PPF account.
• Minimum Rs.500 has to be invested every year and
  maximum upto Rs.1,50,000 can be invested in the
  PPF account every year. The amount invested can
  be claimed as deduction under section 80C up to
  the maximum limit of Rs.1,50,000.
• The interest earned on the deposit amount in PPF
  is completely exempt.
• The maturity period of the amount invested is 15
  years. However you can make a premature withdrawal
  from the 7th year onwards subject to certain
  ceiling limits.

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TAX SAVING SCHEMES FOR SENIOR CITIZENS

• If your age is more than 60 years, Senior
  Citizens Savings Scheme is an ideal tax saving
  option for you.
• Your money is safe with the banks and at the same
  time you can enjoy the liquidity.
• The return is marginally higher than the Five
  year government bond yield.
• The interest earned on this scheme will be
  taxable.
• Maximum deduction allowed up to Rs. 1,50,000
  (Subject to overall limit of Rs. 1,50,000
  under Section 80C, 80CCC and 80CCD).
• Unlike PPF, interest rate will remain unchanged
  until the maturity of your investment.

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 INSURANCE PLANS

• Insurance plans are basically aimed at providing
  you insurance cover and tax saving plans at
  the same time but from the point of view of
  return, they are the worst way for tax saving.
• The positives of the insurance plan is that the
  income is tax free and you can get a loan
  against such policy which would help you in a
  liquidity crunch.
• Maximum deduction allowed up to Rs. 1,50,000
  (Subject to overall limit of Rs. 1,50,000
  under Section 80C, 80CCC and 80CCD)
• Source https//quicko.com/blog/tax-saving-tips/

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