Tax Saving investment: There are many investment options available in India that offer tax benefits. Most investors look for options that can help them save taxes while investing. Some of these options are available for both men and women, while some are for retirement.
Best Tax-Saving Investment Options: In the last few years, women’s participation in investing has increased significantly. This indicates that in today’s era women are taking a lot of interest in managing their finances. There are many investment options available in India that offer tax benefits. Most investors look for such options while investing so that they can save their tax. Some of these options are available for both men and women, while some are for retirement.
Today we will tell you about those investment options which women (Investment Options for Women) can use to save tax.
Sukanya Samriddhi Yojana
The government’s Sukanya Samriddhi Yojana is a good option for working women to save tax. It is also known as SSY in short. SSY is an investment option that encourages parents to invest for their daughter’s education and marriage. If your daughter is less than 10 years old, then you can take advantage of this scheme.
This government scheme falls under the EEE (exempt-exempt-exempt) tax category. This means that the investor will not have to pay any tax on the investment, income from it or withdrawal. Section 10 (11A) of the Income Tax Act, 1961 provides this exemption. The amount invested in this scheme is eligible for deduction under Section 80C, the limit of which is Rs 1.5 lakh.
National Savings Certificate
Section 80C of the Income Tax Act allows claiming deduction on investments made in National Savings Certificate. The maximum limit for deduction claim is Rs 1.5 lakh. This scheme available in post offices currently offers a fixed return of 7.7% with a minimum deposit amount of Rs 1,000. The interest rate on this scheme is reviewed from time to time.
Public Provident Fund (PPF)
In this scheme, you can deposit a minimum of Rs 500 and a maximum of Rs 1.5 lakh every financial year. Public Provident Fund is a good investment option for women who want to save tax as well as earn attractive returns. The Finance Ministry has fixed the interest rate on Public Provident Fund (PPF) at 7.10% per annum till the third quarter of the financial year 2025.
There is no tax on the interest and withdrawal of the amount deposited in the PPF account, i.e. it is tax-free and tax benefits can be claimed on this investment under section 80C. The maturity period of a PPF account is 15 years. However, this period can be extended in blocks of 5 years.
Insurance
Insurance not only helps you in difficult times but is also a good tax-saving option. Women investors can also claim tax benefits on life insurance policies. Deduction can be claimed for policies taken for yourself, your spouse and children. However, deduction cannot be claimed for more than 10% of the total sum insured.
Under Section 80U of Income Tax, this limit is 15% of the total sum insured for a person with certain diseases. Deduction can be claimed on health insurance premium for your family. In this, you can claim deduction on premiums paid for yourself, your spouse, children, and parents.
Equity-Linked Savings Scheme
Section 80C of the Income Tax Act offers tax benefits for equity-linked savings schemes. Since the returns on this investment are linked to the market, this option comes with high risk. ELSS (Equity-Linked Savings Scheme) has a lock-in period of three years. Considering this, this option is good for women who have a high risk-taking capacity.
Employee Provident Fund
Tax benefits can be claimed under Section 80C of Income Tax on investment up to Rs 1.50 lakh made in EPF (Employee Provident Fund) in a financial year.
National Pension System (NPS)
In addition to the deduction of Rs 1.5 lakh available under section 80C, NPS subscribers get the benefit of additional deduction on investment of up to Rs 50,000 in NPS under sub-section 80CCD (1B). This means that they can save tax on an investment of Rs 2 lakh.
Tax-Saving Fixed Deposit
Banks and post offices offer tax deduction under Section 80C on fixed deposits with a minimum lock-in period of five years. The tax deduction limit is Rs 1.5 lakh per annum, but the income from the investment is taxable.
Home Loan
Under Section 80C of the Income Tax Act, one can avail a tax deduction of up to Rs 1.5 lakh per financial year on repayment of the principal amount of the home loan. You can also claim a tax benefit of up to Rs 2 lakh on the interest paid on your home loan under Section 24(b) of the Income Tax Act.
Senior Citizen Savings Scheme
Investments made in Senior Citizen Savings Scheme (SCSS) can also be claimed for tax deduction under section 80C.
