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Rajkotupdates.news: Tax Saving PF, FD, and Insurance Tax Relief
Rajkotupdates.news : tax saving pf fd and insurance tax relief: Tax saving is an essential aspect of financial planning, and various instruments are available in the market to help individuals save taxes. This article will discuss tax-saving options such as PF, FD, and insurance tax relief and how they can help you save taxes.
Tax-saving options: Rajkotupdates.news : tax saving pf fd and insurance tax relief
Provident Fund (PF):
A Provident Fund (PF) is a retirement benefits scheme mandatory for salaried individuals in India. It is a long-term investment that provides tax benefits to employees. The contribution towards the PF account is deductible from the taxable income under Section 80C of the Income Tax Act.
The maximum deduction that can be claimed under Section 80C is Rs. 1.5 lakh per annum. The interest earned on the PF account is also tax-free. The PF account can be withdrawn after retirement, but it attracts tax if the withdrawal is made before five years.
Fixed Deposit (FD):
Fixed Deposit (FD) is a low-risk investment option that provides fixed returns over a specific period. It is a popular investment option among conservative investors. The interest earned on FD is taxable, and the bank deducts TDS (Tax Deducted at Source) if the interest earned exceeds Rs. 10,000 in a financial year.
However, one can claim a deduction under Section 80C for investments made in tax-saving FDs. The maximum deduction that can be claimed is Rs. 1.5 lakh per annum. The lock-in period for tax-saving FDs is five years.
Insurance Tax Relief:
Life insurance policies are a popular investment option, as they provide financial security to the family in case of the policyholder’s untimely death. Apart from providing financial security, life insurance policies also provide tax benefits.
The premium paid towards the life insurance policy is eligible for a deduction under Section 80C of the Income Tax Act. The maximum deduction that can be claimed is Rs. 1.5 lakh per annum. The maturity amount received from the life insurance policy is also tax-free.
Tax planning is an essential part of financial planning, and various instruments are available in the market to help individuals save taxes. Provident Funds, Fixed Deposits, and Life insurance policies are popular investment options that provide tax benefits.
One should carefully analyze their financial goals and investment horizon before investing in these options. It is recommended to consult a financial advisor before making any investment decisions. By investing in these tax-saving instruments, individuals can save taxes and secure their financial future.