Year End Investment Checklist for Old Regime – FY 2023-24: Invest in these before March 31 to Max-Out Tax Savings

Tax Savings can be maximized by effective tax planning. Make Sure you’ve invested according to your income and deductions. Know More Here.
Year End Investment Checklist - Year End Investment Checklist for Old Regime - taxscan

Tax-Saving Investments to Consider Before the March 31 Deadline

As we approach the March 31 deadline for tax-saving investments for Financial Year 2023-24, the urgency to maximize tax savings becomes paramount. If you haven’t utilized the Section 80C deduction limit yet, time is running out.

Let us explore some viable options for tax-saving investments:

Public Provident Fund (PPF)

The Public Provident Fund (PPF) stands out as a tax-free investment avenue available to all resident individuals. Opening a PPF account at nationalized banks, authorized banks, or post offices is straightforward. PPF deposits fall under the EEE (Exempt, Exempt, Exempt) tax category, ensuring no tax liability on investment, earnings, or withdrawal. Contributions to PPF qualify for deduction under Section 80C of the Income Tax Act.

National Pension System (NPS)

NPS, a voluntary retirement savings scheme, offers tax advantages through its Tier-I account contributions eligible for Section 80CCD deduction. Central Government employees can also benefit from deductions on Tier-II account contributions under Section 80C. Additional deductions up to Rs 50,000 are possible under Section 80CCD(1B).

Equity Linked Saving Scheme (ELSS)

ELSS, a type of mutual fund predominantly investing in equity markets, offers Section 80C deduction benefits. However, gains exceeding ₹1 lakh in a financial year are subject to long-term capital gains tax. ELSS presents an opportunity for potential growth along with tax benefits.

National Savings Certificate (NSC)

Investments in NSC qualify for Section 80C deductions. The interest earned on NSC deposits, considered reinvested, is also eligible for deduction under Section 80C. However, interest income from NSC is taxable under the head ‘Income from other sources’.

Senior Citizen Savings Scheme (SCSS)

Senior citizens can benefit from SCSS, receiving tax deductions under Section 80C for their deposits. Additionally, interest income is taxable but eligible for deduction up to Rs 50,000 under Section 80TTB of the Income Tax Act.

Read More: Senior Citizens’ Tax Saving Guide for Tax Planning 2023-24: SCSS vs Tax-Saver FDs

Tax Saving Fixed Deposits

Term deposits with a maturity period of 5 years or more are eligible for Section 80C deductions. Senior citizens can claim additional interest deduction under Section 80TTB, making this a viable option for tax planning.

Sukanya Samriddhi Account Scheme

Designed for the girl child’s future, the Sukanya Samriddhi Account Scheme offers tax-free status throughout the investment journey. Contributions to this scheme are eligible for Section 80C deductions, and withdrawals are exempt under Section 10(11A).

Unit-Linked Insurance Plan (ULIP)

ULIPs combine insurance and investment benefits, offering Section 80C deductions on premiums paid. Conditions apply for tax exemption on maturity proceeds under Section 10(10D).

In conclusion, these tax-saving investment options not only reduce your tax burden but also provide avenues for potential growth. Evaluate your financial goals and consult with a tax advisor to make informed investment decisions before the impending deadline.

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