5 ways to save your tax, you will get huge amount in return too – 5 Best and Easy ways to save your tax, you will get huge

Tax Saving Investment Schemes: Investment has always been a good way for any person to earn money and if this investment helps you in earning money as well as saving money, then it feels like icing on the cake. Investment is always considered the best way to secure the future, in such a situation, we are going to give information about some such schemes which will not only save your tax but will also give excellent returns.

Let us take a look at those 5 tax saving schemes which will make your future secure and will also give excellent returns.

1. National Pension System (NPS): NPS is a voluntary pension scheme that helps you save for retirement and get tax benefits. You can deposit as much money as you want in it, and you get tax exemption on your contribution under Section 80CCD (1).

Example: Suppose you contribute ₹50,000 per year to NPS. So, you can deduct ₹50,000 in your taxable income, thereby saving tax.

There are two types of accounts in NPS:

Tier-1 is a mandatory account that can be opened by your employer, while Tier-2 is a voluntary account that you can open yourself. In Tier-1 account, you can invest up to 60% in equities, which offers high return potential. Whereas in Tier-2 account, you can invest 100% in equity, which is suited for a more aggressive investment strategy.

2. Senior Citizens Savings Scheme (SCSS): SCSS is a savings scheme launched by the Government of India for senior citizens. This scheme offers an attractive interest rate of 8.2% per annum, making it a popular option for retirees.

Example: Suppose you deposit ₹15 lakh in SCSS. So, you will get interest of ₹1,23,000 every year. To invest in SCSS, you must be 60 years of age or above. You can deposit from ₹1,000 to ₹15 lakh. The account is opened for a period of 5 years, which can be extended for 3 additional years.

3. Equity Linked Savings Scheme (ELSS): ELSS is a type of mutual fund that offers both tax savings and high returns. Over the last 5 years, ELSS have given an average return of over 18%. You get tax exemption of up to ₹ 1.5 lakh under Section 80C on investing in ELSS. ELSS have a lock-in period of 3 years, which means you cannot redeem the investment for 3 years.

4. Sukanya Samriddhi Yojana: Sukanya Samriddhi Yojana is a small savings scheme launched by the Government of India for the education and marriage of girls. This scheme offers an attractive interest rate of 7.6% per annum. To invest in Sukanya Samriddhi Yojana, your daughter’s age should be less than 10 years. You can deposit from ₹250 to ₹1.5 lakh. The account is opened for maturity time of 21 years. You get tax exemption under Section 80C on investment in Sukanya Samriddhi Yojana.

5. Unit Linked Insurance Plan (ULIP): ULIPs provide a combination of insurance protection and investments. In ULIP, you pay a premium, one part of which goes towards insurance coverage and the other part is invested in units. These units are linked to the stock market, which means their value can fluctuate depending on the performance of the market.

The amount received on maturity of ULIP and death benefit is completely tax free under section 10(10d). The average annual return of ULIP has been above 8%. Whereas ULIP has a lock-in period of 5 years. If the annual premium is more than ₹2.5 lakh, you will have to pay tax on the returns also. In some ULIP plans, the insurance coverage should be at least 10 times the annual premium, only then you get the full benefits.