It’s the last week of March and we are all locked down in our homes. For those who still haven’t availed of the various benefits to save income tax, there are still a few days to do it. Let’s look at the options of what can be done online without having to visit a bank branch.
Under Section 80C
Upper Limit: Rs. 1.5 Lakh.
Tax Saver FD: Bank Fixed Deposit with interest rate @ 6% p.a. approx. (Varies depending on the bank). Lock-in of 5 years. Invest via NetBanking. The interest accrued is taxable.
ELSS: Tax Saver Mutual Fund. Lock-in : 3 years. Invest via PayTM/ET Money/Zerodha. The capital gains are subject to long term capital gains tax of 10%.
ULIP: Unit Linked Insurance Policy. Minimum lock-in: 5 years. It can be bought through online portals such as PolicyBazaar. The entire Amount is tax-free on redemption.
PPF: Public Provident Fund. Current interest rate @ 7.9%. Lock-in: 15 years from the date of account opening. The entire amount is tax-free on redemption.
The Tax Saver FD & PPF provide a fixed rate of return to investors looking for stability and consistent returns. ELSS & ULIPs are linked to stock markets and their return varies based on market performance.
Under Section 80CCD
Upper Limit: Rs. 50,000.
NPS: National Pension System. Lock-in: Till Subscriber turns 60 years. Post 60 years, 60% of the amount will be tax-free and the balance 40% has to be invested in an annuity which gives annual income for the rest of the subscribers’ life.
The pros of NPS are that it allows users to choose between a mix of equities, corporate bonds, and government bonds. The cost factor is much lower than regular mutual funds. The only disadvantage here being it is locked in till the age of 60.
Under Section 80D
Upper Limit: Rs. 25,000
All Health Insurance or Mediclaim purchases are deductible up to Rs. 25,000.