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What are some tax-efficient ways to invest?

Curious about tax savings

What are some tax-efficient ways to invest?

There are several taxefficient ways to invest in India. Some of the common options are:

1. Equitylinked savings schemes (ELSS): ELSS is a type of mutual fund that invests primarily in equities and offers a tax benefit under Section 80C of the Income Tax Act. The investment in ELSS is eligible for a tax deduction of up to Rs 1.5 lakh.

2. Public Provident Fund (PPF): PPF is a popular longterm savings scheme that comes with a tax benefit. The investment in PPF is eligible for a tax deduction of up to Rs 1.5 lakh under Section 80C. The interest earned and maturity amount are also taxfree.

3. National Pension System (NPS): NPS is a retirement savings scheme that offers tax benefits under Section 80C and Section 80CCD. The contribution to NPS is eligible for a tax deduction of up to Rs 2 lakh.

4. Taxfree bonds: These are bonds issued by governmentbacked institutions and are exempt from tax. The interest earned on these bonds is taxfree.

5. Unitlinked insurance plans (ULIPs): ULIPs are insurance products that offer a combination of investment and insurance benefits. The investment in ULIPs is eligible for a tax deduction of up to Rs 1.5 lakh under Section 80C. The returns from ULIPs are also taxfree.

It is important to note that the tax benefit varies for each investment option and it is advisable to consult a financial expert before making any investment decision.

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