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5 Best Income Tax Saving Schemes & Plans in 2023

by Maria James
Tax Saving Schemes

Tax saving schemes are an integral part of many people’s financial planning, as it can help them manage their money better and reduce the amount of taxes they owe. There are many tax-saving schemes and plans available to individuals and businesses that can help them save money on taxes. With the right strategies, individuals and businesses can make their money work harder and maximise their tax savings. 

With the tax year ending soon, many individuals and businesses are looking for ways to reduce their liabilities. Depending on the type of income earned, the type of expenditure incurred, and the applicable laws and regulations, there are various tax saving schemes available for individuals and businesses. These schemes can help individuals and businesses reduce their tax burden and save money. By assessing these tax saving schemes carefully and taking advantage of available benefits, they can significantly reduce their tax liabilities. 

5 Tax Saving Schemes You Must Know About

Below listed are the five schemes: 

Section 80G

Section 80G of the Income Tax Act of 1961 offers tax relief for those who make donations to registered charities, non-profit organisations, and trusts in India. It allows a taxpayer to claim deductions for the amount donated when calculating their taxable income. This means that it’s possible for taxpayers to reduce their tax liability and increase their after-tax income. Donations extended to Save the Children are eligible for 80G tax exemptions, allowing eligible donors to reduce their total taxable income by the amount of their donation. The primary benefit of 80G tax exemptions is that the amount of the donation, up to a maximum of 50% of the total gross income in some cases, can be claimed as a deduction when an individual files their tax return. 

Unit-Linked Insurance Plan (ULIP)

In India, one of the most significant investment programmes is the Unit-Linked Insurance Plan. In the event of one’s passing, it makes sure that their family would be financially secure. The taxpayer can profit from the Income Tax Act provisions by buying a life insurance policy. The premium for a life insurance policy can be written off up to Rs. 1.5 lakh under the Income Tax Act of 1961. Furthermore, income from the policy’s maturity is tax-free according to section 10(10D).

Public Provident Fund (PPF)

Taxpayers have always regarded the Public Provident Fund as one of their favourite tax-saving strategies. The fact that PPF qualifies for exempt tax status is one of the main causes of this popularity. Your PPF accounts can be opened at a bank or post office. 

Section 80C allows taxpayers to deduct the amount of investments they made during the fiscal year. The highest deductible amount is Rs. 1.5 lakhs. The interest and maturity rate of PPF is tax-free because it falls within the exempt category.

Senior Citizen Savings Scheme

An income tax saving plan called a Senior Citizen Savings Scheme is accessible to senior citizens who live in India. The programme offers one of the highest rates among the numerous savings plans and is accessible for investment through banks and post offices.

National Savings Certificate

A National Savings Certificate is a government-sponsored fixed-income investment programme that targets small and middle-income investors with the promise of attractive returns. As safe as the Provident Fund, it is regarded as a low-risk investment. Investors can make investments based on their investing preferences and income profile.

In conclusion, these five best income tax saving schemes are an ideal way to save money and potentially increase your overall financial health in 2023. They are easy to implement,  relatively low-risk investments that provide great tax advantages. Investing in these strategies can help you maximise your returns while reducing your tax burden. Ultimately, the decision to invest in these plans will depend on your individual financial situation and goals. 

Donating to Save the Children India provides eligible donors with a way to reduce their tax liability while at the same time helping to provide much-needed aid to those in need. Every rupee donated through 80G tax exemption can be used to ensure that the most vulnerable children have access to healthcare, education, and other basic necessities.

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