Money tips: Save your income tax online in times of coronavirus crisis - PPF, Tax Saving FD to National Pension System
Money tips: If you are yet to file tax returns for FY19, you need not to worry as the last date for doing so has been extended by three months. It does not make any difference, if you have already done it.
Whichever group you belong to, you have only a week to complete your investments for the current financial year.
With social distancing becoming the call of the hour, here is a list of five tax saving options by ICICI Bank that you can avail from the comfort of your home, using the Bank’s mobile and internet banking platforms and save tax.
1. Public Provident Fund (PPF)
The Public Provident Fund (PPF) scheme is a popular long term investment option backed
by Government of India. It offers the safety with attractive interest rate and returns that are
fully exempted from tax. Investors can get the facilities such as loan, withdrawal and
extension of account.
You can open a PPF account instantly online, using internet banking.
The key benefits of investing in a PPF account include:
* Attractive interest rate of 7.9% that is fully exempted from Income Tax under Section 10(11) of the Income tax Act, 1961
* Good long term investments of 15 years
* Deposit Amount as low as Rs.500 and maximum Rs.1,50,000 in one financial year. Deposits should be in multiples of Rs.5
* Loan can be availed between 3rd to 6th financial year
* Partial withdrawal facility can be availed after completion of 5 financial years
* Account can be extended in a block period of 5 years after maturity (Photo: Reuters)
2. Tax Saving FD
The ‘Tax Saving FD’ offers you a tax deduction on your savings under Section 80C of Income
Tax Act, 1961.
The FD is not just an efficient tax saving instrument but also a rewarding investment, where you
can make a minimum investment of ₹10,000 or a maximum upto ₹150,000 for a duration of 5
years.
You can either go the traditional way and choose a plan that pays interest monthly or quarterly,
or opt for a plan that pays interest compounded quarterly and reinvested with the principal
amount.
*As per the term deposit scheme, 2006, issued by the Central Government of India, the above
Fixed Deposit scheme will not have facilities like - Premature withdrawal, Loan against Fixed
Deposit and Auto-renewal (Photo: Pixabay)
3. Tax Saving Health Insurance Solutions
Customers can buy and invest in tax-efficient health insurance policy to save tax under Section 80D. You can
do so from the comfort of your home while following the government’s advisory of social
distancing, without having to visit a branch.
The policy provides a comprehensive coverage for family and other benefits like:
· Deductions up to ₹50,000 (total deduction upto ₹75,000 in case of senior citizen
parents) from the taxable income for the medical insurance premiums paid for self,
spouse, children (₹25,000) and parents (If senior citizens, ₹50,000/-,
else ₹25,000/-) under Section 80D of the Income Tax Act, 1961.
· No medical test for policy holders below 46 years of age
· No maximum entry age to avail this policy
· Get cashless treatment across India in 4500+ network hospitals
· Coverage up to Rs. 10 lakh with multiple sum insured options (Photo: Pixabay)
4. Equity Linked Saving Scheme (ELSS)
Investors can invest in an open-ended, diversified equity linked saving scheme (ELSS) to avail tax benefit under Section 80C.
This scheme offers benefits like:
* Option to invest through Systematic Investment Plan (SIP) and the income on the
redemption of ELSS units is treated as long-term capital gain, which is not subject to
taxation upto ₹1 lakh.
* ELSS is suitable for investors who want to earn competitive returns and invest for a
shorter tenure of 3 years as compared to other investment options that qualify for Section
80C
The Bank enables its customers to enroll for this facility digitally, using the iMobile app or
internet banking. (Photo: Pixabay)
5. National Pension System (NPS)
This facility enables customers to register in the National Pension System (NPS) in a completely
online and paperless manner using mobile banking apps. Customers do not need to visit a branch and submit physical documents to enroll for NPS.
The option of investment can be availed by all customers in the age bracket of 18 years to 65 years.
As per the amendment, if any customer contributes voluntarily towards the NPS scheme, then
he would get an additional benefit of ₹50,000 under Section 80CCD (1B) which would be over
and above the ceiling limit of ₹1,50,000 as prescribed under Section 80 CCE. (Photo: Pixabay)