Income Tax return filing alert! Top trick to minimise tax liability
Tax and investment experts are of the opinion that it's better to give tax and get better returns than to get conservative returns to avoid income tax. ELSS plans fit into this category.
In the month of income tax filing, people are looking for the avenue to save their money by minimising tax. For them, PPF, PF and government-backed funds under the ambit of section 80C is a major relief. However, tax and investment experts are of the opinion that it's better to give tax and get a better return than to save tax and get conservative returns. Experts advise such investors to go for the Equity Linked Saving Schemes (ELSS), where they can avail income tax exemption up to Rs 1.5 lakh return and get a return to the tune of near 15 per cent after giving tax to the government.
Elaborating upon the avenues to maximise your income and minimise tax Kartik Jhaveri, Director — Wealth Management at Transcent Consultants told Zee Business Online, "ELSS plans are emerging as a better option for the people looking forward to saving tax. By choosing ELSS plans, you get income tax exemption up to Rs 1.5 lakh returns while your return can be to the tune of near 15 pre cent after paying tax on the rest of the returns. But, the investment should be around 10-15 years means an investment for long-term." He said that in ELSS plans lock-in is for three years but an investor should avoid fishing out his or her money and continue investing for long term adding, "ELSS plans have been giving around 15-20 per cent returns in last twenty years. If you deduct the 10 per cent tax that one needs to pay after Rs 1.5 lakh deduction, your income comes to the tune of near 15 per cent after paying tax on your return.
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Jitendra Solanki, a SEBI registered investment expert said, "In PPF or EPF, one can get 8 per cent of return while in government-backed schemes falling under the ambit of SEction 80C, you get 8.5 to 9.0 per cent return per annum."
"In case of liquidity, an investor can reinvest his or her investment portfolio in PPF after five years in equity-linked plans and can avail around 10.5 per cent to 11 per cent after giving taxes on their returns while in PPF an investor can expect around 8 per cent average return for the same period," said Solanki.
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