Income Tax Savings: Options and Schemes to Save Tax by March 31st

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Tax savings at the end of a fiscal year can be financially detrimental unless you use your money wisely by linking it to your goals. Since March 31 is the last date to save tax during this fiscal year, you have less than 2 working days to complete the tax saving exercise.

If you want to make investments without leaving your home or office, there are a few online tax saving options you can consider.

Above all, make sure you invest before the deadline or better to talk to the company or the bank before transferring funds. You must ensure that the investment will be credited to your account before the end of the financial year on March 31.

Only if the statement of account or proof of investment indicates that the date is March 31, you will be able to benefit from a tax advantage for the current financial year. Use online money transfer options such as NEFT, UPI, etc. so that the transfer of funds is immediate.

Even if you have provided the proof of investment to your employer, you can claim the tax benefit when filing the income tax return (ITR) for the 2022-23 tax year.

Here are some investment and protection plans you might consider:

1. Health insurance

If you have insufficient health insurance coverage, consider adding coverage through a health insurance plan. Health coverage for all family members is essential, and you can even purchase critical illness insurance for more comprehensive coverage. The premium paid entitles a tax benefit under section 80C up to Rs 25,000 and Rs 50,000 for the elderly.

2. Online Ulips

If you’re looking to save for a long-term goal, online ulips might be an option. There are single-premium and regular-premium Ulips, so make sure you qualify for tax benefits.

3. Five-year tax savings bank fixed deposit

All banks offer a 5 year tax savings bank fixed deposit option. You can log in and visit your bank’s net-banking section to instantly invest in these deposits. These tax savings bank deposits have a lock-up period of 5 years and the interest income is taxable.

4. Repayment of the mortgage

If you have a home loan, you can make an online payment for the prepayment of the home loan, if the lender gives you the option to do so online. The prepaid home loan amount will give you tax benefit under Section 80C up to Rs 1.5 lakh.

5. Equity Linked Savings Scheme (ELSS)

Investing in ELSS can be tricky as units must be allocated on your behalf by March 31. You can visit the fund house’s website, but get clarification on the allocation before you invest. The investment must be made before the cut-off time and the shares will be allocated when the fund house receives the funds.

6. Public Provident Fund (PPF) and National Pension Scheme (NPS)

If you already have a PPF and NPS account, be sure to invest before the cut-off time in the case of NPS. For those who have an online PPF account with a bank, the transfer of funds to the PPF account can be done online and the receipt can be used for tax purposes.

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