Saving taxes is a critical objective of financial planning. When you save on tax liability, you contribute more effectively towards your savings and accumulation of wealth in the long-run. Hence, with each financial year, you must look out for the best tax-saving investment options that can help you progress financially.
Here are five best tax-saving investment options for FY 2020-21:
Public Provident Fund (PPF):
A secure and tax-saving investment choice is a PPF. You can open a PPF account at the nearest post office or an authorised public and private bank. PPF offers a guaranteed return on your principal and utmost security of funds. PPF Investments up to ₹1.5 lakh is exempt from tax under Section 80C.
Fixed Deposits (FDs):
Given the present uncertainty in the market and the expectation that the fluctuations will increase; it is best to secure your funds in a fixed deposit and still earn an attractive rate of interest. Moreover, by choosing tax-saving FDs, you can get a tax deduction under Section 80C. You can claim an exclusion of up to ₹1.5 lakhs for tax-saver FD with a lock-in period of five years.
Unit Linked Insurance Plan (ULIP):
ULIPs combine insurance and investment, with monthly or annual premiums. A small portion of the funds is used for insurance, and the rest is invested like mutual funds. ULIP premiums (less than 10% of the sum assured) are eligible for tax exemption up to ₹1.5 lakhs under Section 80C.
Senior Citizen Savings Scheme (SCSS):
This government-backed scheme is available for people above the age of 60. There is a five-year lock-in period, which can be extended further by additional three years. You can apply for SCSS through a reliable public or private sector bank or an Indian post office. The scheme offers guaranteed returns on your funds, which are taxable under the law. However, the principal amount is subject to deduction up to ₹1.5 lakhs under Section 80C of the old tax regime. The Union Budget 2020 does not offer this exemption.
National Savings Certificate (NSC):
NSC is a fixed income, tax-saving investment, which is available at all post offices in India. This government-backed scheme aims to encourage small and mid-income investors to save money. NSC deposits up to ₹1.5 lakhs are exempt from tax under Section 80C. There is no upper limit for investment, and no TDS is applicable on the interest earnings.
Choose YES BANK
YES BANK offers various tax-saving investment options for FY 2020-21. Trust YES BANK to be your partner in your investment journey with options like FDs, ULIPs, and FDs for senior citizens.
YES BANK FDs: YES BANK allows you to safeguard your savings in FDs, accrue attractive interests and enjoy tax exemptions. YES BANK’s five years tax-free FDs allow you to save on your tax liability while earning the same interest as regular deposits. Moreover, with no impact of the constantly-changing market dynamics on your returns, you will be able to safely accumulate wealth over time. The bank also provides higher returns for senior citizens.
YES BANK ULIPs: YES BANK specially-designed ULIPs, allow you to achieve your financial goal faster and also get tax deductions. Moreover, ULIPs provide financial insurance to your loved ones. YES BANK offers flexible premium payment options and permits you to choose your investment strategy. Further, YES BANK ULIPs include a death benefit, maturity/survival benefit, seamless claim settlement process, etc.
With YES BANK, you save taxes while permitting your funds to grow significantly over time with competitive interest earnings.