What are the benefits that the Government offers in Taxation?

1.      The Employee Provident Fund (EPF) & Voluntary Provident Fund (VPF)

The Employee Provident Fund (EPF) is a money-making fund invested by employees. It was purchased to provide employees with the security of their finances and stability. In addition, to EPF, employers and employees both receive 12% of the employee's salary as a dearness allowance and the basic compensation. The deductions are derived from the employee's earnings on an ongoing basis. This helps in saving an enormous amount of money over the long term.

On the other hand, the Voluntary Provident Fund is available to employees who contribute to this PF account. There is no set percentage of the salary contribution.

Public Provident Fund (PPF)

The Public Provident Fund is a continuous contribution option. It gives a good return on investment and the amount of interest. The interest earned and the profits are tax-free in the sense of Income Tax.

The edge of VPF or PF employees who have added 15 years are eligible for the tax in the vicinity. The tax will fall by Section 80C of the Savings Tax.

3.     Equity Linked Savings Scheme (ELSS)

The Equity Linked Savings Scheme provides three years of lock-in time. If a person invests in ELSS funds, they receive two benefits: the accumulation of wealth and tax deduction over time.

In addition, employees who invest in equity mutual funds are tax-free.

Each year you can get a savings of up to Rs. 46,800 tax-free through the investment of ELSS mutual funds. Also, you can claim tax credits in the amount of Rs 1, 50,000 per year.

4.      Premiums for Life Insurance

If you have to pay a sum of money for life insurance with the Life Insurance Company is called Life Insurance Premium. In the LIP, it is possible for you (employee) can make any life insurance premium and also be eligible for tax savings. It could be to themselves or for children or spouses under section 80C. The premiums for many plans can be paid in months, quarters, or years.

If you have multiple policies, you may get a lump sum of taking all the premiums. However, many believe that the costs of LIC policies can be claimed as an income tax deduction. But it's not!!

Let's say that you're paying LIC policies premiums to private companies. If that is the case, you're entitled to tax benefits, and it is subject to section 80C tax savings.

5.      Principal Repayment of Home Loans

If you obtained a home loan through the bank, you'd have to pay it back in two portions. First, you'll pay the interest component of the loan amount. In addition, you have to pay the total amount of the loan, which is known as the principal amount. When you pay back the principal amount, you will be able to claim the tax benefit under Section 80C.

6.      Infrastructure Bond

Recently, the government has developed a brand new clause specifically for the deduction of investment tax. It's available in the form of Tax-Free Infrastructure Bonds. For example, if you put up 1 lakh in this scenario, you'll get an exemption of approximately Rs. 20,000.

7.      National Savings Certificate(NSC)

In reality, you purchased the NSC for a 6-year time to help save taxes. You could get the tax deductions in section 80C of tax savings in this scenario.

8.      Pension fund that is below section 80CCC

There is a particular sub-section in Section 80C. It's called Section 80CCC and is specifically designed for pension funds investments. It allows you to enjoy the advantages of a tax deduction on the investment. It can be found in any private or public financial firm's pension fund.

9.      Tax Saving Bank Fixed Deposit

Another option is to avoid tax by saving it using the Special Fixed Deposit. The deposit is provided through the institution, and the tax-saving fixed deposit will have five years minimum long-term.

10.  Senior Citizen Saving Scheme-2004

This Senior Citizen Saving Scheme is designed for senior citizens only. You can receive a good amount of compensation for the amount they contribute. Furthermore, the investment made is eligible to tax deduction.

11.  Post Office Time Deposit (POTD)scheme

The Post Office Time Deposit scheme gives you a range of investment options. However, only one scheme currently offers the 7.5 percent iterative rate. The rate can be used to benefit from Tax. However, there is no other plan in the scheme of POTD which is suitable for tax deductions.

12.  United Linked Insurance Plan( ULIP) investments

In essence, investing within ULIP is a mix of insurance and investment. It provides you with a deduction of tax that is covered by Section 80C. But, the person must be identified by heavy fees and periods in long locks. They differ from the one ULIP scheme to the following ULIP scheme.

13.  Stamp duty and registration charges for the home loan

Let's suppose that you bought the property with an unsecured loan or by yourself. In this scenario, you are entitled to advantages on tax. These tax benefits cover the cost of registration fees and stamp duty imposed on buying a house. The benefits are as per Section 80C Tax Saving.

14.  Costs for Children's Education

You may be eligible to receive tax benefits from tuition fees you pay to the educational institution or school. However, in section 80C, you must maintain receipts to claim tax benefits.

What is the reason taxpayers must be tax-paying?

Many people think that tax payments are an expense, but it's not that way, and it is an essential contribution by an entity that is legal or individual. Taxes can be used in many ways:

·         Nation Building

·         Initiation of various Government schemes for the general population

·         Improvements in healthcare and education

·         As accountable citizens, we need to pay taxes on time to ensure our country's sustainable and equitable growth.

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