Tax saving is very important to maximise your returns and grow your income without being affected by too many tax liabilities. Without efficient tax savings, it will not be easy for you to achieve your financial goals.
As the current financial year nears its end, taxpayers rush to maximize deductions and minimize liabilities. Here are some last-minute tax-saving options for taxpayers. Ensure that all investments and payments are done before 31st March 2025. Delayed payments may not qualify for deductions.
Invest in ELSS Funds
Equity-Linked Savings Scheme (ELSS) is a popular tax-saving instrument under Section 80C of the Income Tax Act. It has a lock-in period of three years. ELSS provides both tax benefits and potential capital appreciation. Investments up to Rs 1.5 lakh qualify for deduction.
Adhil Shetty, CEO of Bankbazaar.com, says, “If you want to save income tax at the last minute, using the 80C deduction is one of the most preferred ways. Most taxpayers only need three tax-saving options. First is health insurance, second is term insurance, and third is for those who want to save tax and maximise their returns – equity-linked savings schemes (ELSS), also known as tax-saving mutual funds. ELSS is one of the best ways to save money, create wealth and save taxes. That is why ELSS is highly recommended for investors considering the benefits that come with it in the long run.”
“Investing through small savings schemes like PPF, SSY and NPS can help you save tax and also earn good returns,” adds Shetty.
Also Read: Maximizing Returns: The best strategies for small and mid-cap fund investments
Utilise Section 80C Benefits
Apart from ELSS, Section 80C offers deductions for:
- Public Provident Fund (PPF)
- National Savings Certificate (NSC)
- Tax-Saving Fixed Deposits (FDs)
- Life Insurance Premiums
- Employee Provident Fund (EPF) Contributions
- Sukanya Samriddhi Scheme (SSS)
Buy Health Insurance
Section 80D allows deductions for health insurance premiums. You can claim:
- Up to Rs 25,000 for self, spouse, and children.
- An additional Rs 25,000 for parents below 60 years.
- Rs 50,000 if parents are senior citizens.
Premiums must be paid before 31st March to avail benefits.
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