Best Tax-Saving Investment Options for FY2023-24
Why is the need?
As the financial year 2023-24 unfolds, taxpayers are on the lookout for avenues that not only save taxes but also contribute to wealth creation. Lets explore the best tax-saving investment options and strategies to make informed decisions.
Credit:
Pexels
Evaluate Tax Regimes
Before delving into investments, its crucial to assess the tax landscape. Consider both the old and new tax regimes to determine which aligns better with your financial goals. If the new regime proves advantageous, there might be no need for additional investments as certain deductions are not applicable.
Credit:
Pexels
Invest Wisely in Life Insurance
Never invest in life insurance products solely for tax benefits. Ensure you have adequate life cover to safeguard your familys well-being in unforeseen circumstances.
Credit:
Pexels
ELSS - Ideal for Risk-Takers
For those comfortable with risk and seeking potential high returns, Equity Linked Savings Scheme (ELSS) stands out. With a lock-in period of three years, ELSS historically offers attractive returns. However, consider your risk appetite and future fund requirements before opting for ELSS.
Credit:
Pexels
Fixed-Interest Products for Risk-Averse Investors
Investors averse to risk can explore products with fixed interest rates, such as National Savings Certificate (NSC), Senior Citizen Savings Scheme, and tax-saving fixed deposits. These options provide stability and guaranteed returns over the investment period.
Credit:
Pexels
Public Provident Fund (PPF) for Long-Term Gains
Individuals in higher tax slabs willing to commit funds for an extended period can opt for Public Provident Fund (PPF). The interest earned is fully tax-free, making it an attractive option. Salaried individuals can also consider contributing more to their provident fund for high returns without significant risk.
Credit:
Pexels
Health and Life Insurance for Holistic Savings
Explore deductions under Section 80D for health insurance premiums and Section 80C for life insurance. These not only offer financial security but also contribute to tax savings.
Credit:
Pexels
Diversify with NPS
National Pension Scheme (NPS) not only offers tax benefits but also serves as a long-term retirement planning tool. Balancing equity and debt funds within NPS can align with both tax-saving goals and wealth accumulation.
Credit:
Pexels
Real Estate and Home Loan Benefits
Home loan repayments offer dual benefits—deductions under Section 24 and Section 80C. However, delve into real estate investments cautiously, considering factors like location, market trends, legal aspects, and liquidity.
Credit:
Pexels
View More Web Stories