Tax Saving

If investors want to reap the growth potential of investing in mutual funds along with tax benefits under the old regime, then ELSS may be a suitable choice. ELSS tax-saver funds are ideal for most types of mutual fund investors. However, some investors are unaware that the withdrawal process is different for ELSS than other types of mutual funds. They simply go online and search “how to redeem mutual fund” and follow the steps given; only for their redemption request to be rejected.

As the new financial year begins, tax planning becomes a priority for individuals aiming to optimise their savings and investments. Among the various tax-saving instruments available, ELSS mutual funds stand out as a powerful tool that combines tax benefits with the potential for wealth creation.

TDS stands for Tax Deducted at Source. As the name suggests, this tax is deducted by the income payer (deductor) while making a payment to the deductee. Such taxes are taken from the total amount payable by the payer and deposited with the Income Tax Department. The person paying the income and deducting the TDS is called the deductor, while the person receiving the income and on whose behalf the tax has been deducted is called the deductee.

National Savings Certificate (NSC) is one of the investment options the Government of India offers. NSC investments are received and serviced by the National Small Savings Fund, managed by the government through the interface of post offices.

When talking about various tax benefits and tax incentives to the taxpayers under the Income Tax laws, deduction under Section 80C is one of the most commonly used tax benefit. It provides a deduction of up to Rs. 1.50 lakh to the taxpayers from their taxable income for making certain eligible payments and investment options. Such options include contributions to Public Provident Fund (PPF), Statutory Provident Fund (SPF), payment of Life Insurance Premium, housing loan repayment, 5-year tax-saver fixed deposits etc.

TDS stands for Tax Deducted at Source. As the name suggests, this tax is deducted by the income payer (deductor) while  making a payment to the deductee. Such taxes are taken from the total amount payable by the payer and deposited with the Income Tax Department. The person paying the income and deducting the TDS is called the deductor, while the person receiving the income and on whose behalf the tax has been deducted is called the deductee.

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It is a fine balance every investor needs to achieve. We need to pay the taxes due from us. Yet, we need to plan our taxes especially on our investments. The idea is to make more money available for growth so that we save ample amounts for future needs. But how does one do that?

It is a known fact that the purchasing power of money reduces over time. An Rs. 2000 note today will fetch lower value a year later and further lower a decade later. Similarly, a Rs. 100 item will most likely not be available at the same rate a year later and available at much higher rates 10 years later. This happens due to the increase in prices of raw materials, input services etc. In normal parlance, this is referred to as inflation, which reflects the increase in prices of commodities and services across different periods.

Debt funds provide an excellent alternate investment option for investors for traditional investment products. The debt funds may be categorised based on their investment strategies and/or the issuer companies wherein such funds are invested.