How do you plan your tax-saving investments for the year?
As you prepare to file your IT returns, keep in mind that the timely submission of documents supporting your tax-saving investments under Section 80C of the Income Tax Act can help prevent higher TDS deductions.
Determining the apt tax-saving instrument for your unique financial scenario can be a complex task without the guidance of an expert. However, the annual ranking of tax-saving avenues by ET Wealth simplifies this for us. The National Pension Scheme (NPS) has emerged as the champion tax-saver for two consecutive years.
The report meticulously analyses and compiles a shortlist of ten tax-saving investments.
They are evaluated on eight crucial parameters - ease of investment, flexibility, stability, liquidity, costs, transparency, safety, returns, and the taxability of the income under the Income Tax Act. Each of these metrics is assigned equal weightage by analysts and finance professionals to select the top Tax-saving Investments for a given period.
The scheme has been improved to make it easier for investors. The maximum amount of equity that can be invested has been raised to 75%, and people can change their asset mix up to four times a year. They can also invest in more than one pension fund, and they can choose the systematic withdrawal option to spread out their withdrawals when the scheme matures.
NPS has emerged as a top tax-saving investment in the financial year 2024, overtaking other investment categories like ELSS, ULIP, Senior Citizens Saving Scheme and Sukanya Scheme.
The allure of the NPS doesn’t stop at being the preferred tax-saver, what sets it apart is the provision for additional tax benefits on top of the standard deduction under 80C of the Income Tax Act. For guidance on establishing your required corpus based on your financial targets and other considerations, follow this link - https://proteantech.in/articles/nps-calculator.
The NPS Prosperity Planner is a personalised easy-to-use NPS calculator that will assist you to comprehend your monthly pension amount and tax benefits under Section 80C of the income tax. The calculation for your tax savings takes place considering the historical data present in your PRAN account. Furthermore, with this NPS calculator, you can also find out what your yearly contribution must be to achieve the given corpus on maturity. It will also help you know how financially prepared you are for your retirement.
For detailed instructions on how to set up an NPS account online and enjoy tax benefits under Section 80C, please refer to this resource - https://www.proteantech.in/articles/nps-contribution-invest-online-offline/
- Story by Bruhadeeswaran R.
