INCOME TAX SAVING OPTIONS

You can save Tax under Sec 80C & 80D

Make investment of Rs 1.5 Lakh under Sec 80C to reduce your taxable income
Buy Medical Insurance & claim a deduction up to Rs. 25,000 (Rs 50,000 for Senior Citizens) for medical insurance premium under Section 80D
Claim deduction upto Rs 50,000 on Home loan interest under Section 80EE

Some common Investment options under Sec 80C

The most popular tax-saving options available to individuals and HUFs in India are under Section 80C of the Income Tax Act. Section 80C includes various investments and expenses that can be used to claim deductions. The Section 80C limit is ₹1.5 lakh in a financial year, which means that you can use this entire amount to reduce your taxable income.

Investment	Expected Returns	Lock-in Period
5-Year Bank Fixed Deposit	6% to 7%	5 years
Public Provident Fund (PPF)	7% to 8%	15 years
National Savings Certificate	7% to 8%	5 years
National Pension System (NPS)	8% to 10%	Till Retirement
ELSS Funds	15% to 18%	3 years

Other Tax Saving options beyond Sec 80C

Apart from the deductions available under Section 80C, there are various other Section 80 deductions that can also be claimed to save on income tax. These deductions include health insurance premiums, tax benefits on home loans

Buy Medical Insurance & claim a deduction up to Rs. 25,000 (Rs 50,000 for Senior Citizens) for medical insurance premium
Claim deduction upto Rs 50,000 on Home loan interest under Section 80EE
A home loan would also help you in reducing your taxable income as the principal portion of home loan can be claimed under Section 80C upto Rs 1.5 lakhs and the interest portion can be claimed as a deduction from income from house property

How to plan your tax-saving investments for the year

The best time to start planning your tax-saving investments is at the beginning of the financial year. Most taxpayers procrastinate till the last quarter of the year, and end up taking hurried decisions. Instead, if you plan at the start of the year, you can make investments that can also help you fulfill your long-term goals. Tax-saving investments should be used to build wealth as well, not only to just save tax.

Use the following pointers to plan your tax-saving for the year:

Check the tax-saving expenses that you’re already making that you can claim. This includes expenses like insurance premium, children’s tuition fees, EPF contribution, home loan repayment etc
Deduct this amount from ₹1.5 lakh to figure out how much to invest. The entire amount doesn’t need to be invested if expenses are covering it.
Choose tax-saving investments on the basis of your goals and profile. ELSS funds, PPF, NPS and fixed deposits are some of the popular options.

This way, you can figure out how much you need to invest to save taxes. It is best to begin investing in the first quarter of the financial year so that you can spread the investments over the year. Doing this won’t burden you at the end of the year and will also allow you to make informed investment decisions.

Disclaimer: Due care has been taken to draft this write-up and is intended to express the Authors understanding and to start an academic discussion on the subject discussed in above write-up. it should not be considered as professional advice. Readers are advised to refer to relevant provisions of law before applying any of the above-mentioned views. The author accepts no responsibility whatsoever and will not be liable for any losses, claims or damages which may arise because of the content of this write-up.