If your last year has been quite painful in terms of finances, then it’s time to work better towards financial management. Make your 2019 easy on money and put things in the right order. And we would highly recommend tax saving investment schemes. In the beginning of 2019, it is important to take a retrospective look at the passed by year and rethink on the proposed improvements. If the financial aspects are troublesome, then it’s better to adapt to tax saving plans as the best way forward.
Being a salaried man, you would like to explore investment options that not only save you taxes but also provide adequate returns. Here are some tax saving plans to achieve your long terms goals as mentioned below:
ELSS Tax Saving Mutual Funds
ELSS tax saving investments are mutual fund plans where you can save upto 1.5 lacs per annum. Similar to mutual funds, ELSS tax savers do not commit on the returns. You can get returns between 12-18% by planning ELSS. ELSS has a lock in period of 3 years compared to other longer tax saving plan. Individuals can choose the dividend option and continue to receive regular income.Investment in ELSS via SIP every month would only ease the pressure of a one shot payment, take into account the market changes and adjust returns. It’s important to note that each SIP will have a lock in of about 3 years. Let’s say if you’re SIP has a lock in of 3 years, starting Dec 18, then the lock in will be till Dec 2021. Returns received on ELSS are tax exemptible as it is equity and the investments last for at least 3 years. Some ELSS tax saving plans are Axis Long Term equity fund, DSP BR Tax Saver Fund etc. This is one of the best saving plans in the upcoming year 2018-19.
Top Public Provident Fund
In a new endeavor, the Ministry of Finance restructuring the small saving schemes. Interest rates on PPF account are becoming lower. But still this is believed to be one of the best investment options to save some money.
It has 7.8% annually on offer, after the quarterly update. It’s always up on revision.
The interest received is tax exemptible on maturity.
A PPF account has a 15 years lock in period. An amount upto 1.5 lacs is exemptible under section 80C. An amount more than 1.5 lacs is absolutely counted out.
Loan facility on PPF is available from 3rd financial year onwards. The interest rate on loan is charged at 2% annually above the amount paid.
Withdrawn is made available after the 6th year of investment.
Minimum investment is Rs 500 and maximum at Rs 150,000. If a greater amount is invested, the amount is sent back to the account without the need for any interest.
A portion can be invested in PPF every month and ideally before 5th April for better returns. This is an appropriate scheme for individuals with long terms goals.
Top Sukanya Samriddhi Account Scheme
With a girl child, you can invest upto 1.5 lacs into Sukanya Samriddhi Account Scheme for the highest interest rates.
Interest rates vary at 8.3% annually.
This scheme is suitable for deposits for parents/guardian till girls attain 15 years of age.
The interest on Sukanya Samriddhi Account Scheme is tax free.
There are tools to pre estimate returns from Sukanya Samriddhi Account Scheme before actually investing in it.