Tax-saving In The Eleventh Hour

With the current financial year nearing its close, it’s time to take stock of your tax-saving investments. In case you opt for the old tax regime, you can claim deductions of up to ₹1.5 lakh in a financial year under Section 80C. There are other sections also to help you reduce your tax outgo. Do your tax planning activity at the beginning of the financial year to avoid last-minute hiccups. But in case you are late, there’s still time to invest and save taxes. A look at the options available for last-minute investors.

Section 80C: The Most Popular

You can avail a deduction of up to ₹1.50 lakh in a financial year under Section 80C of the Income-Tax Act. A number of options are available but choose the one that suits your risk profile the best. Think long-term and do not take decisions on an ad-hoc basis.

Most financial planners swear by tax-saving mutual funds, or ELSS. An ELSS is an open-ended equity-linked scheme with a statutory lock-in period of three years and tax benefits. ELSS funds have the shortest lock-in period among tax-saving options available under Section 80C. “In the tax-saving space, ELSS is one of the preferred investment vehicles as it has one of the lowest lock-in periods and offers the maximum potential for returns.