Tax Saving Options in India
Indian citizens are offered several tax saving options in India by both the public sector and the private sector. The tax saving options include tax saving bonds, certificates, funds and the central government also allows various tax deductions and tax rebates and tax exemptions from time to time.
Birla Tax Relief 96
StanChart Tax Saver Fund
Kotak Tax Saver
UTI Equity Tax Saving
Tata Tax Saving Fund
HDFC Tax Saver
ABN AMRO Tax Advantage
6.5% Savings Bonds Cumulative bonds
6.5 % Savings Bonds Non-cumulative bonds The interest payment on these bonds is done with the help of either ECS or with Interest Warrant for 6.5% Savings Bonds Non-cumulative bonds and the interest payment on 6.5% Savings Bonds Cumulative bonds is made with the principal amount at the time of maturity of the bond. The best thing about this bond is that the people who have invested in these bonds are entitled to get complete tax exemption on the interest income under the Income Tax Act, 1961.
8% Cumulative Savings Bonds
8% Non-Cumulative Savings Bonds Though the investor is required to pay taxes on the interest income of the bond but the tax is not in any way deductible at source.
Post Office Time Deposits
Post Office Monthly Income Scheme
Deposit Scheme for Retiring Government Employees
Post Office Recurring Deposits
National Savings Scheme
Deposit Scheme for Retiring Employees of Public Sector Companies
National Savings Certificates
Public Provident Funds
Postal Life Insurance
Kisan Vikas Patra Post office time deposit schemes offer various interest rates based on the tenure of the loan for example the interest rate for:
The rate of interest offered by the post office monthly income scheme is 8% per annum and the scheme holders are allowed a monthly interest payment and receive a bonus of 10% on the principal at the maturity of the scheme. However, the best part is that the investors are entitled to get tax relief under section 80L of the Income Tax Act, 1961. Similarly, investment in the public provident fund scheme fetches income tax rebates as per Section 88 of the Income Tax Act, 1961.
Tax Saver Mutual Funds as a Tax Saving Options in India:
Indian citizens are offered various tax saver mutual funds schemes. Some of the prominent schemes include:Tax Saving Options in India by Public Sector Bank:
The Reserve Bank of India offers a unique tax saving bond named as the 6.5% Savings Bonds, 2003. This tenure of the bond stretches over a period of 5 years and as the name of the bond suggests, the rate of interest allowed on the bond is 6.5% per annum. The bond is endowed with the facility of interest payment on a half yearly basis. The Reserve bank of India issues these bonds as Stock Certificates and provides for the bank ledger account facility together with the bond. The maximum limit of investment on the bond has not been fixed and the 6.5% Savings Bonds, 2003 are of 2 types :Tax Saving Options in India by Private Sector Banks:
Private Sector banks like UTI Bank Ltd., HDFC, IDBI, and ICICI offer many tax saving bonds to the Indian citizens. But the 8% Savings Bond, 2003 is a special bond which is offered by all these organizations. The tenure of the 8% Savings Bond, 2003 is 6 years and the name of the bond suggests that the rate of interest on the bond is 8%. This bond is similar to 6.5% Savings Bond, 2003 with respect to the payment of interest on a half-yearly basis. All organizations provide a bank-ledger account facility to the bond holders. These bonds are available in 2 kinds:Tax Rebate as a Tax Saving Options in India:
The central government has now removed the previous discrimination done in case of people who earn more than Rs. 500,000 by allowing tax rebates even to them as per the modified version of Section 88 of the Income Tax act, 1961. The latest budget allows tax rebates on significant issues like rebates on medical insurance premiums, interest paid for a housing loan, expenses incurred for medical treatment of an individual, and so on. Tax rebates are also offered to the employees as per Section 89 (1) of the Income Tax Act, 1961 and this rebate is allowed to employees who have received their salary in arrears or opted for a share of the company profits instead of their salary, received salary in advance, or received salary of more than12 months at a time.Post Office Saving as a Tax Saving Options in India:
The Postal System offers numerous tax saving options in India and the tax saving schemes of the post office are quite popular among the Indian citizens on account of the high interest rates. The stakes involved in investing in these funds is comparatively less and some of these schemes qualify for tax deductions. The various schemes offered by the post offices include:| Tenure | Interest Rate per annum |
| 1 Year | 6.25% |
| 2 Year | 6.50% |
| 3 Year | 7.25% |
| 5 Year | 7.50% |
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