Key Points
These investment options enable tax payers to claim income tax exemption up to 1.50 lakh under section 80C of the Income Tax Act, 1961..
An exemption of 1.50 lakh means you save 15,000 of your income if you fall in the 10 percent tax bracket, 30,000 if you fall in the 20 percent tax bracket, and 45,000 when you are in 30 percent tax bracket (excluding cess and surcharge)..
If you invest in financial instruments on the last day to save taxes then there is a possibility that you may end up buying such products that may not help you to create long-term wealth such as traditional insurance policies, NSCs or 5-year tax-saving FD..
That is why, it is advisable to stick to the goal-based investments as per the required asset allocation and choose the products for tax planning accordingly," says Preeti Zende, a Sebi-registered investment advisor and founder of Apna Dhan Financial Services...
Priority is to save tax: When you invest to save income tax, the goal is to save income tax and not to earn dividend or return, or long-term wealth creation which should ideally be the key reasons of making an investment..
