Various tax savings that can be subscribed online
- For FD, all you need is a Know Your Customer (KYC) compliant bank account and access to internet banking. Then you can easily invest in the fixed deposit of the tax-efficient bank over five years.
- In the case of a term life insurance policy, your tax benefit for the 2021-22 fiscal year will depend on the date of issue. If the issue date is after March 31, 2022, you will not benefit from the tax benefit for the 2021-22 financial year.
- If you already have a PPF and NPS account, be sure to invest before the cut-off time in the case of NPS.
Taxpayers usually plan ahead when it comes to signing up for an investment plan or insurance policy for tax saving purposes. But sometimes they are not able to purchase tax saving instrument in time due to busy work schedule or any other reason, which ultimately results in higher tax expenditure for them. . Since March 31 is the last day of the fiscal year, taxpayers only have one day to obtain an investment plan or policy. So, despite time constraints, they can choose from many tax-efficient investment options available online.
As the government now offers taxpayers two options in terms of calculating their tax liability. Under the new tax regime, which comes with more slabs and lower tax rates, you cannot enjoy the benefits of deductions and various exemptions. On the other hand, the old plan offers you various investment options to save tax under various sections of the
If you are considering opting for the old tax regime and you have not yet finalized the financial products in which to invest to reduce your tax burden for the year, you can consider these online options to save time on the paperwork.
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The simplest online tax investment is the five-year tax fixed deposit (
All you have to do is log into your net banking account and invest from there. When making an investment, make sure you have not enabled the auto-renewal option (unless you wish) or else on the day of maturity your FD Tax Savings Bank will automatically renew for next five years. Once the investment has been made, early withdrawal is not permitted in the case of a tax-saving DF. If the auto-renewal option is not selected, the maturity proceeds go directly to your bank account.
Individuals can take out temporary insurance or unit-linked insurance (Ulip) online. However, buying a term life insurance policy online may not work out at the last minute as you may be called in for medical tests or the underwriter may require more information before issuing you a policy.
Your tax benefit for the 2021-22 fiscal year will depend on the date of issue. If the issue date is after March 31, 2022, you will not benefit from the tax benefit for the 2021-22 financial year.
Equity-linked savings plan (
Investing in ELSS can be tricky as units must be allocated on your behalf by March 31. You can visit the fund house’s website, but get clarification on the allocation before making the investment. The investment must be made before the cut-off time and the shares will be allocated when the fund house receives the funds.
If you already have a
Reimbursement/prepayment of the home loan
If you have an outstanding home loan, there are two types of tax benefits. The tax deduction under Section 80C of the Income Tax Act 1961 is available on the repaid principal amount of the home loan. Additionally, the interest paid on the loan enjoys a tax deduction of up to Rs 2 lakh.