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While working in the private sector, people have some misconceptions regarding tax saving. Tax is mostly deducted from the salaries of employees in the months of February and March, after which they think about where to invest to save tax. It is known that every employee gets exemption up to Rs 1.5 lakh under 80C. But there is no information about how to save more than this.
Where investment is exempted under Section 80C
The most important thing to know is that under 80C, exemption is available only on investments up to a maximum of Rs 1.5 lakh. Apart from this, approval is given for LIC premium, investment in PPF, payment of Unit Linked Insurance Plan (ULIP) premium, payment in respect of non-convertible deferred annuity, investment in National Savings Certificate, payment of children's education fees (tuition fees only). was given. Investments in debentures/shares/mutual funds, fixed deposits (FDs) for 5 years or more, repayment of home loan (principal amount only) and investments in Sukanya Samriddhi account come under Section 80C.
So in all these, income tax exemption is given on investment up to a maximum of Rs 1.5 lakh. But apart from this, where else can you invest and save more tax? Today we will tell you about it. You must have heard about the National Pension Scheme (NPS). Today we will talk about the benefits of investing in NPS.
Why is it important to invest in NPS to save tax? ,
To save tax, you can deposit up to Rs 50 thousand in NPS. According to Income Tax rules, savings made in NPS under Section 80C(1B) can provide more benefits under 80C. So by investing in NPS you can get a discount of up to Rs 50 thousand. That means, overall you can avail tax exemption on investments up to Rs 2 lakh.
Can private company employees save tax by investing in NPS?
So the answer is yes, you can save your salary from being deducted by opening an account in NPS immediately. Not only this, apart from tax, NPS is an excellent retirement scheme. Earlier only government employees could invest in this scheme. But from the year 2009 it was opened to all categories of people. That means now every employee can take advantage of this scheme.
What is NPS?
National Pension Scheme (NPS) is a voluntary retirement savings scheme, which helps an individual to save returns and happily meet their needs during their retirement. In this scheme, after completion of 60 years, a fixed amount is paid as monthly pension. This means that after 60 years you will not need to depend on anyone.
For example, understand what are the benefits?
Suppose you are 30 years old and you invest Rs 5000 every month in NPS account and continue this investment for 30 years i.e. till the age of 60 years, then you will get Rs 10.12 crore on this investment. Account till the age of 60 years with percentage returns. According to the rules, on completion of 60 years, you will get Rs 45 lakh at one go, apart from this you will get a pension of Rs 45000 per month. Let us tell you that you will invest a total of Rs 18 lakh in 30 years. In this, 10 percent annual return can be assumed, the interest rate can go up and down.
