There are only a few days left for the end of the financial year 2024-25. And if you are still thinking about how to save your income tax, then I can help you with some exiting Tax Saving Schemes. March 31, 2025 is the last date, i.e. before that, you can save your FY25 income tax by investing in tax-saving schemes.
If you are paying tax in the old tax regime, then you can reduce your tax burden by investing in these schemes. But keep in mind that if you have chosen the new tax regime, then you will not get the benefit of these schemes. So, let’s understand in simple terms which schemes to invest in and what are their benefits!
Which tax saving schemes should you invest in?
There are many good schemes to save tax, which not only help you save tax but also save for the future. These schemes come under Section 80C, where you can get tax deduction up to Rs 1.5 lakh. Let’s look at some popular schemes:
PPF (Public Provident Fund):
PPF is a very safe and popular scheme. In this, you can invest for 15 years, and save tax by depositing Rs 1.5 lakh every year. Currently, PPF offers an interest rate of 7.1%, and the interest and maturity amount of this scheme are tax-free. You can extend this scheme by 5-5 years, so it is a great option for long-term savings.
NPS (National Pension System):
NPS is a good scheme for retirement. In this, you can get tax deduction of Rs 1.5 lakh under Section 80C and an additional Rs 50,000 under Section 80CCD(1B). That is, you can save tax up to Rs 2 lakh in total. The money you invest in NPS is invested in the stock market and other places, so you can get good returns, but there is also some risk. After retirement, you will get a pension, and you can withdraw some amount in a lump sum.
ELSS (Equity Linked Savings Scheme):
ELSS is a type of mutual fund, where you invest in the stock market. It has a lock-in period of 3 years, which means you cannot withdraw money before 3 years. But the advantage of this is that along with saving tax, you can get good returns. You get tax deduction up to 1.5 lakhs under Section 80C. If you don’t mind taking a little risk, then ELSS is a good option.
SSY (Sukanya Samriddhi Yojana):
If you have a daughter and she is less than 10 years old, you can invest in SSY. This scheme is for saving for the education and marriage of the daughter. Currently, SSY offers 8.2% interest, and this interest is tax-free. You can invest up to Rs 1.5 lakh per year in this, and get tax deduction under Section 80C. This scheme is for 21 years, and the amount received from this is also tax-free.
Other options:
Apart from this, you can also save tax by investing in National Savings Certificate (NSC), Tax-Saving FD (for 5 years), Unit Linked Insurance Plan (ULIP), and Life Insurance premium. Also, under Section 80D, you get a tax deduction of Rs 25,000 (Rs 50,000 for senior citizens) on health insurance premium.
Income Tax Calculator for FY 2025-26 (New Regime) : New Regime Calculator
How to invest in tax saving schemes? – Step by step guide
Investing in tax-saving schemes is very easy. Follow the steps below and complete your investment before March 31:
Step 1: Check your tax regime
Check whether you are paying tax under the old tax regime or the new tax regime for the first time. Because the benefits of these schemes are available only under the old regime.
Step 2: Decide your budget
Decide how much you can invest. You can get tax deduction up to Rs 1.5 lakh under Section 80C. An additional tax deduction of Rs 50,000 is available for NPS.
Step 3: Choose a scheme
Choose a scheme as per your needs. For example, if you want to save for your daughter’s future, choose SSY. For retirement, choose NPS, and for market returns, choose ELSS.
Step 4: Invest online or offline
PPF: Open a PPF account by visiting your bank’s website or post office and deposit money.
NPS: Open an account on the official website of NPS and start investing.
ELSS: Select an ELSS fund through a mutual fund app (like Groww, Zerodha) or a bank and invest.
SSY: Open a Sukanya Samriddhi account by going to a post office or bank.
To know SBI RD Interest Rates 2025 Click here
Step 5: Submit proof of investment
After you invest, keep the receipt or statement. You will need this information while filing ITR.
Step 6: Complete the investment before March 31
Remember, investments made after March 31, 2025 will not be counted towards getting tax exemption for FY25.
Some important things to remember
- Invest on time: March 31 is the last date, so don’t waste time now. There may be problems with bank or online payments on the last day.
- Choose a plan according to your needs: You don’t need to invest in all the plans. Choose a plan according to your financial goals (like retirement, children’s education).
- Understand the risk: Schemes like ELSS carry market risk, while schemes like PPF and SSY are safe. Decide how much risk you want to take.
- Prepare for ITR filing: ITR filing will start from 1 April 2025. Keep your investment documents ready now, so that there is no problem while filing your tax return.
- Health Insurance: Health insurance premiums are also eligible for tax deduction under Section 80D. If you haven’t taken health insurance yet, get it now.
A little further
Saving taxes is not the only thing; these schemes also secure your future. Schemes like PPF and SSY allow you to save for the long term, while NPS provides pension for retirement. ELSS allows you to get good returns from the market. So don’t waste time now – invest in these schemes before March 31 and save your taxes! If you have any more questions, be sure to ask me. I will explain it to you in simple terms!
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FAQ:
1. What are tax-saving schemes for FY25?
Tax-saving schemes like NPS, PPF, ELSS, and SSY under Section 80C help you save up to ₹1.5 lakh, with extra ₹50,000 for NPS, before March 31, 2025.
2. Can I save tax with the new tax regime?
No, tax-saving schemes under Section 80C are not applicable in the new tax regime; they work only in the old tax regime.
3. How to invest in PPF for tax savings?
Open a PPF account at a bank or post office, deposit up to ₹1.5 lakh annually, and claim tax benefits under Section 80C.
4. What is the last date to invest for FY25 tax savings?
The last date to invest in tax-saving schemes for FY25 is March 31, 2025, to claim deductions in your income tax return.
5. Which scheme is best for retirement planning?
NPS is ideal for retirement planning, offering tax savings up to ₹2 lakh (₹1.5 lakh under 80C + ₹50,000 under 80CCD(1B)) and a pension post-retirement.