January 1, 2021: Start your new year with these 5 tax saving plans

The earlier you begin with your investments, the more you benefit.

Representational Image/PIXABAY

New Delhi: We are already into the New Year 2021. New Year is also a day to make resolutions and set the promise for a better year ahead. And what more better could it be than to think about your finances.

There is a very popular saying that THE EARLY BIRD CATCHES THE WORM. Investment and tax saving plans can also be categorised under these lines. The earlier you begin, the more you benefit.

There are multiple options available for you under 80C. These options are not just tax saving, they also promise great returns in the long run. The maximum tax deduction that you can claim under Section 80C is Rs 1.5 lakh.

Here are 5 tax saving plans for you under 80C

Public Provident Fund (PPF)

Public Provident Fund (PPF) is a 15-year investment scheme under which an investor enjoys tax exemption at the time of deposit, accrual of interest and withdrawal. Though PPF has a lock-in period of 15 years, you can make extension in a block of 5 years for tenures upto 20, 25 and 30 years.

Sukanya Samriddhi Yojana (SSY)

Sukanya Samriddhi Scheme account can be opened in the name of a girl child till she attains the age of 10 years. The deposits fetch 7.6 per cent. Account can be opened with a minimum of Rs 250 - and thereafter any amount in multiple of Rs 100- can be deposited. The deposits made to the account, and also the proceeds and maturity amount, would be fully exempted from tax under section 80C of the Income Tax Act.

Life Insurance Premium

A Life Insurance policy not only gives you cushion against unforeseen circumstances, the Life Insurance Premium paid by you is also allowed for tax deduction under Section 80C. While you can claim deductions for premiums paid for you, your spouse and your children; there is no deduction for premiums paid for your parents.

Infrastructure Bond       

Tax payers can avail tax-saving benefits by investing in government-approved infrastructure bonds under Section 80CCF. The maximum amount for deduction under Section 80CCF is Rs 20,000 for an assessment year.

National Saving Certificate (NSC)

National Savings Certificates is yet again a very good investment option for people with low risk appetite. NSC gives you 6.8 percent interest rate compounded annually but payable at maturity. The NSC Deposits also qualify for tax rebate under Sec. 80C of IT Act.