7 Best Investment Tips to Save your Income Tax^~

Another year gone by and many of us will be happy regarding our investments in the previous year. We do plan for our contingencies and other emergencies including investment plans to be done for our future. Various investment strategies help you preparing for future and help you in tax planning as well.

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Below are some of the investment tips for 2018 that will help securing your future and meeting your financial goals also:

Cash reserves in savings bank account: You can keep accumulating money in your saving bank account that will help you to meet any kind of emergency. Moreover, interest on savings bank account has gone up providing you better returns on your deposits. Further, income tax laws allow you exemption in taxable income up to RS 10000 which you can use as a strategy in your tax planning.
Investment in Public Provident Fund: You can continue investing funds in provident fund account. Interest on provident fund has increased and it assures you returns on your investment. Income from provident fund continues to be exempted from income tax. Further, it also acts as a source of retirement planning for an individual. You can also open provident fund account for your spouse and children which will help you securing their future as well.
Real estate investments: If you still don’t own home for your family, then you can start investing money in real estate. This will help you building your dream home and further, investment in residential property does not attract income tax. You can avail special tax deduction under section 24 of income tax for interest payment on loan for residential property. Other than interest exemption, repayments of the housing loan also enjoy tax deduction under section 80C.
Tax free bonds: One can invest in tax free bonds as investments done in these bonds will attract more interest than bank fixed deposits. The investments in tax free bonds will impact income tax savings if you will calculate your income tax liability.
Investments for your minor child: An individual having a minor child must start their investments in order to secure their future. As we all know that education has gone very expensive and it takes huge out of an individual to provide proper education to their children. So, an individual can start investing in provident fund or in postal recurring deposits to provide good education. You can also start investment in life insurance policy for the children from very early age, this can help save you money on premiums as insurance premiums are very less for a minor.
Investment in postal instruments: An individual can plan and save their tax by investing in postal instruments like National Savings certificate, post office time deposit receipts and senior citizen savings scheme. Investment in these instruments can help lowering your tax liability and also, interests on these instruments have risen over the past few years earning you money as well.
New Pension Scheme: You must not forget about investment in new pension scheme of the government. Investments in pension scheme can help you ensuring your life after retirement.

Above investment strategies can help you ensuring your secure future along with safety of your family members. You can alter your investment strategies but must not completely withdraw them.

˜Top 5 plans based on annualized premium, for bookings made in the first 6 months of FY 24-25. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in

Past 10 Years' annualised returns as on 01-05-2025

^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.

Tax benefit is subject to changes in tax laws. Standard T&C Apply
++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CARG 8%; ₹50,45,591 @ CAGR 4%

¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.

**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).

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