Quick Answer: Which Tax Saving Scheme Is Best?

Is ELSS better than PPF?

PPF is suited for individuals who are absolutely risk-averse and can afford a 15-year lock-in period.

Whereas those investors who are willing to take a moderate risk to earn higher returns can opt for ELSS.

The best way to reduce risk in ELSS to its minimum is by staying invested for the long term..

How much tax do I pay on 10 lakhs?

Income between Rs 7.5 lakh and Rs 10 lakh will be taxed at 15 per cent. Income between Rs 10 lakh and Rs 12.5 lakh will be taxed at 20 per cent. Income earning between Rs 12.5 lakh and Rs 15 lakh will be taxed at 25 per cent. Income above Rs 15 lakh will continue to be taxed at 30 per cent.

What is the 80c limit for 2020 21?

Source of income (FY 2019-20)Income (Rs)Less: Standard deduction ( 50,000)6,00,000Interest on fixed deposit50,000Gross total income6,50,000Less: Deduction under section 80C1,50,0005 more rows•Dec 4, 2020

What is the new tax slab for 2019 20?

Tax Rates for Individuals as per budget 2019-2020Income Tax Slab (in Rupees)Tax Rate for Individual Below the Age Of 60 Years0 to 2,50,000*Nil2,50,001 to 5,00,0005% of total income exceeding 2,50,0005,00,001 to 10,00,000Tax Amount of 12,500 for the income up to 5,00,000 + 20% of total income exceeding 5,00,0001 more row•Dec 11, 2019

How do you avoid tax?

There are also other legal ways to avoid tax which are well worth looking at.Use your Isa allowance. … Save into a pension. … Use your capital gains tax allowance. … Use your partner or spouse’s tax allowance. … Use childcare vouchers. … Think about where you buy your insurance from. … Eat more healthily.

Which ELSS is best to invest in 2020?

6. Top 10 Best ELSS Mutual Funds in 2020Fund Name5-Year ReturnsLinkUTI Long Term Equity Fund – Regular Plan – Growth5.17%Invest NowICICI Prudential Long Term Equity Fund (Tax Saving) Growth5.06%Invest NowEdelweiss Long Term Equity Growth3.85%Invest NowSBI Magnum Long Term Equity Scheme Regular Growth3.79%Invest Now6 more rows•Oct 30, 2020

Can I save tax more than 1.5 lakh?

The most popular avenue for tax-saving is section 80C of the Income Tax Act. Under Section 80C, an amount equal to the investment you make in specified instruments or expenses, up to a maximum of Rs 1.5 lakh in a financial year, reduces your gross total income (GTI) by the same amount.

Is 80c removed in 2020?

[Budget 2020] Tax Rates Lowered But HRA, 80C, and INR 50,000 Standard Deduction Gone. In the Union Budget 2020, finance minister Nirmala Sitharaman proposed a new tax regime with lower tax rates for different income groups. … However, all without deductions.

How is income tax 2020 2021 calculated?

Hence, you will be required to pay a tax of Rs 37,500 (excluding cess) on your gross taxable income i.e. Rs 7.50 lakh….Frequently Asked Questions ( FAQ’s )Income SlabApplicable Tax RateAbove Rs 7.5 lakh and up to Rs 10 lakh15%Above Rs 10 lakh and up to Rs 12.5 lakh20%5 more rows

How can I save tax on 2020 21?

Tips for Saving Tax in FY 2020-21Invest in Equity-Linked Saving Scheme (ELSS)Invest in the National Pension Scheme.Invest in Sukanya Samriddhi Yojna.Know When to Opt for the New Tax Regime.

How can I save tax on FY 2019 20?

Equity-linked savings schemes or ELSS offer tax deduction under section 80C of the Income Tax Act, for investments up to Rs 1.5 lakh in a financial year. You can invest via the SIP route or put in a lump sum amount. Click here to read more about ELSS.

Is ELSS tax free?

Better post-tax returns: Except PPF and NPS, ELSS offers better post-tax returns than other 80C investments because long term capital gains of up to Rs. 1 lakh a year from ELSS mutual funds are exempt from income tax and long-term capital gains above Rs. 1 lakh are taxed at 10%.

How can I reduce my taxable income in 2020?

Here are five ways to lower your 2020 taxable income (or reduce what you owe) before you file your tax returns this year.Make an IRA contribution. … Add money to your HSA. … Choose the right deduction strategy. … Don’t forget about tax credits. … File for an extension or negotiate a repayment strategy.

Can I invest more than 1.5 lakhs in 80c?

Your total investment upto 1.5 lakhs will only be allowed as deduction u/s 80C. The additional contributions do not have any problem from tax point of view, except that you cannot claim deduction u/s 80C on them.

How can I reduce my taxable income in 2020 in India?

32 Easy Ways to Save Income Tax in 2020Tax Deduction In Case of Availing A Home Loan:Income Through Savings Account Interest:Income Through NRE Account Interest:Money Received from Life Insurance Policy:Scholarship for Education:Amount Received From Sold Shares or Sold Equity Mutual Funds:Amount Received as Dividends on Shares or Equity Mutual Funds:More items…•