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ToggleThe government offers several ways to legally reduce your liability and save taxes. There are various tax-saving avenues where you may invest your money to reduce your tax liability.
You have two options to save taxes; the first is tax deduction and the second is tax exemption.
In this article, we have discussed the various tax-deduction investment options that are available. The most popular with multiple investment options is Section 80C of the Income Tax Act, 1961.
Section 80C offers multiple tax-saving investments that can be categorized as government-backed and non-government schemes. The former offers fixed returns guaranteed by the government.
Although the latter types of investments do not offer fixed returns, these are also good options to consider.
Let us now look at seven government-backed investments.
Your employer also contributes to the EPF to help you save for your retirement; however, this contribution is a part of your overall cost to the company (CTC).
The minimum contribution is INR 1800 per month and the maximum is capped at 12% of the basic salary plus the dearness allowance (DA).
Generally, EPF contribution is mandatory if your salary is less than INR 15000 per month. The primary goal of EPF is retirement; however, you can prematurely withdraw the amount under certain conditions. The rate of interest is changed every quarter.
EPF is an exempt-exempt-exempt scheme—the contribution, interest, and maturity amounts are all tax-exempt—(EEE).
Our EPF calculator will help you determine the amount of money generated by your EPF and how much you can expect to get at retirement.
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