Tax saving Tips: There is no doubt that a large part of our income is spent on paying taxes. In India, currently, taxes are being collected under the rules of two different tax systems. In the old tax system, income up to Rs 2.5 lakh is tax-free. 5% tax has to be paid on Rs 2.5 lakh to Rs 5 lakh, 20% on Rs 5 lakh to Rs 10 lakh and 30% tax has to be paid on income above Rs 10 lakh. 

What is the tax slab in the new tax system?

On the other hand, in the new tax system, income up to Rs 3 lakh is tax-free. 5% tax has to be paid on Rs 3 lakh to Rs 7 lakh, 10% on Rs 7 lakh to Rs 10 lakh, 15% on Rs 10 lakh to Rs 12 lakh, 20% on Rs 12 lakh to Rs 15 lakh and 30% on income above Rs 15 lakh. However, there are many rules in the country through which tax can be saved. Today we will learn about some such savings and investment schemes here, where a lot of tax can be saved by investing money.

ELSS Funds

ELSS (Equity Linked Savings Schemes) funds are a category of mutual funds. ELSS funds come with a lock-in period of 3 years. You can save tax up to Rs 1.25 lakh on these funds. Let us tell you that ELSS funds have given a return of about 19.39 percent in the last 5 years.

NPS

NPS (National Pension System) is a long term pension scheme in which money has to be invested till retirement. After the scheme matures, a part of your total corpus is received as a lump sum amount and a part goes to the pension fund. There are 3 different ways to save tax in this scheme. First of all, contribution up to Rs 1.5 lakh is exempted under section 80C. Then, under section 80CCD (1B), additional deduction of up to Rs 50 thousand can be availed and under the third benefit, 10 percent of the company's contribution in the basic salary is kept tax-free. If you choose the new tax system, this limit becomes 14 percent. NPS has given a return of 7.5 to 16.9% in the last 5 years.

Retirement Mutual Funds

Retirement mutual funds are a category of mutual funds. These come with a lock-in period of 5 years. A lot of tax can be saved by investing in retirement mutual funds. Let us tell you that retirement mutual funds have given a return of 9 to 19 percent in the last 5 years. 

ULIP

ULIP (Unit Linked Insurance Plan) is a great scheme. In this, a part of your investment goes into the stock market while the rest goes into the insurance plan. The income from ULIP is completely tax-free under Section 10 (10D). However, for this the life cover should be at least 10 times your annual premium. This scheme also comes with a lock-in period of 5 years. It has given returns of 7 to 18 percent in the last 5 years.