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Income Tax – How to Save Tax Under Section 80c | Tax Saving Tips 2020 | Groww

Friends, you work very hard and earn money and a lot of that money goes in tax And as a citizen we should pay taxes But there are a lot of sections where we get a lot of privileges to save taxes And like that there is a section 80c Under 80c we can save taxes And along with saving taxes, on that saved money we can make a lot of returns In this video today we will talk about those 7 ways Under 80c, investing in which We can save taxes and make returns on that money as well I, Jagdeep Singh, welcome you to the Groww channel Let us start today's video in which we will talk about how we can save taxes And what are the ways of saving taxes And what are the benefits and drawbacks of these ways If I talk about the first way by investing in which you can save taxes That is ELSS Equity Linked Saving Scheme This is one type of mutual fund If you invest in this Then you have to make a minimum investment for three years And if I talk about the lock-in period This is the minimum if I talk about the other ways of investing to save taxes This is the minimum lock-in period By investing in this you can make good returns and apart from that You can take a tax deduction up to 15 lakhs So if you come in the 30% salary bracket And if you invest 1

5 lakhs So 45,000 Rupees tax And if I talk normally about the past year's returns Then ELSS has given around 12% return So if I talk about the total income, by investing here You can save 15-16,000 rupees return and on 15 lakhs you can save 45% taxes So an average of 123% returns were given by ELSS funds So if I talk about how much the highest return, then the highest return was One ELSS mutual fund gave a return of around 21% So you can get an idea that by investing in ELSS Along with saving taxes, you can get good returns as well Whenever the topic of mutual funds comes up, I always tell you to see where those mutual funds invest So if I talk about ELSS mutual funds Then there is one type of multi cap mutual fund Multi cap means they invest in large cap, mid cap and small cap They state their investment objective and accordingly invest And they try to give you very good returns But whenever we invest we should always get an idea of our risk And only after that we should decide which ELSS fund we should invest in But by doing a little research and investing for the longer horizon Like here, you have to make a minimum investment for three years Then ELSS can be a very good option To save tax and make good returns Let us talk about the second way under 80c through which you can save taxes by investing And this is PPF Public Provident Fund This is an investment and saving scheme, in which if you invest for 15 years You get a tax deduction on your invested money And the maximum tax deduction you get here is up to 15 lakhs Now I will talk about the returns on this The normal returns that PPF gives you is 81% Now this question must be coming in your mind That you get very good returns in ELSS And in PPF you get a return of 8

1% And you should pay a little attention here That ELSS invests in equity Where there is a little volatility And the risk is also higher so you can get higher returns But if I talk about PPF then its under the central government Where the volatility is very less and your money is almost always safe And if I talk about returns then 81% is a moderate return Now you must be thinking that if you invest in PPF then your money is blocked for 15 years Now consider that if I need money after 3-4 years then what should I do? What option is left for me in that case? So in the case of PPF you get an option that the money you have invested, you can get a loan on that So in between if you require money So if you have put money in PPF You will get return on that money And if you need money for short term then you can get loan on that money And complete your short term requirement Now we will talk about after how long can you remove money from PPF So in PPF there is a withdrawal option after 7 years Which means that if you invest now, you can remove some money after 7 years There are different slabs in this about how much money you can remove Let us talk about the third way Now you must be thinking you don't want to invest in PPF and you don't want to put money in ELSS either Because I normally deal with banks And I consider my money to be very safe to when it is in a bank So here also there is an option to save taxes If you make an FD in any bank with a five year lock-in Then on your invested money you can get a 15 lakh tax deduction Which means that if you're going to make an FD in any bank And you did not think of tax deduction under 80c You can make an FD for more than 15 lakhs In that bank with a five year lock in and get a tax deduction up to 15 lakhs So if I talk about returns then in every bank you get different returns Because every bank has their own interest rates So you can go and see and try for yourself which bank gives the highest returns And after that you should decide in which bank you should open and FD On tax deduction also and returns on their interest rate Let us talk about the fourth investment option through which you can save a lot of money and taxes And the name of this investment option is EPF Employee Provident fund As you know that in India there are a lot of people who are salary employees So the government brought about a new account EPF through which a certain amount of money goes in that account So that when they go into retirement they have a good amount of money So that they can fulfil their requirement If I talk about the returns of EPF In the past year the return that EPF has given is around 8

65% So the amount of money that goes in EPF depends on the employee policies But no employer can make a contribution more than 12% of the employees salary Now you must be thinking that if you're working for ten years and there is a good collection of money in your EPF In what cases can you remove money from the EPF So there are overall three cases from which you can remove money from the EPF Without any penalty The first is if you have reached the retirement age The retirement age is 58 years So after 58 years you can go anytime and remove money from the EPF The second case is that you have lost your job and it has been more than two months since you lost your job You can remove money from your EPF to meet your requirements If I talk about the third case, there are a lot of cases in which can remove money from your EPF Like, while doing your job you realise you want to go abroad for your higher education In that case you can remove the money If there is a medical emergency, then you can remove the money It's your child's wedding or any other expense like this Where you really need money, then you can remove money from here Let us talk about the fifth way, investing in which you can save taxes, that is called NSC It stands for National Saving Certificate In which the minimum investment is Rs 100 And if your investment is up to 15 lakhs then you can get a tax deduction If I talk about the returns here then on an average you get a return of 8% Which is a good return in comparison to bank FD If I talk about 5 years, then after 5 years when your principal amount And you get your interest back Both your things are tax free Which means that the interest you earned, there will be no tax on that And the money you invested, you wont have to pay tax on that either Now let us talk about Sukanya Samriddhi Yojana This also comes under 80c, and if you invest in this You can make returns and save taxes on your invested money Under Sukanya Samriddhi Yojana, if you have a baby girl Before she reaches the age of 10 years you have to make an account in this And the maximum investment can be up to 14 years When you open your account for the first time And the return you get here is around 8% And when the girl child reaches the age of 18, you can make a 50% withdrawal for education Apart from that, at the time of marriage, you can remove that money and meet your requirements for that Let us talk about the last investment option under 80c Investing in which you can save taxes and make returns And the name of this investment option is ULIP The full form of ULIP is Unit linked insurance plan You serve two purposes by investing here First is of investment Because when you invest under 80c, you think your tax should be saved and you get returns So under this plan, your tax gets saved and you get returns But here you get the benefits of insurance as well So here two purposes are served But from here some amount will go in the insurance premium And some amount will go in your investment And that investment you can decide if you want to invest in equity or debt And you can go ahead and change that as well Where there are other ways of investing So these were the investment ways under 80c where you can save taxes But you shouldn't think that you should invest only in one plan Because a lot of people, looking at their risk want to diversify So under 80c, you can invest in different places You will get an overall benefit on 15 lakhs In this you can invest in different places, you will the maximum benefit on 15 lakhs so out of that you can divide the money in different places To take a little risk you can invest a little money in ELSS From where you can get more returns as well If you like bank FD then you can put a little money in bank FD as well In the same way you can put a little money in Sukanya Samriddhi Yojana and plan your baby girl's future So I have told you about these different investment options So that you can see the overall plan and put your money in different places So that you can diversify your money And your different investment objectives That can also be met along with saving taxes So if I talk about the financial year '20, you have to invest before 31st March if you want to enjoy tax benefits So if you haven't invested anywhere You can start investing from now So that if you file your taxes this year On which we will make a very detailed video, about how you can file taxes So that you can start investing now so that you don't have the pressure of saving taxes then So if you liked this video, press the like button, if you haven't yet subscribed to this channel then please subscribe Because we bring 2-3 videos on investment every week on this channel Which can help you become a good and an intelligent investor So I will end this video with a question for you If you have to invest under 80c, then which one would be your favourite investment option You can give a reason for that as well So that from your comment, we and a lot of of our viewers can get to learn Happy investing!

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