Tax crunch time: Unlock your tax savings with expert tips before March 31

Tax-saving countdown: For those who haven't yet ventured into tax-saving investments for the current fiscal year 2023-24, fear not, there's still time until March 31 to make strategic moves, say experts. "Remember, any investments made after the fiscal year concludes won't qualify for the coveted deductions under the old tax regime during the Income Tax Return (ITR) filing for FY24," said Arpit Suri, CA, personal finance expert.

Section 80C's savvy tax escape routes

National Pension Scheme (NPS)

Positioned as a government-backed retirement savings initiative, the NPS is more than just a financial plan, it's a strategic move. Contributions towards NPS fetch tax deductions under Section 80C, capping at Rs 1.5 lakh. An added bonus? A supplementary deduction of Rs 50,000 under Section 80 CCD (1B). Corporate NPS participants get their slice too, with 10 per cent of the basic salary kicked in by the employer becoming eligible for a deduction under Section 80CCD (2).

Equity-Linked Saving Scheme (ELSS)

ELSS stands out for its diversified equity mutual fund nature, coupled with a breezy lock-in period of three years. Riding on the coattails of large-cap funds, ELSS is poised as a tax-saving marvel under Section 80C. The introduction of Systematic Investment Plans (SIPs) adds an element of financial discipline for those aiming at long-term wealth creation.

Public Provident Fund (PPF)

As a government-sponsored scheme, PPF pulls a triple tax-advantage feat: deduction at the investment stage under Section 80C, tax-free interest, and a tax-free maturity amount. Safety is the buzzword here, backed by the government. A 15-year lock-in period not only breeds disciplined saving habits but also leverages the magic of compounding. PPF enthusiasts also get the liberty to extend the account in 5-year blocks post the initial 15-year stint.

Senior Citizens Saving Scheme (SCSS)

 Tailored exclusively for the 60-and-above club, SCSS oozes security and rewarding returns with an enticing interest rate of up to 8.2 per cent per annum. This government-backed scheme serves as a reliable income source during the golden years of retirement, capped at a maximum investment of Rs 30 lakh with a maturity period of five years.

Sukanya Samriddhi Yojana (SSY)

Empowering the 'Beti Bachao, Beti Padhao' campaign, SSY steps in as a government-backed savings scheme for the girl child. Offering an impressive interest rate of 8.2 per cent, SSY boosts accessibility with a minimum requirement of Rs 250 and a maximum annual deposit limit of Rs 1.5 lakh. Openable at any post office, this scheme remains operative for a substantial 21 years from the account opening date.

Insurance policies

Two mainstays in the insurance landscape, ULIPs and traditional policies, wear the tax-saving hat too. ULIPs, a hybrid of insurance and investment, boast an average return of 8 to10 per cent over the past five years. However, a watchful eye is needed for policies post February 1, 2021, as maturity becomes taxable if premiums breach Rs 2.5 lakh. For traditional policies post April 1, 2023, maturity amounts remain tax-free as long as the annual premium doesn't surpass Rs 5 lakh.

National Saving Certificate (NSC)

NSCs, available across post offices, cater to a diverse investor base with denominations ranging from Rs 100 to Rs 10,000. With a five-year term, NSCs offer an attractive compounded interest rate of 7.7 per cent per annum, qualifying for tax deductions under Section 80C.

Tax saving Fixed Deposits (FDs)

The simplicity of Tax Saving FDs adds a layer of ease to tax-saving endeavours. Offering a straightforward route, these FDs allow a maximum claim of Rs 1.5 lakh under Section 80C, coupled with a fixed lock-in period of five years.