Income Tax Saving: Options and schemes to save tax on or before March 31

Tax savings at the fag end of a financial year may prove to be financially damaging unless you put your money to good use by linking to your goals. With March 31 as the last date for saving tax in this financial year, you’ve got less than 2 working days to complete the tax saving exercise.

If you want to make investments without moving out from home or office, there are a few online tax-saving options that you may consider.

Importantly, make sure you invest before the cut-off time or better speak to the company or bank before transferring funds. You need to ensure that the investment will be credited to your account before the financial year ends on March 31.

Only if the account statement or the investment proof shows that the date is March 31, will you be able to claim tax benefit for the current financial year. Use the online money transfer options such as NEFT, UPI etc so that transfer of funds is immediate.

Even if you have provided the investment proof to your employer, you may claim the tax benefit while filing the income tax return (ITR) for the assessment year 2022-23.

Here are a few investment and protection schemes that you may consider:

1. Health insurance

If you are having inadequate health insurance coverage, consider adding coverage through a health insurance plan. Health coverage for all family members is essential and you may even buy a critical illness plan to get a more comprehensive coverage. Premium paid qualifies for tax benefit under Section 80C up to Rs 25000 and Rs 50,000 for senior citizens.

2. Online Ulips

If you are looking to save for a long term goal, online ulips could be an option. There are single premium and regular premium Ulips, so make sure you meet the conditions required to avail tax benefits.

3. Five-year tax saving bank fixed deposit

All banks provide a 5-year tax saving bank fixed deposit option. You may log on and visit the net-banking section of your bank to invest in these deposits instantaneously. These tax saving bank deposits come with a lock-in period of 5-years and the interest income is taxable.

4. Home loan repayment

If you have a home loan, you may make an online payment towards home loan prepayment, if the lender gives you the option to do so online. The amount of home loan prepaid will give you tax benefit under Section 80C up to Rs 1.5 lakh.

5. Equity Linked Savings Scheme (ELSS)

Investing in ELSS may be tricky as the units need to be alloted in your name before March 31. you may visit the website of the fund house but get a clarity about the allotment from them before making investment. The investment has to be made before the cut-off time and units will be alloted when the fund house receives the fund.

6. Public Provident Fund (PPF) and National Pension Scheme (NPS)

If you already have a PPF and NPS account, make sure you are investing before the cut-off time in the case of NPS. For those having an online PPF account with a bank, the transfer of funds into the PPF account can be made online and the receipt may be used for tax benefit.