Investments or specific transactions to be made before March 31 to save taxes

With the financial year coming to an end on March 31, many taxpayers would now be looking at ways to save taxes. In the old taxation regime, there is an option to enjoy tax exemption, which is not there for taxpayers in the new taxation regime.

For all taxpayers still following the old tax regime, can avail tax exemptions of up to Rs 1.5 lakh.

Below are some ways to save taxes on expenses or investments

Public Provident Fund/ Voluntary Provident Fund/ Employees’ Provident Fund:

PPF is a government-guaranteed fixed income security scheme availed by salaried and non-salaried employees. In PPF, you not only earn interest in the invested money but also on the interest earned.

Under the VPF scheme, an employee can voluntarily contribute any portion of his or her salary to the provident fund account. The contribution must be more than the PF ceiling of 12 per cent.

EPF is mandatory for salaried people that are working in organisations registered under the Employees’ Provident Fund Organization (EPFO). It is risk-free and eligible for tax deductions.

Picking any one of these or having multiple picks from above-mentioned options is a very good way to save and enjoy tax exemption. Among the three funds, opting for any will depend on interest, risk, withdrawal period among others factors.

Savings accounts/ Fixed Deposits (FD)

While interest income from savings accounts in a bank or post office is taxable, investing in tax-saving FD will help save taxes. Many individuals invest in the tax-saving FD for a minimum lock-in period of five years to save taxes. Such deposits are useful under tax deduction. However, in the case of savings accounts' interest, there are some tax exemptions for senior citizens.

Specific mutual fund

It is only Equity Linked Saving Scheme (ELSS) among various mutual funds that is eligible for tax deduction under section 80C. So, this is the only mutual fund that allows you to invest in the stock market and still enjoy tax benefits on it. The return from ELSS are usually higher than other forms of investments.


Life Insurance and other insurance policies that help save taxes. To enjoy tax deduction either opt for traditional plan policy, a term policy or ULIP. The maximum tax deduction for insurance products is up to Rs 1.5 lakh. The insurance should be for a minimum term of two years.


Home loan borrowers can save taxes due to their loan. Buying a home before March 31 will help a taxpayer in a few states enjoy an extra bonus with banks offering lower interest rates, and stamp duty, it will be an added bonus for an individual.

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