Which investment is 100% tax-free: 3 tax-saving investment options for tax-free income
Your complete tax-saving guide
Therefore, investments offering tax-free returns can significantly enhance your post-tax yield.
In the fiscal year 2023-24, salaried individuals have the option to opt for either the old tax regime or the new tax regime. Under the old tax regime, individuals can avail themselves of tax deductions and exemptions, whereas the new tax regime provides lower tax rates but fewer deductions and exemptions. It's crucial for salaried individuals to compare their final tax liabilities under both regimes before making a decision. If the old tax regime proves more beneficial, it's equally important to select the appropriate tax-saving options.
Given below are four tax-saving investment options that help you not only save income tax but also earn returns on which zero tax is payable.
1. Public Provident Fund (PPF)
Under Section 80C, individuals can reduce their taxable income by investing in the Public Provident Fund (PPF). This scheme falls under the «exempt-exempt-exempt» (EEE) category. Essentially, this implies that investors can claim deductions on their invested amount, and they are not liable to pay tax on the interest earned or the maturity amount. Additionally, in terms of safety, the PPF scheme is considered highly secure as it carries a sovereign guarantee.
The central government revises the PPF's interest rate every quarter, i.e., three months. For the quarter ending on June 30, 2024, the PPF is offering an interest rate of 7.1% per annum.
Also read: Why the Public Provident Fund
