Tuesday, December 24, 2024
154,225FansLike
654,155FollowersFollow
0SubscribersSubscribe

5 tax free investment options to become Crorepati

As an investor, you might boast the huge profits you make and your investment routine. However, when it comes to saving your profits and skipping taxes you might not have a lot of experience. A smart investor is one who can diligently plan their investments and store them in schemes that can help offer tax benefits as well as tax-saving and fall under the EEE category. 

If you are unaware of this fact, this article is a perfect read for you and can help you in a lot of ways. Nevertheless, before you learn the few ways you can implement tax-saving benefits in your investment routine, you must learn what EEE stands for in income tax. 

What do you mean by EEE?

Short for Exempt Exempt Exempt, EEE is a category in income tax that allows you to save quite a bit of taxes on your investment. Say you plan on investing a stipulated amount in a scheme to save your tax. With this policy, the first step of your investment will be exempted from any kind of tax. In addition, the part of your salary that you have used for the investment will also not be taxable and your investment will qualify for a deduction. 

Secondly, once you start earning an interest on your invested amount, the entire sum of interest that you collected throughout the investment phase will also be exempt from any kind of taxes. The third exemption under the EEE category entails the total income that you generated. This will include you accumulated principle amount and interest, both of which will not be taxable when you are withdrawing the matured amount. 

In short, the EEE category exempts you from paying any taxes on your real income investment, interest and maturity. If this sounds interesting to you, here are five of the most popular money Investment options that fall under the EEE category you can try. 

  • Public Provident Fund (PPF)

Perhaps the most popular investment schemes in India, PPF has been ruling this sector for decades. It is a risk free investment scheme that promises the investor high returns, specifically given its compounding power. The scheme is further backed by the Government of India which reassures the investor of zero risks and high returns. 

You can open a PPF account in any bank or post office. However, if you plan on investing in this policy, you should note that it comes with a preliminary lock-in period of 15 years. This means you will not be able to take out the investment money for the first 15 years and if you do, all the interest gained will be nullified. However, if you want to keep investing in the policy even after 15 years, you can increase the period for five years at a time. 

  • Sukanya Samriddhi Yojana

Another great policy to consider is the Sukanya Samridhhi Yojana, especially if you are a girl child. This policy was launched as a part of the ‘Beti Bachao Beti Padhao’ campaign by the Indian Government and has been quite successful. 

You will have to open the scheme under the girl’s name with the main motive of saving up for your daughters educational and marriage expenses. It offers an interest of 7.6% per annum which is quite high compared to the others. In addition, you can start this scheme with an investment of as low as INR 250, right after the girl is born till anytime she is 10. 

  • Equity Linked Saving Scheme (ELSS)

Another great way to make good use of your income and ensure that you do not have to pay any taxes on your investment or return is this. The Equity Linked Saving Scheme allows an individual to earn huge interest on their investment. However, you should remember that any capital gains up to INR 1 lakh are tax free. Any amount more than that will be deemed as long-term capital gains, which is subject to 10% tax.

  • Employee Provident Fund (EPF)

The Employee Provident Fund is a government backed scheme that aims at providing you a secure retirement. Here you will invest a part of your income every month/year to the bank, on which you will receive an interest. Once you retire from the job, usually when you are 60, you can take out the total sum collected.  

  • Unit Link Insurance Plan (ULIP)

Lastly, if you are a long-term investor, this is the perfect investment scheme for you. This is more of a life insurance plan with a varied array of investment features. Some of the most notable features of this scheme consist of goal safety, automated portfolio management and multi-fun allocation. This can be quite fruitful if you are not in a hurry to earn profits. 

With these schemes you can ensure that you do not have to pay taxes on your investments and returns.  

spot_img

News Update