An Online Investment Options to Save Tax before 31st March

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Though, the due date for investment in the LIC/PPF/NSC for claiming deduction under section is extended from 31st March 2020 to 30th June 2020, still one may invest the amount as ideal fund don’t yield any returns. In a relief to individual tax payers, the finance minister Nirmala Sitharaman announced that the deadline for investing in tax-saving instruments has been extended to June 30 2020. The usual deadline is March 31. But with the entire country in lockdown mode, it has been difficult to make last-minute tax investments. The extension of the deadline comes as a relief, especially to those still relying on physical modes of investments. The date extension is a concession to those who have not yet made the requisite tax savings investments. This change does not impact tax payers who have already made their tax savings investments before this announcements.

Thought the lock down is there still investment options are open. One can invest through an online mode also. If taxpayers have an internet banking access, then the options to invest is better.  Let us have a at the investments which can be done on the concept of “work from home”

  1. Life Insurance Policies:
    Now buying online options for buying insurance plan is available. Even such portal does provide comparison and calculations to the prospective customers. One can buy endowment plan or a term plan through online options. The premium paid is also allowed as deduction subject to same overall cap of Rs 1.5 lakh. One must note that now, for deduction and subsequent exemption on maturity, annual premium for life insurance policies should not exceed 10% of the sum assured.
  1. Health insurance i.e., Mediclaim:
    Taxpayers can also buy best mediclaim policy through online mode by furnishing few required details. There are portal which is providing comparative prices along with distinctive feature of the policy. The mediclaim premium is admissible as a deduction under section 80D and it is in addition to the deduction u/s 80C of Rs. 1.50 Lakh. In view of the rising medical expenditure in case of health issue, one must go for mediclaim policy and onlne options can be one of the best price offer.

Further, it may be noted that whether it’s a life insurance company or health insurance company, all have facility for accepting the renewal premium through an online mode.

  1. ELSS i.e., Equity-linked saving schemes:
    ELSS enable deduction benefits under section 80C subject to overall cap of Rs. 1.50 Lakh. Mutual fund is often recognized as the best tax-saving investment, more particularly when the stock exchange has a strong correction now. It is available at a discount of around 30%. Most of the funds are now providing an online investment options . Taxpayers can choose the appropriate fund as per his individual perceptions. It could be a large cap fund, small cap fund, infra funds, banking funds, pharma funds etc. Online payment can be done using your basic details with mobile number and some more basic details. One can make the payment by using latest Unified Payment Interface (UPI) app such as BHIM, Google Pay or online internet banking facilities. It may be noted that online internet banking is the best options as not all mutual funds is accepting payment through UPI.
  1. National Pension System (NPS):
    An additional deduction of Rs. 50,000/- U/S 80CCD (1B) is provided in the Income Tax Act -1961. This is over and above Rs. 1.50 Lakh deduction u/s 80C.  Taxpayer have a choice of choosing one of the 8 pension fund managers. Furher, taxpayer can choose amongst 3 assets classes i.e., equities, corporate bonds and government securities). One can read more about it at –
  1. https://thetaxtalk.com/2019/02/22/save-tax-dont-forget-to-invest-in-national-saving-scheme-nps/
  2. https://thetaxtalk.com/2018/12/11/tax-bonaza-for-investing-in-national-pension-scheme-nps/

Taxpayer can subscribe to NPS account online through the link mentioned in above article. To invest online in NPS, even for first time, one has to  enabl internet banking. NPS can also be opened at several Point-of-Presence outlets (such as banks and post offices) by filling and submitting the Permanent Retirement Account form.  One need a Permanent Retirement Account (PRAN) that is allotted while opening the account.

  1. Five-year bank FD’s:
    Specified Bank FDR is also eligible for deduction u/s 80C. However, such Bank FDR have a lock in of 5 years as against mutual fund wherein lock in is just of 3 years. One can invests in Bank FDR through online mode by availing internet banking facilities.

Dear Taxpayer, if you haven’t yet gone online, it’s time you switch to online buying and selling, sooner or later. Most of us already have a mobile phone and an email account; so half of our job is already done. Internet banking is a good weapon to have as a back-up. Even mutual fund distributors and financial advisors have shifted to online buying and selling of units. They register you on a mutual fund portal on which they transact. When you wish to buy a mutual fund, they initiate a transaction online and you get a link in your email. Click on this link and transfer money from your bank account using your internet banking and the transaction is complete. It’s simple and convenient, more so in times like this.

 

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