While investing his hard-earned money, every investor wants to get maximum returns. But many times a large part of your income goes into paying income tax. But there are some such options also, from which you do not have to pay any tax on the income earned. Today we will tell you about some such options. In which you will get tax exemption while investing and the returns will also be tax-free. For this, you should invest in the best EEE category schemes in terms of tax saving investment.
Triple E (EEE) means Exempt - Exempt - Exempt. Those investment schemes are called Triple E schemes, in which not only tax exemption is available at the time of investment, but the return and maturity amount are also tax free as per the rules. This is the category in which you can save the most tax by investing. The major schemes in this category are - Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY) and Employees' Provident Fund (EPF). Apart from these, ELSS and Unit Linked Insurance Plan (ULIP) can also give tax-free returns with certain conditions.
Tax exemption under 80C is available on investment up to Rs 1.5 lakh every year in Public Provident Fund (PPF). In this, the initial lock-in is of 15 years, after which the account can be extended for 5 years each. Presently 7.10 percent annual interest is being given on this. Which is deposited in the account and is paid on maturity. Being an EEE scheme, the maturity amount is completely tax free.
Employees' Provident Fund (EPF) is a government scheme, in which contributions are made by both the employed employees and their employers. Tax exemption under 80C is available on employee's contribution of up to Rs 1.5 lakh per year in the EPF account. Currently, the highest interest being received on EPF is 8.25 percent, which is deposited in the account. There is no tax on this interest. If the employee wishes, he can contribute to the EPF account every year as per his wish, which is called Voluntary Provident Fund (VPF). By doing this, no tax will have to be paid on the interest received on investment up to Rs 2.50 lakh in a year. But the maximum investment limit for tax exemption will remain Rs 1.5 lakh per year. The maturity amount of EPF is also completely tax free. The amount deposited under VPF is also tax free if withdrawn after 5 years.
Sukanya Samriddhi Yojana (SSY)
Sukanya Samriddhi Yojana (SSY) has been introduced for daughters, in which parents of a daughter up to 10 years of age can open an account in her name and deposit an amount of up to Rs 1.5 lakh in a year. At present the annual interest of 8.2 percent is being given on this. Both the interest and maturity amount received in this scheme are tax free.
Tax exemption under Section 80C is also available on investments up to Rs 1.50 lakh annually in equity-linked savings scheme (ELSS). If you maintain your investment for at least 3 years, then after that capital gains up to Rs 1 lakh annually are also tax free. If there is capital gain of more than Rs 1 lakh in a year, 10 percent long term capital gains tax has to be paid. That means, if your annual capital gain is Rs 1 lakh or less, then ELSS also works like Triple E scheme for you. The special thing is that its lock-in period of 3 years is less than all other EEE schemes.
Unit-Linked Insurance Plans (Ulips)
Investments made in unit-linked insurance plans (Ulips) are also tax exempt under Section 80C, provided the insurance amount is at least 10 times the annual premium. On withdrawal of money after 5 years, the entire maturity amount of Ulip is tax free. If during this period you switch between the two options available in your Ulip scheme, then no tax is applicable on it. Investments made in Ulip give returns according to the market performance.
