A penny saved is a penny earned. One strategy for reducing your tax burden and boosting your revenue is tax planning. The income tax act allows for deductions for a variety of investments, savings, and expenses made by the taxpayer during a specific fiscal year. We will go over a few ways that you can reduce your tax liability.

1. National Pension Scheme(NPS) 

NPS can reduce taxes in three ways: under Section 80C, contributions up to Rs 1.5 lakh are deductible; under Section 80CCD(1b), there is an extra deduction of up to Rs 50,000; and if the employer contributes up to 10% of the employee's salary to NPS, that sum is not subject to tax.

2. PPF (Public Provident Fund) 

A popular investment instrument for tax reduction is the Public Provident Fund. To begin with, you must open a PPF account at the post office or specific branches of public and private sector banks. The interest rate on contributions to the PPF account is guaranteed. On these deposits, you may deduct tax expenses up to Rs 1.5 lakh in a financial year under Section 80C.

3. Pension Plans

Pension Plans are another type of life insurance, though they serve a different purpose than other types of insurance plans, such as term and endowment plans, and are referred to as protection plans. While protection plans are designed to financially secure an individual's family in the event of his death, pension plans are designed to provide for the individual and his family as he lives.

Pension contributions are exempted under Section 80CCC (a subsection of Section 80C) of the Income Tax Act. The total deduction limit under all subsections of Section 80C cannot exceed Rs 1.5 lakhs.

4. Fixed Deposit

By making investments in tax-saving fixed deposits, you can reduce your tax liability. By making investments in tax saver fixed deposits, you can deduct up to Rs. 1.5 lakh from your income. Such FDs have a 5-year lock-in period, and the interest received is taxable. Typically, interest rates fall between 5.5% and 7.75%.

5. National Savings Certificate

National Savings Certificates are a savings bond programme that primarily encourages participants with low to moderate incomes to invest while reducing their income tax liability under Section 80C. If you have a savings account with a bank or a post office and have access to internet banking, you can purchase NSC certificates in e-mode.

6. Life Insurance

 A tax shelter for life insurance uses insurance investments to shield assets or income from tax liability. Many governments do not tax the proceeds of life insurance. Consumers are frequently recommended to buy life insurance policies since the majority of other types of income are taxed.

7. ELSS Mutual Funds

ELSS Mutual Funds have the potential to provide large returns, are transparent about their investment decisions, and have very minimal costs. Investors also benefit from a relatively short lock-in period and the freedom to stop.

8. Senior Citizen's Saving Scheme

SCSS is the best investment option for those above 60, especially after the additional tax exemption for interest up to Rs 50,000. The scheme beats PPF in terms of interest. It has a limit of ₹15 lakh per person. 

9. Medical Insurance

The maximum deduction permitted under Section 80D for purchasing medical insurance is Rs. 1,00,000 (Rs. 50,000 for the senior citizen's family and self, and Rs. 50,000 for the senior citizen parent).

10. Home Loans

Interest paid on a home loan is deductible under section 24 up to Rs 2 lakh. Section 80EE also allows you to deduct up to Rs 50,000 in home loan interest over and above the limit set by section 24.

# How can PensionBox help? 

[PensionBox](https://pensionbox.in) not only helps you track your investments, but allows you to flexibly invest in NPS, NPS Subscribers gets exclusive tax benefits for investment up to Rs. 50,000 in (Tier I account) under subsection 80CCD (1B). This is over and above the deduction of Rs. 1.5 lakh available under section 80C of Income Tax Act.

Sign Up and download the app on [Android]( https://play.google.com/store/apps/details?id=in.pensionbox.twa) and on [IOS](https://apps.apple.com/in/app/pensionbox-plan-track-more/id1632735947).

A penny saved is a penny earned. One strategy for reducing your tax burden and boosting your revenue is tax planning. The income tax act allows for deductions for a variety of investments, savings, and expenses made by the taxpayer during a specific fiscal year. We will go over a few ways that you can reduce your tax liability.

Which tax saving investment option should you choose

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