Tax Saving Tools for Individuals

Direct Taxes (including International Taxation) | By ALOK PATNIA | Last updated on Oct 5, 2017

There is a plethora of tax-saving products that come with varied duration, interest rates and taxability. Thus, a person can reduce his taxable income and ultimately his tax liability by investing in various tax saving schemes like:-

Name of Securities	Rate of Interest	Limits of Investment	Exemption under the IT Act	Exemption under the WT Act
(1)	(2)	(3)	(4)	(5)
1, 2, 3 and 5 year Time Deposit	Interest @ 6.25 per cent,Â 6.50 per cent, 7.25 per cent and 7.50 per cent p.a. (calculated at quarterly compounding basis)	No limit on deposits (Minimum: Rs. 200); account can be opened, in multiples of Rs. 50 in a single name or joint names; even a minor can open account	Interest chargeable to tax (no TDS). No deduction under section 80L from the assessment year 2006-07. Deposit in 5 years Time Deposit Scheme qualifies for deduction under section 80C from the assessment year 2008-09	Not chargeable to wealth tax
6- year National Savings Certificates VII Issue	Compound (half yearly) interest @ 8 percent p.a. payable on maturity	No limit on deposits;Â certificates are issued in denominations of Rs.100, Rs.500, Rs. 1,000, Rs.5,000 and Rs.10,000	Investment and accrued interest qualify for tax deduction under section 80C (no TDS). No deduction under section 80L from the assessment year 2006-07.	Not chargeable
5-year Post Office Recurring Deposit	Interest compounded quarterly but payable on maturity. An amount of Rs. 10 denomination will yield Rs.728.90 at maturity.^	No limit on deposits. Deposits can be made in multiples of Rs. 5 p.m. (minimum Rs. 10 per month)	Interest chargeable to tax (no TDS). No deduction under section 80L from the assessment year 2006-07.	Investment not chargeable to wealth tax
15- year Public Provident Fund	Compound interest @ 8 per cent every year but payable at the time of maturity	Minimum: Rs.500 and Maximum: Rs.70,000 in every financial year	Interest totally exempt under section 10(11); investment qualifies for deduction under section 80C	Investment not chargeable to wealth tax
Post Office Savings Bank Account	Interest @ 3.5 per cent p.a. credited annually*		Interest totally exempt under section 10(15)(i)	Investment not chargeable to wealth tax

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Name of Securities	Rate of Interest	Limits of Investment	Exemption under the IT Act	Exemption under the WT Act
(1)	(2)	(3)	(4)	(5)
1, 2, 3 and 5 year Time Deposit	Interest @ 6.25 per cent,Â 6.50 per cent, 7.25 per cent and 7.50 per cent p.a. (calculated at quarterly compounding basis)	No limit on deposits (Minimum: Rs. 200); account can be opened, in multiples of Rs. 50 in a single name or joint names; even a minor can open account	Interest chargeable to tax (no TDS). No deduction under section 80L from the assessment year 2006-07. Deposit in 5 years Time Deposit Scheme qualifies for deduction under section 80C from the assessment year 2008-09	Not chargeable to wealth tax
6- year National Savings Certificates VII Issue	Compound (half yearly) interest @ 8 percent p.a. payable on maturity	No limit on deposits;Â certificates are issued in denominations of Rs.100, Rs.500, Rs. 1,000, Rs.5,000 and Rs.10,000	Investment and accrued interest qualify for tax deduction under section 80C (no TDS). No deduction under section 80L from the assessment year 2006-07.	Not chargeable
5-year Post Office Recurring Deposit	Interest compounded quarterly but payable on maturity. An amount of Rs. 10 denomination will yield Rs.728.90 at maturity.^	No limit on deposits. Deposits can be made in multiples of Rs. 5 p.m. (minimum Rs. 10 per month)	Interest chargeable to tax (no TDS). No deduction under section 80L from the assessment year 2006-07.	Investment not chargeable to wealth tax
15- year Public Provident Fund	Compound interest @ 8 per cent every year but payable at the time of maturity	Minimum: Rs.500 and Maximum: Rs.70,000 in every financial year	Interest totally exempt under section 10(11); investment qualifies for deduction under section 80C	Investment not chargeable to wealth tax
Post Office Savings Bank Account	Interest @ 3.5 per cent p.a. credited annually*		Interest totally exempt under section 10(15)(i)	Investment not chargeable to wealth tax

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