If you want to invest in tax saving instruments such as PPF, NSC, SSY and NPS, it is important to do it within the right timeframe.
Those taxpayers who want to claim tax benefits for financial year 2024-25 must do it before March 31, 2025., failing which they will not be able to claim deduction for this year. Let us understand more on this here.
Investing for tax saving: Key things to know
What are different types of investment instruments in which one can invest?
Taxpayers can invest in a number of tax instruments such as PPF, NSC, SSY and NPS, among others. These financial instruments enable taxpayers to claim tax benefits under different provisions such as 80C and 80CCD(1B).
What is the deadline to make investment in these instruments?
The deadline to invest in these instruments is March 31, 2025. The deadline to file an income tax return is July 31, 2025 for FY 2024-25 for individual taxpayers.
Which are the key investing instruments in which taxpayers can invest?
There are numerous saving instruments wherein taxpayers can invest such as Public Provident Fund (PPF), National Savings Certificate (NSC), Senior Citizen Savings Scheme (SCSS) and Kisan Vikas Patra (KVP), among others.
What is the maximum limit of tax deduction which taxpayers can claim?
The maximum limit of tax deduction is ₹1.50 lakh for all these investments put together. However, there is an extra ₹50,000 deduction given for investment in NPS under section 80CCD (1B) of Income Tax Act, 1961.
Is every taxpayer eligible to claim these tax deductions?
By default, every taxpayer is meant to pay income tax as per the new tax regime of Income Tax wherein these deductions are not permitted. To be able to avail these deductions, one must file tax returns under the old tax regime.
So, the decision of whether to file a tax return under the old or new regime is incumbent upon total savings which accrue on account of these investments.
In other words, if you stand to save more under the old tax regime, you should opt out of the new regime, and if the new tax regime is beneficial because of the concessional tax rate, then you may want to opt for it.
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