Which is better tax saver FD or NSC?
Table of Contents
Which is better tax saver FD or NSC?
Number 1: NSC has two advantages over Fixed Deposits of banks, which are lower risks and a higher rate of interest. Number 2: Because of the re-investment of the TDS amount on the FDs of banks it may be lower than that of NSC irrespective of the fact that the former offers a marginally high rate of interest.
Why ELSS is the best tax saving option?
Investing in ELSS funds are an efficient way to save taxes when compared to the other investment instruments available under Section 80C of the Income Tax Act, 1961. ELSS comes with the advantage of a shorter lock-in period and professional fund management, which can lead to wealth accumulation.
Is TDS deducted on NSC?
According to the NSC (Viii Issue) Rules, 1989, interest earned on the NSC certificates is not subject to TDS. On the other hand, interest earned on a bank tax-saving FD is subject to TDS. The TDS is deducted at the rate of 10 per cent in case interest accrued or paid out exceeds Rs 10,000 in a financial year.
Is NSC eligible for 80C?
The money you invest into NSC gets income tax deduction under Section 80C of the Income Tax Act, 1961.
Which is the Best Tax Saver plan in India?
Best Tax-Saving Investments Under Section 80C
| Investment | Returns | Lock-in Period |
|---|---|---|
| ELSS Fund | 15\%-18\% | 3 years |
| National Pension Scheme (NPS) | 12\%-14\% | Till Retirement |
| Unit Linked Insurance Plan (ULIP) | Returns vary from plan to plan | 5 years |
| Public Provident Fund (PPF) | 7\%-8\% | 15 years |
How can I save tax in 2021?
Here’s a list of popular investment options to save tax under section 80C.
- Public Provident Fund.
- National Pension Scheme.
- Premium Paid for Life Insurance policy.
- National Savings Certificate.
- Equity Linked Savings Scheme.
- Home loan’s principal amount.
- Fixed deposit for a duration of five years.
- Sukanya Samariddhi account.
How much should I invest in ELSS to save tax?
The investment in ELSS mutual fund schemes can be done either as a lump sum or via monthly systematic investment plans (SIP). By investing Rs 1.5 lakh in a financial year in an ELSS, an individual taxpayer in the highest tax bracket can save tax of Rs 46,800 (inclusive of cess at 4\%).
Is NSC taxable on maturity?
Is NSC taxable on withdrawal? NSC is paid on maturity, this includes the invested amount and the interest earned. The initial investment is tax-free provided that you have filled it for deduction u/s 80C.