BANGALORE: Section 80C of the income tax act of India is a little used provision. Most people don’t take advantage of all the benefits offered. It allows tax deductions for those whose salaries are below Rs 1 lakh per annum. Most tax saving incentives is under section 80C of the income tax act, and it is vital for a person to avoid getting confused while choosing a tax saving strategy.

The sooner you start planning taxes; the greater are the chances of choosing the right financial instrument to evade the burden of taxes.

Postponing it to the last minute can increase the risk of picking a unsuitable tax saving instrument. , In fact, one will often end up paying more than their minimum tax requirement.

Youngsters in their twenties and early thirties have a higher threshold for risks, due to a relative lack of financial responsibilities. Hence, planning their taxes using market linked instruments is a good option to create wealth and legally save taxes under Section 80.

Equity Linked Savings Schemes, more frequently referred to as ELSS are popular choices. They are basically mutual funds with hundred percent diversified equity funds with tax saving benefits to the investor.

ELSS funds also have a lock-in period of only three years, which is the shortest time period among all tax saving instruments. /

Another popular instrument is a ULIP or Unit-Linked Insurance Plan. They are market linked, and the amount received at maturity is also tax free, as per the provisions of Section 10(10D) of the income tax act.

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