All of us earn and pay taxes. There are many efficient and legal means to manage tax. While avoiding taxes is illegal and undesirable, it’s perfectly fine to save taxes using the legal means sanctioned by authorities.
All of us use methods like Insurance policies, specific Mutual Fund schemes(Equity Linked Savings Scheme or ELSS) and other similar popular means to save taxes.
A relatively newer and unconventional avenue is investment in NPS(New Pension Scheme). This scheme was started by Central government for it’s employees in 2004 but was later extended to ALL Indian Citizens.
Any individual can take tax benefit of investment upto Rs 1.5 lacs in a financial year by investment in specific insurance policies, ELSS etc under IT Section 80CCE. Above this, an individual can invest an amount upto Rs 50, 000/ and take tax benefit under IT Section 80CCD(1B). Thus he will get tax benefit of investment upto Rs 2 lac(1.5 lac+0.5 lac).
PLEASE NOTE THAT THIS TAX BENEFIT OF Rs 50, 000/ IS AVAILABLE ONLY FOR INVESTMENT IN NPS SCHEME.
So, all taxpayers should read about this scheme and consider investing - if possible. Apart from this benefit, there are other benefits of this scheme(I have mentioned details in my blog also).