For many, the rescue comes from banks, mutual fund houses and insurance companies that are hawking tax-saving products. But before you jump to invest for the purpose of saving tax, check if you really need to do it. For instance, many senior executives who come under the highest income tax bracket are unlikely to get any benefit under Section 80C because their employee provident fund (EPF) might have crossed the Rs 1 lakh limit for tax-saving investments.
So, buying insurance or mutual funds will not help save any extra tax. "Over the years, PPF (public provident fund) and ELSS (equity-linked savings schemes) have emerged as popular tax saving instruments. However, they are also subject to certain lock-in periods," says Parizad Sirwalla, partner at KPMG India.
Text: Business Standard