One of the most elated aspects of your first job is living life on your own money but fresher’s need to realise the importance of financial viability and the tips and tricks to handle your money through saving and investing.
Well, first of all you won’t be having too much tax deduction depending on your salary if being fresher. Also you can produce rental receipts and exempt your most of your tax once produced to your HR. There are several other investment options which you can perform to save tax namely PPF, ELSS and NSC can be used as a tax saving investment by people looking for fixed and secured returns.
An investor who is also looking for creation of wealth can opt for mutual fund schemes that invest in the equity and equity related instruments. ELSS schemes are ideal in such cases. They have a lock–in period of three years, but they carry higher degree of risks, as they are linked to the equity markets. The returns on these schemes are exempted from tax, which make them a popular tax saving investment option.
PPF is one of the best options for tax savings as the investor enjoys the rebate on his investment under section 80C of I.T. Act 1961. Secondly, the income from PPF is considered tax free. What can be better than this for a fresher?
ELSS is a type of diversified equity mutual fund which is qualified for tax exemption under section 80C of the Income Tax Act and offers the twin advantage of capital appreciation and tax benefits. It comes with a lock-in period of three years.ELSS funds are one of the best avenues to save tax. This is because along with the tax deduction, the investor also gets the opportunity of investing in the equity markets.
The National Savings Certificates offered by the Government of India is one of safest investment tools available at all Indian post-offices. These certificates are designed for salaried employees and businessmen, and they produce fixed income like fixed deposits. A yearly investment of Rs. 1, 00,000 can qualify for a income tax rebate too and there is no tax deducted at source too. Apart from all this there are a lot of benefits provided by NSC’s like there is no maximum limit for investment and the minimum limit is only Rs.100. The best part of NSC is you get assured returns up to 8.8%.
So act smart and choose your options wisely and be a smart fresher at work.