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Financial year is about to end . In such a situation, are you thinking of investing in tax savers coming under 80C? There are two products that can help you in meeting your long term financial goals - VPF and ELSS, know what is better. Up to Rs 1.5 lakhs under Section 80C of Income Tax Act on contributions or investments in both VPF and ELSS . You can avoid the LTCG tax of ELSS by withdrawing less than 1 lakh rupees from your profit amount in one year.
As the financial year draws to a close, the demand for purchasing investment and insurance products is increasing to meet the goals related to income tax saving. All this is being done to purchase tax and insurance products by buying investment and insurance products, especially to get the most out of the benefits available under section 80C of the Income Tax Act. Most people are focusing on fixed income tax saving products such as public provident funds, but there are two more products that can help you meet your long-term financial goals that should not be ignored.
EPF: EPF is a very safe tax saving product currently having a return of 8.65%, which is the highest return product among all other government backed investment products. Salaried people working in a company with more than 20 employees or receiving more than the minimum stipulated amount are required to contribute 12% of their basic salary and dearness allowance (DA) to their EPF account.
ELSS: On the other hand, ELSS is a mutual fund where your money is invested in a portfolio of equity or equity related products. As a result, it can give higher returns in the long run with moderate to high risk. Being a long-term investment, the returns the equity gives are often higher than the returns from debt instruments, as its average of 10 to 20 years returns is around 11% to 12%. Many macroeconomic.
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EPF / VPF: You can withdraw money without any tax after investing in EPF / VPF for five consecutive years. But, it can be taken out only for a specific reason like marriage, studies, emergency medical expenses, or housing loan repayment. The waiting period before which you can withdraw money may vary depending on your offer to withdraw money. Usually you are not allowed to withdraw money from your EPF account ahead of time.