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Use This Tax-Saving Guide to Save The Most!

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Tax saving is a broad term that includes all types of investments that help you reduce your tax burden. All of these investments come with their own set of rules and benefits. They can be divided into two categories – investments you make in yourself, such as insurance plans and pension schemes, and those that you make for your family members, typically in the form of education or healthcare plans.

Section 80C deductions are the most commonly used tax-saving tools in India today. Other sections include 80CCC (for pension schemes) and 80 CCD (1B) (for contributions to NPS). The Section 80D deduction is available for premium payments towards medical insurance, while the Section 80E deduction is allowed on interest paid towards a student loan.

Let’s take a look at some of the best tax saving schemes you can consider in India along with an online income tax calculator:

1. Equity Linked Saving Scheme

Equity Linked Saving Scheme (ELSS) is a type of mutual fund that allows you to save on taxes and create wealth over the long term. ELSS is one of the most efficient tax-saving schemes available for you to reduce your tax liability under Section 80C of the Income Tax Act, 1961. You can invest in ELSS by paying a lump sum amount or through SIPs.

This fund scheme invests at least 80% of its corpus in equity shares and equity-related instruments. The investment period for these funds is 3 years which makes it the shortest lock-in period among all 80C investments. If you feel problem in calculating taxes then try out our online income tax calculator for the same purpose.

2. National Pension Scheme

Next on the list of tax-saving schemes is the National Pension Scheme (NPS). This is a self-contributory scheme for government employees and all other Indian citizens, who are not government employees. Under NPS, you contribute towards your retirement corpus and may claim a deduction in the process. Let’s look at how much NPS contribution qualifies for a tax deduction.

Of the ₹1,50,000 that you can claim under Section 80C, you can claim a further amount of up to ₹50,000 under Section 80CCD(1B). This effectively takes your total limit under Section 80C to ₹2 lakhs. Note that this upper limit doesn’t include any investments that qualify for deduction under other permissible Sections such as Section 80D or Section 24. Consider using an income tax calculator for accurate results.

3. Unit Linked Insurance Plan

A ULIP is a combination of insurance and investment. The policyholder invests their money in the market through these plans. In exchange, the policyholder receives life cover as well as market-linked returns.

The policyholder can choose to invest their money in a mix of equity and debt funds according to their age and risk appetite. However, investments made in ULIPs cannot be withdrawn by the policyholder until they complete five years of their maturity.

In addition to this, ULIPs also offer multiple tax benefits to investors under Section 80C of the Income Tax Act, 1961. The amount invested by the investor is eligible for tax deduction up to INR 1.5 lakh per year.

4. Public Provident Fund

The PPF is a long-term investment that is open to all, including minors. With an interest rate of 8% and the option for premature withdrawals for some reasons, it remains one of the most popular tax-saving schemes in India.

The interest rate of PPF is set by the government and there are no charges levied by banks on it. So if you’re looking for a safe and low-risk investment option with assured returns, then PPF must be on your radar.

There is a lock-in period of 15 years but there are provisions for premature withdrawals (for specific purposes) after 7 years. The maximum amount eligible for tax deduction under Section 80C is Rs 1 lakh per annum.

5. Sukanya Samriddhi Yojana

The Sukanya Samriddhi Yojana was instituted by the government of India in 2015 with an aim to help parents save for their daughter’s future, including but not limited to, her education and marriage. The scheme is run by the Ministry of Finance, Department of Economic Affairs, Government of India and is eligible for tax exemptions under Section 80C of the Income Tax Act 1961.

6. National Savings Certificate

National Savings Certificate (NSC) is a government-backed investment instrument available in post offices. The scheme was launched to encourage people to save money for their future and at the same time, provide them with tax benefits. The investment is eligible for tax deductions under Section 80C of the Income Tax Act, 1961.

The NSC has a lock-in period of 5 years. It can be issued by an individual in his own name or jointly for and on behalf of minor children (not exceeding two). Even HUFs and trusts can invest in this scheme. However, an NSC cannot be pledged as security with financial institutions as it is non-transferable.

7. Senior Citizen Saving Scheme

If you are a senior citizen, you can invest in the Senior Citizen Saving Scheme (SCSS). The maximum investment is Rs 15 lakh. Interest rates are fixed by the government and are currently 8.6% p.a. The interest is paid quarterly. You can open an account at any post office or designated branch of public sector banks. There is no tax deduction available on the amount invested in SCSS but it comes under EEE i.e., Exempt-Exempt-Exempt status, and hence the interest earned and maturity amount will be exempt from income tax.

Final Words

That’s a wrap! So, saving taxes is important. And it’s hard to do alone. But now that you’ve gone through this guide, you’ll be able to choose the best tax-saving investment as per your needs and risk appetite. After all, there’s a tax-saving option for every age group. So choose wisely and save the most you can. Moreover, to know how much you can effectively save on taxes with these options, you can also consider using an income tax calculator.

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Finance

Understanding the Theta Token and Its Value Proposition

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The Theta Token is a cryptocurrency that has been gaining significant attention in recent years. As the world becomes more digital, the need for a decentralized system that can handle large amounts of data and video content is becoming increasingly important.

Theta Token is aiming to provide a solution to this problem. You can also carry out trading via exchange platforms. An excellent example of a reliable platform is chain-reaction-trading.com.

What is Theta Token?

Theta Token is a cryptocurrency that operates on the Theta blockchain. The Theta blockchain is designed to handle video content, making it an ideal platform for streaming and sharing video content. Theta Token was created as a way to incentivize users to share their excess bandwidth and computing resources with others on the network.

Theta Token is different from other cryptocurrencies in that it is specifically designed for the streaming and sharing of video content. This makes it an ideal platform for content creators, as it allows them to share their content without having to worry about the high costs associated with traditional video hosting services.

What is the Value Proposition of Theta Token?

The value proposition of Theta Token lies in its ability to provide a decentralized solution to the problems associated with video content sharing. By incentivizing users to share their excess bandwidth and computing resources, Theta Token is able to provide a more cost-effective solution to traditional video hosting services.

Theta Token also has a number of other features that make it an attractive platform for content creators. For example, Theta Token allows for micropayments to be made to content creators, meaning that they can be rewarded for their content in real-time. This is particularly important for content creators who rely on their content for income.

Another key feature of Theta Token is its ability to provide a better user experience for viewers. By utilizing a decentralized network, Theta Token is able to provide faster and more reliable streaming for viewers, without the need for buffering or other interruptions.

How Does Theta Token Work?

Theta Token works by utilizing a decentralized network of nodes. These nodes are operated by users who have excess bandwidth and computing resources that they are willing to share with others on the network.

When a user wants to access video content on the Theta network, they send a request to the nearest node. The node then retrieves the video content from other nodes on the network and streams it to the user. The user is then rewarded with Theta Tokens for sharing their excess bandwidth and computing resources with the network.

In addition to the streaming of video content, Theta Token can also be used for other purposes, such as the creation of smart contracts and the storage of data.

Conclusion

Theta Token is a cryptocurrency that has been specifically designed for the streaming and sharing of video content. Its value proposition lies in its ability to provide a decentralized solution to the problems associated with traditional video hosting services. By incentivizing users to share their excess bandwidth and computing resources, Theta Token is able to provide a more cost-effective solution for content creators and a better user experience for viewers.

As the world becomes increasingly digital, the demand for decentralized solutions to problems such as video content sharing is only going to increase. Theta Token is well-positioned to meet this demand, and its value proposition is likely to continue to grow in the years to come.

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Simple Ways to Save for Your Future

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People are often so focused on their current situation that they do not pay enough attention to saving for the future. It is important to keep one eye on the future and find ways to save money over time, but what are the best ways to do this? There are a few simple ways to save for your future that could make a big difference to your life down the line.

Creating Savings

One of the best ways to build wealth for the future is with a fixed-rate bond. Essentially, this is a savings account that will hold your money for a pre-determined period of time. You will get a fixed interest rate and this is generally higher than what you would get in an easy-access savings account. Provided that you are happy to put your money away for 1 year+, this can be a highly effective way to make money from your savings.

Investing

Investing can be a smart way to build your wealth over the long term. Of course, there is always risk with any kind of investment, but there are some investments that are considered safer than others. It is important to educate yourself before making any kind of investment and to only invest money that you do not need access to in the short term. An index fund is a good option for beginners and most experts agree that these are smart for long-term investors.

Take Control of Your Spending

You certainly want to find ways to make more money, but you also need to address your spending. You should go through all of your regular expenses and find ways to make savings whether this is shopping at a cheaper supermarket, cutting back on a luxury item or switching providers. This will then give you more money to save and make more money from.

Differentiate Between “Want” and “Need”

We want many things in our lives. But all those are not necessary. Therefore, you should differentiate between want and need. You should follow a strict restriction on your spending, especially when something does not match with your financial goals.

Make a Plan with Your Partner

If you live with someone or are married to someone, then you have to communicate with your partner and together you should prepare a plan for household finances. Both you need to discuss your desires and decide on where to prioritize.

Don’t Ignore Your Pension

It is also important to consider your pension and the earlier that you do this the better. The money that you put into the pension now will compound and grow over a long time period, so you want to contribute as much as you can without making a difficult financial situation for yourself.

Review Your Spending

We actually don’t realize how much we spend every month and where we spend our money unless we review our spending. Therefore, reviewing your spending is a great idea to clear understand where you can cut your expenses and how you can improve your saving.

Consider Your Children

You can also teach your children to save money for future. Your children will learn from you that they need to wait to purchase something that they want. You should also help children to recognize particular ways to save money and make wise choices. 

These are some of the best and simplest ways to save for the future. It is always important to plan financially for the future and the earlier that you start doing this the better so that your money can grow and compound over time. However, you should also enjoy life besides preparing a plan to save money for future.

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Don’t Invest Your Emergency Fund… Unless

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Getting the most out of your emergency fund is hard these days. The average savings rate isn’t keeping pace with inflation, which means your money is losing value the longer it sits in a basic account. All that lost earning potential can make you break one of the most important rules of emergency funds: don’t invest.

As a general rule, you should never invest your emergency fund. Investments can tie up money that’s supposed to be available at the drop of a hat. These delays can complicate an already difficult financial situation if you can’t access your cash for urgent repairs or expenses.

But as the saying goes, all rules are meant to be broken. There might be times when investing some of your emergency fund can strengthen your financial health. How much you have sitting in your savings is an important distinction that can help you decide whether investments are right for you.

How Much Should You Save in Your Emergency Fund?

Financial advisors recommend saving three to six months of living expenses in your emergency fund.

If you aren’t quite there yet, your emergency fund may fall short of what you need. In an emergency, online loans can help pick up the slack.

Online loans provide quick and convenient applications, so you don’t waste any time wondering if you qualify. If approved, a financial institution like MoneyKey can deposit your funds directly into the account of your choice. This way, your online loan is just as accessible as savings would be, making them a fast-acting solution in an emergency.

Why You Shouldn’t Invest Your Emergency Fund

If you rely on online loans, or you’re still working towards saving up three to six months of expenses, investing your emergency fund is a bad idea. It could delay how quickly you get your hands on your cash, and your fund could even lose value.

1. Timing

Your savings should be easy to access at any time. After all, an emergency can crash-land in your life without any warning — morning, noon, or night.

Most basic savings accounts allow you to transfer your savings whenever you want online, with very short processing times.

Investments are different. Depending on how you invested your money, you might have locked your money into a specific term. Withdrawing before its maturity date is possible, but it can take time to cut through the bureaucratic red tape.

2. Penalties

Paperwork isn’t the only headache of withdrawing from your investments early. You may also face steepcash penalties. You’ll also have to factor in how this withdrawal affects taxes.

3. Lost Value

You can’t predict when you’ll deal with an emergency or the eventual expense that comes with it. That means you can’t strategically time your withdrawal to maximize their value. Your funds may not even retain their original value if you’re forced to withdraw when your stocks take a nosedive.

When Can You Invest Your Emergency Savings?

Let’s say you’ve finally reached your goal of six months. Congratulations! Only roughly27% of American households can boast this achievement.

At this point, do you put a stop to your emergency savings? No, but how you save them should change.

Top up this account any time you use it, but don’t over contribute beyond three or six months. Rather than exceeding your goal in a basic account, you should funnel the excess into investments.

This way, you have the best of both worlds. One, you’ll keep the liquidity of a fully stocked emergency fund with a basic account. And two, you’ll start to maximize your earnings potential through tax-advantaged investments that promise a higher return rate.

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