Being an adult isn't an easy job. You can earn and earn but the fact is the more you earn, the more tax you have to pay to the government. And you lose a major chunk of all your hard earned money. But luckily there are many legal ways of saving your money. All it requires is some really smart investments to save the tax.
Here are some smart and totally legal ways to save tax:
1. Invest in tax free bonds:
You can heavily invest in tax free bonds sold by the Indian Railways Finance Corp (IRFC). There are multiple tax free bonds available in the public sector which have negligible credit risks and an assured tax free return over long term of 15-20 years.
2. Travel the globe:
Travelling can actually help you save taxes. If you are a salary person, you can use your leave travel allowance. And in case you have your own business you can show travel and hotel expenses as business expenses and pay tax only on the remaining profit.
3. PPF and VPF:
PPF (Public Provident Fund) scheme has been a benchmark bond for decades now. The returns are completely tax free and the principal interest earned on a PPF account. You can even invest in Voluntary Provident Fund. It also offers the same interest rate and tax benefits. In VPF account there is no limit to how much you can invest.
4. Invest in ULIPs:
Unit Linked Insurance Plan or ULIP. The scheme offers greater flexibility and it is cheaper than ELSS. The investor can switch their corpus from equity to debt and vice versa. Whereas in ELSS the investment cannot be touched before three years. As it is tax free investment the benefits on maturity are high. This investment has an inbuilt life cover element which is ideal for the people who are on the initial stage of their professional career.