ITR 2020: Follow these Income Tax investment options to become rich and enjoy wealthy life

ITR 2020: Income Tax Return or ITR filing for the year 2020 is just four months away and people have started to find their investment options to save their income tax liability in their ITR AY 2020-21. However, it would be an icing on the cake, if they get an investment opportunity where they will get higher returns and income tax exemption too. For such investors ELSS Mutual Funds are the better option as any of the equity mutual funds gives at least 12 per cent return in the long-term, says tax and investment expert. However, the ELSS Mutual Fund has some risk involved and different investors may have the different risk appetite. Those who believe in zero risk and higher returns can opt Public Provident Fund or PPF where they can get 7.9 per cent annual returns on their investment. In both ELSS mutual funds and PPF, an investor can claim income tax exemption up to Rs 1.5 lakh investment in a financial year under Section 80C of the Income Tax Act 1961.

Speaking on the investment options that an earning individual can choose to save income tax liability and better returns Pranav Mishra, Head — Liabilities at ICICI Bank said, "Equity Linked Saving Schemes like ELSS Mutual Fund, Tax Saver FD, National Pension Scheme or NPS, Public Provident Fund, National Savings Certificate or NSC, Sukanya Samridddhi Yojana and ULIP are such options where an investor can think of getting better returns and income tax exemption too." Speaking on the income tax outgo involved in the above-mentioned schemes Mishra said that in all the above-mentioned saving schemes except ELSS Mutual Funds, entire interest and maturity amount is income tax exempted while in the ELSS Mutual Funds, income up to Rs 1 lakh is income tax-free. On an income above Rs 1 lakh in the ELSS Mutual Funds would attract 10 per cent Long Term Capital Gain Tax or LTCG Tax.

Batting for the Sukanya Samriddhi Yojana for those who have a girl child Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "For those who want to invest for their girl child and have low-risk appetite can go for the Sukanya Samriddhi Yojana as the scheme gives benefit of income tax exemption under Section 80C of the Income Tax Act. It gives 8.65 per cent annual returns which are at par with the EPF or PF. This scheme is a better option for those who believe in disciplined investment and have the low risk appetite."

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Tags: Income Tax, ELSS Mutual Fund, PPF, Public Provident Fund, EPF, Provident Fund, Sukanya Samriddhi Yojana, Mutual Funds, Personal Finance

Keywords: ITR 2020-21, ITR 2020, ITR AY 2020-21, ITR Filing 2020, EPF return, Section 80C, Income tax exemption, income tax saving schemes