It is necessary for you to analyze your finances from a tax efficiency point of view. You are free to claim various tax exemptions, deductions, and benefits so as to reduce your tax liability at the end of the financial year.
Even though tax planning is very much legitimate in nature, you need to ensure that you don’t indulge in tax evasion or tax avoidance. There are a number of deductions available under Sections 80C through to 80U that are given in the Income Tax Act.
The most efficient way to take advantage of Section 80C is to invest in Equity Linked Savings Scheme (ELSS). It has the shortest lock-in period as compared to all the other tax-saving options available under Section 80C.
Under this section, you can save taxes up to Rs.45,000 and avail a deduction of up to Rs.1.5 lakh. Additionally, ELSS is a diversified equity fund that helps you achieve your financial goals via investment in the equity market.
