Here are five tax-saving investments such as ELSS, PPF, 5-year tax saving bank fixed deposit, Ulips and health insurance that you may invest or buy online and thus save tax.
The current financial year is going to close just in a few days and hopefully you must have completed all your investment and tax-saving tasks by now. However, some of you must be looking for last-minute investment opportunities to further reduce your tax outgo. If that is the case, you need to hurry up. However, if time is a problem for you – as doing it physically takes lots of time – you can make some investments online also, which will save your precious time.
Here are 5 tax-saving investments such as ELSS, PPF, 5-year tax saving bank fixed deposit, Ulips and health insurance that you may invest or buy online and thus save tax.
But a word of caution: Do not invest merely for saving tax. Also, last-minute tax saving has a larger probability of turning into a wrong investment choice.
Before buying insurance do a complete need analysis and also before investing in the ELSS scheme do a careful evaluation of the specific funds. If you have already done that exercise, go ahead and save taxes now.
1. Invest in online ELSS plans
If you are KYC complaint, its easier to directly buy ELSS units from the website of the fund house or any of the Fintech players such as Paytm Money, FundsIndia etc. Most fund houses do not even require one to register online but allows online investing in the schemes.
Watch out: For those who are not KYC complied, the video KYC may come handy and let the investment go through sitting at home. It’s better to call the customer care of the fund house before you proceed to invest in ELSS as tax benefit will apply only if units are allotted before the end of the financial year.
2. Invest in online PPF
One may open a PPF account online if you have a savings account in some of the authorised banks such as SBI, ICICI, HDFC etc. The process is instantaneous and the receipt also gets generated for tax benefit. Online PPF account can be opened even though the mobile app of the bank.
Watch out: Some banks may require a printout of the application form to be submitted at the bank branch before the account can be opened.
3. Invest online in 5-year tax saving bank fixed deposit
As bank savings account holder with access to the bank’s net banking facility, one may invest in the tax saving bank fixed deposit in no time. The funds will get debited from the savings account and the FD receipt gets generated instantaneously. You will have to opt for the interest payments which could be monthly, quarterly or annual but the tenure of such FDs is five years. There is no provision to withdraw mid-way as the lock-in period is 5 years. Make sure you do this within the normal working hours of the bank so that transaction is not held up in the system.
Watch out: Interest income in such FDs is entirely taxable and carry a low post-tax interest rate. Ideally suits ultra-conservative investors or those in the lower and middle tax slabs.
4. Invest online in life insurance plans
One may buy life insurance such as pure term insurance and Ulips online directly from insurer’s website or through any insurance aggregators such as Policybazaar, Coverfox etc. Some life insurance companies offer online ulips that may be invested directly from the insurer’s website while almost all of them offers pure term insurance plans that can also be bought online. The online versions come at a lesser cost than their offline versions.
Watch out: There could be medical tests involved in the insurance buying process that may delay policy issuance.
5. Invest online in health insurance plans
One may even buy health insurance plans such as Mediclaim or Family Floater directly from insurer’s website or through any insurance aggregators such as Policybazaar, Coverfox etc. There may not be any advantage in terms of lower premium but the process is entirely online thus saving time.
Watch out: Till certain age and sum insured, there may not be need for medical tests, else you will have to undergo them before policy gets issued.