I earn ₹6 lakh per annum. My dad also earns the same amount. I have a life insurance cover of ₹10 lakh and my dad has no cover. I also have a health insurance cover from my company. We stay in a joint family with my uncle now. I am planning to buy a house in a year or two. I will also have to invest to save taxes. If I block the money in a tax saving instrument now, I won't be left with any liquid funds when I need the money to buy a house. I am a bit confused. Please suggest how to save and in which instruments.
- Ankit Narshana
Since you need the money in a year or two, you cannot invest in any tax saving instrument to save taxes under Section 80C of the Income Tax Act. Tax planning mutual funds have the shortest lock-in period of three years among the investments permitted under Section 80C. You can claim the tax deduction on your life insurance premiums. You must keep the money in a safer avenue like bank deposits as you would need the money in a year or two. Open a recurring deposit to save money every month.
This article was originally published on December 09, 2015.
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