tax-free income in India

Latest Income tax slabs for FY 2015-2016

Calculate your tax based on the tax slabs for year 2015-2016. Detailed split for general, women, senior citizen etc are provided.

India Income tax slabs 2015-2016 for General tax payers and Women

Income tax slab (in Rs.)	Tax
0 to 2,50,000	No tax
2,50,001 to 5,00,000	10%
5,00,001 to 10,00,000	20%
Above 10,00,000	30%

India Income tax slabs 2015-2016 for Senior citizens (Aged 60 years but less than 80 years)

Income tax slab (in Rs.)	Tax
0 to 3,00,000	No tax
3,00,001 to 5,00,000	10%
5,00,001 to 10,00,000	20%
Above 10,00,000	30%

India Income tax slabs 2015-2016 for very senior citizens (Aged 80 and above)

Income tax slab (in Rs.)	Tax
0 to 5,00,000	No tax
5,00,001 to 10,00,000	20%
Above 10,00,000	30%

There are many options available for investment which has tax free return in india.

U/S 80C - investment can be made in PPF , interest and maturity amount fully exempt at the end, and NSC, Tax free FD issued by some nationalized bank, LIC(Primium) for which deductioin is available u/s 80c.

 New scheme also launched i,e Sukanya Samriddhi Scheme(SSS) is also one option for tax free return at the interest rate of 9.1%.

U/S 80CCD - Additional benefit of rupees 50000 over and above 150000 by contribution made in New Pension Scheme of Central Govt.

Investment in Shares -There are also some risky investment available by which you can get a higher return and which will be tax free if you invested for more than one year like long term capital gain (SST Paid) on equity shares, mutual fund etc. are exempt u/s 10(38).

Asking how to save tax anonymously is interesting (Yes, all puns intended!!)
but I will still answers as itis A2A

The basics 1st 
There will be 2 points in time when you can save your tax

1st is 
When you are investing a certain ammount somewhere then government may give you exemption forthat ammount from taxing in the year of invetment. But such exemption usually has limit. For example you can get exempion of 1.5 Lack per annum (LPA) under section 80c of income tax.

2nd is
At the time of maturity of such investments you may get tax exemption on the interests/returns earned. Usualy this does not have any limits for even if you get cores in interest...all will be yours. No lollypop for govt.

One more important basic will be if you are planning in short term(say >2years) thensve it at point no. 1 and if you are planning on long term then go for savings on Point no 2.

With this now you can make maximum out of following list of tax free invetments 

1) Public Provident Fund (PPF)

• If offers 8.7% interest per annum. Govt. of India would keep updating this every year. But lookingat current stable mode of economy it will remin arround 8%and wont fluctuate much.
• Tax free returns at maturity.
• PPF has lock-in period of 15 years. but you can withdraw from 6th year.
• Investment up to Rs 1.5 Lakhs per annum qualifies for IT act section 80 C. so double savings...
• NRIs, HUF are not eligible.
• Minimum investment is Rs 500 and maximum is Rs 150,000

2) ELSS (Equity Linked savings Schemes) Tax Saving Mutual Funds

• Offers highest returns (like 50% to 80% but not fixed and not guaranteed, depends on market) compared to other tax saving options.
• Lowest lock-in period of i.e 3 years.
• Investors can opt for dividend option and get regular income even during the lock-in period.
• Investing in ELSS funds through SIP every month would help you reduce burden of investing a lump sum, take care of market fluctuations and provide higher returns.
• Since this is an equity mutual fund and investment period is 3+ years, returns / capital gains are tax free.
• Some of the top ELSS tax saving mutual funds are Reliance Tax Saver fund, ICICI Pru Tax Plan, Franklin India Tax Shield fund etc.

3) Tax Saving Bank FD Schemes

• Very good option to save income tax under section 80C of IT act.
• Interest rates vary between 8.5% to 9.75% per annum
• Interest is taxable so no saving at the time of returns (point no 2 explained above)
• Minimum 5 Year Lock-in period

4) Rajiv Gandhi Equity Saving Scheme (RGESS)
(Personaly I dont like this scheme it is like china maal : ekbar dekho fir feko)

• RGESS offers tax benefits for first time investors who are earning up to Rs 12 Lakhs per annum.
• Maximum investment is Rs 50,000. Such amount can be invested in BSE100 stocks or RGESS Mutual funds.
• 50% of such invested amount qualifies for tax benefit u/s 80C. Means if you invest Rs 50,000 in BSE 100 stocks or RGESS
• Mutual funds for the first time, you would get tax exemption of Rs 25,000 for the first time and only one time. Means you can get the maximum tax benefit of Rs 7,725 (30% tax bracket).
• Returns are not guaranteed as investments are made in stocks and RGESS mutual funds.

5) Voluntary Provident Fund (VPF)

• Voluntary provident fund is the contribution from employee to his provident fund account. This is beyond the employee EPF contribution of 12%. However, there is no bound from employer to contribute to this VPF.
• The maximum amount an employee can contribute is 100% of the Basic and DA.
• This would carry the same rate of interest of the employee Provident Fund (EPF). The current EPF interest rate is 8.5% per annum.
• Investment in VPF can be withdrawn only during retirement, hence it is one of the best tax saving options to save income tax. so for very long term planningyou can go for this.
• Maturity returns are tax free.

6) New Pension Scheme (NPS)

• Under secton 80C who are looking to save for retirement.
• NPS returns vary between 4% to 10%. In 2013, some of the funds opted in this scheme has provided 14% returns.
• Low cost investment option. The fund management charges are very low at 0.0009% of investment value.
• You can invest Rs 500 per month or Rs 6,000 per annum. There is no maximum limit for investment in NPS.
• Investors have the choice to opt for allocation of equity, bonds and gilts.
• Maturity amount is taxable. so returns are not tax free (short term benefit only)

7) National Saving Certificate (NSC)

• National Saving Certificate is issued by Post offices and principal along with interest is backed up by the Govt. of India.
• Hence, these are safe investment options.
• NSC’s are available for 5 and 10 year period
• NSC’s are available for a minimum investment of Rs 500 and in multiples of Rs 1,000 / Rs 5,000 / Rs 10,000
• There is no maximum limit for investment.
• Interest rates are 8.5% for the 5 year NSC (VIII) and 8.8% p.a. for 10 years NSC (IX)
• Rs 100 invested in 5 year NSC would fetch Rs 151.62 and in 10 years would fetch Rs 234.35
• Interest is compounded every half year.
• Interest received is taxable. You need to show this as other income while filing ITR and pay income tax. However, such interest can be claimed again as exemption u/s 80C (within the limit of Rs 1.5 Lakhs). Means you would show as other income and exemption u/s 80C and need not pay any tax on such interest.
• Individuals, Joint and minor, supported by Guardian can invest NSC.

P.S.

1. If you want to go for tax saving and anthing like that i recommend you to get help of some CA.
2. Too much tax saving makes you immune to take risks (Which is risky..!!); but that is just  one man's openion
3. This information should be applied after your discretion and it is not at all any type of legal advise.
4. Why anonymous?