Save Tax by Investing in These 2 Schemes in a Child's Name Under Section 80C:

Save Tax by Investing in These 2 Schemes in a Child's Name Under Section 80C  Are you someone who is still following the old tax regime but has not made any investment under Section 80C to save tax? The current FY 2024-25 is ending soon and you have a few days to make investments to save tax. If you missed this deadline, you would miss the opportunity for tax deduction benefits. Individuals can avail of tax deductions up to Rs.1.5 lakh by investing under Section 80C of the Income Tax Act, 1961. Among these options, some popular schemes enable taxpayers to make tax deductions even on investments made in a child's name. Here are two such schemes:

Sukanya Samriddhi Yojana (SSY) account

• The Sukanya Samriddhi Yojana (SSY) can be opened for a girl child whose age is up to 10 years. The scheme is available in several bank accounts and post offices.
• In this scheme, the guardian can only invest an amount up to Rs. 1.5 lakh in a financial year.
• At present, the scheme is offering an interest rate of 8.2%.
• The account matures on completion of a period of 21 years from the date of opening of the account.

Public Provident Fund

• Under the Public Provident Fund, a guardian can open a PPF account on behalf of a minor child.
• Currently, the Public Provident Fund (PPF) interest rate is 7.1% per annum.
• The minimum deposit is Rs. 500 and the maximum investment amount is Rs.1.5 lakh.
• The scheme is available in several bank accounts and post offices.
• The maturity tenure in PPF is 15 years. However, after maturity, you can choose to extend the account for multiple 5-year blocks.

From the financial year 2025-26, you can invest in NPS in the name of your child under the scheme NPS Vatsalya and claim an extra tax deduction of Rs. 50,000. This benefit is only for the next financial year and not the current FY 2024-25. Salaried individuals who want to save taxes by opting for the old tax regime before March 31, 2025. If you chose the new tax regime at the beginning of the financial year, you can still switch to the old tax regime when filing your Income Tax Return (ITR).