10. Which of the following is a tax saving investment?
(A) Fixed deposit
(B) Shares
(C) NSC
(D) PPF
Answers
Answer:
Such investments include ELSS (Equity Linked Saving Scheme), Fixed Deposits, Life Insurance, Public Provident Fund, National Savings Scheme and Bonds. There are a very few investment avenues that provide a further tax deduction, over and above this limit.
Answer:
(A) Fixed deposit, (C) National Savings Certificate (NSC), and (D) Public Provident Fund (PPF) are tax saving investments are tax saving investments.
Explanation:
(A) Fixed deposit: A fixed deposit is a savings account with a bank in which you deposit a lump sum amount for a fixed period of time, usually ranging from 1 to 10 years, at a fixed rate of interest. Interest earned on a fixed deposit is taxable under the income tax act.
(B) Shares: Shares refer to the ownership units of a company. When you buy shares of a company, you become a shareholder and have a claim on a portion of the company's profits and assets.
(C) National Savings Certificate (NSC): The National Savings Certificate is a government-backed investment scheme offered by the post office.
(D) Public Provident Fund (PPF): The Public Provident Fund is a long-term savings scheme backed by the Government of India. Investments made in PPF are eligible for tax deductions under Section 80C of the Income Tax Act, 1961.
To learn more about Public Provident Fund (PPF),refer these links.
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