Flipkart-owned digital payments platform PhonePe has launched a tax saving solution for its customers. The company claims that the solution allows users to save upto Rs 46,800 in taxes in just a few minutes on the PhonePe app. This is the second wealth management product launched by PhonePe after it launched gold on its platform a year ago.
The idea here, Hemant Gala, Head Payments, Banking and Financial Services for PhonePe says is that most consumers find buying financial products to be a complicated process today, and through this platform, PhonePe wants to help them by making the end-to-end research and purchase journey really simple.
The investment process has been designed in such a way that it makes the user’s tax saving journey simple and easy, the company said in a statement.
How this works is, a user needs to do enter the amount and select the fund to invest in, complete the one-time digital KYC using their Pan Card and make payments using a UPI-linked bank account. Post this, they will get an instant receipt.
Tax Saving Funds are also known as Equity Linked Savings Schemes (ELSS). The tax saving amount for investing in the tax saving fund is as per Section 80C of the Income Tax Act, which allows individuals to reduce their taxable income by up to Rs 1,50,000 by claiming deductions with regard to certain investments and expenditures as specified. The tax saving of Rs 46,800 is calculated for a customer in the highest tax bracket (30%) and includes 4% cess as applicable for FY 2018-19 and FY 2019-20.
“The Government of India has created many attractive tax-savings opportunities that every Indian citizen should be availing. Yet most of us don't leverage these opportunities to the fullest extent. PhonePe’s Tax Saving product is an excellent way for millions of Indians to quickly save thousands of rupees in just a matter of minutes. This can be done instantly anytime, anywhere and in a completely paperless manner. We are confident that our 100 million user base will see tremendous value in this product,” says Terence Lucien, Head – Mutual Funds at PhonePe.