The Various Types of Tax Saving Investments

If you are confused and require some assistance with tax saving investments, then this is your space. You can build your knowledge on the basis of the returns, liquidity, flexibility, etc. in order to avail the best deal.

This list shall enable you to select your perfect tax saving investment that suits your needs and financial situation best.

Equity-Linked Saving Scheme

Known as ELSS, this fund allows you to save taxes and also generate long-term returns from the market, with a three year lock-in period.

Public Provident Fund

This is again a long-term scheme of the Central GOI wherein you pay no tax, under section 80C, during the maturity period. A long-term scheme, this one is for a period of fifteen years. If you wish to invest in a short-term scheme, then this one is not for you due to its lock-in period.

Bank Fixed Deposits for 5 years

A bank deposits for a tenure period of over five years is exempted from tax under section 80C. These banks do not allow pre-mature withdrawal facility along with the fact that the interest for the amount generated is taxable.

Unit-Linked Insurance Plans

ULIPs provide you with benefits such as life insurance as well as savings, hence they are eligible for a tax rebate, under section 80C. But most importantly, if you do not wish to invest in insurance, then you shouldn't really select this type of a scheme. You can make a pre-mature exit without being penalized in this scheme, which makes it one of the most attractive and lucrative schemes.

Employee Provident Fund

This is one of the most common tax saving investments wherein a salaried employee is compulsorily required to contribute a certain percentage of one’s salary. This amount is general deducted from the monthly payroll in order to save for retirement planning. The returns of the EPF are tax free, according to section 80C.

Insurance, Health Premiums

The major advantage of availing health insurance premiums is that one can claim tax benefits under section 80C.

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