Tax Saving Financial Products

It is necessary to make optimal decisions while investing that will help reduce your tax burden. There are various investment schemes available that not only help you avail tax exemptions but also help you achieve your long-term investment goals. 

Confused on which is the best tax-saving investment scheme? We have shortlisted a few schemes below...

1. Life Insurance

Life insurance has several benefits, from securing your family’s future to providing you an income stream. Your life insurance premium is deductible from your total income under section 80C. Also, the pay-out to a beneficiary in case of death is not taxable.

2. Public Provident Fund (PPF)

This is one of the best options to save tax under section 80C of the Income Tax Act. Since it is backed by the government, it is a safe long-term investment option. You enjoy attractive interest rates and the returns are fully exempt from tax.

3. National Savings Certificate (NSC)

This instrument is issued by post offices and is backed by the government. The interest on your investment amount is compounded every six months. While the interest is taxable, you can later claim it as a deduction under section 80C

4. Sukanya Samriddhi Yojana

This scheme is especially designed to ensure your girl child has a bright future. SSY offers attractive rate of interest and is fully exempt from tax under Section 80C.

5. Fixed Deposit

Some banks offer tax saving Fixed Deposits, which have a lock-in period of 5 years. These Tax-Saving FDs offer tax deduction under section 80C of the Indian Income Tax Act.

6. Equity Linked Savings Scheme (ELSS)

ELSS funds are tax saving mutual funds, in which majority of the funds are invested in equity schemes. ELSS Mutual funds has a lock-in period of 3 years. Your investment is deductible from your total income under section 80C.

7. Atal Pension Yojana

You can now get assured pension with Atal Pension Yojana. You can contribute a small sum and avail a guaranteed pension of Rs.1000/- to Rs. 5000/-. The pension starts at the age of 60.

8. Senior Citizens’ Saving Scheme (SCSS)

This scheme offers guaranteed returns to senior citizens. It is a Government-backed scheme offered to Indian residents above 60 years of age.

9. National Pension Scheme (NPS)

This is a voluntary contribution retirement savings scheme, with an aim to provide retirement income to every citizen. Your savings are pooled in a pension fund which grows over the years. At the end of the scheme, you can withdraw the pension as lump sum or purchase an annuity. Investing in NPS can get you extra tax deduction up to Rs.50,000/-.

10. Health Insurance

You can get tax deduction on your health insurance premium under Section 80D of the Income Tax Act. It covers the policyholder, spouse, children and dependent parents of the policyholder.