Tax Savings & Better Returns Plan

Top 4 Better Returns Tax Savings Investments

Here are the best options to Invest for Tax savings and Better Returns

If you are planning to Invest your money for tax savings with better returns on your Investment but you are confused that where to invest to get better results then there are few top 5 better options for you.

1. PPF – Public Provident Fund

A public provident fund (PPF) account is an investment option that provides income tax deduction u/s 80C for the amount invested (subject to a limit of Rs 1.5 lakh a year). Interest received is exempt from tax and there is no tax on the amount received on maturity of the account either. In view of the tax benefits offered, many assessees open PPF accounts with their bank/post office to build a sizeable corpus.

  • You can open PPF account with any of the bank or Post Office
  • You can start this account with only 1000 Rs.
  • This scheme for Min 15 years and you can increase the tenure for 5-5 years based on your requirement.
  • Current rate of Interest in PPF account is 7.1%

2. ELSS – Equity Linked Saving Scheme

As the name suggests, Equity Linked Saving Scheme or ELSS is a type of mutual fund scheme that primarily invests in the stock market or Equity. Investments of up to 1.5 Lac done in ELSS Mutual Funds are eligible for tax deduction under section 80C of the Income Tax Act. The advantage ELSS has over other tax Saving instruments is the shortest lock-in period of 3 years. This means you can sell your investment only after 3 years, from the date of purchase! However to maximise returns from ELSS funds, it is recommended to keep your investments intact for the maximum duration possible. If you have an ELSS SIP (Systematic Investment Plan), each instalment has a lock-in period of three years, which means each of your instalments will have a different maturity date.

  • You can get ELSS option from any of the mutual fund company.
  • You can start this scheme with only 5000 Rs.
  • Minimum lock-in period for this scheme is 3 years.
  • In this scheme you will get market linked return.
  • In Previous 10 years ELSS mutual fund scheme provided 8.46 return.

3. Time Deposit Scheme

Tax-saving FD is one of the tax saving instruments where one can invest to save tax under section 80C of the Income Tax Act. One can invest in this FD easily by visiting a bank, filling the form and giving a cheque. In fact, if you can place the FD in the same bank branch on which you are drawing the cheque then the transfer of funds can happen quickly and the investment can be done within a few hours.

  • This scheme can save tax upto 1.5 lac under section 80C.
  • Time deposit scheme also known as Fixed deposit.
  • You can opt this scheme through bank or post office.
  • Minimum lock-in period of tax saving time deposit scheme is 5 years.
  • 5-Year Bank Fixed Deposit will give you 6 to 7% returns.

4. NPS – National Pension Scheme

The National Pension Scheme is a social security initiative by the Central Government. This pension programme is open to employees from the public, private and even the unorganised sectors except those from the armed forces. The scheme encourages people to invest in a pension account at regular intervals during the course of their employment. After retirement, the subscribers can take out a certain percentage of the corpus. As an NPS account holder, you will receive the remaining amount as a monthly pension post your retirement. Earlier, the NPS scheme covered only the Central Government employees. Now, however, the PFRDA has made it open to all Indian citizens on a voluntary basis. NPS scheme holds immense value for anyone who works in the private sector and requires a regular pension after retirement. The scheme is portable across jobs and locations, with tax benefits under section under 80CCD(1)

  • There is a deduction of up to Rs.1.5 lakh to be claimed for NPS.
  • This benefit is not available for self-employed taxpayers.
  • Claim any additional up to Rs 50,000) under section 80CCD(1B).
  • Total tax deduction can save up to Rs 2 lakh.
  • Minimum investment amount is 500 Rs.
  • Interest Rate between 8 to 10%.
  • Minimum lock-in period till retirement.


Earning Options