Top 5 Tax Saving Options

In our earlier report on tax saving plans, we had covered the top 5 ELSS plans under section 80C. Here we have covered top 5 performing tax saving plans u/s 80C.

Public Provident Fund: PPF, a risk-free guaranteed return scheme, established by the Central Government it is a long-term savings instrument. The fund offers tax benefit on both principal as well as interest on withdrawal after the lock-in period. The objective of this scheme is to provide old-age income. The minimum investment limit in this scheme is Rs 500 to a maximum limit of Rs 1 lakh per annum for a lock-in period of 15 years.

National Saving Certificate: NSC is one of the safest investment options backed by the Government of India. The safe and small saving instrument is one of the popular schemes available at post-office. It is available in two options - 5 year (Return: 8.5% per annum) and 10 years (8.8% per annum). The minimum investable amount in the scheme is Rs 100.

5-year Bank Fixed Deposit: The bank fixed deposit provides an option to earn a better interest on their savings compared to what one can get on ordinary savings bank account. The minimum amount required to invest for a bank FD is Rs 1000 per annum and there is no upper limit for this scheme, however, tax benefit is available till Rs one lakh only.

Equity-Linked Saving Scheme: Among all the tax saving options, ELSS have the shortest lock-in period of 3 years. This scheme is fully market-linked, which means the returns may vary as the market fluctuates. But it can generate a good return in a long run period.  

Senior Citizen Saving Scheme: As retirement brings with itself several doubts about investment, Government of India provides a guaranteed return scheme for retired citizens. The invested capital is completely protected under this scheme, however the interest earned is taxable. People with age of more than 55 years and retired are the only ones eligible for this scheme. The lock-in period for this scheme is 5 years.