Public Provident Fund (PPF)

Public Provident Fund (PPF) is the most popular long-term tax saving investment product among the several investors and is still standing tall. After all, the principal invested and the interest earned is guaranteed and the returns are tax-free. It is most suitable for the ones who want to save funds for their retirement.

PPF allows contribution to a limit of INR 1,50,000, which can be done by small investments or lump-sum. The lock-in period for PPF is 15 years. After the completion of 7 financial years from the date of initiation, amount can be withdrawn partially subject to certain conditions.

Unit Linked Investment Plan (ULIP)

Unit Linked Investment Plan (ULIP) is a hybrid product i.e., a combination of investment and insurance which is eligible for tax exemption. It covers the risk but no guaranteed returns. The returns can range from 5% to 11% depending upon the scheme. The maturity revenues earned are tax-exempted U/S 10(10D) of the IT Act. A Ulip has the lock-in period of 5 years but can have a duration of 15 or 20 years.

Equity Linked Saving Schemes (ELSS)

Equity Linked Saving Schemes (ELSS) is the diversified mutual funds which are linked to equity. It has two differentiating features - one, investment of up to a maximum limit of INR 1.5 lakh a year in ELSS schemes is eligible for tax exemption under Section 80C of the Income Tax Act, 1961 and secondly, the amount invested in ELSS has a lock-in period of 3 years.

Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana (SSY) is launched as a part of ‘Beti Bachao, Beti Padhao’ campaign. Investments made towards this scheme are eligible for tax deduction under Section 80C of the Income Tax Act. This deduction is subject to a maximum of Rs 1.5 lakh

On 23 July 2018, the criteria for minimum annual deposit for the Sukanya Samriddhi Yojana account has been revised to Rs.250 from the earlier amount of Rs.1,000.

The SSY account can be opened for girl children below the age of 10 years. The account matures in 21 years from the time it has been opened.

As a great tax saving investment, the plan ensures that the future of your girl child remains safe and secure.

National Pension Scheme

National Pension Scheme (NPS) is a voluntary and long-term investment plan for retirement, which is regulated by the Pension Fund Regulatory and Development Authority (PFRDA).

The contributions can be claimed as a deduction under section 80C of the Act. One cannot make any withdrawals in NPS till the person retires, except in some specific situations. It aims to provide adequate financial security to individuals during retirement.

National Saving Certificate

National Savings Certificate (NSC), a post office savings product is a fixed income tax saving investment scheme with a host of benefits. Similar to fixed-income instruments like PPF and Bank FDs, this scheme too is a secure and low-risk product, which offers guaranteed return on investment.

It comes with two fixed maturity periods – five years and ten years. There is no maximum limit on the purchase of NSCs, but only investments of up to Rs.1.5 lakh can earn you a tax break under Section 80C of the Income Tax Act.

Currently, the certificates offer a fixed rate of interest of 8% per annum.

Senior Citizens Savings Scheme (SCSS)

Senior Citizens Savings Scheme (SCSS) is for the senior citizens to save tax. It is a government-backed tax savings financial product offered to Indian residents aged over 60 years. Under this scheme, depositors are allowed to make a lump sum deposit of minimum Rs.1000. The maximum SCSS limit deposit is Rs.15 lakh.

The interest is taxable, but it is mostly covered in the taxable limit. The maximum limit for investment is Rs. 15lakhs. There is a lock-in period of 5years also. The deposit can be extended once by an additional 3 years after the maturity of 5 years from the date of account opening.

As of January 2020, the interest rate available on the SCSS account is 8.6% per annum for the final quarter of the financial year 2019-2020 (January to March).

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