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Tax saving options under section 80C: Features explained

You can save tax if you understand how these tax saving options work.

, ET Bureau|
Jul 22, 2019, 06.30 AM IST
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ELSS funds make your investment grow along with letting you save tax.
1. Equity linked savings scheme (ELSS)
Tax benefit: Investment is deductible, gains tax free till Rs 1 lakh.
Returns: Market linked
Lock in period: 3 years

2. Public Provident Fund (PPF)
Tax benefit: Investment and interest are tax free
Returns: 7.9% for July-Sept quarter
Lock in period: 15 years from first investment. Partial withdrawals after 5 years

3. 5-year bank fixed deposit
Tax benefit: Investment deductible, interest fully taxable
Returns: 6-7.75%
Lock in period: 5 years

Also read: Financial planning: 7 money steps new earners must take

4. Unit-linked insurance plan (Ulips)
Tax benefit: Investment and maturity amount is tax-free
Returns: Market linked
Lock in period: 5 years

5. Traditional insurance policy
Tax benefit: Premium and maturity amount is tax free
Returns: 4.5-5% for 20-yr plan
Lock in Till policy matures. Can be closed after 3 years. Before that, all the premiums paid are forfeited

Also Read

Best tax saving investment for my retired mother

Best tax saving investment for my retired mother

Four commonly-held misconceptions about ELSS or tax saving mutual funds

When should you sell an ELSS or tax saving mutual fund scheme?

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