Top 10 tax-saving investment schemes for long-term growth
In the maze of taxation and financial planning, the Income Tax Act generously extends numerous deductions to smart investors. One can significantly reduce taxable income through careful planning and investment in specified avenues.
Here are the top ten investment tips that not only promise attractive returns but also offer substantial tax savings:
Public Provident Fund (PPF): A highly secure investment, PPF comes with a lock-in period of 15 years and is offering a return of approximately 7.1% currently. The long tenure ensures compounded, tax-free returns.
National Savings Certificate (NSC): NSC is a 5-year fixed income investment scheme with a return of 6.8%. It’s a safe option for those looking at medium-term investment.
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Unit Linked Insurance Plan (ULIP): ULIP or UTI has a 5-year lock-in period. The returns vary based on the investor’s chosen plan. Apart from investment returns, it provides insurance coverage as well.
Equity Linked Savings Scheme (ELSS): With the shortest lock-in period of 3 years among tax-saving options, ELSS funds offer expected returns between 12% and 15%. They invest in the equity market, making them suitable for investors with a higher risk appetite.
National Pension System (NPS): A retirement savings plan, NPS remains locked in until retirement. It provides expected returns between 8% and 10% and offers multiple fund options based on risk preference.
Fixed Deposit or Post Office Deposits: These 5-year deposits promise returns between 7% and 9%. They’re best for investors looking for guaranteed returns with zero risks.
Sukanya Samriddhi Scheme: A special scheme for the girl child. Deductions are permitted for two girl children, with a
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