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Tax Saving Investments Guide

A comprehensive list tax saving investments in India and our detailed analysis. Covering Section 80C, 80CCC, 80CCD(1), 80CCD(1b), 80CCD(2), 80D, 80DD, 80U, 80DDB, 80E, 80G, 80GGA, 80GGB, 80GGC, 80GG.

Type of InvestmentReason for RecommendationTypical Return % Per YearRisksMaximum Deduction Allowed
ELSS (Equity Linked Saving Scheme)You can not only save tax but also save money.18.50%Invest long period get more benefit and try to avoid dividends1,50,000
NPS (National Pension Scheme)Get money at the time of retirement, 40% of the return is tax exempted.12.30%Only 20% exempted when you withdraw before 60 years of age.
i) Employee's contribution to NPS (Section 80CCD-1)1,50,000
ii) Employer's contribution to NPS (Section 80CCD-2)10% of salary
iii) Additional Employee's contribution to NPS (Section 80CCD-1B)50,000
ULIPS (Unit Linked Saving Scheme)5 Years lock-in-period gives you Savings and Tax-free Returns10.70%Early withdrawal may incur charges that may reduces return on investment.1,50,000
Sukanya SamriddhiFor higher education purpose you can withdraw 50% deposited8.50%Available for Girl child under 10 years of age.1,50,000
VPF (Voluntary Providend Fund) and
PPF (Public Providend Fund)
Safe and Secure; Money automatically flows into the PF account.8.50%1,50,000
Senior Citizen Saving SchemePost Office saving scheme; Maturity period is 5 years. After 5 years you can increase your period, interest will be added to your savings account8.30%If account is closed before 2 years, you have to pay 1.5% of balance in to the account, after 2 years 1% of the balance.1,50,000
NSCs (National Saving Certificate)Like FD of Money, but the earned interest is not taxable; On retirement, it will fetch you monthly pension as the NSC matures.8.20%Investments cannot be withdrawn prematurely unless the case involves the death of the primary holders.1,50,000
Pension Plan33% of Tax free at the time of withdraw8-10%High Charges1,50,000
Bank FDsThe interest rate on tax saving FD is decided by the banks. Senior citizens get a higher interest rate.7.50%-8.50%Tax on interest, The lock in period for the Tax Saving FD is 5 years.1,50,000
Insurance PlanLower the taxes5.50%May earn 5 to 6% of savings only1,50,000
Total Deduction Allowed across all Investments1,50,000 + 50,000 + 10% of Salary

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