Public Provident Fund (PPF)
This is a traditional investment, especially as an Income Tax saving avenue. This is universally applicable for all cadres of employees especially considered as an old age provision.
PPF reigns supreme among the long-term savings plan. Currently, an individual can save up to Rs. 1.5 Lakhs per year in PPF. No tax will be deducted on the maturity of PPF as well as the interest earned through this PPF deposit.
PPF account can be easily opened in nationalised banks as well as Post Offices. Presently, an annual interest rate of 8 percent is being paid for PPF deposits.
Equity Linked Savings Scheme (ELSS)
The customers who opt for this scheme cannot get the investment back for a period of 3 years. The maximum investment per year is Rs. 1.5 Lakhs. This saving is invested in the share market just like the Mutual Fund Schemes. So, the interest rates is entirely dependent on the stock market trend/situation. There is no tax deducted when this investment matures.
Fixed Deposit (FD)
As an investment, this has been a long-time traditional avenue for making Fixed Deposits in the banks The special feature is the rate of interest accrued as per the security of the deposit. Further, senior citizens will get additional interest. However, a major negative point is that the both this amount on maturity as well as the interest earned on this deposit are taxable.
National Savings Certificate (NSC)
National Savings Certificate investment is done through the Post Offices. This investment cannot be withdrawn for a period of 5 years. The interest rate is fixed at 8 percent. The amount on maturity is taxable.
Equity Linked Insurance Scheme
This is a unique scheme covering 3 aspects - saving, investment, and insurance. The premium paid in this scheme is divided into 2 portions of investment - one for shares investment and the other for insurance. The maturity amount in this investment is not taxed.
National Pension Scheme
This is the scheme for a long-term investment, especially as you plan and dream your wishes for your old age. However, being a long-term deposit, any amount withdrawn before the maturity will entail penalty payment.
Life Insurance is the most popular scheme under the Income Tax Section 80-C. In case the policy holder dies before reaching old age, the insured amount will be paid to the nominated heirs. There are no taxes charged at any stage. Indeed, Life Insurance is a must for the policy holders family to survive in case of any untoward event to the policy holder.
Selvamagal Semippu Thittam (Sukanya Samruthi Yojana)
This is the scheme to lighten the expense burden of the parents with daughters. The guardians of the girl child can also save under this scheme. One can join in this scheme when the girl is under the age of 10. When the girl reaches the age of 21, the savings will mature. 50 percent of the invested amount can be withdrawn when the girl reaches 15 years of age for education purposes. Up to Rs. 1.5 Lakhs can be invested this scheme for IT exemption under IT 80-C section. No income tax will be deducted when this investment matures.