Tax Saving Investment blog

Tax Saving Investment

Top -5 Tax Saving Investment (2025-26)

1. Equity Linked Savings Scheme (ELSS)

• Tax Benefit: Up to ₹1.5 lakh under Section 80C.

• Returns: Market-linked; historically 12%–18%.

• Lock-in Period: 3 years (shortest among 80C options).

• Ideal For: Investors seeking high returns and willing to accept market volatility.

• Note: Gains above ₹1 lakh are subject to 10% LTCG tax.

2. Public Provident Fund (PPF)

• Tax Benefit: Up to ₹1.5 lakh under Section 80C.

• Returns: 7.1% per annum (government-backed, tax-free).

• Lock-in Period: 15 years (extendable in 5-year blocks).

• Ideal For: Risk-averse investors seeking stable, long-term growth.

• Note: Interest and maturity proceeds are fully tax-exempt.

3. National Pension System (NPS)

• Tax Benefit:

  • Up to ₹1.5 lakh under Section 80C.

  • Additional ₹50,000 under Section 80CCD(1B).

• Returns: Market-linked; typically 9%–12%.

• Lock-in Period: Until retirement (age 60), with partial withdrawals allowed.

• Ideal For: Individuals planning for retirement with a mix of equity and debt exposure.

• Note: Employer contributions are also eligible for tax benefits under Section 80CCD(2).

4. Sukanya Samriddhi Yojana (SSY)

• Tax Benefit: Up to ₹1.5 lakh under Section 80C.

• Returns: 7.6% per annum (government-backed, tax-free).

• Lock-in Period: Until the girl child turns 21 or upon marriage after age 18.

• Ideal For: Parents or guardians saving for a girl child's education or marriage.

• Note: Interest and maturity amounts are fully tax-exempt.

5. 5-Year Tax-Saving Fixed Deposits (FDs)

• Tax Benefit: Up to ₹1.5 lakh under Section 80C.

• Returns: Approximately 6.5%–7.5% per annum (taxable).

• Lock-in Period: 5 years.

• Ideal For: Conservative investors seeking fixed returns with tax benefits.

• Note: Interest earned is taxable as per the investor's income tax slab.

Comparison Summary:

Note: Returns are indicative and subject to change based on market conditions and government notifications.