The investments that provides tax savings according to section 80(C) of income tax regulations differs in investment risk, investment period, gain and investment period. The tax discounts are for investments up to one lakh. The limit for tax free investment is 1 lakh rupees except in public provident fund.

Public Provident Fund(PPF)

The major features of PPF are

• It provides about 8% of annual interest .No tax is deducted on the interest.
• The investment period is 15 years.
• Partial withdrawal of the sum is possible before the investment period.

Bank Fixed Deposit For 5 years

The features of this scheme are

• The interest rate of different banks lies between 6%-7.75%. The interest gained is taxable.
• It is applicable to tax deduction at source.
• This has the lowest investment period when compared with other traditional investment schemes.

National Savings Certificate

The features of National Savings Certificate are

• The annual interest rate is 8%. The return from the scheme is not subjected to taxation.
• The period of investment is 6 years
• The investment can be withdrawn before the completion of the period, but only after the completion of 3 years.

Life Insurance Schemes

The chief features of Life Insurance Schemes are

• The return from the investment is not subjected to tax.
• The withdrawals within the investment period may cause huge losses.
• Loans can be taken from the investment

Unit Linked Insurance Plans

The features of this plan are

• The return is not subject to taxation.
• The withdraws in between the lock in period of 3 years will result in huge loss.
• In this scheme the switch over facility can be utilized.

Equity Linked Savings Schemes

• The return is not subject to taxation.
• The investment cannot be withdrawn at any means in the first 3 yeas
• This is an excellent scheme for investors choosing a time period of 3-5 years.