NPS, PPF, ELSS: These 7 investment schemes will surely help you save income tax

Tax Saving Schemes: Every taxpayer, while filing their income tax return, thinks about how they can save tax on their income. Many times, when they don't have investments where they can get a significant tax rebate, they end up paying huge taxes. Then they look for investment options that not only give good returns but also help them save tax. Post Office schemes such as the Public Provident Fund (PPF), Fixed Deposit (FD), Sukanya Samriddhi Yojana (SSY), Senior Citizen Savings Scheme (SCSS), and National Savings Certificate (NSC) are some investment schemes where the investor gets assured income and guaranteed returns in the form of interest.

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Along with that, such schemes also fall under Section 80C of the Income Tax Act and provide tax relaxation up to Rs 1.50 lakh.

Apart from these Post Office schemes, there are investment schemes such as National Pension Scheme (NPS) and Equity-Linked Saving Schemes (ELSS), where one doesn't get assured returns but they are considered stable income options.In this write-up, learn more about such schemes that can help you save tax on your hard-earned money.
 

Public Provident Fund (PPF)

This is one of the most popular Post Office schemes and is also run by a lot of banks.

The scheme provides you with guaranteed returns, and the interest that you get from it is also tax-free.

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PPF matures after 15 years, which means it is a long-term investment scheme.

At present, the interest one can get in the scheme is 7.1 per cent.

Investments made in PPF have been kept in the E-E-E category.

This means that your investment, interest, and maturity amount are completely tax-free.

If one invests in PPF, they can get a tax exemption up to Rs 1.5 lakh under Section 80C of the Income Tax Act.
 

Senior Citizen Savings Scheme (SCSS)

Senior Citizen Savings Scheme, i.e., SCSS, is a special scheme run by the government for the elderly.

Under the Post Office's savings scheme, senior citizens get 8.20 per cent interest on their deposits.

One can invest from Rs 1000 to Rs 30 lakh in SCSS.

Through investment in the scheme, account holders can claim tax exemption up to Rs 1.50 lakh under Section 80C.
 

Sukanya Samriddhi Yojana (SSY)

If you are the father of a daughter, you can invest in Sukanya Samriddhi Yojana to secure her future.

At present, the SSY scheme is providing interest at 8.20 per cent, which is the joint highest among all Post Office schemes.

One can invest a minimum of Rs 250 and a maximum of Rs 1.5 lakh in a financial year in the scheme for up to 15 years.

The account can be opened for a maximum of two daughters.Among many other benefits, one of the significant advantages of the scheme is that it provides tax relaxation up to Rs 1.5 lakh annually under 80C.
 

National Savings Certificate (NSC)

National Savings Certificate i.e. NSC, is also a popular Post Office scheme that provide guaranteed returns.

Any Indian citizen can invest in NSC, and the investment can start with Rs 1000.

There is no maximum limit for investment.

The NSC account can be opened at any post office in the country.

At present, interest is being given on it at a rate of 7.7 per cent.

In this scheme, one gets the benefit of tax exemption under Section 80C.
 

National Pension Scheme (NPS)

National Pension Scheme is one of the best investment options in India for investors seeking a huge corpus at the time of retirement and a monthly pension after that.

One can withdraw a maximum of 60 per cent of their corpus from their NPS account and the fund invests 40 per cent of the money in a debt fund to give you an assured monthly pension.

The scheme is a good option from a tax-saving point of view, as one can get an exemption under 80C and a tax exemption of Rs 50 thousand under 80CCD (1B).
 

Fixed Deposit (FD)

You don't get a tax exemption on all Fixed Deposit (FD) investments.

But if you make an FD for 5 years, you get tax benefits under Section 80C.

Therefore, this FD is also known as tax saving FD.

You can make an FD in a bank or in a post office.

In a Post Office, the scheme is known as ​National Savings Time Deposit Account.

Interest rates and time duration vary in different FDs.

Equity Linked Savings Scheme (ELSS)

Equity Linked Savings Scheme (ELSS) come under the mutual fund category.

They come with a lock-in period of three years, which means that one can't withdraw their money before three years.

The scheme is market-linked, but it is considered more stable than most of the equity funds.

The biggest benefit of investing in ELSS funds is that it provides tax relaxation up to Rs 1.50 lakh under Section 80C.

Since mutual funds also provide compounding, one can expect to build a huge corpus in the long run.