Everyone is looking to save income tax by investing in various schemes in order to save money by reducing their tax outgo. Those who do it without thinking will end up losing a lot of money, while those who do a bit of homework stand to gain much - in fact, they stand the chance of laughing all the way to the bank! We give you an opportunity to save money by laying out an income tax returns filing roadmap that is big on saving money.

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1) ELSS funds - ELSS funds continue to lead the Section 80C basket, generating the highest returns among all tax-saving instruments. The funds have generated over 13% returns over the past three years with gains up to Rs 1 lakh being tax-free. Harvesting of gains can help investors avoid tax on long-term capital gains. The best route for investments in ELSS funds is through monthly SIPs barring those taxpayers who have to show proof of Sec 80C tax-saving investments in a few days. They can stagger the purchases over 2-3 tranches before the 31 March deadline. The top three recommendations are Mirae Asset Tax Saver, Axis long term Equity and JM Tax Gain.

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2) National Pension Scheme (NPS) - NPS funds have generated very good returns in the last 4-5 years with an average return exceeding 9%.  Moreover, the fact that 60% of the corpus withdrawn at the time of retirement is tax-free, makes it a more attractive investment option. The scheme has also allowed early withdrawals for specified reasons. HDFC Pension Fund, ICICI Prudential Pension Fund, Kotak Pension Fund, LIC Pension Fund and SBI Pension Fund are viable options.

3) Ulips - Ulips are a good choice with respect to tax savings and income from the Ulip is completely tax-free under Section 10(10d) if the insurance cover is 10 times the annualized premium. The investors also have the freedom to change their asset mix depending on the market situation. Switching from equity to debt or vice versa does not have any tax implications. New Ulips launched by insurance companies are very low on costs and compete with direct plans of mutual funds on charges.

4) Senior Citizens Saving Schemes (SCSS) - The SCSS is offering assured returns of 8.6% rate of interest for the Jan-Mar 2020 quarter. It is a Government of India (GoI) backed scheme and hence is safe for investors. It also offers high liquidity options with interest paid every quarter. The SCSS has a five-year lock-in but premature closure is permitted with a penalty. One can also make withdrawals subject to conditions and penalties.

5) Public Provident Fund (PPF) - PPF as against the bank deposits is a far better option because the interest on its is tax-free. The PPF is also high on safety, and flexibility with no obligation of a long term commitment. It also allows partial withdrawals after the fifth year so it can be crucial at the time of emergency. The PPF is offering a 7.9% interest for Jan-Mar 2020 quarter.