Investing in an investment plan has become one of the most preferred ways of financial security and wealth creation for the coming years. Apart from providing financial security, you can invest your money in market-related schemes, such as equity, stocks, bonds, shares, etc., depending on how much risk can you take. How much returns you get directly depends on how your investments perform in the market.
Investment plans come with various benefits, such as providing financial security to the policyholder and his family, lump-sum death benefits, flexible payout options, etc. One of the crucial benefits of a saving investment plan is the tax benefits. Saving investment plans offer lump-sum tax benefits under Section 80C and 80CCC. Please note that tax laws are subject to change from time to time.
Today, there are numerous tax saving investment plans available to choose from. This makes it important for us to compare and choose the plan that is best suited for us and matches our expectations. Below are 5 of the best tax-saving investments under Section 80C in India for you to check out.
- Unit Linked Insurance Plan (ULIP)
One of the best tax saving investment plans in India is Unit Linked Insurance Plan (ULIP). This tax-saving investment plan offers the policyholder dual benefits of investment and insurance. In other words, a part of the premiums paid by the policyholder for ULIP plan is used for insurance purposes. The other part of the premium is used to invest in market-related schemes, such as stocks, bonds, shares, equity, etc. How much you want to invest totally depends on how much risk can you take. The performance of your investments directly depends on how they perform in the market.
This tax-saving investment plan offers the policyholder a lump sum tax deduction of upto Rs. 1.5 lakhs in one year under Section 80C of the Income Tax Act, 1961.
- Public Provident Fund (PPF)
Another one of the best tax saving investment plans is Public Provident Fund (PPF). This tax savings investment plan provides an ideal financial safety net for your family and you and ensures that you do not face any financial hassle in the coming years. It comes with a 15-year lock-in period but has the provision of partial withdrawal after the 7th year of the plan.
This tax-saving investment plan comes with ideal tax benefits for the policyholder. This plan offers a lump-sum amount of tax benefits up to Rs. 1.5 lakhs in one financial year under Section 80C of the Income Tax Act, 1961.
- National Pension Scheme (NPS)
National Pension Scheme is one of the best tax saving investment plans for retirement. This plan ensures that you have a peaceful and financially secure retirement. Moreover, it provides a regular income after the policyholder retires, ensuring that he or she can fulfil all his dreams without worrying about finances.
National Pension Scheme offers a tax benefit to the policyholder of up to Rs. 1.5 lakhs under Section 80C of the Income Tax Act, 1961 in one financial year.
- Sukanya Samriddhi Yojana (SSY)
The main aim of Sukanya Samriddhi Yojana is to provide financial security and a better future for the girl child. This ensures that even if the parent is not around to financially back her up, the girl child can fulfil her dreams without facing any financial constraints in the future.
The tax benefit under this tax savings investment plan is that it provides an amount up to Rs. 1.5 lakhs of tax benefits to the policyholder in one financial year under Section 80C of the Income Tax Act, 1961.
- Mutual Funds
ELSS (Equity-Linked Saving Scheme) Mutual Fund is a tax-saving investment policy that focuses on equity or stocks investment. The returns that the policyholder will get under this policy are dependent on how the investments perform in the market.
This tax savings investment offers tax benefits of up to Rs. 1.5 lakhs to the policyholder in one year under Section 80C of the Income Tax Act, 1961.
You now know 5 of the best tax saving investment plans in India. When you plan to invest in tax saving investment plans, make sure that you go for an insurance company that is trusted and leading.