Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Top Headlines »
Open DEMAT Account in 24 hrs
 ITR Filing Deadline 2026: Is July 31 the Last Date to File Your Income Tax Return? Latest Official Update
 ITR filing deadline nears: How to file income tax return online on e-filing portal - quick 15-step guide
 Will the ITR Filing Deadline Be Extended Beyond July 31 for FY 2025-26? Here's the Latest Update for Taxpayers
 Income Tax Refund Delayed for AY 2026-27? 5 Common Reasons Your Refund May Be Stuck and How to Fix It
 ITR Filing 2026: FM Nirmala Sitharaman Asks Tax Officials to Let Honest Taxpayers Correct Genuine Mistakes
 Will Your FCNR Deposit Stay Tax-Free After Returning to India? Tax Rules Explained for NRIs
 ITR Filing 2026: Section 143(1) Tax Demand Explained Reasons, Solutions, and How to Avoid Penalties & Disputes
 ITR Filing 2026: Over 3 Crore Income Tax Returns Filed for AY 2026 27 Income Tax Department Urges Taxpayers to Avoid Last-Minute Rush
 ITR Filing 2026: CBDT Upgrades Income Tax Portal Ahead of July 31 Deadline Key Changes Every Taxpayer Should Know
 Sold house for ₹1.10 crore, tax computed on ₹1.96 crore? ITAT explains when Section 54 relief is still available
 ITR 2026: How Taxpayers Earning 25 Lakh to 1 Crore Can Save Up to 1.5 Lakh Under the New Tax Regime

List priorities while choosing tax-saving scheme
March, 02nd 2009

As March approaches, many people wake up to the challenge of saving taxes before the month-end. Like every year, they start consulting friends and colleagues about where to put their money.

The popular choices under section 80 C, which allows you to invest up to Rs 1 lakh, are National Savings Certificate, Public Provident Fund, Post Office term deposit and bank fixed deposits, among others. Some intrepid ones also opt for Equity-Linked Tax Savings Scheme (tax saving schemes from mutual funds).

However, according to financial advisors, many people are clueless about how to choose the right investment because they are not aware of the returns and their tax treatment. "Most people are not aware of the lock-in period, returns and the incidence of tax on returns on the investments permitted under Section 80 C. They end up picking up the wrong products and regret it later,'' says a financial advisor.

Preference

The first step to pick the right product is to ask yourself whether you prefer a fixed rate of return with more safety or market-related return with more risk.

If you want fixed rate of return, you should go for the usual NSC, PPF, Bank FD, and so on.

However, if you can take more risk to earn better returns from stocks, you should pick up ELSS.

Lock-in period of investment to claim tax benefit

The next is to find out how many years you are willing to lock in the investment to claim the tax benefit.

As you can see from the table, ELSS has the least lock-in period, whereas PPF has the highest lock-in period of 15 years.

Others fall in between. Depending on your willingness to wait, take your pick.

Rate of return offered

The next factor to consider is the rate of return offered by them.

According to financial advisors, ELSS has the potential to offer highest return, but it is recommended only for people who can afford to take risk.

"On the fixed income category, the returns range within 8-8.5%, but tax-saving schemes have the potential to give 12%. Of course, it is not guaranteed,'' says a financial expert.

How the returns are taxed?

The most crucial part is to look at how the returns are taxed. Only PPF and ELSS offer tax free returns, whereas interest earned on NSC, Post Office term deposits and bank FDs is taxed.

"At the moment, bank FD is a better option that NSC as banks are offering interest rate of 8.5% on FDs.

Also, bank FDs have a lock-in of only five years,'' says a senior banker.

 

Home | About Us | Terms and Conditions | Contact Us
Copyright 2026 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting