Best Tax Saving Investments in India for FY 2022-23

No one told you growing up included figuring out the best tax saving plan & investments, right?

Worry not, we have got you covered with 4 extremely popular and evergreen investments that will prevent your income tax from burning a hole in your pocket.

1.Public Provident Fund

PPF is a long-term savings-cum-investments scheme and is extremely popular among Indian households for its tax saving benefits. It is a popular investment that falls under the EEE category.

EEE stands for Exempt-Exempt-Exempt; where Investment, Accrued Interest as well as Maturity Value are all exempt from tax.

Here are the features of PPF scheme:

• Accumulated amount and interest are exempt from tax
• Minimum tenure is 15 years
• Risk-free returns and complete capital protection
• Partial withdrawals from year 7
• Minimum investment of ? 500 per year and maximum of ? 1.5 Lacs

Any Indian Citizen can open a PPF account for oneself or on behalf of a minor.

2. ELSS (Equity Linked Savings Scheme)

One of the best tax-saving mutual fund?in India undoubtedly is ELSS. Don't settle for anything?LESS!

Tax Saving Mutual Funds can also be called Equity Linked Savings Scheme or ELSS.

ELSS is a?diversified equity mutual fund scheme?that invests in Equity and Equity related securities.

Here are the benefits of ELSS:

• Best tax saving investment under 80C
• Lowest lock-in period
• 2x higher returns than FD/PPF
• Monthly investment option available

If you are willing to take risks for higher returns and can invest for a longer period of time, you can consider ELSS funds.

3. National Pension Scheme

NPS or National Pension Scheme is a Government-backed investment specially for retirement.

The scheme allows subscribers to contribute regularly in a pension account during their employment.

After retirement, the investors can withdraw lump sum amount from a portion of the corpus. The remaining amount will be received as monthly pension post-retirement.

Features & Benefits

• Annuity income with at least 40% of corpus accumulated
• Tax deduction of up to Rs.1.5 lakh to be claimed for NPS + additional self-contribution of up to ? 50,000
• Equity allocation of up to 50% of investment; giving 8 to 10% annualised returns
• Matures when investor turns 60 years or post-retirement
• Withdrawal up to 3 times (gap of 5 years) available for NPS Tier-II account

NPS allows the investor to receive pension post-retirement and gives the flexibility to set equity allocation for capital growth.

Bonus Recommendation

4. Sukanya Samriddhi Yojana

SSY is a government-backed scheme which comes with income tax benefits under 80C. A Sukanya Samriddhi Yojana account can be opened anytime before the girl child turns 10.

Benefits of Sukanya Samriddhi Yogana for girl child are:

• Higher rate of interest compared to others
• Min investment of ? 250 and max ? 1.5 lacs
• EEE benefit, claim up to ?1.5 lacs per fiscal year under 80C
• Educational & other expenses covered for a tenure of 21 years
• Payment periods for 15 years & premature withdrawal up to 50% when the girl turns 18

To get recommendations of the best tax saving funds and a free tax planning report, click here.

For more on how to plan your taxes, click here!

For a step-by-step guide on how to file your taxes on the ITR portal, click here!

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