Section 80C offers you a host of popular tax saving options including life insurance policies, PF, PPF, NSC, infrastructure bonds and ELSS or Equity Linked Savings Schemes. You can also offset long-term commitments such as a home loan or education fees against your tax rebate.
Here’s a broad overview of some popular tax savers:
- Life Insurance
- Medical insurance
- Mutual Funds
- Public Provident Fund
- National Savings Certificate
- Employee Provident Fund
- Tax Fixed Deposit
* Life insurance basically provides cover, except for some unit-linked plans, which invest a part of your money while the rest goes towards insurance, which does not earn you a return.
* ‘Fixed rate’ interest earning options such as PPF and NSC are considered ‘safe’, since they are backed by the government or by established financial institutions and can earn anywhere between 5-8%. Perhaps, not quite so safe in the face of inflation!
* An ELSS or Equity Linked Savings Scheme is the only pure equity option, which invests in the stock market and despite short term volatility has been known to create true wealth over the long term.
More coming soon……