Last day of the current fiscal is knocking the door and tax saving investments for Income tax returns filing has been the top priority of taxpayers. For those who are panicking about the same, needn’t worry for you are at the right place. 

Here`s a list of four such tax saving investments schemes offered by the government, which can help you save big on tax. Take a look!

Life Insurance

Investment in life insurance has been a practice since ages. Though life insurance is not a pure form of tax saving investment, yet it comes under the list, because under section 80C of IT Act, the premium you pay under this plan is deductible from your total income – which means your taxable fraction can be lowered.

The upper limit for this deduction is up to Rs 1 lakh. Also, premiums paid for the unit linked life insurance plans (ULIPs) are exempted from taxes under section 80C - under which Rs 1.5 lakh can be tax saving medium. 

Life Insurance is not limited to investment in ULIPs, there are other life insurance plans like endowment plans, term plans and money back plans.

National Pension Scheme:

This scheme is offered by the Central government. Although it mandatorily covers government employees, it is also open to all Indian citizens on a voluntary basis.

Up to Rs 1.5 lakh investment made in NPS, can be tax exempted under section 80C. On the other hand, deductions under this section should not exceed 10% of your salary.

Additionally, the scheme involves low-cost investment as much as Rs 500 can be invested. Returns from this scheme range from 4% to 10%.

Public Provident Fund (PPF):

In comparison to other tax-savings schemes, PPF has the maximum lock-in period of 15 years which are issued by the Central government. Contribution made towards this scheme is tax deductible under section 80C.

The upper limit on this contribution is around Rs 70,000. In addition, the interest earned and received on the maturity is completely tax-free. Taxpayers can earn more than 8.50% rate of return from PPF.

Equity Linked Saving Scheme (ELSS) Mutual Funds:

It is considered to be one of the most hunted after tax saving investments options - as these are market linked product. Investment in equities emerges to be a most flexible medium, as risk is taken as per your ability and financial status.

The compounding annual growth return (CAGR) under ELSS is between 20% and 22%.  While many reports say that ELSS category has given an average return of 43.48% over the past one-year and 22.99% over three years.

Also, another benefit perk that ELSS offers is that investment can be made through a Systematic Investment Plan (SIP) where you can spend a small fraction of amount (example Rs 1,000) every month than paying a heavy sum altogether.

Other government schemes which can be an option to tax saving investment are - Fixed Deposit Schemes, Senior Citizen Savings Scheme (SCSS), Rajiv Gandhi Equity Saving Scheme (RGESS), Voluntary Provident Fund (VPF) and health insurance.

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