Published On: Tue, Sep 3rd, 2019

5 Investment Options to Maximise Your Tax Savings

Given a choice, we would never want to pay taxes on our earned income. As citizens of India; however, we are also consumers of the public facilities and infrastructure in the country, and the tax we pay serves as a crucial source of revenue for the government.

Therefore, it is our duty that we pay income tax and file tax returns on time, to ensure that we contribute towards maintaining and improving the existing infrastructure. In turn, the government helps us ease the liability by offering several tax-saving investment options that we can leverage to pay lesser income tax. To maximize these savings, we need to start planning our tax-saving investments as soon as the financial year begins.

By planning our taxes at the start of the year, we can also make sure that our investments get ample time to grow and help achieve long-term goals while providing continual tax-saving benefits. To help you maximize your tax savings; therefore, here are some of the most popular investment options today in the country.

1. Term Insurance

Term life insurance is one of the best tax-saving investments in the country, offered by reputable insurers such as Max Life Insurance. These term insurance plans work as a financial safety net for your family against life’s uncertainties.

In times of crisis, say your untimely demise, your family receives a significantly large sum of money as insurance benefit to help them continue their current lifestyle in your absence. Also, these term plans offer tax deductions up to Rs. 1.5 lakhs under Section 80C of the Income Tax Act.

2. ULIPs

Unit Linked Insurance Plans or ULIPs not only providelife insurance protection but also helps you channel your savings into different market-linked assets and create wealth – all under a single policy. The asset allocation under a ULIP varies between debt and equity offerings, and you can earn maximal investment returns by allocating your savings into different fund options as per your risk appetite.

tax savings

The longer the investment tenure, higher the returns. Also, you can avail tax savings up to Rs. 1.5 lakhs by investing in ULIPs under Section 80C. Even the maturity benefit received on exiting the policy (ULIPs have a mandatory lock-in period of 5 years), is tax-exempt under Section 10(10D).


The government offers different measures and instruments to help reduce your tax liability. These instruments differ in term of asset-class and offer varied investment benefits. When it comes to paying taxes; therefore, you must choose an instrument that best suits your individual needs.

Equity Linked Savings Scheme or ELSS are one such instrument that offers a combination of safety, liquidity, and high tax returns. A form of mutual funds, ELSS help you regularly invest in equity markets and earn high returns. Along with these benefits, ELSS also help you save taxes under Section 80C, up to Rs. 1.5 lakhs.

4. PPF

Traditionally, Public Provident Fund or PPF investments are one of the best tax-saving investments that offer guaranteed investment returns along with comprehensive tax benefits.While the investments made towards PPF are tax-deductible under section 80C (up to 1.5 lakhs), even the returns on PPF accounts are tax-exempt.

The rate of interest earned on PPF contributions is subject to change every quarter. From 1st July 2019, the rate of interest has been revised to 7.9%. Therefore, if you prefer low-risk investments and do not want to deal with mutual funds or volatile equities, PPF investments are best suited for you.

5. NPS

National Pension System or NPS is a pension-cum-investment opportunity launched by the Government of India to provide financial security to the citizens during their retirement years.

NPS offers an attractive long-term saving option to help you plan your retirement through regulated and safe market-based returns. NPS is regulated by the Pension Fund Regulatory and Development Authority (PFRDA), while the National Pension System Trust (NPST) is the registered owner of all the assets registered under NPS.

Invest Smart to Save Taxes

There are different investment measures and instruments available today to help you reduce the financial burden on yourself. These tax savers differ in terms of their asset-class, so you can always choose one instrument that best suits your individual needs.
However, it would help if you did not make the decision solely keeping the tax savings in mind. Instead, choose an instrument that not only helps save on taxes but also enables you toachieve different goals in life. Therefore, make sure that you research thoroughly and compare between best tax saving instruments. Also,verifythe year-on-year performance of various instruments to understand the impact of service tax in insurance.

About the Author

- I am an internet marketing expert with an experience of 8 years.My hobbies are SEO,Content services and reading ebooks.I am founder of SRJ News,Tech Preview and Daily Posts.

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