Dhadkan of India

You can save tax and thus a portion of money that goes out of your pocket. You can save tax by investing in different investment options. You can invest in different types of investment instruments like life insurance, Public Provident Fund (PPF), National Savings Certificate (NSC), and tax-saving mutual funds etc.

To save tax, you have to allocate your resources among the investment instruments. Your asset allocation will depend on your profile, objectives, needs, and expectations. For short term your asset allocation will be different from a long term perspective. Depending on your risk taking ability you have to decide where to put your money.

EPF (Employees Provident Fund)

A portion of your salary goes into it. You do not have control over it but it helps you in saving tax. The more the amount taken to EPF is better for you.

PPF (Public Provident Fund)

PPF is a popular investment instrument. It has a period of 15 years. The returns in such schemes vary considerably. It will vary each and every year. The interest you receive in PPF is also interest free. There is good tax benefit associated with PPF. You can invest a portion of your money in here.

NSC (National Savings Scheme)

NSC matures in 6 years. It is better because the interest rate is fixed previously in case of NSC. But the interest you earn from NSC is taxable.

ELSS (Equity Linked Saving Scheme) or tax saving bonds

ELSS is another good option for investment to save tax. It contains risk, but if you can take risk for better results then invest in ELSS. You will get better return from ELSS.

Both the dividends and capital gains that you receive from tax-saving funds are tax-free. So, more and more people are interested in this. The returns are also good and this increases popularity. But when you do not want to take more risk, avoid these schemes.

Mutual Fund

Mutual funds are great as investment instruments to save tax. Mutual funds are managed by professional managers and they perform better. When you do not know about equity o investment, then invest in mutual fund. You will get a good return and a secured return. Your money will be safe with such expert investors like mutual funds.

Life Insurance

You can put your money in life insurance. You get tax benefit on the investment in life insurance. You get two benefits. One is the tax benefit and the other is the insurance of your life.

Kisan Vikas Patra

Your money will be doubled in 8 years. Along with that it will offer you tax benefit. You can invest any denomination starting from Rs. 100.