[Last minute] Tax-saving options and their possible returns
These instruments are legitimate ways of saving taxes and also help you grow your wealth. Every tax-saving option usually has a lock-in period and returns amount vary depends upon the nature of the investment. Every tax saving investment needs be aligned with your financial goals, hence never stuck with an unsuitable investment. Based on your risk appetite and financial goal, you can choose a product that’s best suits for you.
Tax saving options and their returns
Top 3 tax saving options:
ELSS Tax Saving Mutual Funds: ELSS invest your money in equity markets, hence the returns is fully based on the performance of equity market. The lock-in period is three-years hence it is the shortest for any Section 80C option. ELSS funds have the ability to deliver superior returns compare to other investments – in last 3 years the ELSS category has given average returns of 17.8%. The main advantage of ELSS is superior return with greater transparency.
PPF: PPF is a safe bet for the people who want returns at par with inflation and have low risk appetite. PPF earns interest at a rate announced every year by the government – currently the interest rate is 8.50%. The duration is 15 years which is extendable by 5 years at a time.
ULIP plans: Online ULIP plans are cheaper compare to mutual funds investments; hence there is a high possibility of greater returns. Investors also have the option where they can switch their corpus from debt to equity or vice versa. The average returns in the last three years in ULIP investment is around 10%.
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