How to Choose the Best Tax Saving Investment Options Under 80C Section

How to choose the best section 80C investment option: There are many ways to save income tax using section 80C. The best income tax saving option under section 80c is the LIC Policy. Initially the maximum limit of section 80c tax exemption was up to 1 lakh, but after last year’s budget it has been increased to 1.5 lakh for the Financial Year 2014- 15.

There are Many Investment Schemes Under Section 80C which are Given Below:

  • Bank Fixed Deposits schemes (FD) – 5 years block period
  • 5 year term deposit scheme in post office
  • Any life insurance policy premium paid yearly basis, not only LIC policies
  • PF (Provident Fund) and VPF (Voluntary PF)
  • PPF (Personal Provident Fund) with any bank of post office
  • Home Loan Principle Component
  • National Saving Certificate (NSC) for 5 year and 10 year
  • Tuition Fee or Education cost for first & second child
  • Investment in ELSS (Equity Linked Savings Scheme)
  • Stamp duty or registration charges for home
  • Infrastructure Bonds popularly called as Infra Bonds
  • Senior Citizens Savings Scheme (SCSS)
  • Bonds issued by NABARD (National Bank for Agriculture and Rural Development)
  • Any ULIP (Unit linked insurance plan) policy
  • Investment under Sukanya Samriddhi Account

How to Choose the Best Section 80C Investment Option:


The most common investment under section 80c is to buy an insurance plan. Many people are investing more than 1 lakh for ULIP and other insurance policies. Most popular short term investment options under section 80c are bank FD schemes. In 5 year you can earn a handsome return. But you have to pay tax on maturity. So the net return may be less.

In the same way the person can also buy NSC certificates for 5 year term which are actually very popular schemes and which actually help to create a habit of investment. The little risk taking option would be investing in ELSS mutual funds. They have a lock in period of 3 years and in 4 to 5 year time span one can expect a better return.

The long term investment options under section 80c would be one can increase their VPF amount and enjoy a very good interest from EPF. The persons can invest regularly in PPF account and can get a huge amount after 15 years. The maturity in PPF account is also tax free. This is the best instrument under section 80c if you don’t want to take risk. If you have a girl child then you can start investing in Sukanya Samriddhi Account and get a maximum interest of 9.1% this year. 

ULIP is also a best option. ULIP is a mixture of insurance and savings scheme. The candidates can also plan term insurance to meet life insurance needs. The tax exemption may be possible also for the education needs, for this you can plan for a good school and get tax exemption on the entire school fee paid for your children. If a person wants a guaranteed return with taking any risk then section 80c options investment would be the best choice.
How to Choose the Best Tax Saving Investment Options Under 80C Section How to Choose the Best Tax Saving Investment Options Under 80C Section Reviewed by amara sangati for Rating: 5