Saving tax in India is not just about reducing liability, it is also about building wealth safely. Under the old tax regime, Section 80C allows deductions up to ₹1.5 lakh each year. Choosing the right mix of investments makes a big difference.
Equity Linked Savings Scheme (ELSS) is a mutual fund option with a three‑year lock‑in. It carries market risk but can deliver higher returns, often around 10% in favourable conditions. For those who prefer safety, the Public Provident Fund (PPF) is a government‑backed scheme with a 15‑year tenure. It currently offers 7.1% tax‑free interest and allows partial withdrawals after a few years.
National Savings Certificate (NSC), available at post offices, has a five‑year lock‑in and pays 7.7% annually. It is a secure choice for conservative investors. Parents can also consider Sukanya Samriddhi Yojana, designed for the girl child’s future. Contributions range from ₹250 to ₹1.5 lakh yearly, and the maturity after 21 years is completely tax‑free.
It is important to note that these deductions apply only under the old regime. The new regime offers a rebate up to ₹12.75 lakh income but does not allow 80C benefits.
In practice, ELSS suits those seeking growth, while PPF and NSC provide stability. Sukanya Samriddhi ensures long‑term security for daughters. A balanced approach helps achieve both tax savings and financial goals.