Invest Wisely — Top 3 Investment Options for Salaried Persons

With the increase of 80C deduction limit from 1lakh to 1.5lak, every individual is looking for best investment options that can provide them with higher returns and at the same time provide them relief from tax deductions. Although, there are numerous types of investment options available, but here are the best 3 investment options, specifically for the salaried people.

1. Public Provident Funds or PPF

PPF is an instrument introduced by the government of India by the ministry of finance to generate funds from the public. It is similar to opening an account where you need to invest money on regular intervals.

· PPS offers interest at 8% per annum that is expected to be updated by the government every year.

· You can expect tax free returns at the maturity time.

· The total lock-in time of PPF is 15 years and you can make an annual investment of up to 1.5lakhs for IT rebate under the section 80C of Income Tax Act.

· PPF also offers loan facility from the 3rd financial year to the 5th financial year with an interest rate of 2% per annum charged on the loan.

· You can make withdrawals in case of emergencies from the 6th financial year.

· NRIs or Non-Resident Indians are not eligible for this investment and even an individual cannot invest on behalf of his family members.

· With a minimum investment amount of INR500 and maximum INR 1.5lakh, you can opt to invest on a monthly basis and enjoy the interest on your investment for the remaining period.

2. National Savings Certificate or NSC

National Saving Certificate is one of the safest investment options that is issued by the Post Offices and the principal money along with backed interest rate is offered by the Government of India.

· The National Savings Certificate is available for a period of 5 years or 10 years.

· The minimum sum of investment is INR 500 that can be increased in multiple of INR 1,000, INR5, 000, INR10, 000. There is no maximum limit for investment.

· The interest rate for 10 years NSC is 8.8%, while that for 5 years NSC is 8%. The interest is compounded after every six months and the sum received as interest is taxable.

· It is essential to show this investment while filing ITR and pay income tax as it is possible to claim the interest deducted as exemption u/s 80C.

· Joint, minor, and individuals can invest with the help of Guardian.

3. Bank Fixed Deposits

The Bank fixed deposits of FDs is and old and one of the finest investment options to save income tax under the section 80C of IT act.

· The interest rate for tax saving fixed deposits may vary 5.5% to 7.5% per annum.

· The interest is taxable and the lock-in time for such FDs is 5 years.

· There are only few banks that offer tax saving fixed deposit schemes and hence you must avail information about them before investing.

Besides these 3, the other lucrative investment options are ULIP, ELSS, Senior Citizen Saving Schemes, NPS, and Insurance Plans.