|Public Provident Fund (PPF)||PPF is a tax-free long-term saving instrument that encourages small yet regular savings.|
It is also backed by the government, making it a safe option.
|It falls under the Exempt (Investment) - Exempt (Partial Withdrawals) - Exempt (Pay-outs) category - which means that you do not pay any tax at any stage of the investment. |
While PPF rate or return varies based on government policies, it currently offers 8.1% (compounded annually) effective from 1st April 2016.
|Sukanya Samriddhi Yojana (SSY)||SSY is a scheme launched by Prime Minister Narendra Modi to encourage families to save for a girl child. It intends to help parents meet the cost of higher education, wedding, etc.||You can enjoy tax benefits for the amount paid in this plan under Section 80C. |
The interest earned, as well as the amount received on maturity are tax-free.
|National Pension Scheme (NPS)||NPS is a voluntary, defined contribution pension scheme, which is regulated by the Pension Fund Regulatory and Development Authority (PFRDA). |
It aims to provide adequate financial security to individuals during retirement.
|In case of employees, up to 10% of the salary is allowed as deduction under Section 80CCD. |
In case of non-employees, up to 10% of their gross total income is allowed as deduction under Section 80CCD.
It also qualifies for an additional deduction of Rs. 50,000 under Section 80CCD(1B), which is over and above the limit of Rs. 1,50,000 prescribed under Section 80CCE.
|Equity Mutual Funds (Diversified, Balanced, etc.)||An equity mutual fund is a vehicle that invests in secondary markets such as stocks, bonds, etc., on your behalf.||Equity funds have the potential to earn extraordinary returns over the long-term. This is an ideal mode of investment to beat inflation. |
Long-term capital gains on equity funds are tax-free under Section 10(38).
Moreover, dividends received from an equity fund are tax exempt under Section 10(34).
|Life Insurance Policies||Life insurance is a financial tool where you enter into a contract with an insurance company. You pay premium for a fixed no. of years and should an unfortunate event such as death or disability occur, your family's financial needs are taken care of by the insurance company who pays the agreed life cover amount.||Life insurance policies are long-term plans that offer multiple benefits like regular savings, wealth creation, tax-savings under Section 80C, along with the core feature of life coverage, ensuring financial protection for your loved ones in your absence.|