Tax Saving Investments: Easy & Efficient tax saving investments options

  • Posted By :
  • Tuesday Nov 27, 2018

You might know that Section 80C allows you to save up to Rs.1.5 Lakh per annum by investing in tax saving instruments. However, returns on the amount saved depends on the tax saving scheme you choose. Mutual funds are easy tax saving options.

List of Tax-Saving Investments under 80C

There are a plethora of tax-saving investment options available in the market and it’s easy to get confused! So, we decided to enlist the best tax-saving investment options under 80C Income Tax Act, 1961. You can compare and choose the saving scheme as per your risk appetite and preferences.

Comparison table:






Equity Linked Saving Schemes (ELSS)

3 Years


Partially Taxable


Public Provident Fund (PPF)

15 Years




National Pension System (NPS)

Till Retirement (60 years of age)


Partially Taxable


National Savings Certificate (NSC)

5 Years




5-Year Fixed Deposits (FDs)

5 Years





Why you should plan your taxes through mutual fund investments

Professionally Managed

Experienced fund advisors who are experts in market research manage mutual funds. For a new investor, mutual funds offer better tax saving options as they don’t have to worry about market dynamics.

Higher Returns

Tax saving in mutual funds offer higher returns than any other instrument. Investment in Equity Linked Savings Scheme (ELSS) provides better returns than other tax saving instruments like Public Provident Fund (PPF), National Savings Certificate (NSC) and Fixed Deposits (FDs).ELSS is a type of diversified fund where more than 80% of the fund is invested in equity. Considering higher returns, ELSS is one of the most recommended tax saving schemes.


Mutual funds help you get the best of each asset class (equities, bonds, treasuries etc.). These funds help you diversify risk associated with each asset class. Even if some stocks in your investment basket are not performing well, the outperforming stocks will balance them, giving handsome returns.


You can choose from a variety of schemes while investing in equities. Tax saving in mutual funds can be done by comparing performance of stocks using the Compare feature.

SIP reduces your burden

Systematic Investment Plan (SIP) allows you to invest a pre-determined amount at a fixed period of time. Rather than investing all at once, you can save from your monthly income. Investing certain amount of your monthly income will save you from the last moment burden of investing Rs.1.5 Lakh all at once.

Lock-in Period

ELSS has the lowest lock-in period as compared to other tax saving instruments like PPF, FD and NSC. Further, ELSS investments don’t have a maturity period. Thus, you can stay invested for as long as you want after your lock-in period ends.

What are Tax-Saving ELSS Mutual Funds?

Equity Linked Saving Scheme (ELSS) is a tax saving fund scheme that invests only in equity and equity-related securities. The risks associated with the ELSS funds are similar to the equity funds as they both invest in the equity markets. Despite, the ELSS mutual fund provides the dual benefit of tax saving and relatively higher growth potential compared to other tax saving schemes under Section 80C IT Act, 1961.

Why should you invest in ELSS Mutual Funds?

With so many options out there, it is not easy to choose the right tax-saving investment option to invest in. It is simply because everyone has different financial goals in life. However, what’s important is to understand that such investments are not only to save tax, but also to accumulate wealth and beat inflation over the long-term.

There are several tax-savings investment options that help with tax exemption under Section 80C and wealth accumulation like FD, PPF, NSC, and NPS but none of them can compete against the ELSS mutual fund which stands out with its dual-benefit – tax exemption and comparatively higher returns than other tax-saving instruments.

There are several benefits of investing in ELSS mutual funds which are as below:

ELSS tax-saving fund can provide you with the capital growth that you needed to achieve your certain financial goals. Since they invest in equities and equity-related securities, the ELSS funds can help you generate high returns and beat the inflation in the long-term.

Who should invest in ELSS Mutual Funds?

Anyone who is paying taxes to the government should consider investing in the equity-linked saving schemes (ELSS) as these are one of the tax-saving investment options under Section 80C eligible for a tax deduction of up to RS. 1,50,000 and offer comparatively higher returns than other tax-saving investment options such as National Pension System (NPS), Public Provident Fund (PPF), National Savings Certificate, and Fixed Deposits (FDs).

Also, those who are planning to invest in equity mutual funds primarily for wealth creation should consider ELSS tax-saving schemes as well. It is because of the similarity in the nature of both investment options - both are equity-oriented and susceptible to market volatility. But, in the case of ELSS, you’ll have the tax exemption benefit of up to Rs. 1,50,000 that is not available in common mutual fund investment schemes.


ELSS enables tax savings and helps you convert your tax saving instrument into a high return investment. Start your SIP by investing in mutual funds ; the easiest and famous tax planning option.

Easy & Famous Tax Planning through Mutual Funds

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