10 Best Investment Options To Save Tax

3. Unit Linked Insurance Plan

Ulips, or market linked insurance schemes, are also eligible for deduction under Section 80C. This scheme provides investors with the benefit of both life cover and investment in equity and debt markets, highly popular with investors. Few years ago, Ulips was one among the worst investments but nowadays this investment is customer friendly. Not as the first but Ulips can be included in your tax saving planning. While taking Ulips you should be fully aware of their policies, because there are conditions like if you forget to pay premium for at least once then your policy will be discontinued.

Investors would, however, do well to check the premiums charged by these schemes before making an investment decision as most Ulips charge high premiums.

4. Voluntary PF

Voluntary Provident Fund or VPF is an extension of your Employee’s provident fund (EPF) that provides an easy way to save for your retirement years from your current pre-tax income. The investment is hassle free as you just need to inform your employer about your decision of contributing to Voluntary Provident Fund once at the beginning of a financial year.

Every month your employer will deduct 12 percent of your basic and dearness allowance and contributes an equal amount from its side and put the money in your Employee Provident Fund Account. If you wish to save more, you can contribute more. However, it is not mandatory for your employer to contribute beyond the mandated 12 percent, but you cannot stop your VPF contributions in the middle of the year. One of its drawbacks is limited liquidity; you cannot withdraw cash until you retire.

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