10 Best Investment Options To Save Tax

5. Senior citizen saving scheme (SCSS)

If you are 60, then you can think of investing in Senior Citizens' Savings Scheme while earning a higher return. From this year, senior citizens will get a 9 per cent annual interest on deposits. In this scheme you can have multiple accounts but your total investment in SCSS cannot exceed Rs.15 lakh. You cannot withdraw money until one year but there is an option of closing the account after a year. In addition to that there is a deduction of 1.5 per cent interest if you close the account between one and two years.

Thus, Senior Citizen Saving Scheme investment qualifies for deduction under Section 80C but the interest is taxable.

6. New Pension Scheme

Under Section 80C, contributions up to Rs.1 lakh is deductible thus building retirement corpus with lower tax liability. You can invest in various plans for instance the National Pension System (NPS), unit-linked pension plans or mutual funds. Any individual aging between 18 and 55 years can invest in the NPS, but the tax deductions are allowed only for contributions to a tier-I NPS account with a minimum annual investment of Rs.6,000 without any premature withdrawals until the age of 60. In addition to that the contribution made towards your NPS by your employer also deductible.

If you want to save tax this year through NPS, then be ready to do a lot of legwork and paperwork before you invest in this unique pension plan.

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