Best Recipe to Save Taxes

As we approach the annual tax-saving investment season, the landscape has changed decisively. As things stand, I would expect tax-break investments to be biased heavily in favour of the government’s small savings schemes as opposed to an equity-based tax saving option like ELSS mutual funds. There’s a push as well as a pull for this. The small savings schemes have got a lot of attention lately when the government raised interest rates on these across the board. Rates were raised by margins ranging from half a per cent to 1.45 per cent. Among the instruments whose returns were enhanced, the PPF (Public Provident Fund) and the NSC (National Savings Certificates) are heavily used as tax-breaks. For PPF, the rate of return has been enhanced from 8 per cent a year to 8.6 per cen

This article was originally published on November 21, 2011.