Where should I invest to save tax under section 80C? I want to invest for a five-year term.
-Rajesh
Investment options to save taxes under section 80C are pretty straightforward. You can save tax by investing in fixed income options like bank deposits, National Savings Certificate and PPF. In equity, ELSS or Equity Linked Savings Scheme are the only option. Although Indian equity markets have struggled in the past few years, we don't expect the next 5 years to be that disappointing. Hence, if you can withstand the volatility, you should invest in an ELSS fund. Franklin India Taxshield and ICICI Prudential Tax Plan are relatively stable tax planning funds. Franklin India Taxshield has given returns at 14.78 per cent over a five-year period and ICICI Prudential Tax Plan yielded 17.15 per cent for the same period.
This article was originally published on October 10, 2013.
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