Investing in PPF or ELSS is a profitable deal, you can save tax with better returns

Best Investment OptionsIf you plan to invest, then Public Provident Fund (PPF) and Equity Linked Savings Scheme (ELSS) are the best options for this. While both these options give you higher returns than FD, in both these schemes, under section 80C of the Income Tax Act, tax exemption can be availed on investments up to Rs 1.5 lakh.

public provident fund

• At present, 7.1% interest is being given in this scheme. The government reviews the interest rates every three months. Interest rates can be higher or lower.
• This plan comes with EEE status. In this, tax benefits are available in three places. Contribution, interest income and maturity amount, all three are tax free.
• The benefit of tax exemption is available under section 80C of the Income Tax Act.
• PPF account can be opened with only Rs.500. But later it is necessary to deposit Rs 500 every year in one go.
• Only a maximum of Rs 5 lakh can be deposited in this account every year.
• This scheme is for 15 years, from which it cannot be withdrawn in the middle. But it can be extended for 5-5 years after 15 years.

ELSS

• There is no maximum investment limit in the scheme.
• The investment in the scheme is locked-in for 3 years.
• After three years, the entire money can also be withdrawn or as much as is needed.
• The remaining amount can be kept in ELSS as long as you want.
• There is a lock-in for 3 years, but if the investor takes the option of dividend pay-out in it, then he will continue to get money in between. But keep in mind that money cannot be withdrawn midway from the income tax saving ELSS scheme.
• In this, a maximum tax exemption of Rs 1.5 lakh can be taken.
• One can start investing in ELSS through Systematic Investment Plan (SIP or SIP) with as little as Rs 500.
• Let us let you know that those who have given excellent returns in the last 1 year include Quant Tax Saver Fund (86.3%), DSP Tax Saver Fund (67.8%), BOI AXA Tax Advantage Fund (67.2%) etc.

where to invest

• If you can take a little risk in saving income tax, then you can choose ELSS.
• If you do not want to take risk, then it would be right to invest in PPF.

(Here ABP News is not giving any investment advice in any scheme. The information given here is for informational purpose only. Consult experts before depositing money in any scheme)

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