80C: SAVE `1.5 LAKH

THIS IS THE MOST IMPORTANT TAX SECTION DUE TO THE QUANTUM OF TAX THAT IT ALLOWS YOU TO SAVE. THERE ARE FOUR OPTIONS YOU SHOULD LOOK AT HERE.

FANCY TAKING MODERATE RISKS?

Buy ELSS: EquityLinked Savings Schemes (ELSS) are mutual funds that allow you to invest in the stock market and claim tax deductions. You can start investing from `500 a month. You can start and stop your ELSS investment as per your wish. ELSS funds have a three-year lock-in — the lowest of any tax-saving instrument. This means you can redeem your money quickly. You can register online with a mutual fund aggregator or fund house to start investing immediately.

DON’T LIKE RISKS?

Invest in PPF: The Public Provident Fund is the best tax-saving and long-term investment scheme for those investors who eschew risk. Currently, PPF offers 7.6 per cent returns, which are completely tax-exempt. Open an account via your participant bank with just `100, and pay `500 a year to maintain your account. PPF have a 15-year tenure and partial withdrawals are allowed from the sixth year.

JUST NEED A QUICK, SAFE TAX SAVER?

Get A 5-Year FD: A five-year fixed deposit is just that — a deposit you open with your bank or local post office for a tenure of five years. The returns currently hover around 7 per cent. The deposit amount can be tax deductions.

NEED LIFE INSURANCE?

Get A Term Plan: Your first life insurance should be a term insurance policy. These allow you to cover your life risks at low costs. If you are a 25-year-old male with no tobacco habit, earning `4 lakh annually, you can get a life cover of `1 crore with annual premiums starting from `6,143. You can compare and buy these online, and also add useful riders and add-on such as accidental death cover.