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Tax Saving Schemes in India: Best schemes other than section 80

Jun 10, 2022

Tax Saving Schemes

While Tax planning is essential to reduce taxable income, investments in tax savings schemes bring about the same level of tax savings and earn a return at the same time. The best tax saving schemes that are available in India are:

1. Post Office tax saving Schemes

This tax saving schemes includes several products which are risk-free and are reliable. All the services under it are operated by all the post offices across the country. 

The minimum deposit which is needed to open a savings account is Rs. 500. Customers can jointly open the account or individually. This scheme provides interest at the rate of 4% per annum along with it one can avail of services like a checkbook, e-banking, ATM card, mobile banking, and other services.

There are 8 types of options that can be availed under this scheme are:

  • Recurring Deposit
  • Time Deposit Account 
  • Monthly Income Scheme
  • Senior Citizen Savings Scheme
  • Public Provident Fund Account 
  • National Savings Certificates
  • Kisan Vikas Patra (KVP)
  • Sukanya Samriddhi Accounts (SSA)

Recurring Deposit

The recurring deposit is for 5 years and because of this period, this deposit is also called a 5-year Post Office Recurring Deposit Account. One can start a fixed deposit with just Rs.100 and can earn an interest rate of 5.8% / annum. After completing 12 installments one can get a loan up to 50% against the deposit that one has already made (given the condition that one should not lie in the defaulter list).

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Time Deposit Account 

This deposit scheme offers four time periods for a deposit, such as 1 year, 2 years, 3 years, and 5 years. One can choose a deposit of his/her own choice. The minimum deposit which is allowed is Rs. 1000. The interest here is calculated annually. 

Monthly Income Scheme (MIS)

In this scheme, one can deposit an amount of Rs. 1000 to Rs. 4.5 Lakh in an account that is owned by a single owner and up to Rs. 9 Lakh in the case of the joint account. An interest rate of 6.6% per annum can be earned via this tax savings scheme. This scheme helps one to avail monthly fixed income but one cannot prematurely close the account before one year of completion. If one opts for pre-mature closure then penalties have to be paid. 

Senior Citizen tax savings scheme (SCSS) 

This scheme is for the senior citizen who can deposit a lump sum in one installment. This scheme is backed by the Government to secure senior citizens’ financials. The deposit ranges from Rs. 1000 to Rs. 15 Lakh. With this scheme, one can get an interest rate of 7.4% per annum for individuals who are 60 years and above years of age. 

Individuals who are in the age group of 55 years and 50 years (defense employees) can easily open accounts in this scheme.

Public Provident Fund Account 

This tax saving schemes is preferred by most individuals as it offers deductions up to Rs. 1.5 Lakhs in a financial year. The minimum deposit which is required is Rs. 500 to open the account and the maximum limit is Rs. 1.5 Lakh. 

The tenure of this scheme is 15 years, hence it is called also called a 15-Year Public Provident Fund Account. The interest rate offered in this scheme is 7.1% and is compounded yearly. Additionally, the interest rate earned on this account is tax-free. 

National Savings Certificates

For this tax saving schemes, one has to make a minimum deposit of Rs. 1000 for a tenure of 5 years. There is no maximum limit set for this scheme. Just like the Public Provident Fund Scheme, the interest rate of 6.8% per annum is given which is compounded annually and is paid at the time of maturity only. Individuals are free to open an ‘n’ number of accounts.  The certificate can be pledged or transferred as security to the housing finance company, banks, government companies, and others.

Kisan Vikas Patra (KVP)

The minimum deposit required for this tax savings scheme required is Rs. 1000. The applicable rate of interest is 6.9% per annum (As per the rates applicable to quarter 4 of the fiscal year 2020-21). 

The period of this account is 124 months, that is, 10 years and 4 months. But in this scheme the tenure and the interest rate are variable. 

Sukanya Samriddhi Accounts

This tax saving schemes is introduced by the government for the girl child. A single girl child who is below the age of 10 years is eligible to get the benefit from this scheme. As the scheme is for the little one so the account is opened and operated by parents or guardians. 

The minimum deposit which is required is Rs. 250 and the maximum amount which can be deposited is Rs. 1.5 Lakh per financial year. Additionally, an interest rate of 7.6% per annum this scheme attracts. 

The maximum tenure of this scheme is 15 years (from the date of opening)

Advantages of Post Office Investment are immense as this scheme provides an easy investment process, the documentation & process related to it is simple, the investment is future-oriented as one can easily plan for investment up to 15 years. Among all the advantages one can get a tax advantage and a high-interest rate. 

Since this scheme is vast and has a lot of services available under it so, to know more about this risk-free and safe scheme. Contact HA, our virtual experts are available 24/6 for our valuable clients. 

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2. National Savings Certificate (NSC)

Most risk-averse individuals like to invest in a scheme that is safe and provides a sense of security. Among the other scheme like this National Savings Certificate is one of them. 

This tax saving schemes can be opened up with any post-office branch which is near to individuals. The scheme is mainly designed for small to mid-size investors by the Government of India. Low-risk fixed income instruments like Public Provident Fund and Post Office Fixed deposit are under this scheme. 

This tax saving schemes comes with a fixed maturity period of 5 years. With investment done up to Rs. 1.5 Lakh one can reduce tax which is implemented under Section 80C of the Income Tax Act. The interest rate which this scheme attracts is 6.8% per annum (the rate is revised as per the Government policies). like most fixed income schemes, they cannot deliver inflation-beating returns like tax-saving mutual funds and the National Pension System. 

This tax saving schemes is only for individual taxpayers, HUF/ Firm/ companies or NRI are not eligible to avail of this scheme. 

Since there are many schemes that are similar to NSC, so as to know the comparison aspect among all the schemes contact HA. Our experts are available 24/6 to help our clients.

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3. Public Provident Fund (PPF)

It is one of the oldest tax saving schemes which was introduced by the Government of India in the year 1968. It was introduced to seed the concept of saving in the minds of citizens and because of its nature, it is also known as savings-cum-tax savings investment plan. 

The current interest rate which is attracted by this scheme is 7.1% which is compounded annually. The interest rate is set by the finance minister every year. The interest is calculated on the lowest balance between the close of the fifth day and the last day of every month.

Some of the features of the Provident Fund are:

  • The investment amount can be a minimum of Rs. 500 to a maximum of Rs. 1.5 Lakhs for a given financial year. The account can be opened with just Rs. 100. With a less demanding investing frequency (that is, once a year).
  • The tenure of investment is 15 years and it can be further increased to 5 years 
  • The mode of deposit can be made via cash, Demand Draft, Cheque, or by online fund transfer
  • This scheme also offers to add nominees while at the time of taking up the scheme or afterward.
  • The risk associated is very less hence it is considered a risk-free return

The withdrawal can be only carried out at the time of maturity which is 15 years period. However, if one wants to prematurely withdraw the amount then after 6 years it can be done or 50% of the amount at the end of the 4th year can be done. 

Knowing more about the procedure for withdrawing an amount from a PPF account, how to open a PPF account in different banks and many other related queries can be easily answered by HA’s virtual expert team.

HA aims to provide ease to our clients by making their investment journey a smooth ride


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4. Kisan Vikas Patra (Tax Savings Scheme)

The Indian post office has come up with this tax saving schemes which indeed doubles a one-time investment in a 10 year period. It is a scheme that was launched in the year 1988 to motivate people to invest and carry out long-term investment planning.

The scheme initially was targeting mainly the farmers but now the scheme is open for everyone. As to making a deposit or saving highly monitored PAN card and salary slip is asked during the time of deposit of amount Rs. 50000 and Rs. 10 Lakhs respectively. Additionally Aadhar card or number is also used as a proof of identity.

Any Indian citizen whose age is above 18 years can avail of this scheme from the nearest post office. As there are three types of Kisan Vikas Certificate scheme which one can avail. This gives an opportunity to individuals to invest flexibly.

Some of the well-known benefits from this scheme are high-interest rates, saving tax, affordability, safe investment as it promises guaranteed return, one can get a loan against the KVP certificate.

To know the filing procedure of the Kisan Vikas Patra nomination certificate and related aspects to it contact HA without any second thought. Our experts are here to help clients to save and grow their money.


5.Sukanya Samriddhi Yojana (SSY)

This tax saving schemes was launched by Prime Minister Narendra Modi while addressing social media campaign on 22nd January 2015 to take care of the sex ratio in the country. This scheme is run by the Ministry of Human Resource Development, the Ministry of women and child development, and the Ministry of Health and Family welfare.

As the name means the prosperity of the girl child, the scheme uplifts girls in concern with education and marriage which ease parents in building her future.

The interest rate which this scheme attracts is 7.6%. The investment made under this scheme is eligible to get a deduction under Section 80C of maximum capital of Rs. 1.5 Lakh. The interest which accrues against this account is also compounded annually.

For any further information regarding the SSY account contact HA.

how to save tax in India

6. Unit Link Insurance Plan (ULIP)

It’s a deduction plan or tax saving schemes that provides investors to claim an 80C deduction. This scheme is a mix of insurance and investment. The scheme aims to provide a goal for wealth creation for an individual by making investments in insurance and the rest in equity & debt. The fund manager which works in an insurance company manages all the investments. Individuals who know about the market and its performance can switch portfolios between debt & equity.

The lock-in period was increased from 3 years to 5 years in the year 2010. Some of the major benefits which one can avail of through this scheme are tax benefits, long-term financial goals, portfolio switches, and many more like these.

As this scheme allows one to invest in equity and debt one should clearly analyze the risk factor, check the personal financial goals, and other likewise risk factors associated with it.

If you face any problems before planning to fund this scheme, contact HA for the same. Our financial, accounting and tax professionals have dealt with all the difficult aspects that one faces while filing.

The funds (Equity, Balanced, and Debt) and the use of funds such as (Retirement, Child education, and Wealth creation) will be made simpler with HA’s superior service & consultation.


7. Voluntary Provident Fund (VPF)

It is a voluntary fund contribution from the employee towards his/ her provident fund account. This contribution is beyond the 12% of contribution by an employee towards his EPF. The maximum contribution is up to 100% of his Basic Salary and Dearness Allowance. Interest is earned at the same rate as the EPF.

VPF is an extension of EPF. The facility to select this scheme is for the individuals who are salaried and receive monthly payments through a specific salary account. An exemption in contribution, from the principal and on interest makes VPF one of the most attractive schemes. The other benefits which one can avail are, it gives high return rate, safe & risk-free investment, and one can easily transfer.

To avail of this tax saving schemes, there are some formalities that have to be done so, to avail of the scheme soon contact HA. Our team which is available 24/6 is here to help you reap the scheme benefit as soon as possible.


8. Equity Linked Savings Scheme (ELSS)

This is one of the most efficient financial instruments which is listed under Section 80C of the Income Tax Act 1961. This scheme is under the eyes of the Fund Manager. These are the only mutual funds that are eligible for a tax deduction which saves up to Rs. 46800.

One can invest whatever amount one wishes to but amount more than Rs. 1.5 Lakhs doesn’t attract tax benefit and the return generated are taxable in nature.

There are two types of dividend funds and growth funds-

  • Growth Fund
  • Dividend Payout

The former is a long-term wealth creation platform for investors where the full value of the fund is realized at the time of redemption. While the latter one a further two-sub categories Payout & Reinvestment.

Even after ELSS is taxed it is the preferred option for individuals because of the High Returns on Investment, shorter lock-in period, flexibility, and protection at the time of vitality.

Before investing one should be aware of a few points before planning to invest in ELSS, like,

  • The investment amount is not limited under this scheme however investment is more than Rs. 150000 a year is not exempted from the tax.
  • It is one of the best investment options which offers tax benefits with a potentially higher tax return with a short lock-in period of 3 years
  • Even after the lock-in period is over one can continue to invest in this scheme.
  • The risk involved in ELSS is higher as compared to the other scheme. So, before investing one should be well aware of it.

To know more about the ELSS funds contact HA for the same. Our experts are here to help you with all the minute doubts which one has.

9. National Pension Scheme (NPS) (Tax Saving Schemes)

Under the Pension Fund Regulatory and Development Authority (PFRDA) National Pension Scheme comes. It is social security that is introduced by the Central Government.

This program is for all the individuals who are employed in public, private, and other unorganized sectors who can invest in their pension account at a regular interval of time during the time of their employment. Post-retirement one will receive the amount of a regular monthly pension.

This scheme holds a lot of value, especially for individuals who are in the private sector. A planned investment like this will make a massive difference for one post- life retirement.

To know more about the scheme, the benefits associated with it, and related aspect doesn’t hesitate to contact HA. Our virtual experts are here to help our valuable clients 24/6.

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