Top 10 Tax-Saving Investments Under Section 80C

Here are the Top 10 Tax-Saving Investments Under Section 80C (for FY 2025-26), each offering deductions up to ₹1.5 lakh per annum:

1. Equity Linked Savings Scheme (ELSS Mutual Funds)

• Shortest lock-in (3 years), high returns potential (10–15%), market-linked risk.
• Long-term capital gains above ₹1 lakh taxed at 10%.​

2. Public Provident Fund (PPF)

• Safe, guaranteed returns (~7.1%), tax-free on maturity.
• Lock-in: 15 years, partial withdrawal from year 7; ideal for long-term goals.​

3. Employee Provident Fund (EPF)

• Mandatory for salaried employees, 8.25% currently, entire amount is tax-exempt.
• Withdrawal mainly on job change or retirement.​

4. National Savings Certificate (NSC)

• Fixed returns (~7.7%), lock-in 5 years, low risk.
• Interest is taxable, but reinvestment eligible under Section 80C.​

5. 5-Year Tax-Saving Fixed Deposit

• Returns 6.5–7.5% (bank-specific), lock-in 5 years, safe for conservative investors.
• Interest earned is taxable.​

6. Sukanya Samriddhi Yojana (SSY)

• Highest fixed interest (~8.2%), for girl child below 10.
• Lock-in until she turns 21, partial withdrawal allowed for education at 18.​

7. Life Insurance Premiums (Traditional & Term)

• All premiums paid towards life cover are eligible (including term policies).
• Returns vary, insurance focus is vital.​

8. National Pension System (NPS)

• Tax benefit under 80C (and extra ₹50,000 under 80CCD(1B)).
• Market-linked, mix of equity and debt, partial withdrawal before retirement.​

9. Principal Repayment on Home Loan

• Principal paid on housing loan qualifies; interest usually under Section 24(b).​

10. NABARD Rural Bonds

• Government-backed, secure, eligible for deduction, but check lock-in and yield.​

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Tips for Investors:

• Mix growth (ELSS, NPS) with safety (PPF, NSC, SSY).
• Align investments with liquidity needs (prefer PPF/ELSS for long-term, FDs/NSC for medium).
• Use insurance primarily for protection, mutual funds for wealth creation.
• Review bank FD rates, ELSS mutual fund performance each year for best results.

Section 80C is designed to encourage disciplined, goal-focused investing while lowering taxable income. Smart allocation across these options can maximize both tax savings and future wealth.