From this financial year, tax limit on 80C deduction has been increased from Rs 1 lakh to Rs 1.5 lakh. One can plan and invest to take maximum benefit out of the enhanced limit. Here are some best tax saving instruments you could conider for FY 2014-15 which can help you in saving tax as well as provide you with better returns.

Public Provident Fund

This is one of the best options available under Sec 80C. Investing in this will benefit you from tax as well as it can act as retirement fund. PPF offers interest rate of 8.7 per cent per annum. The interest rate is changed every year by the government of India. A minimum deposit of Rs 500 must be made during one whole financial year. The maximum that could be deposited is Rs. 150,000 in a financial year.

Click to know the list of banks offering PPF Account

ELSS Tax Savings Scheme

Equity linked savings scheme (ELSS), comes with a lock-in period of three years, because they provide you with Section 80C benefits. Equity Linked Savings Schemes invest most of the investor corpus in equities and are hence prone to how the stock markets perform. Click to know 7 best equity linked savings scheme in India.

Tax saving Fixed Deposits

Tax saving bank fixed deposits are eligible for tax benefits under SEC 80C of the Income Tax Act. What this means is if you have taxable income and have invested in these deposits, you can deduct the sum from your taxable income, thus reducing your tax liability. Click to know facts on tax saving fixed deposits.

Senior Citizen Savings Scheme (SCSS)

Senior Citizen Savings Scheme (SCSS) is a safe instrument which provide assured returns. They are backed by governemnt of India. Interest rate is offered at 9.2 per cent per annum. Click to know more about SCSS.

Rajiv Gandhi Equity Savings Scheme- RGESS

Rajiv Gandhi Equity Savings Scheme or RGESS, enables the investor to earn the returns of equity market and be eligible for tax benefits on the investments made under this Scheme. This is a scheme which give tax benefit for new investors who invest up to Rs 50,000 and whose annual income is below Rs 10 lakh. Click to know FAQs on RGESS.

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