Tax planning


When the pandemic first reached India in 2020 and the countrywide lockdown was announced in March, the CBDT had extended the 31 March deadline for tax-saving investment till 31 July. The arrival of the Omicron variant has once again set the alarm bells ringing, but taxpayers should not expect any leniency in the deadline this year. As they rush to complete their tax planning for the year, we have put together all the information they need. Like in the past, we have assessed 10 tax-saving instruments on eight key parameters returns, safety, flexibility, liquidity, costs, transparency, ease of investment and taxability of income. Each parameter is given equal weightage and the composite scores of the various tax-saving options determine their place in the ranking.

We hope you find the ranking useful and are able to choose the best tax saving option.

ELSS funds

Returns: 16.5%
For past five years: These equity funds have given high returns and have the shortest lock-in among all tax savers. But investing a large amount at one go can be risky.


Our rating: 5 stars
Returns: 8-11%
For past five years: Has a very long lock in period, but additional deduction it offers is very beneficial for high income earners.


Our ratings: 4 stars
Returns: 9-14.5%
For past five years: The tax on long-term gains from equity funds has made this tax free haven attractive. You don’t pay tax but are stuck with same fund.


Our rating: 4 stars
Interest rate: 7.1% (for Oct-Dec 2021)
For past five years: Tax-free interest makes this more attractive than bank deposits, but watch out for the long lock-in period.

Senior Citizens’ Saving Scheme

Our ratings: 3 stars
Interest rate: 7.4% (Oct-Dec 2021)
Best way to save tax for senior citizens. Exemption for Rs 50,000 interest makes it more attractive.

Sukanya Yojana

Our ratings: 3 stars
Interest rate: 7.6% (Oct-Dec 2021)
This scheme offers higher interest than the PPF, but limited scope has pulled down its ranking.

Pension plans


Our ratings: 3 stars
Returns: 6-9%
Pension plans from insurance companies can’t match the NPS on costs, flexibility and tax benefits.

Our rating: 2 stars
Interest rate: 6.8% (Oct-Dec 2021)
Govt backed option is ultra-safe but declining interest rates and taxability have led to low rank.

Tax-saving FDs

Our ratings: 2 stars
Interest rate: 5.75%-6.3%
Good option for senior citizens who may have exhausted investment limit in SCSS.

Life insurance policies

Our rating: 1 star
Returns: 5-6%
these continue to be the worst way to save tax. Corpus is tax free but score low on flexibility and returns.

We are dealing in all these schemes to invest please contact us…

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By BABAR ZAIDI By The Economic Times Wealth| January 3-9, 2022

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