What are less popular 80C investment options in India?

There are many other investment options under section 80C of the Income Tax Act. Hereby, I mention three popular investment schemes that have a tax deduction under 80C.

1. Fixed Deposits (Tax-saving)

All Indian banks provide tax-saving fixed deposits. Like regular fixed deposits, tax-saving FDs also have a minimum investment amount of Rs.1,000/- and every Indian citizen is eligible to start the investment in tax-saving fixed deposits. Almost, it is similar to that of regular fixed deposits with only two differences. They are:

a) Tax-saving fixed deposits have a tax break on deposit investments up to Rs. 1,50,000/- as per the Income Tax Act, under Section 80C.

b) Tax-saving fixed deposits have a 5 years lock-in period for maturity, before which we can not redeem the investment amount.

2. National Savings Certificate (NSC)

National Saving Certificate (NSC) is a small saving instrument controlled by the Central Government of India. Any Indian citizen can open an NSC account at any Indian post office. It is almost similar to the Public Provident Fund (PPF) as it guarantees the stated returns to the investor. The lock-in period for National Saving Certificate is only five years. On maturity of the investment (After five years), the total amount will be paid along with the interest.

The tax deduction is available only on investments up to Rs. 1,50,000 per year as per the Income Tax Act, under Section 80C. If you wish, you can also invest more than Rs. 1,50,000/- in the instrument and there is no any maximum limit to invest in National Saving Certificate per year.

3. National Pension System (NPS)

The National Pension System (NPS) is a pension scheme for working professionals and employees of the unorganized sectors to benefit them post their retirement age. Any Indian citizen between the age of 18 and 60 years can benefit National Pension System (NPS) scheme. Like tax-saving fixed deposits and National Saving Certificate, NPS is also eligible for a tax deduction for investments up to Rs.1,50,000/- as per the Income Tax Act, under Section 80C. The lock-in period for NPS is until the investor turns 60 years of age.

Equity Linked Saving Scheme (ELSS), typically a mutual fund is much better than any other investment scheme. Because it has the least lock-in period of 3 years and the return is the highest of all (12% to 15%).