BENGALURU: 2014 Budget proved to be kind of a boon to taxpayers. Under section 80C, the hike in the deduction limit provided the taxpayers with the benefit of reducing their taxes up to 15000 if they saved more. What if someone saved a higher limit, but lacks knowledge of the best tax saving option? Hence, to clear all the confusions among the wide range of tax saving options under section 80C, here are few of the most common and best tax saving instruments, as reported by the ET.

ELSS Funds

Equity Linked Saving Schemes ranks the highest position scoring 28 out of 30 points. These funds provide with high returns, tax free income, an investor free to alter time and amount of investment. It also comes with a locking period of 3 years which is the shortest among the tax saving investments only with a cost of 2 to 2.5 percent a year.

Depending on these funds one should be cautious about few things. Though ELSS funds have shown tremendous results in the past few years, but may not do the same in future. Equity funds suffer when the investment returns carry a high risk as the exit route may be blocked. Secondly the locking period of three years can hold back someone on the wrong side of the circle, says Amit Kukreja, a Delhi based financial planner.

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