BENGALURU: We all want to save on tax in some way or the other, don’t we? But sometimes we get confused regarding which tax saving investment plan suits us the best. This in itself is a very challenging, because if you make the wrong choice, you are stuck with an unsuitable investment for at least 3-5 years, if not longer, according to indiatimes.com

Insurance Policies:

We all know that the insurance policies remain the worst among all as to save tax but in spite of this, more and more number of people buy insurance policies as they offer triple benefits of life insurance covers, long term savings as well as tax benefits. However, these insurance policies offer a very limited cover. For example- A premium of 20,000 a year will get you a cover of roughly 2 lakh and the returns are very poor, which is barely 6 percent if you opt for a 20-year plan.

Bank FD’s And NSC’s:

Banks fixed deposits and national savings certificate are thought of as the safest way and from which you would get good returns but this too has a loop hole in it which we miss out on. The interest earned on the deposits is also fully taxable by which the post-tax returns are not very lucrative. Those in the highest 30 percent tax bracket should not invest in these deposits.

Read More: Tax Saving Options for High Net Worth Investors in 2016

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