Two smart investment options that can help you save tax as well

It is the season when most of the salaried employees in India are asked to submit details of their tax saving investments for FY 2015-16 to avail deductions under various sections of the Income Tax Act, 1961. While it always pays to plan in advance, you can still make a smart move by choosing instruments that will save tax along with giving high returns and beat inflation. Here are the top two options which are considered among the better ones that can help in saving tax and generating returns:

Equity Linked Savings Schemes (ELSS)
These are one of the best options for wealth creation and saving tax. They have a relatively low lock in period of 3 years and offer one of the best growth potentials along with a good degree of liquidity. What’s more, returns in the nature fo long term capital gains from these funds are also tax free. As with any market linked instrument, however, the returns are not guaranteed and past performance is no indicator of future performance as well, which means that you may stand to lose on your investment. However, ELSS options have historically provided some of the best returns among all other investment options. If you do not wish to opt for a lump sum investment, you can go for a Systematic Investment Plan (SIP) that will help you invest small monthly amounts over a period of time in the scheme.

Unit Linked Insurance Plans (ULIPs)
Life Unit Linked Insurance Plans offer another good route for making investments. You need to keep these plans in force for a minimum of 2 years to avail tax benefits under Section 80C. While protection cover is offered, the bigger benefit of these plans is that they deliver good returns since they are linked to the market. The same caveat of market risks apply here. Like ELSS, returns from the Life ULIPs are also tax free subject to conditions under Sec 10 (10D). ULIP corpuses can be linked to either debt or equity instruments and you may choose either depending on your risk appetite.

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Tax Benefits subject to prevailing tax laws. The user/investor needs to verify all the facts and circumstances with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information. Tax laws are subject to amendments from time to time.
Mutual Funds investments are subject to market risks. Please read all Scheme Information Documents carefully before investing. Investors in the scheme(s) are not offered a guaranteed or assured rate of return and there can be no assurance that the scheme(s) objective will be achieved and the NAV of the scheme(s) may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the scheme(s).
Unlike traditional insurance products, Unit Linked Insurance products are subject to market risk, which affect the Net Asset Values. The names of the company, product nams or fund options do not indicate their quality or future guidance on returns. Funds do not offer guaranteed or assured returns.
Standard Chartered Bank, India is a distributor or referrer of the relevant third party investment products. In its capacity of a distributor or referrer of relevant third party investment product, Standard Chartered Bank , India may offer advice which is incidental to its activity of distribution/referral. Nothing in this document should be construed as ‘Investment Advice’ as defined under the Securities and Exchange Board of India (Investment Advisors) Regulations, 2013 or otherwise.
Standard Chartered Bank, India having its corporate office at Crescenzo Building C-38/C-39 G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400051 is a licensed Corporate Agent of ICICI Prudential Life Insurance Company Limited (IRDA registration no. 105) for life insurance products, vide composite license number 1096736. Insurance is the subject matter of solicitation.

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