You have plenty of tax-saving instruments under Section 80C of the Income Tax Act. But while saving on taxes, wouldn’t you want the best returns out of your investments as well? After all, the purpose behind investment is to build wealth. So, which of the tax-saving investments would help you do that?
Don’t just guess. Look at the data. That’s exactly what we did.
So, imagine it is three years ago and you were thinking of the same question. What option would have served you best? Would you be able to get your money back today if you needed it? Let’s find out! Look at the table to know what each investment option would be worth today, if you had invested Rs. 50,000 in March 2012.
*ELSS amounts assume the average returns of ELSS schemes for the period March 31, 2012 – Nov 17, 2015
**NPS amounts assume the maximum equity contribution of 50%, and the average returns of the fund managers for each category
ELSS has the shortest lock-in of three years. The other instruments have lock-in periods of five years or more.
As you can see, not only do tax-saving mutual funds (ELSS) have the shortest lock-in period, they also provide far superior returns than the rest. So, if you’re looking to add a strong wealth-building investment to your tax-saving portfolio, ELSS is the way to go.