Investment Based Schemes
| Particulars | Tax Saving FDs | PPF (Public Provident Fund) | Tax Saver Mutual Funds | Unit linked Insurance Plans | Sukanya Samriddhi Yojana |
| Eligibility | Can be opened by Resident Indian individuals. | Can be opened by Resident Indian individuals, salaried and non-salaried individuals. A HUF cannot open a PPF account. | Any individual or HUF can invest in ELSS | An investor can buy ULIP for self or spouse or child | Parents/guardians can open an account in the name of a girl child till she attains the age of 10 years |
| Liquidity | Fixed Deposits have lock-in period of 5 years. | PPF account have lock-in period of 15 years, but can be further extended by 5 years. Partial withdrawals are allowed after 7 years. | ELSS has the lowest lock-in period of 3 years. | Interest rate varies as it is market linked | Up to 50% of the deposit amount can be prematurely withdrawn once the girl reaches the age of 18 years |
| Rate of Interest | FD interest rate across different banks ranges from 5.5% to 7.75% | Current interest rate is 8.0% p.a. |
|
Return rate on the ULIP varies between 12% – 14% | Interest rate on Sukanya Samriddhi Yojana is 8.5% |
| Investment Limit | Minimum investment limit is Rs 1000. | Minimum and maximum investment limit is Rs 500 and Rs 1.5 lakh respectively. | As low as Rs 1000. Moreover, there’s no upper limit on amount of investment. | No limit on maximum contribution | Investment is limited to maximum Rs.1,50,000 in a financial year |
| Tax Treatment | Interest earned is taxable. | Interest earned is tax-free | Partially Taxable | Investment and withdrawals & maturity amount are tax-free | Investment and withdrawals & maturity amount are tax-free |
Payment Based Schemes
| Particulars | LIC | Children’s tuition fees | Repayment of Home Loan |
| Eligibility | Self, Spouse, Children – In case of Individual
Any member of HUF – In case of HUF |
The tuition fee paid for the education of two children is eligible for tax deduction under Section 80C of up to Rs 1.5 lakh. The fee can be paid to any school, college, university or educational institute situated in India. The fees have to be for a full-time course only. | The repayment of the principal of a loan taken to buy or construct a residential property is eligible for tax deductions under Section 80C. This deduction is also applicable on stamp duty, registration fees and transfer expenses |
| Deduction Limit |
Lower of the following
Lower of the following
Lower of the following
|
Rs. 1.5 Lakhs | Rs. 1.5 Lakhs |
| Tax Treatment | As per Section 10(10D) of the Income Tax Act, 1961 the amount of sum assured plus any bonus (i.e. the policy proceeds) paid on maturity or surrender of policy or on death of the insured are completely tax free for the receiver subject to certain conditions. | N.A. | N.A. |
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