In this article about “Top 5 Tax Saving Scheme in India” As the financial year moves ahead, every salaried person and investor starts thinking. how can I save more tax legally while growing my wealth? Thankfully, the Indian government provides multiple tax-saving options under Section 80C and beyond that help you invest smartly and reduce your tax burden. Let’s look at the Top 5 Tax Saving Scheme in India for 2025, ideal for both beginners and experienced investors.
Here’s the Top 5 Tax Saving Scheme in India for 2025 :
- Equity Linked Savings Scheme (ELSS).
- Public Provident Fund (PPF).
- National Pension System (NPS).
- Employees’ Provident Fund (EPF).
- Sukanya Samriddhi Yojana (SSY).
1- Equity Linked Savings Scheme (ELSS) – Smart, Fast-Growing & Tax-Efficient :
ELSS mutual funds are one of the most popular tax-saving tools for modern investors.
They invest primarily in equities and offer tax deductions up to â‚ą1.5 lakh under Section 80C.
Why ELSS stands out:
- Highest return potential among all 80C options (10–14% annually)
- Shortest lock-in period: only 3 years
- SIP option available for easy monthly investment
Example:
If you invest â‚ą5,000/month in an ELSS fund, you can save tax up to â‚ą1.5 lakh per year and grow wealth faster than traditional instruments.
2- Public Provident Fund (PPF) – Safe and Long-Term Wealth Builder :
PPF is the most trusted tax-saving option for Indians for decades.
It offers guaranteed, tax-free returns backed by the government.
Key Features:
- Tenure: 15 years (extendable in blocks of 5 years)
- Current interest rate (2025): ~7.1% p.a.
- Investment limit: â‚ą500 to â‚ą1.5 lakh per year
- EEE status: Exempt at investment, growth, and withdrawal
Perfect for risk-averse investors who value stability over high returns.
3- National Pension System (NPS) – Build Your Retirement Wealth :
If your goal is long-term retirement planning, NPS is a brilliant tax-saving avenue.
It offers dual benefits: tax deduction + retirement corpus.
Tax Benefits:
- â‚ą1.5 lakh under Section 80C
- Additional â‚ą50,000 under Section 80CCD(1B) (over and above 80C)
- Returns around 9–12% depending on asset allocation
Bonus Tip:
Choose a mix of equity and government securities for a balanced NPS portfolio.
4- Employees’ Provident Fund (EPF) – For Salaried Professionals :
EPF is automatically deducted from your salary and matched by your employer.
It’s a steady, low-risk tax-saving instrument with long-term benefits.
Key Highlights:
- Interest rate: ~8.25% p.a. (2025)
- Lock-in till retirement
- Tax benefits under Section 80C
- Entire maturity amount is tax-free
EPF ensures financial security while building a disciplined savings habit for salaried individuals.
5- Sukanya Samriddhi Yojana (SSY) – For Girl Child’s Future :
If you have a daughter below 10 years, SSY is one of the best tax-saving and social-benefit schemes in India.
Benefits:
- Tax deduction under Section 80C
- Interest rate: ~8.2% p.a. (government-backed)
- Maturity after 21 years or when the girl marries after 18
- Tax-free maturity
This scheme ensures both tax saving and long-term financial support for your daughter’s education and marriage.
Read : What is IPO?
Other Popular Options Top 5 Tax Saving Scheme in India :
| Instrument | Section | Lock-in | Returns | Risk Level |
|---|---|---|---|---|
| ELSS Mutual Fund | 80C | 3 years | 10–14% | Moderate–High |
| PPF | 80C | 15 years | 7–8% | Low |
| NPS | 80CCD | Till 60 yrs | 9–12% | Moderate |
| EPF | 80C | Till retirement | 8.25% | Low |
| SSY | 80C | 21 years | 8.2% | Very Low |
Expert Tip :
To maximize your savings:
- Mix safe (PPF, SSY) and growth-oriented (ELSS, NPS) options.
- Always start early in the financial year instead of rushing in March.
- Automate your monthly investments via SIP or auto-debit.
Final Thoughts :
Tax planning is not just about saving tax it’s about building financial discipline and creating wealth systematically. By combining instruments like ELSS, PPF, and NPS, you can ensure both tax efficiency and long-term growth. The earlier you start, the smoother your financial journey will be. So, instead of waiting for March’s panic rush, start your tax-saving investment plan today and take a step closer to financial freedom.
Disclaimer: Stock Market Investments are Subject to Market risks, read all scheme Related Document Carefully Before Investing.