We list the 5 options to try starting from this year, from mutual fund investments to realty.
Now that the income tax returns for the previous financial year have been filed, you are probably on the lookout for suitable tax saving investments for the FY 2018-2019.
Here’s a handy list to get you started:
- Mutual funds. Over the years, mutual funds in India have become the prime investment destination for those who are not too interested in traditional instruments. Mutual fund investments are certainly subject to market risks, but they also offer good capital appreciation over time. Meanwhile, based on the mutual fund investment that you choose, you can eliminate the element of risk (normally associated with equity markets). Mutual funds in India are also quite affordable, especially when you invest in them using SIPs.
- Fixed deposit. The fixed deposit is almost every investor’s go-to destination for investment. It is a good option to try for those who have surplus funds that they wish to park in a suitable instrument for capital growth. The deposit is paid a certain rate of interest throughout its tenure. However, you may be charged tax for interest earning exceeding Rs 10,000. A good option to try is the tax saving FD – it gets you tax benefits, has a lock-in period of 5 years and a maximum tenure of 10 years.
- Real estate. One of the most lucrative investment options for investment is real estate. Realty normally appreciates every year, and you can hope to make a profit even in stagnant markets. A residential or commercial property that you own can be leased out for constant income. Also, realty has good liquidity, so you can choose to mortgage or sell a property if you need a large amount of money.
- Gold. Just like realty, gold too shows steady appreciation year on year. However, it is more prudent to invest in gold bonds instead of buying actual gold. The latter option necessitates storing the gold in a safe place, like in a bank locker or at home. It also does not offer regular growth the way a gold bond does. Leading fund houses in India are offering gold bonds with high NAVs and steady returns every year.
- PPF. Like the fixed deposit, the PPF (Public Provident Fund) has long been a mainstay in terms of ‘safe’ investment options. It is one of the most affordable instruments today – you can invest as little as Rs 500 per year in it. It pays a certain rate of (fixed) interest for the tenure of the fund. It has a lock-in period of 7 years, after which partial withdrawal or borrowing a loan against the available funds is possible. The fund matures at 15 years, and you can choose to create a fresh PPF account at this stage with the maturity amount if you don’t need it right away.