New Delhi: Everyone dreams of investing in a place where their money remains secure while also yielding future returns. To achieve this, people explore various avenues. However, falling prey to greed, some individuals deposit their money with unreliable entities and end up becoming victims of fraud. In today’s changing times, it is prudent to invest only after gathering complete information beforehand.
India offers several schemes where people can invest and accumulate substantial returns without any hassle. We are also going to tell you about some specific schemes designed to help you avoid tax-related complications. This implies that the invested principal, the interest earned on it, and the maturity proceeds—all three components—remain completely tax-free.
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The PPF Scheme: A Standout Option
The Central Government’s Public Provident Fund (PPF) scheme is not only highly beneficial but also a trustworthy investment avenue. Under this scheme, one can invest a minimum of ₹500 and a maximum of ₹1.5 lakh annually. It comes with a lock-in period of 15 years.
This tenure can be further extended in blocks of five years each. Furthermore, the interest earned on PPF investments remains entirely tax-free. Currently, an annual interest rate of 7.1% is being offered on this scheme.
A Special Scheme for Daughters
The Sukanya Samriddhi Yojana, administered by the Central Government, is a truly exceptional scheme. It plays a pivotal role in securing a bright future for daughters. Under this scheme, an account can be opened in the name of a girl child up to the age of 10 years. Annual investments ranging from ₹250 to ₹1.5 lakh can be made into this account.
Currently, this scheme offers an annual interest rate of 8.2%. Upon reaching the age of 18, the account holder is permitted to withdraw up to 50% of the accumulated corpus to fund higher education. The maturity period for this scheme is 21 years.
The Equity Linked Savings Scheme: Another Great Option
The Central Government’s Equity Linked Savings Scheme (ELSS) is another excellent investment option. It serves as a superb choice for investors. If you are considering investing in equities while simultaneously saving on taxes, do not miss out on this opportunity. The scheme features a lock-in period of three years—the shortest available.
The returns generated by this scheme are market-dependent. Profits of up to ₹1.25 lakh fall under the tax-free bracket; however, any amount exceeding this limit is subject to a Long-Term Capital Gains Tax of 12.5%.