Among the tax saving investment options, ELSS and PPF/EPF are unique in the sense that returns from are absolutely tax free.
1) Interest earned from PPF is not taxed during accrual or pay out.
2) Dividend from ELSS is tax free.
3) ELSS has a lock-in period of three years. So,Profit on sale of units held after 3 years is a long term capital gain. It is subject to Nil tax as per current IT act.
ELSS and PPF are the way to go...
ELSS- equity linked saving scheme of Mutual Funds
PPF- Public provident fund
RPF- Contribution to Employee Provident Fund
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