Why ELSS Tax Saving Mutual Funds is best choice for tax planning

Investors can save up to Rs 46,350 in taxes per year by investing up to Rs 1.5 Lakhs in eligible schemes under Section 80C of the Income Tax Act 1961. There are broadly two types of tax savings schemes - risk free or low risk schemes and market linked schemes. The risk free or low risk schemes are Public Provident Fund (PPF), National Savings Certificates (NSC), 5 year tax saving Fixed Deposits (offered by banks and post office), traditional life insurance plans (e.g. endowment plans, money back plans etc), Senior Citizens Savings Schemes etc. In these schemes capital safety is assured. In some schemes like NSC, FDs returns (interest) are guaranteed, while in others the interest rates can change from time to time over the investment tenure.