Goals can be an essential part of your life. While many of you might have professional goals, the rest of you might aim to achieve your personal goals. Whether you have professional or personal life goals, you might require adequate financial backup to meet them. If you haven’t started planning for your goals, the new financial year 2020-2021 can be the right time to turn your dream into reality. Therefore, let’s understand how you can start working towards your goal in FY 2020-2021 with the help of these top 4 types of investment plans mentioned below:

1. Unit Linked Insurance Plan (ULIP)

A ULIP plan can be a financial product that can offer dual-benefits under the following:

• Insurance & Investment

While ULIP insurance can offer a financial payout to your nominees in your absence, a ULIP investment can ensure the growth of your wealth.

• Section 80C and Section 10(10D) of the Income Tax Act, 1961

A ULIP policy can provide you with dual tax exemptions on premium and maturity proceeds. When you pay the premium amount regularly, you can easily claim Rs. 1,50,000 on your taxable income based on Section 80C. On the other hand, your family members can receive a tax-free pay-out after your ULIP policy matures in accordance with Section 10(10D). Since a ULIP policy can be applicable under both the new tax slabs of Union Budget 2020, you can choose between new or old tax regime based on your preference.

2. Fixed Deposit (FD)

FDs are the traditional investment options that can allow you to save taxes, according to Section 80C of the Income Tax Act, 1961. Moreover, you can receive attractive interest rates that can range from 4.5%- 7.5% per annum. Under FDs, you can invest under two main types, which are as follows:

• Bank FD

When you invest in a bank FD, you can receive taxable interest in return. Typically, the tax return can qualify only on investments and not returns.

• 5-year FD

Under a 5-year FD, the offered interest rate can be approximately 8% per annum.

3. Sukanya Samriddi Yojana (SSY)

As the name suggests, SSY is a government initiative to safeguard the interests of all the daughters in the nation. If you have a girl child, you can opt for SSY Scheme with an investment of Rs. 1,50,000. Under the SSY Scheme, the interest rates can be nearly 8.5% per annum.

Until your daughter crosses the age of 15 years, you can make monthly contributions under the SSY scheme to keep it active. However, see to it that you do make a deposit between the 16^th year to the 21^st year. After she nears 21 years, your SSY scheme can mature. When the SSY reaches the maturity period, you can be eligible to receive tax-free interest.

4. Equity Linked Savings Scheme (ELSS)

An ELSS scheme is a market-linked investment product, which can generate returns based on market performance. The generated returns on investment might not be fixed or guaranteed under an ELSS scheme. When you invest in an ELSS scheme for a duration of 5-8 years, you might receive relatively high returns ranging from 12%-15%.

Under the ELSS scheme, the returns can be taxed based on the long term mutual fund taxation rules. After lock-in period of three years is over, you can redeem it. On redeeming after 3 years, the Long Term Capital Gains (LTCG) can be tax-free up to Rs. 1,00,000. If the LTCG exceeds beyond Rs. 1,00,000, it can be taxed at 10% without indexation benefit. ELSS can be an ideal tax-saving option that can allow you to save money in the financial year 2020-21.

5. Senior Citizen Savings Scheme (SCSS)

The SCSS scheme can allow senior citizens to receive fixed returns on investment. Since the SCSS scheme is backed by the government, your principal amount can be secure. As a senior citizen, you can open an SCSS account to save taxes in FY 2020-2021 as per the Section 80C of the Income Tax Act, 1961.

Under SCSS, the maximum investment limit can be Rs. 1,50,000. The interest earned in return can be tax-free like any other fixed deposit scheme. In case you want to close your SCSS account, you can do so after the completion of a year. However, premature closure can be allowed only after the deduction of an amount, which can be equal to 1.5% of your deposit. After 2 years, there can be a 1% deduction of the deposit.

To sum up, there are numerous tax-savings investment options that can let you invest under Section 80C. However, see it that you don’t get overwhelmed by the number of choices available in the market. Choose the right types of investment plans based on your risk appetite, investment goals, and financial requirements of the family.