How to Save Tax and Make Your Money Work for You

• Most retail investors have welcomed the budget 2012. Tax planning in India has now become a very lucrative business and certified financial planners are in great demand in metro cities. However most people prefer to plan their investments and do tax planning on their own. The availability of a multitude of options leaves the tax payer with a variety of options to help them save tax and earn a tidy return on their investments. The change in tax slabs has ensured that tax payers now have more funds to invest. This is a perceived boost to the financial services industry which has been looking to the government to help them tide over the hit they have taken from the slowdown in manufacturing and the debilitating effect of inflation and price rise.

• Investment plans are plans which let the investor invest by making fixed periodic investments. These plans operate like mutual funds and ensure that people do not require huge sums of money to invest and gain from India's economic boom. For a sum as low as Rs 500 per month you could buy a Systematic Investment Plan (SIP). Some financial institutions offer a graduated plan where your SIP subscription gradually increases with time. The threshold for all these schemes can be from medium term to long term and the returns offered are on par or even better than bank deposits.

• FDs: They have always been a safe and secure option for investors but the proposal to tax the interest earned on an FD on maturity has left tax payers miffed. However, the recent hike in the interest rate of FDs by the RBI has ensured that in a 3-5 year scenario they are a very good option to invest in.

• National Savings Certificates: The reduction in their term from 6 years to 5 years has ensured that more people will opt for this form of saving. The government also has plans to introduce a "super NSC" which has a term of 10 years. The current rate of interest of 8.6 percent makes it an attractive investment especially since the amount at maturity is not taxable.

• Infrastructure bonds: In an attempt to help the infrastructure sector, which is critical to India's growth, have easier access to funds, the government has enhanced the tax break given to investments in infrastructure bonds. The government has doubled the amount that infrastructure funds can raise to Rs 60,000 Crore.

• Chris has gained strong expertise in insurance industry. With the amount of experience he has, he loves sharing deep insights and information about insurance, ULIP, life insurance, financial planning, money management, investment plans, types of insurance plans, wealth creation opportunities, tax saving tips and more.

• Insurance: Insurance policies have long been a primary part of tax planning and investment in India. Endowment policies and Unit linked Plans (ULIPs) are the most popular methods of using insurance policies to save Best Tax Saving Investments are tax free up to certain prescribed limits and the interest offered on certain schemes makes them an attractive and relatively safe option. Unlike Mutual funds, some insurance products have a very low-risk investment pattern which insulates the investors from market risks.

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