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Tax Saving Instrument Flowchart

tax saving

Financial year is about to over and it is time to do tax saving exercise. It is possible to achieve major tax saving by doing proper planning. If you are confused in terms of where to invest your money for tax saving here is simple yet logical method of Tax saving by following simple flowchart.

Tax Saving Instrument Flowchart

Got Adequate Insurance Cover?

If your answer is No. Recommended Tax saving options are given below.

Life Insurance –

You can plan to purchase life insurance cover. Life insurance can bring saving up to 1.5 Lac on premium under section 80C.

Health Insurance –

Additional to above you can think of purchasing health insurance and get saving up to 15,000 Rs/- under section 80D.

If you are covered adequately with life insurance & health insurance you can skip to next section.

Open to Risk? Invest in Equities

If your answer is YES.Recommended Tax saving options are given below.

ELSS (Equity Linked Saving Scheme) –

You can plan to invest in equity based ELSS. ELSS are equity based mutual funds with lock in period of 3 years. ELSS can provide to tax saving of 1.5 lac under section 80 C.

ULIP (Unit Linked Insurance Plan)

Another way to save tax using equity investment is ULIP. ULIP  gives advantage of life insurance and investment. Investment made under ULIP are subject to market risk.

If you are not Opened Risk you can skip to next section.

Need Safe Investment for Retirement?

If your answer is YES.Recommended Tax saving options are given below.


You can plan to purchase NSC or can invest in PPF. NSC or PPF provides you return in range of 8-8.5%.  Investment under NSC or PPF also falls under section 80C.


Another way to invest for retirement is SCSS- Senior citizen saving scheme, but Investment under SCSS is permissible only after age of 60 years.

If you are not looking for any safe Investment for Retirement you can skip to next section.

Want Tax Saving without Investing?

Yes you can achieve tax saving without investment also. Under 80TTA you are entitle for tax saving up to 10,000 Rs/- on saving bank interest.

Home Loan Interest –

If you have taken home loan, Interest amount up to 2 Lac is allowed as tax exemption under section 24.

Education Loan Interest –

Education loan brings you additional tax benefit. Entire interest amount is tax exempted under section 80E.

Tuition Fees –

If you are paying tuition fees for your children you can claim tax exemption under 80 C for the amount paid as fees.

Disability –

If you are disabled person, based on severity you can claim tax deduction  50,000 Rs/- to 1,00,000 Rs/- under section 80U.

Diseases –

Amount spend up to 60,000 Rs/- on certain diseases can be claimed as tax exemption under section 80DDB.

Donation –

Donation amount up to 10% can be claimed as tax exemption under section 80G.

Tax saving Flow Chart (Click on Image to enlarge)

tax saving

Also read:-  Tax saving Instrument Infographic

Shitanshu Kapadia
Shitanshu Kapadia
Hi, I am Shitanshu founder of moneyexcel.com. I am engaged in blogging & Digital Marketing for 10 years. The purpose of this blog is to share my experience, knowledge and help people in managing money. Please note that the views expressed on this Blog are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment , tax, financial advice or legal opinion. Please consult a qualified financial planner and do your own due diligence before making any investment decision.