With March ending around the corner most of the individuals are busy evaluating investment options for their tax planning. Different advisors giving different advice depending on commission they get from your investment. So the question is which investment option to choose?

BEST OPTIONS U/S 80C

   – Investment in PPF – Has 15 year lock in
   – Employee’s share of PF contribution – Not all private employers provide it
   – Life Insurance Premium payment – Long lock in depending on term chosen
   – Principal Repayment of home loan – One has to buy property for this benefit

– Investment in Sukanya Samridhi Account – A daughter is must
– ULIPS – Bad History of returns
– ELSS – Shortest lock in of 3 years and average of 12%+ returns over long term
– Five year deposit scheme – Lock in of 5 years

The dilemma is which option to choose?

No doubt about ELSS as it is the best performing investment option for tax planning with least lock in. However, the question is should you invest in ELSS? All financial advisors will suggest ELSS all insurance agents will suggest insurance, those not involved in financial service business will advise PPF and Sukanya Samriddhi and you will get a new advice and experience from each one of your friends and relatives whom you talk with.

Buy sorry to tell you all are right in their opinions but wrong for you. Why? Because the tool you select depends on your spending habits. I have seen people investing in ELSS just because they can use the money in 3 years, for such people ELSS is worst option. There are people who invest for 35 years with LIC with risk-free moderate returns, for such people ELSS is the best option. Select your investment option based on your spending habit.

If you are thoughtless and extravagant in spending, go for long term options like LIC policies. If you are a thoughtful spender go for ELSS option.

Remember LIC offers plans with 19%-21% annual returns too. It is just that we are not aware about them. For knowing such plan read more.