Tax-Saving Investments: Millennials, born between 1981 and 1996, often juggle financial planning, lifestyle goals, and career development. They can grow wealth and reduce tax payments through tax-saving investments if they possess a long investment horizon and a high tolerance for risk. There are many options in Section 80C of the Income Tax Act of 2025, which have growth potential along with tax savings of a maximum of ₹1.5 lakh per annum.
Let’s check the best tax-saving investments for millennials.
Equity-Linked Savings Schemes (ELSS):
The benefits of building wealth and tax saving with Equity-Linked Savings Schemes (ELSS) stand out loudly. Though they carry market risk, these equity mutual funds, which invest primarily in equities, can generate long-term returns of 10% to 15%. Having the shortest lock-in period among tax-saving instruments, three years, ELSS funds are flexible and liquid. With Systematic Investment Plans (SIPs) from as low as ₹500, millennials will be able to avail themselves of rupee cost averaging, which dampens market volatility. The percentage of taxation on long-term capital profits above ₹1.25 lakh is 12.5%.
Public Provident Fund (PPF):
For investors who are a little bit scared of investing a huge amount without any idea, the Public Provident Fund (PPF), guaranteed by the government, is a low-risk option. PPF holds Exempt-Exempt-Exempt (EEE) status, meaning that the amount of contribution, interest, and maturity is tax-free, and it provides returns of 7–8% per annum. This option has a 15-year lock-in, ensures long-term, disciplined savings, and is best for people who are planning for savings in their retirement. People can invest up to ₹1.5 lakh per year. This can be partially withdrawn after six years.

Also Read: 5 Tax-Free Post Office Saving Schemes: Interest Rates, Perks and more

National Pension Scheme (NPS):
This savings option is best for most people who have no idea about finances. It provides variable asset allocation through the grouping of government bonds, corporate bonds, and equity. National Pension Scheme gives deductions of up to ₹1.5 lakh under Section 80C, and another ₹50,000 under Section 80CCD(1B). It is best for beginners due to its long-term dedication up to the age of 60 and low management charges.
Unit-Linked Insurance Plans (ULIPs):
Unit-Linked Insurance Plans (ULIPs) integrate insurance and investing, with tax relief for premium payments. This saving plan also has tax-exempt maturity under Section 10(10D). The most exciting part of this plan is the free fund-switching options, which help people choose debt, equity, or balanced funds based on their risk tolerance. Health insurance provides deductions of up to ₹25,000 under Section 80D, shielding against increasing medical bills while reducing taxable income. To minimize risk and returns, begin early, align investments with your goals, and diversify. To tailor these decisions to suit your needs, consult a financial professional.
Also Read: Gold Limit at Home Without Proof: Tax Rules You Must Know

Disclaimer: The content of this post is professional. To ensure your decisions are suitable for your risk and financial objectives, consult licensed financial experts before investing. Benefits are subject to change with amendments to tax laws.

Share

• 
• 
• 
• 
• 
•