1. A life insurance policy or a unit -linked insurance policy. Wherein the lock-in period is between 3 to 5 years for the ULIPs. However, your deduction will be restricted to 10% of the sum assured, if your annual premium exceeds 120% of the sum assured on your policy.
2. A retirement benefit plan offered by mutual funds is also a good option, such as UTI Retirement Benefit Plan and Templeton India Pension Plan.
3. National Savings Certificates (NSCs) are popular as tax saving instruments. NSC scheme has been designed for government employees, businessmen and other salaried classes who are income tax assesses.
4. Equity-linked savings schemes popularly known as ELSS are open-ended and diversified equity schemes offered by mutual funds in India. They offer tax benefits under the new Section 80C of Income Tax Act 1961.
5. Bank fixed deposits that provide the Section 80C tax benefit, generally come in with a lock-in of 5 years.