As the government plugs loopholes that help tax avoidance and bring more investment vehicles such as debt funds under tax net, the search for tax-efficient investment gathers momentum.

Tax-saving investment products such as unit linked insurance plans, public provident fund and Sukanya Samriddhi Yojana offer tax-free proceeds at the time of redemption. While ULIPs have conditions attached around sum assured and the premium paid and not many are comfortable mixing insurance with investments, it can be a long-term compounder of money. 60 percent of the proceeds of the accumulated corpus in the National Pension Scheme can be withdrawn tax free at the time of maturity. Choose your investment carefully.