4 Top Tax Saving Investment Offers For Risk Takers

2025-05-16

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Balancing risk-taking and tax saving is not an easy task. But it is not impossible either. In order to do so, you simply need to understand the fundamentals of various financial instruments and invest wisely.

Before discussing the best tax saving instruments, it is imperative to assess your risk profile. You are in the category of a risk-taker if you are willing to be an aggressive market investor. You can only be a high-risk taker, if you have a large capital, limited liabilities, surplus assets as well as a long-term investment horizon. Once you’ve determined that you fit the profile of a high risk-taker, you can begin investing in tax-saving instruments, assuming you have opted into the Old Tax Regime.

Important Update: New vs. Old Tax Regime

Before we proceed, it is important to note that a crucial change introduced in Budget 2025, the New Tax Regime (NTR), continues to be the default tax structure for individual taxpayers as of FY 2025–2026. Budget 2025's major improvements have increased NTR's appeal, particularly for middle-class individuals. Notably, people with net taxable incomes up to ₹12 lakh no longer owe taxes due to the increase in the tax rebate under Section 87A to ₹60,000.

Sections 80C, 80D, 80CCC, 80CCD(1), and 24(b) are among the many conventional deductions and exclusions that are not available under NTR. However, the regime simplifies tax computations and may cut tax burden without requiring significant tax-saving investments because it offers lower slab rates and a higher basic exemption ceiling.

Criteria	Old Regime	New Regime (Default)
Deductions	Multiple (80C, 80D, etc.)	Limited (Standard deduction, 80CCD(2))
Slab Rates	Higher	Lower
Basic Exemption	₹2.5 lakh	₹4 lakh
Section 87A Rebate	Up to ₹12,500 for income up to ₹5 lakh	Up to ₹60,000 for income up to ₹12 lakh
Ideal for	Investors utilising tax-saving instruments	Non-investors or those with straightforward income structures

Maximise Tax Benefits with These 4 High-Risk Investment Options

Here is a list of the best tax-saving investments for a risk-taker. These instruments offer the potential for higher returns while also helping reduce taxable income. However, their benefits largely depend on whether you choose the Old or New Tax Regime.

Unit Linked Insurance Plans (ULIPs): Unit Linked Insurance Plans offer investors the two-pronged benefits of life insurance and high market-linked returns. While a portion of your premium is dedicated to providing you with life cover, the rest is invested in equity, debt or mixed funds. You don’t require in-depth knowledge of the financial market, as these funds are managed by professional fund managers. ULIPs also have the key feature of fund switching, where you can switch the investments from debt to equity or vice versa. If you are a risk-taker, then you can select equity-linked funds, which can garner high returns over a long-term investment horizon. These funds have a fixed lock-in period of 5 years.

While ensuring high returns for high risk-takers, Unit Linked Insurance Plans provide one with significant tax benefits, but only under the Old Tax Regime. The premiums paid for these plans are tax-deductible under Section 80C of the Income Tax Act. The payouts received from your ULIPs are also eligible for tax exemptions, as per Section 10(10D) of the Income Tax Act.provided the aggregate premium across policies does not exceed ₹5 lakh in any financial year (for policies issued on or after April 1, 2023). If the premium exceeds this threshold, maturity proceeds (except the death benefit) are taxable as income from other sources.

With the enhanced rebate under Section 87A in the New Tax Regime for FY 2025–26, it is essential to assess whether the deductions available under the Old Regime outweigh the simplified, lower-tax benefits of the New Regime. This makes it crucial to consider both the premium structure and your applicable tax regime before relying on ULIPs for tax-free maturity benefits.

Equity Linked Savings Scheme (ELSS): These are mutual fund schemes investing primarily in equities. As compared to traditional investment options, like Fixed Deposits and National Savings Certificate (NSC), ELSS offers higher returns. You can also choose to invest in Equity Linked Savings Scheme via Systematic Investment Plans (SIPs), where a fixed amount has to be contributed regularly. These funds have a lock-in period of three years, the lowest among most tax-saving plans.

In ELSS, you can avail tax deductions up to ₹ 1.5 lakh under Section 80C of the Income Tax Act, but only under the Old Tax Regime. Under the New Tax Regime, this deduction is not available. Therefore, investors must weigh the potential returns from ELSS against the loss of tax benefit under NTR, and only opt for OTR if the tax savings justify it.

Annuity Plans: This is another tax-saving option for high risk-takers. These pension funds invest both in equity and debt instruments. Along with tax savings, these funds provide you with a retirement corpus. The returns from these funds are contingent upon the proportion of investment in debt and equity instruments, besides the management of funds in different market conditions. You can either invest in deferred annuity plans (plans which begin your pension payouts after a buffer period) or immediate annuity plans (plans which begin your pension payouts immediately). The contribution made towards your pension funds are tax-deductible up to Rs 1.5 lakh under Section 80CCC of the Income Tax Act, but only under the Old Tax Regime. As with other instruments, this deduction is not available under NTR.

The tax treatment of the accumulated amount and the maturity proceeds will depend on the type of plan you have opted for.

National Pension Scheme: The union government introduced this scheme in 2009 to provide social security to Indian citizens post-retirement. Regulated by the Pension Fund Regulatory and Development Authority (PFRDA), this scheme is open to all Indian citizens between the ages of 18 and 60 years. Employees from the private, public and unorganised sectors—except defense personnel and officers—can invest in the NPS. After opening an NPS account, you are provided with a unique Permanent Retirement Account Number (PRAN).

There are two accounts in the NPS: Tier I Account and Tier II Account. While Tier I is a compulsory account, where withdrawals are permitted only post-retirement, Tier II is a voluntary account allowing withdrawals. You can invest in the NPS, either in the ‘Active’ mode or the ‘Auto’ mode. If you are a risk-taker, then you can invest in various asset classes, including equities. You must, however, remember that the government has capped equity investments to a maximum of 75%.

Under the NPS, you can avail of tax deductions of up to ₹1.5 lakh - ₹ 2 lakh under sections 80CCD(1) and 50,000 under 80 CCD(1B) under the Old Tax Regime of the Income Tax Act.

Conclusion

Thus, a risk-taker can avail a wide variety of tax saving schemes like ULIPs, ELSS, pension funds and the NPS., provided they opt for the Old Tax Regime.. The Invest 4G plan from Canara HSBC Life Insurance can be an ideal plan for both conservative and aggressive investors. Not only does the plan provide unbeatable features, like loyalty additions and wealth boosters, but it also offers a slew of portfolio management strategies to get the best returns for investors with varied risk appetites.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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