during the last quarter of each financial year it is not uncommon to find the salaried class scouring the horizon for making investments in tax savings instruments in a bid to bring down their tax liability normally the taxsavings schemes or instruments that come first to taxpayers mind are the public provident fund pension plans national savings certificate and national savings scheme these instruments are giltedged when it comes to protection of investors capital but their returns leave much to be desiredhowever if you desire superior returns as compared to traditional savings schemes instruments then you could consider investing a portion of the rs 100000 tax savings limit under section 80c of the income tax act in equity linked savings schemes elss floated by various mutual fundsequity linked savings schemes are generally open ended schemes but have a lock in period of three years these schemes serve the dual purpose of equity investing as well as tax planning for the investor however it must be noted that investors cannot under any circumstances get their money back before three years are over from the date of investmentadvantages of elssthe main advantage of elss is its short lockin period whereas the lockin period of elss is only 3 years maturity period of nsc is 6 years and ppf is 15 years in life insurance policies only trivial amounts can be withdrawn in certain schemes after 3 years since elss is an equity linked scheme earning potential is much higher compared to the other tax saving instruments equity investments have on an average returned over 15 annualized over long holding periodsanother big advantage is that the investor can opt for dividend option and get some gains during the lockin period even when he can not exit or redeem the same some elss schemes also offer personal accident death cover insurancelastly proceeds from elss investments are taxfree which is not the case with many of the other options available under section 80cdisadvantages of elssthe main drawback for these schemes is that the risk component is much higher compared to the traditional tax saving products also premature withdrawal from these schemes is not allowed whereas it is allowed in other instruments in some specific conditions moreover unlike life insurance products these schemes generally do not provide any risk coverease of investing in elssmutual funds offer easy and convenient ways of investing and tracking your investments a simple form needs to be filled up and you need to attach your kyc know your client number and cheque of the requisite amount to subscribe to any elss scheme tracking your investments is easy as navs of these funds are regularly quoted in news papers internet sites and business channelsalso your advisor can always help you monitor your investments similarly withdrawal from these schemes after the mandatory lockin period is also fairly simple and easy in contrast service standards on the small savings schemes are very deplorablethe author is ceo of invest shoppe india ltd