Despite knowing the advantages of mapping out a structured tax plan through out the year, most people put off tax planning until the very last month.

When you are that late, you might not be able to avail the benefits you could have if you had planned early, but that doesn’t mean you still cannot file a decent tax return. There are still a lot of things you can do to come up with a respectable tax plan. A few such tax instruments you can utilise are discussed below.

Tax Saving Mutual Funds
Also referred to as Equity Linked Service Schemes (ELSS), Tax Saving Mutual Funds are equity funds that have tax benefits under Section 80C of the 1961 Income-Tax amendment act.

The main difference between these mutual funds and equity funds is that there is a 3 year lock-in period. So unlike other funds where the investor can sell at any given point, here it is mandatory that he waits for a minimum of 3 years. Also, unlike other equity funds, the ELSS can avail all tax benefits.

Public Provident Fund
The Public Provident Fund (PPF) is a scheme which has guaranteed returns. It is recurring in nature and runs for a period of 15 years. Annual investments have to be made during that period to keep the PPF alive.

The minimum investment required for a PPF is Rs 500 per annum and the maximum amount for the same is Rs 70,000.

Just like Tax Saving Mutual Funds, the PPF can also avail of benefits listed under Section 80 C.

The current return offered on a PPF for the 2010-2011 financial year has been increased from 8.5 per cent per annum last year to 9.5 per cent, but this percentage is subject to revision every year and hence the final interest generated after 15 years is likely to vary as per the change in the interest over that period.

This option is favourable to young investors as they have time on their side and 15 years will be an agreeable waiting period for them.

NSC
The National Savings Certificate (NSC) is another scheme with assured returns. But unlike the PPF, it is not recurring in nature. The investor makes a one-time investment of a huge sum, which matures over a period of 6 years.

The minimum amount that you can invest in the NSC is `100 and there is no upper limit to the money you can invest. The interest generated from the NSC is only paid on maturity of the same and is taxable. The interest is considered to be reinvested with the NSC and hence can avail all benefits listed under Section 80 C.

Investing in NSC offers an 8 per cent return per annum and this is calculated every six months. The rate at the time of investing remains constant and hence is not subject to change. The NSC helps you lock-in surpluses that you have for a six-year period. This lets you prepare in advance for expected expenses after that duration of time.

Tax-Saving Fixed Deposits
Tax-saving fixed deposits are not any different from the fixed deposits schemes offered by banks. The minimum amount required is Rs 100 and up to Rs 1,00,000 can avail tax benefits under Section 80 C.There is a 5-year lock-in period for these schemes and the investor cannot withdraw his investment prematurely under any circumstances.

The interest rate varies from 6.5 to 8 per cent per annum, but an additional 0.5 per cent per annum is offered to senior citizens. The interest that is generated is taxable, and like the NSC this scheme can also be used to plan in advance .

ULIPS
Unit linked Insurance Plans (ULIP) is probably the best option to fall back on when you are late on making your tax plans. ULIPs in simple terms are investments and insurance together. Returns are subject to deduction under Section 80C. But it should be remembered that ULIPs are long term investments and not a temporary way out.

(The writer is the CEO of bankbazaar.com)