How to Use Your Tax-Saving Investments to Become a Crorepati

How to Use Your Tax-Saving Investments to Become a Crorepati

It’s everyone’s dream to accumulate wealth and become super rich. But the path to this target is not a cakewalk. You may need to take many smart and, at the same time, tough decisions to reach that destination.

These days the market is flooded with investment options. But you must channel your money to the right investment option to grow your wealth swiftly. Investing in tax-saving instruments is a good strategy for growing your money.

Selecting the right investment platform, like Koshex, is as crucial as choosing a suitable investment avenue. It helps to safeguard your money from financial fraud. It also protects your personal and financial data.

How to get affluent by investing in tax-saving instruments?

Here are a few tax-saving investment options that will help you become wealthy over time.

Public Provident Fund (PPF)

One of the most preferred tax-saving investment avenues of Indians is the PPF. The main reason for its huge popularity is the EEE tag it carries. EEE represents

-Exemption from tax for investment

-Exemption from tax for interest earned

-Exemption from tax for the maturity amount

In a financial year, you can invest up to Rs.1.5 lakh in the PPF. Your investments in the PPF are eligible for tax exemption under Section 80C of the Income Tax Act. You should invest at least Rs.500 in your PPF account during a financial year. The PPF is a low-risk investment avenue. It offers moderate returns compared to equities but provides higher returns than conventional investment options like Recurring Deposits (RD).

The Government of India decides the interest rate of PPF and revises it quarterly. While writing this article, the effective interest rate on PPF was 7.1%. No matter where you have opened your PPF account, in a bank or at a post office, the interest rate of the PPF will remain the same everywhere.

Before investing in a PPF, you should know a few more facts about it.

o   PPF is a long-term investment option with a lock-in period of 15 years. After 15 years, you can extend your investment period in blocks of 5 years or withdraw your money.

o   Partial withdrawals from your PPF account are possible only after 7 years. There is no penalty for partial withdrawals. But your withdrawal should not go beyond 50% of the balance at the end of the prior fiscal year.

o   You can’t open PPF accounts jointly. This means that a person can open only one account at a time.

o   You can make investments in installments or a lump sum. However, the number of installments should be at most 12 in a financial year.

o   You must operate your PPF account at least once in a financial year.

Now, let’s see how you can accumulate Rs.1 crore through PPF investments.

Suppose you’re investing Rs.12,500 per month in your PPF account at an interest rate of 7.1%. Then in 25 years, you can get Rs. 1.03 crore.

In case your financial position does not allow you to invest that large amount in a month, you can invest only Rs.8,000 per month. Then at an interest rate of 7.1% per annum in 31 years, your investments will fetch Rs. 1.07 crore.

On the other hand, if you’re investing Rs.5,000 per month at a 7.1% interest rate, you’ll get Rs. 1.05 crore in 37 years.

Monthly Instalments(In Rs.)TenureTotal Interest Earned @7.1% p.a.(In Rs.)Maturity Value(In Rs.)

You can grow your PPF investments to Rs.1 crore in another way as well. Invest Rs.12,500 per month at 7.1% for 15 years. After 15 years, stop investing in this account. Now your investments will reach a maturity value of Rs. 40.68 lakhs.

Instead of withdrawing, keep the amount in the same account for 13 more years; at an interest rate of 7.1%, it will grow to Rs.1 crore.

Monthly Instalments for 15 years(In Rs.)Maturity Value After 15 years@ 7.1% p.a.(In Rs.)Non-contribution Investment Tenure(Years) Maturity Value(In Rs.)

Equity Linked Saving Schemes (ELSS)

ELSS is a type of equity mutual fund. It helps you save tax. Investments up to Rs. 1.5 lakh in ELSS funds in a financial year are eligible for tax exemption under Section 80C of the Income Tax Act. Here are a few important points about ELSS funds.

  • A lock-in period of 3 years is applicable for ELSS investments. But there is no limit on the number of years you can stay invested in these schemes.
  • You can invest in ELSS either through Systematic Investment Plan (SIP) or a lump sum. If you’re investing through SIP, every installment will have a lock-in period of 3 years.
  • A large chunk of the portfolio of ELSS comprises equity or equity-linked instruments. Hence, ELSS funds do not guarantee returns. But historically, they provided better returns than traditional avenues in the long run.
  • You need to pay long-term capital gains on redemptions for your gains from ELSS funds. But no tax will be applicable if your long-term capital gains are below Rs.1 lakh in a financial year.
  • Usually, ELSS funds invest in stocks across all market capitalization and sectors. Hence, you can easily diversify your portfolio through ELSS investments.

Now, let’s check how you can create an Rs. 1 crore corpus through ELSS investments.

SIP Amount(In Rs.)TenureEstimated Returns @12% p.a.(In Rs.)Maturity Value(In Rs.)

Here, one thing is obvious. Compared to PPF, you can reach the 1 crore mark swiftly through an SIP in an ELSS fund.


Investing in tax-saving schemes is a better way to achieve your financial goals than investing in plans that offer unrealistic returns and land you in financial fraud. No doubt, it may take some time to reach your target by investing through tax-saving options, but they secure your financial future.

Koshex is a trusted platform for investing in mutual funds, fixed deposits, digital gold, and smart deposits. Through Koshex, you can invest in various funds from nearly 40 fund houses. This platform helps you to track your cashflows and build better saving habits.


1. Besides PPF and ELSS, which is the best tax-saving scheme to grow your wealth?

National Pension Scheme or NPS is another tax-saving investment scheme. It also aids you in reaching your financial goals.

2.  How is interest calculated in PPF?

The interest of PPF is calculated on the balance between the 5th and last day of every month. Hence, to take maximum advantage of PPF, invest before the 5th of every month.