Which of the following is not a tax-saving investment?

Correct option is D

The correct answer is (d) Fixed deposit (FD)
Explanation:
• A standard Fixed Deposit (FD) is not a tax-saving investment. The interest earned is fully taxable, and the principal amount does not qualify for deduction.
• Only specifically designated "Tax-Saving Fixed Deposits" with a mandatory lock-in period of 5 years qualify for deductions under Section 80C. The option simply mentions "Fixed deposit," which implies a general term deposit.
• All other options listed are standard tax-saving instruments under Section 80C of the Income Tax Act.
Information Booster:
• Section 80C allows for a maximum deduction of ₹1.5 Lakh per financial year from the total taxable income.
• Tax-Saving FDs cannot be prematurely withdrawn before 5 years.
• Interest earned on National Savings Certificate (NSC) and Tax-Saving FDs is taxable, whereas interest on PPF is tax-free (Exempt-Exempt-Exempt category).
Additional Knowledge: (a) Home loan principal repayment (Option a)
• The principal component of a home loan EMI is eligible for deduction under Section 80C. (Interest is deductible under Section 24b).
(b) Public Provident Fund (PPF)
• A government-backed savings scheme with a 15-year lock-in, offering tax deductions and tax-free returns.
(c) Life insurance premium
• Premiums paid for life insurance policies for self, spouse, or children are eligible for tax deduction under Section 80C.