INVESTMENT ALTERNATIVES : Wide varieties of investment avenues are now
available in India. An investor can himself select the best avenue after studying
the merits and demerits of different avenues. Even financial advertising,
newspaper supplements on financial matters and investment journals offer guidance
to investors in the Selection of suitable investment avenues.
The following investment avenues are popular and used extensively in India:
(1) Investment in shares, debentures and bonds of different types issued by companies,
corporations and public sector organisations.
(2) Postal savings schemes.
(3) PF, PPF and other tax sheltered savings schemes such as National Savings
Schemes, National Saving Certificates and Tax Saving Schemes of LIC, ICICI,
infrastructure bonds and so on.
(4) Investment in investment intermediaries such as UTI and mutual funds run by LIC,
banks and HDFC, etc.
(5) Deposits in companies, (public deposits) or deposits in public sector organisations
and banks.
(6) Life insurance investment i.e., investment in different life policies such as whole life
policy, endowment policy and so on.
(7) Investment in gold, silver, precious metals and antiques.
(8) Investment in real estates.
(9) Investment in gilt-edged securities and securities of government and semigovernment
organisations (e.g. Relief bonds, bonds of port trusts, treasury bills, etc.).
It may be noted that there are some avenues/investment schemes where tax
benefits are available. Such schemes are called tax savings schemes of investment.
The tax liability reduces when investment is made in such schemes. The schemes
are decided by the government and announced along with the annual budget. A tax
payer can take the benefit of such schemes and bring down his total tax liability.
The basic purpose of such schemes is to encourage investment in certain
investment avenues. In some schemes, the entire investment is made tax free i.e. it is
deducted from yearly taxable income.

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