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Which should be the best investment plan for tax saving.?


I am in India

If you are in the USA, you have several options.

Roth IRA
Traditional IRA
Tax Free Municipal Bonds
US Saving Bonds

A Roth IRA really is a great tax saving plan. The money is taken pretax, and so you lower your tax bracket. If you receive payments after 62 and a half, the taxes are less on the income than regular income. Saves you on taxes twice!

A Roth Ira is not funded with pretax money. Just the opposite. If your only consideration is to avoid taxes on investment returns, then home-state municipal bonds are the "best". The returns are state and federal tax free.

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