r2i forum

I have recently R2Ied (indian citizen/no GC) and started looking at ways to save taxes for a couple of days. I have learned a lot from these forums and google.

As RRK mentioned at http://www.r2iclubforums.com/forums/content.php/39-India-Insurance-hidden-costs-of-ULIP-Plans?commentid=338417, these are the 2 avenues for obtaining EXEMPT-EXEMPT-EXEMPT

a) PPF
b) Various insurance cum investment policies

I would like to add:
c) EPF/GPF etc. but these are not available to non salaried folks.

Are there any other avenues?

b) seems to be great because you can put in pre-tax(up to 1L u/s 80C)/post-tax money and then money grows tax-free and even the proceeds are tax-free subject to some rules. The interesting fact is that there seems to be no limit on the amount of the proceeds on withdrawal before they are taxed.

The general consensus is that lot of these insurance cum investment plans have high costs. So, we need to find a 'good' plan to take advantage of EXEMPT-EXEMPT-EXEMPT. Can the gurus comment on this.

I copied this from a ET article titled: "Exempt exempt tax will hit tax payers hard"

[QUOTE]
Currently, any sum (including bonus) received under a life insurance policy, except policies where the premium paid for any of the years exceeds 20% of the capital sum assured, is exempt from tax. In case where the premium paid in any of the years exceeds 20% of the capital sum assured, an exemption is available only if the sum is received on the death of the insured.

Under the DTC, the entire proceeds from a life insurance policy are proposed to be made taxable. The proceeds are not taxable only if it is in respect of a policy, wherein the premium paid in any of the years does not exceed 5% of the actual capital sum assured and where the sum is received on completion of original contract period or upon the death of the insured.