Investors love the PPF because they get a tax deduction on the amount they invest. There is no tax on the interest earned and withdrawals are also tax-free. The only glitch is the annual investment limit, which has now been hiked. However, another instrument gives almost the same returns and tax benefits without imposing any investment limit. Salaried taxpayers who are covered by the Employees' Provident Fund can put more than the mandatory 12% of this basic in the Voluntary Provident Fund (VPF). The VPF is an ideal saving instrument for high-income earners looking to build a tax free corpus. Unlike the PPF, there is no limit on how much you can invest.

The contributions to the VPF are eligible for tax benefits that the Provident Fund enjoys. They also earn the same interest (8.75% for 2014-15). Unlike the PPF, its returns are not linked to the market but decided by the Central Board of Trustees of the Employee Provident Fund Organisation in consultation with the government.

However, the VPF scores low on liquidity. You can't access money till you retire.

A one-time withdrawal is allowed in special circumstances--medical emergency, purchase or construction of a house, or a child's marriage. As with EPF, money withdrawn within five years of joining service at tracts tax at the applicable marginal rate.

For some taxpayers, this may not be an option now.

Typically, employees have to inform their employers about deducting VPF at the beginning of the financial year. If you have opted for the deduction, you can't discontinue till the end of the financial year.

Experts advise this option to those nearing retirement and face a shortfall.