If you intend to stay invested for period of more than five years then ELSS schemes can be a better choice over tax-free fixed deposit.
These schemes are offered by mutual fund companies and they predominantly invest in equities.
One needs to first understand the risk-reward equation here before investing in ELSS schemes as due to stock market fluctuations, your investments here can be in the negative territory for some time.
In the proposed Direct Tax code which is supposed to be now implemented from 1st April 2013, this investment has been excluded.
So you may still be able to take the benefit of this scheme till March 2013.