Investment options:

1. Senior Citizen Scheme
2. 5 year FD in P.O. or Bank.
3. MIS in P.O.
4. Debt Funds from M.F.s
5. NSCs
6. PPF

You need not worry about tax saving options because the non-taxable income limit is Rs 2,25,000/-

Your 2nd Q is un-intelligent. Let your annual income increase far beyound Rs 2,25,000/-. You will pay tax @ 10 or 20%, but the rest 80 to 90% after tax is yours to enjoy.
If you are asking about investments u/s 80C, then some of the options listed above are eligible.