how to make HTML elements (H1, H2 etc..) as links?

What is the correct code for turning HTML elements (H1, H2 or Paragraph etc..) into a link and search engines index texts of header and link both?

which one is better:
<a href="#"><h1>heading</h1></a>

or
<h1><a href="#">heading</a></h1>

The element which displays as a block (in this case <h1>) always should surround %inline elements (such as <a>).

Another example <div> should always be outside <span>.

That is why:
<h1><a href="#">heading</a></h1>
is correct.

<a href="#"><h1>heading</h1></a>
is Wrong.

An even easier way of understanding this is that the following makes sense:

<h1><a href="#1">link</a> and <a href="#2">Another link</a></h1>


It would be highly unusual to try the inverse with multiple <h1>s inside an <a>.

Reference:

http://www.w3.org/TR/html401/struct/global.html#h-7.5.4