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Tuesday 9 December 2014

Tax Saving Instruments (2)

In the last post we have discussed the Housing loan under the head of Tax saving instruments:
We would like to discuss more instruments of Tax savings under 80C.
1)      PPF:
It is an all-time favourite INVESTMENT option and 2014-15 Budget has made it more attractive by enhancing the annual INVESTMENT limit to Rs 1.5 lakh. For PPF you can open an account in a post office branch or a bank. The maximum INVESTMENT of Rs1.5 lakh in a year can be done as a lump sum or as installments on any working day of the year. Just make sure you invest the minimum Rs 500 in your PPF account in a year, otherwise you will be slapped with a nominal, but irksome, penalty of Rs 50. Though the PPF account matures in 15 years, you can extend it in blocks of five years each.
2)      Equity-linked saving schemes (ELSS):
a)     Shortest Lock in period
b)    Minimum investment as low as Rs.500/-
c)     Unlike ULIP, PPF, insurance plan, no compulsion for continuity in investments over the years.
d)    It is also equity funds provide good returns over a long maturity period.

3)      SCSS: This assured return scheme is the best tax-saving avenue for senior citizens. However, the Rs 15 lakh investment limit somewhat curtails its utility. The interest rate is 100 basis points above the 5-year government bond yield. The interest is paid on 31 March, 30 June, 30 September and 31 December, irrespective of when you start INVESTING.
4)      Bank FDs and NSCs: Remember always that interest on FDs is taxable.
5)      Life Insurance Plans: Costliest Tax saving instruments, we always would like to suggest that Life Insurances should always be covered as per their genuine purpose instead of investing point of view.

6)      ULIPS: Keep in mind that a Ulip yields good results only if held for at least 10-12 years. A small charge levied for risk coverage.

For further Consultation or Help please feel freee to write to us on contact@munim.in Or visit our website

Munim Team
Reach us @ +91 8800681678 | contact.munim@gmail.com | contact@munim.in
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