Skip to main content

PPF Investment

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

 

THE change in the guidelines for small savings has big implications as far as the public provident fund (PPF) is concerned and the investors should take special note of this. There is a need for investors to rework their existing plan to take into account the change that has been witnessed and get an added advantage.

This will help them to plan better for the long term and here is a look at the way in which the PPF can now be used as an investment option.

Nature of PPF: The PPF is a long-term savings scheme that is offered at the post offices and some public sector banks. This is a 15-year scheme, and is hence, meant for longterm investments so that the amounts here can be accumulated for the purpose of retirement or some other need several years down the line.

For a long period of time, the rate of interest offered on this scheme was 8 per cent. There has been a change now with the linking of the interest rates for small savings to the market rates, and from December 1, the new applicable rate is 8.6 per cent.

The investments can be extended in blocks of five years for unlimited number of times and there is also a tax benefit that is available for the investment under Section 80C of the Income Tax Act.

Higher investment limit: The investment limit under the PPF was at Rs 70,000 per annum till December 1. This created some practical problems, and hence, there was a need to increase this investment limit. This has now been done and the new limit stands at

Rs 1,00,000. This is a suitable figure that the individual must make full use of to ensure that they complete their investment and tax requirements.

At present, the limit for the deduction under Section 80C of the Income Tax Act is Rs 1,00,000, which means that, previously, if there was an investor who wanted to make use of the limit for the investments made under PPF, then they would need to use some other instrument as well to complete the total tax-saving requirements.

This is the reason that the new higher limit will ensure that there can be the use of just the PPF for the entire tax-saving needs.

Period of benefit: The application of the higher limit for the investment will start from December 1, which is in the current financial year itself, so the investors should be ready to make use of this in the last few months that remain in the financial year. At the same time, they should also include the higher figure in their planning for the coming time period.

This means that for all those who have already made the Rs 70,000 investment in the year, then there is still Rs 30,000 that can be used, while for the others, a larger amount remains available for investments.

Further, the higher interest rate will also be applicable from December 1 as mentioned in the notification, and hence, there will be an immediate benefit that will be seen for the investors. What the investors need to watch out for is that fact that the interest rates can come down in the future also and that these are not fixed for the entire duration of the investment, so, just as the higher rates became applicable, the reverse can also happen.

Future gains: The real benefit of the entire development for the investor will come from the fact that the new direct tax code (DTC) also mentions the PPF as an eligible investment that will get the benefit of tax deductions. While there are a lot of existing instruments that will be out of the ambit, the PPF remains, and hence, PPF will have a favourable long term impact that should be utilised effectively in the times ahead.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

---------------------------------------------

Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

Submit filled up application Collection canter near you

Popular posts from this blog

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...
Read more

WEALTH TAX

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 WEALTH TAX   WHAT CONSTITUTES WEALTH? For wealth tax purposes, "wealth" means property , urban land, car, jewellery , yacht, boat, aircraft and cash in hand in excess of Rs 50,000. CAUTION POINT | Do not think you will have an easy escape from wealth tax by transferring your `wealth' without consideration to your spouse or minor child. Such assets will also be considered as your wealth. HOW TO DETERMINE YOUR TAXABLE WEALTH Add the taxable value of the above assets (computed as per the detailed rules for valuation) owned by you as on March 31 (for FY 2014-15, it will be March 31, 2015). In case you sold your car during the year, it will not be taxable wealth. Deduct loans if any obtained by you to acquire any of the taxable assets from the value of gross tax out for at least 300 days in a...
Read more

Equity Savings Fund

Invest Equity Savings Fund Online   The best part about these funds is that they are subject to equity fund taxation and at the same time are structured like MIP like funds . This new category, equity savings funds , offer a little of everything. They allocate money to equities & equity related instruments, and fixed income. They aim to generate returns by diversification. Such funds invest in fixed income and arbitrage to protect the investors from short term volatility and equity for capital gains. The best part of these funds is that they are subject to equity fund taxation and at the same time are structured like MIP funds.   MIP funds however are subject to debt fund taxation. Investors Equity savings funds are suitable for the following: First time investors who seek partial exposure to equity with less volatility and greater stability Investors seeking moderate capital appreciation with relatively lower risk Those wh...
Read more

How to Pick Top Performing Mutual Fund Schemes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   How to Pick Performing Schemes  Funds that continue to stay in the top grade of performance over longer periods are the ones to bet on, advise investment experts   The mutual fund performance charts of the past few months make for an impressive reading. Funds across all categories boast of stellar returns. Sample this: The mid and small cap category has averaged 77 percent return over the past 12 months, with the best fund delivering a staggering 120 percent. The tax-saving funds also average an impressive 51 percent, including a fund which has soared 92 percent. Many of the table-toppers are funds of proven quality and track record. However, there are also schemes that are not that well-known. Some of these have rarely made it to the performance charts in the past, yet, of late, they bo...
Read more

8% Government of India Bonds quick guide

For those seeking comfort in safety of returns, the Government of India issued 8% savings bond once again comes to the fore. First launched in 2003, these bonds are issued by the government with a maturity of 6 years. The bonds are available at all times with specified distributors through whom you can apply to invest in them. Here is a quick guide to what the bond offers and its features to ascertain to check for suitability. What are Government of India bonds Government of India bonds are like any other government bonds with specified rate of interest. The rate is fixed at 8% per annum paid half yearly, or you can opt for cumulative payment of interest at the end of the tenure. You can buy these bonds from State Bank of India and its associates, other nationalized banks and some private sector banks such as HDFC Bank Ltd and ICICI Bank Ltd, among others. The bonds can be bought from the offices of Stock Holding Corporation of India as well. They are available in physical form onl...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now