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

National Savings Certificate

National Savings Certificate Here's everything you need to know about the 5-year savings scheme offered by the Government This is a 5-year small savings scheme of the government. From 1 July 2016, a National Savings Certificate (NSC) can be held in the electronic mode too. Physical pre-printed NSC certificates have been discontinued and replaced with Public Provident Fund-like passbooks. What's on offer The minimum amount you can invest in them is Rs100 and there is no upper limit. Under this scheme, all deposits up to Rs1.5 lakh qualify for deduction under section 80C of the Income-tax Act, 1961. The interest earned is taxable. You can invest in multiples of Rs 100. These certificates can be owned individually, jointly and also on behalf of minors. The interest rates for all small savings schemes are released on a quarterly basis. The effective rate for NSC from 1 October to 31 December is 8%. The interest is calculated on an annual compounding basis and is given along w...
Read more

Am you Required to E-file Tax Return?

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   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...
Read more

Mutual Fund Review: HDFC Index Sensex Plus

  In terms of size, HDFC Index Sensex Plus may be one of the smallest offerings from the HDFC stable. But that has not dampened its show, which has beaten the Sensex by a mile in overall returns   HDFC Index Sensex Plus is a passively managed diversified equity scheme with Sensex as its benchmark index. The fund also invests a small proportion of its equity portfolio in non-Sensex scrips. The scheme cannot boast of an impressive size and is one of the smallest in the HDFC basket with assets under management (AUM) of less than 60 crore. PERFORMANCE: Being passively managed and portfolio aligned to that of the benchmark, the performance of the index fund is expected to follow that of the benchmark and in this respect, it has not disappointed investors. Since its launch in July 2002, the fund has outperformed Sensex in overall returns by good margins.    While every 1,000 invested in HDFC Index Sensex Plus in July 2002 is worth 6,130 now, a similar amount invested in Sensex then wo...
Read more

Different types of Mutual Funds

You may not be comfortable investing in the stock market. It might not seem like your cup of tea. But you can start by investing in Mutual Funds. Many first-time investors invest in Mutual Funds. This is because they do not know how to invest in individual securities. Basic information on Mutual Funds People invest their money in stocks, bonds, and other securities through Mutual Funds. Each Fund has different schemes with specific objectives. Professional Fund Managers look after these schemes. Your Fund Manager could help you invest in a scheme that suits your financial goal. Functioning of Mutual Funds You could make money through Mutual Funds in different ways. A single Mutual Fund could hold many different stocks, bonds, and debentures. This minimizes the risk by spreading out your investment. You could earn dividends from stocks and interest from bonds. You could also earn capital by selling securities when their price increases. Usually, you could choose to sell your share any t...
Read more

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...
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