Skip to main content

PPF tax saving option

Tax Saving Mutual Funds Online

Invest Mutual Funds Online

Call 0 94 8300 8300 (India)

THE Union government has increased the interest rates on public provident fund (PPF), national savings certificate (NSC) and post office savings scheme by 0.20 to 0.50 per cent from April 1, in a bid to make them competitive and enthuse retail participation. In addition, several banks have once again increased the interest rates on fixed deposits (FDs), including tax-saving FDs. So, should you invest in small-savings schemes or look at other comparable products in the market such as FDs? There are various factors that you should consider before choosing a savings instrument such as liquidity benefits, lock-in period, tax benefits and returns that the savings instrument is offering. Let us look at the most popular instruments.

NSC comes at par with tax saving FDs: NSC comes with a lower lock-in period of five years and there is no upper investment limit. The interest rate for a five-year NSC is 8.6 per cent. The government launched a new NSC with a 10-year maturity last December that will offer an interest rate of 8.9 per cent from April 1.

You can consider a 10year NSC if you are more inclined towards debt instruments and can lock-in money. This instrument is more beneficial for those in the 30 per cent tax bracket.

So, for example, if you are in the 30 per cent tax bracket and have invested in a fiveyear NSC, your post-tax return will be 6.02 per cent and for a 10-year NSC, your posttax return would be 6.23 per cent. In addition to offering a good interest rate, another noteworthy feature of NSCs is that the annual interest accrued can be considered as a fresh investment under section 80C. Also, you can take a loan against your NSC.

Fixed deposits: These instruments are suitable for those who are not in the higher tax bracket and have a medium-term goal and for those who would require money in the near future.

The five-year, tax-saving bank deposit qualifies for tax benefits under Section 80C.

However, the income above Rs 10,000 qualifies for tax deduction at source. Take for instance, ICICI Bank Tax Saver Fixed Deposit (five years) that offers an interest rate of 8.75 per cent. If you are in the 30 per cent tax bracket, your post-tax return will be 6.12 per cent, almost the same as a five-year NSC.

PPF continues to score over all tax saving instruments: From April 1, the interest rate offered on PPF will be 8.8 per cent from the earlier 8.6 per cent being offered since December 1, 2011.

PPF's interest rate every year will be linked with the 10year government securities rates. Under Section 80C, PPF qualifies for a tax deduction up to Rs 1,00,000.

Also, the income earned from PPF is not taxable and that makes it the most superior tax-saving product.

PPF also has an edge over the employees' provident fund (EPF) whose rate is not market-linked and is at present offering 8.25 per cent.


The lock-in in a PPF is 15 years and the entire balance can be withdrawn on maturity. PPF accounts can also be extended for a period of five years after maturity. So, continue to renew your PPF scheme for five years every time it matures. During these five years, you earn the rate of interest and can also make fresh deposits.


But, unfortunately, investment in PPF is restricted to Rs 1,00,000 per year.

PPF should be a mandatory component in every retail investor's portfolio because of its post-tax returns. If you can afford, invest the full Rs 1,00,000 (the maximum you can invest).


Post office recurring deposits: From April, a post office recurring deposit will provide 8.4 per cent for a five-year monthly deposit.


At present, most banks are offering 8.75-9.25 per cent on recurring deposits or term deposits of a similar period. Thus, these are less attractive for now because bank FDs are offering higher interest rates.

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

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

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

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

 

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

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online

      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver Mutual  Funds  Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

 

Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

What is Financial Freedom?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)     There were many things common between our Freedom fighters. All had the Single vision (Free India), common goal (independence) and had a disciplined and focused approach. They were ready to do anything and everything and had made so many sacrifices to see India free . But the road to freedom was not easy .They had faced lot many hardships, went to jail so many times and even confronted physical and mental torture from the British. There was one more thing which proved to be an advantage to our fighters that most of them were professional lawyers. The knowledge of legal issues and its impact on our country at large has helped them counter various bills and proposed new laws by the then government. It is due to their continuous effort that we are able to achieve the goal of Independent Indi...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...
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