Small savings rates are linked to the government bond yields in the secondary market. PPF rates have progressively come down in the past two years, mirroring the decline in bond yields. The PPF rate was cut recently by 20 basis points and could fall further in the coming months. Despite the rate cut, advisers say the PPF remains a good bet because the interest is tax free. The tax-free status of the PPF gives it a distinct advantage over fixed deposits. The interest from fixed deposits is fully taxable, which brings down the returns to barely 5% in the highest bracket.
PPF rates have steadily come down in past few years
On the other hand, since consumer inflation is below 4%, the PPF offers a healthy real return of more than 3%. "This is quite impressive for an option that offers assured returns. Investors should continue to take advantage of this long-term tax-free product
Besides the returns and taxability, the PPF scores high on safety, flexibility and ease of investment. An account can be opened in a Post Office branch or designated branches of PSU banks. Some private banks also offer the facility to invest in the PPF. Opt for a bank that allows online access to the PPF account. Deposits can be made throughout the year, but an investor must deposit at least Rs 500 in a year.
However, there is a better alternative available to salaried taxpayers covered by the Employees' Provident Fund. Although an individual's contribution to the EPF is linked to the salary, one can opt for the Voluntary Provident Fund (VPF). The VPF offers a higher rate (8.65% for 2016-17) compared to the PPF and contributions are eligible for the same tax benefits. But this option can be exercised only at the beginning of the financial year or in October.
Smart tip:Invest through a bank that allows online access and investment in the PPF account.
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The Life Insurance Corporation of India has announced Jeevan Labh , its limited-premium, with-profits endowment plan . It comes with a premium paying terms of 10, 15 and 16 years for corresponding policy tenures of 16, 21, and 25 years respectively. ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saving Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in india for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Franklin India TaxShield 4. ICICI Prudential Long Term Equity Fund 5. IDFC Tax Advantage (ELSS) Fund 6. Birla Sun Life Tax Relief 96 7. DSP BlackRock Tax Saver Fund 8. Reliance Tax Saver (ELSS) Fund 9. Religare Tax Plan 10. Birla Sun Life Tax Plan Invest in Best Performing 2016 Tax Saver Mutual Funds Online Invest Online Download Application Forms For further information contact Prajna Capital on 94 83...
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The NPS is a great way to save tax if you don't mind locking in your money till you retire. Till last year, the taxability of the NPS was a big issue. But last year's Budget changed the rules and made 40% of the corpus tax free. The PFRDA wants that the balance 60% to be exempt from tax as well. The emphasis is on increasing pension coverage. So, allowing EEE status (to NPS ) is our major demand (in the Budget NPS is especially useful for investors who may have exhausted the `1.5 lakh investment limit under Section 80C but want to save more. Another way the NPS can cut tax is by rejigging the salary.If a company deposits up to 10% of the basic salary of an employee in the NPS under Section 80CCD(2d), the amount will be tax free. Turn to page 28 to see how much tax this can save. However, the take-home pay of the employee will come down. 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 10 Tax...
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General insurance has evolved to become as important as life insurance. A look at some categories which can no longer be over-looked… Insuring your belongings can help you cushion yourself against financial losses. While life insurance takes care of your loved ones, it is equally important to safeguard your treasured possessions. Here's a quick look at the 'must-haves' under general insurance… Travel insurance Accidents can happen anytime – worse if they happen when you are in a foreign land. You may get sick and meeting your medical bills in a foreign currency can be quite frustrating! Besides, there may be other tricky situations such as accidents, loss of baggage or passport, trip cancellation, flight delays, plane hijack, etc. Whether you travel for leisure, business or studies, travel insurance comes handy to safeguard your trip against contingencies and that too, at a fraction of the cost of your trip. Home insurance For most of us, the home is the...
