117029 60910 Tax Saving Investments

8/13/2019 117029 60910 Tax Saving Investments

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Tax Savingnvestments

A Guide To The Instruments That Can Help You Achieve The Goal Of Low Risk And High

Capital Gains

PREPARED BY: CA. JIMMIT D MEHTA

MODERATOR: SHINING STARS: A GROUP OF PROFESSIONALS


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Issued by Public Sector EntitiesLong Term Savings OptionInterest earned on these bonds is non-taxable.Bonds having credit rating AA and AAA are likely to meettheir financial commitments.Returns on these bonds are beneficially only after lock-in-period because the returns are guaranteed at maturity.If sold before lock-in-period ends, then you may get anamount higher or lower than the initial amount investment.

TAX FREE BONDS


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It is an equity-oriented mutual fund in which the returnsare tax free as per Section 80C of Income Tax Act, 1961.3 Years lock-in-period.Since the gains are earned through equity investments,they may be relatively higher than the Fixed Deposits andDebt-Oriented Savings Instruments.Good Short Tern Investment Cum Savings OptionsInvestors must be well aware of its past performance andbefine with taking a moderate amount of risk whileinvesting.

EQUITY LINKED SAVINGS SCHEME (ELSS)


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Introduced to encourage first time investors into adoptingthe equity culture.Maximum Investment amount is Rs.50000/- and 50% ofthe investment can be used for tax benefits under Section80CCG.Returns are market based with a moderate to highamount of risk.Dividends are tax-free.1 Year lock-in-period.

A smaller investment amount and a lesser lock-in-perioddefinitely makes the RGESS a more appealing option ifyou are investing in equity savings scheme for the firsttime.

RAJIV GANDHI EQUITY SAVINGS SCHEME(RGESS)


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NSCs are savings certificate issued by post office.Good Tax Saving Instrument.5 Year and 10 Year lock-in-periods offer guaranteedreturns at maturity.

Interests earned are taxable as per individualsIncome Tax Slab.No TDS.

5 YEARS AND 10 YEARS NSCS


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Traditional yet highly preferred retirement planninginstrument.Great Long Term Saving Investment providing aninterest of 8.7% annually for the year 2013-2014

term.Maximum Investment Rs.100000 per annum. Additional benefits include the option of taking loansfrom the start of third year to the end of the 5 th yearas well as withdrawals from the sixth year onwards.

Accumulated amount plus the interest received onmaturity is no-taxable.

PUBLIC PROVIDENT FUND (PPF)


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Under Section 80C, fixed deposits with the bank fora lock-in-period of not less than 5 years is exemptedfrom tax.

Applicable with Rs.100000 limit which includes life

insurance and provident funds.

TAX SAVER FIXED DEPOSITS


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Gives assured returns on maturity.Risk cover to protect your family in case of untimelyevents.Tax benefit under Section 80C for the premium paid

for the policy. Additional benefits, once the policy term finishes.Under Section 10(10D), if premium paid per year forthe policy is less than 10% of the sum assured, thenthe amount received on maturity is exemption fromtax deduction.

LIFE INSURANCE


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Benefit under Section 80D upto Rs.15000 on policiesfor yourself, spouse and children.

And if you are paying health insurance premium foryour parents as well, then you can get an additional

benefit of Rs.15000 taking total benefit of Rs.30000.These benefits are subject to couple of conditions,you must be less than 65 years of age and policypremium must be paid through cheque or credit cardand not cash.

HEALTH INSURANCE


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117029 60910 Tax Saving Investments

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