It is the time of the year when you are waiting for your employer/HR to provide you with the Form 16 so that you can file your income tax returns. Some of you are waiting for your Bonuses/Incentives with waited breath. We all work really hard for our money and it ought to be invested judiciously.
Having made quite a few mistaken of mine in the past, I decided to learn from my money-mistakes .It is ,however, best to plan for next year’s income tax planning plus investments right from the month of April (The beginning for FY).For example, If you start an SIP in an ELSS Mutual Fund in April, not only you can avail of recommended SIP route to MF investment but also make the most of maximum limit under section Section 80 C.
I shall soon publish a separate post on what section 80 C entails and how you can master it like a pro.
Also refer: http://www.oracleinvestor.com/personal-finance/what-is-ppf-account/
A somewhat exhaustive list of all the options available for you to park your funds to save tax under different sections of Income Tax Act is given below:
|Product||Returns(/year)||Latest Update||Maturity/Lock IN Period||Miscellaneous||Web|
|ELSS MF||Between 15 to 20% /year (past 4 years)||FY(15-16) was a failure for all MFs including ELSS Funds.||3 Years||Respective MF Houses’ site/AMC’s site|
|ULIP||between 9 to 10%||ULIPs lost money in FY 15-16||5 years||Respective Insurance co’s site|
|NPS||9.5%- 12%||Check respective scheme name website||5 years||1 Lakh maximum amount under section 80 CCE from taxable income for self, From employer 10% of salary over and above under 80 CCE||http://www.npstrust.org.in/index.php|
|PPF||8.1% (16-17)||Interest rate was reduced to 8.1% from 8.7%||15 years||Respective Banks’ websites|
|SCS Scheme(senior citizens)||8.60%||Age criteria: 60 years or more||5 years||Tax free if interest earned/year is less than 10000||http://www.indiapost.gov.in/scss.aspx|
|Sukanya Smridhi Yojana||8.60%||Interest rate: 8.6% (FY-16-17)||When the girl child turns 21||http://www.indiapost.gov.in/SukanyaSamriddhi.aspx|
|Bank Tax saving FDs||7.5-8.5%||Checl respective bank’s site||5 years||Interest is not tax free.||Respective Banks’ websites|
|NSC (India Post)||8-8.5%||Interest rate: 8.10 %||5 to 10 Years||Investment up to INR 1,00,000/- per annum qualifies for IT Rebate under section 80C of Income Tax Act.||http://www.indiapost.gov.in/NSC.aspx|
|Pension Plans(section 80 ccc)||6-10%||Total investment under section 😯 C and 80 CCC cannot exceed 150000/-||Respective Insurance co’s site|
|RGESS Scheme||5 to – 14%||Max amount eligible for tax benefit: 50000/-||3 Years||Exclusively for first time investors with annual income below 12 lakhs||http://rgess.com/|
|Insurance Policies||5 to 6%||Under section 80 C premium paid are tax exempt||Do not invest to save tax blindly . Do need analysis first||Respective Insurance co’s site|
|Infra Bonds(80 CCF)||Max amount 20000 eligible for 80 CCF deduction||10-15 Yerars period||issuer’s website|
|Tax Free Bonds(section 10)||7.2%- 7.7%||ONLY Interest is tax free. NO reduction in taxable income from principle invested||10-15-20 Years Tenor||Interest is tax exemept, any capital gains in case of sale of bods in market will be taxed as either STCG/LTCG||issuer’s website|
Hope you found this useful. Let us know in case of further questions.
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