SOME VERY POPULAR SCHEMES FOR INVESTMENTS (INCLUDING TAX SAVINGS)

MINIMUM AND MAXIMUM WHO CAN INVEST INVESTMENTS ALLOWED Public A PPF account can be Min Amount : Rs. Provident opened at anytime during 500/- per annum, Fund (PPF) the year in a Post Office, and thereafter in or in SBI & its associates or multiples of Rs 5/in other selected nationalized banks. It is safe to invest in the instrument, Max Amount :Rs. as it is government-backed. 70,000/It can be held by single, joint, minor with parent/guardian and HUF NAME OF THE SCHEME OTHER DETAILS The PPF account matures after 15 years. Tax benefit: Rebate under section 80C for the amount invested. Interest accrued is Tax-free. Interest 8.0% p.a. (compounded annually) is credited to the PPF account at the end of each financial year. Nomination is allowed at the time of opening the account or even later on during the tenor of the account. Loan facility is also available, but the first loan can be taken in the third financial year from the date of opening of the account, and only up to 25% of the amount at credit at the end of the first financial year. Withdrawals are permitted every year from the seventh financial year of the date of opening of the account, of an amount not exceeding 50% of the balance at the end of the 4th proceeding year or the year immediately proceeding the year of the withdrawal, whichever is lower, less the amount of loan if any. This is one of the most

popular schemes of tax savings as the interest received is tax free. One can avail of a loan against the certificates by pledging it to the bank. The certificate can be encashed from the issuing post office on the due date by simply The NSCs have a discharging the certificates at NSCs can be purchased maturity period of the back. It is safe to invest in through out the year by 6 years. Interest this instrument, as it is individuals either in single, rate - 8% government-backed. It is joint, minor with useful for people who invest parent/guardian, Min Amount Rs. to save tax. National HUFs. from Post offices. 100/- and Savings additional If encashed prematurely, Certificate Tax benefit: Rebate under investment in within a year of issue, then (NSC) section 80C. Interest multiples of Rs. only the face value is given. If accrued for any year is 100/encashed after a year but taxable but can be treated as before 3 years, then simple fresh investment in NSC for interest on the face value, at that year and tax benefits Max Amount : No the rate applicable from time can be claimed Limit to time, will be paid. The discount rate (The difference between the accrued interest and the simple interest is the discount rate) will be specified by the government from time to time. Kisan Vikas Kisan Vikas Patra (KVP) Interest rate - 8% This is a good investment Patra (KVP) doubles money in eight years Min Amount : Rs. instrument for retired and seven months. This 100/- and persons and for those who do Scheme is available all additional not have taxable income. The through the year. This investment in certifiates can be encahsed scheme it open to single, multiples of Rs. by discharging on joint, minor with 100/-. certificates and providing parent/guardian. Max Amount : No proper identity If the Nomination facility is Limit certificate is lost due to theft, available at the time of fire or the certificate is opening the account or mutilated, a duplicate anytime during the tenure of certificate is issued after the investment. No Tax proper verification. No benefits available Tax benefits are available for investments in this scheme

under the Income Tax Act Infrastructure bonds can be Liquidity: Lock-in for three purchased only when the years same have been floated by Interest rate usually ranges the specified financial between : 5.50% to Tax benefit: Rebate under institutions. These Bonds provide tax-saving benefits 6% section 80C. Infrastructure under Section 80C of the Income Tax Act, 1961, up to The Maximum bonds However, with low rate of an investment of Rs.1,00,000. investment limit is interest and flexibility of Rs 100000 investing in any type of Safety: Purely depends on instruments since 2005-06, the credit rating of the bank these Bonds are no longer or financial institution popular. issuing the bond Equity linked savings scheme (ELSS) are equity funds floated by mutual funds. This scheme is suited for young people as they have the ability to take on higher risk. The ELSS funds should invest more than 80 per cent of their money in The Maximum Tax benefit: Rebate under investment limit is equity and related section 80C Rs 10000. Equity-Linked instruments. It is ideal to Saving invest in them when the Long-term capital gains tax Schemes markets are down. These Liquidity: Lock-in are exempt from tax. (ELSS) funds are now open all the for three years year round. The other way of investing in these funds could be a systematic investment, which essentially means investing a small sum regularly (monthly or quarterly). It is a marketlinked security and therefore there will be risks accordingly. Insurance There are a range of life Interest rate: Tax benefit: Rebate under policies insurance products to choose Depends on returns section 80C from, such as term life of the funds insurance, whole life Interest or returns are not insurance, variable life The Maximum taxable insurance, universal investment limit is

Pension policies

life insurance, and Rs 70000 variable universal life insurance. Annuities are taxLiquidity deferred investments that Minimum lock-in guarantee you regular of 2 years for payments at some future participatory time, usually retirement. It is policies and 5 years a market-linked security. for unit-linked Pension plans apart from playing a significant role in retirement planning, also offer tax benefits under a Interest rate dedicated section i.e. Section Depends on returns 80C. Premiums paid for the of the funds. same are eligible for deduction. It is a marketlinked security.