Why do I need Savings & Investment Plans?

In life, you have always given your family whatever they have wanted. Yet, there are some promises you have to fulfil, such as taking your family for a vacation, or buying that dream house. Set aside some money to achieve these specific goals with the help of Reliance Savings & Investment Plans. These investment plans allows you to experience the joys of life and provide for your family's needs. Enjoy life without worrying about the promises you have made—we are here to fulfil them.

Our Savings & Investment Plans provide you the assurance of lump sum funds for your and your family's future expenses. While providing an excellent Saving Plans tool for your short term and long term financial goals, these online investment plans also assure your family a certain sum by way of an insurance cover.

You have always given your family the very best. And there is no reason why they shouldn't get the very best in the future too. As a judicious family man, your priority is to secure the well-being of those who depend on you, not just for today, but also in the long term. More importantly, you have to ensure that your family's future expenses are taken care, even if something unfortunate were to happen to you.

A big factor that you need to consider while building your wealth is inflation. It has a dual impact on your hard-earned savings. Inflation not only erodes your current purchasing power but also magnifies your monetary requirements for the future. Sample this: A 35 Year individual needs to invest Rs. 36,000/- per year with 8% returns to build a corpus of Rs. 10,00,000/- by the age of 50 Years.

Life insurance can serve as the foundation of a well-thought-out financial strategy. And if you're someone who wants to take an active role in reaching your financial objectives, you may be looking for a life insurance policy that provides more than just simple protection - one that gives you the potential to accumulate wealth that can help you achieve a variety of future financial goals.

Assured Savings Plan may be just the Plan for you. This Plan not only provides affordable protection but also helps accumulate wealth for achieving future financial goals by giving guaranteed benefits .

Tax Saver: Tax Exemption

About Tax Saving

An income tax is imposed on an individual or a company by the Government of India only if his or her income is included in the slab of taxable income. The Indian Income Tax Act of the year 1961 governs the levy whereas C. B. D. T. (Central Board for Direct Taxes) governs the Department of Income Tax in India. However, as per some of the sections of this Act like Section 80 C, 80 CCF, 80 D etc., exemptions are given on certain incomes. There are many tax saving options, investing on which, one can get a deduction on his or her total income tax.

Tax Saving Options

India has got several government as well as private sector organizations offering numerous tax saving options to the residents of this country. Some of them are as follows:

Public Provident Fund: Commonly known as P. P. F., this tax saving option falls within the Section 80 C of the Income Tax Act in India. Public Provident Fund allows a maximum contribution of INR. 100, 000 per year. The return in this scheme is compounded annually at the rate of 8.5%. It is one of the long term ventures that does not allow complete withdrawal before 15 years. Post 5 years of investment, withdrawal is possible though. No tax is levied on the earned interest. Besides these, it even forms a retirement-planning tool. One can have such an account in either the State Bank of India or some of the nationalized banks or at some of the designated post office branches.

Unit Linked Insurance Plans: Covered by the Income Tax Act's Section 80 C, U. L. I. P. is a unique blend of investment and insurance that gives a tax exemption of INR. 100, 000 per year. Here, the premium, which is being paid by a customer, gets deducted with initial charges while the rest of the amount is invested. Such Saving plans can be of the following three kinds:

Aggressive ULIPs where one can invest 80 % to 100 % in equities. The rest can be invested in debt instruments though.

Balanced ULIPs where an individual can invest 40 % to 60 % in equities Conservative ULIPs, which allows one to invest up to 20 % in equities

Equity Linked Saving Scheme: Popularly called E. L. S. S., this is a kind of mutual fund that comes within the Income Tax Act Section 80 C. With a minimum investment period of 3 years, this investment option helps one get exempted from income tax payment and offers an exemption of maximum INR. 100, 000 in a financial year as well. The interest rate depends on the performance of this scheme in a given year. However, if it does well, then it is more likely to increase even the interest rate of P. P. F.

Fixed Deposits: Fixed Deposits (FDs) are another popular tax saving option covered by the Section 80 C of the Income Tax Act. With a maximum exemption of INR. 100, 000 annually, the rate of interest varies from one bank or post office to another. However, the tax saving can only be done of FDs once you have invested for a minimum duration of 5 years. This scheme neither allows the encashment of the money prior to completion of the 5 years term nor can this be used as the security against any loan.

Employee Provident Fund: Famously called E. P. F., this scheme offers a total yearly exemption of INR. 100, 000 as mentioned in the Income Tax Act Section 80 C. In this fund, 10 % to 12 % of a person's basic salary gets deducted and the other 12 % is contributed by the employer. One can withdraw the entire amount in instances of leaving job, retirement after 58 years of age or taking V. R. S. Partial withdrawal can be done for home, medical or marriage related expenses though.

National Saving Certificate: This tax saving scheme known as N. S. C. helps one get exempted from tax by an investment of up to INR. 100, 000 per year under the Section 80 C of the I. T. Act of India. The interest rate is compounded half-yearly at the rate of 8 % and reinvested every year from the last year's N. S. C. The minimum period for this investment scheme is 6 years post which, one is provided with the entire interest along with the initial capital. The major benefit of this is that one can earn a maximum tax saving interest of INR. 100,000.

Health Premiums: Popular as Mediclaim Policies, which are a form of health insurance, comes within the Section 80 D of the country's Income Tax Act. Applicable even on the proprietor firm's cheques, these policies offers a maximum deduction of INR. 35, 000. This deduction is calculated in addition to any other tax saving done as per the Section 80 C. The total amount of INR. 35, 000 can be divided as follows:

INR. 15, 000: Premium for policies on spouse, children or self

INR. 15, 000: Premium towards policies for dependent parents, who are non-senior citizens

INR. 15, 000: Premium for dependent senior citizens

Besides saving your income tax, these policies even help you deal with your or your family's health related problems with ease during any emergency situation.

Tuition Fee: Covered under the Indian I. T. Act Section 80 C, payment made towards the education of children is even exempted from one's yearly income tax. Being a part of Section 80 C, one can get a maximum exemption of up to INR. 100, 000 per financial year. Tuition fee for school, college and university as well as coaching fee for varied competitive exams are considered under this policy. However, just 2 children are considered for such a kind of tax exemption.

Post Office Saving Options: Under the Section 80 C of the I. T. Act of the nation, one can invest in any of the different tax saving options provided by the post offices. Though, along with the terms and conditions, the interest rate as well as the tenure of the investment varies from one scheme to another, they provide a maximum deduction of INR. 100, 000. To name a few of such schemes offered by India Post are:

Recurring Deposit Account (5 Year)

Time Deposit Account

Public Provident Fund Account (15 year)

National Savings Certificate (VIII issue)

Senior Citizen Savings Scheme

Mutual Fund: Being covered under the Section 80 C of the I. T. Act of India, this type of investment plan helps in a total exemption of INR. 100, 000. The entire tenure of such a scheme varies from 3 years to 5 years. Equity Linked Saving Scheme is considered to be one of the best tax saving mutual funds.

Tax Rebate Such a rebate is actually the deduction calculated on the tax, which is computed over one's annual income. Under Section 88 of the Act, certain rebates are allowed. Apart from the different tax saving schemes, one can get a rebate at the rate of 20 % of the payment, deposit or investment made on a maximum amount of INR. 60, 000. Under the Section 88 B, a rebate of INR. 15, 000 is given to a senior citizen of the country (65 years of age or more) irrespective of his of her income. However, the Section 88 C grants a woman assesse an extra rebate of INR. 5, 000.

Tax Saving Options in Public Sectors Banks Fixed deposits are among the most popular tax saving options in most of the public sector banks. Besides that, some of the public sector banks like the State Bank of India, Allahabad Bank, Punjab National Bank and many more offers some other tax saving options like P. P. F., mutual funds and infrastructure bonds etc. Another unique bond, which helps to save tax payments, is 6.5 % Savings Bonds, 2003 by R. B. I. (Reserve Bank of India). This bond's tenure is for 5 years with an annual interest rate of 6.5 %.

Source: http://www.taxexemption.in/tax-saver.html

5 Simple Rules to Maximize Your Savings

Every year we take some resolution on our birthday or the New Year – like exercising for 1 hour daily, reading a book every month, etc. This year let’s add “save more and invest” in our resolution list. This resolution will go a long way in maximizing savings in the long term, resulting in a much better and happier financial life.

In this article we give you the hands-down approach on planning your savings smartly.

Pay off your debt and credit card bills on time: It is better to have low savings or investments for a short period of time, but being debt-free and starting clean will help you build a much better foundation for the future. Effectively managing debt and credit plays a very important role in achieving financial freedom and stability. It is advised to pay off your high interest debts, particularly credit card dues, as early as possible. Unfortunately, today’s youngsters are the main victims of the credit dept spiral.

A typical free credit period in India is 45-51 days. If you pay off the dues within this period, the interest is saved. If you are unable to pay off the entire amount within the due date, a common practice is rolling over the dues after paying the minimum amount. This is expensive as you would have to pay an interest of about 3 % per month (yes, 36% interest p.a.!) on your dues, and the bad news is that the new purchases made will not get any interest-free period until the dues are completely settled. Many people are still not aware of this.

Hence, it is always advisable to pay your card’s bills well within the prescribed time, thus avoiding unnecessary charges such as overdraw charges, late payment, interest cost, etc. All this adds up and you could save Rs.5000 to Rs.50000 every year.

Track your expenditure and create a cash flow statement: This month, try to record everything you spend. The expenses can be divided under heads like:

Household – Food and groceries, rent/maintenance, conveyance/fuel and maintenance, healthcare, utilities bills, housekeeper, mobile;

Lifestyle: clothes and accessories, shopping/gifts, dining, movies, personal care, vacations;

Dependent Expenses: Children’s schooling and other expenses, contribution to parents’ retirement;

Insurance Premium: Term Insurance, mediclaim, vehicle insurance, other insurance;

Loan Servicing: Home loan EMI, vehicle loan EMI, personal loan EMI.

* If there are any yearly expenses – Divide the same by 12.

All this will tell you what your net outflow is every month. Deduct the same from your income to check what your net saving is every month.

At least 10% to 20% of your total monthly income should be saved and invested towards your goals. If your expenses don’t allow that, look for ways to cut back, like trimming the lifestyle expenses.

Pay yourself first: Most of us have a habit of saving only what is left at the end of month in our bank account, which is not a disciplined approach. On the contrary, we should become a little smarter and pay ourselves first. That is, whenever we receive a pay cheque or other income, we should first save/invest a part of it and then spend the remaining amount. By doing this we will not feel guilty about our spending as we already have kept some aside for investment purpose.

 Pay attention to taxes: The Government of India and Income Tax Authority want to promote savings and investment and give tax breaks under various sections in order to encourage people to do so. Hence it is advisable to do proper tax planning every year and invest in avenues which give tax breaks. This can help you to save up to Rs.50000 every year on taxes, which is not a small sum by any means.

Set savings goals and invest with discipline for that goal: Attaching a goal to a Best Saving Plans and investment plan will always motivate you to stick to the plan. The goal can be short-term like: travelling or buying a car. Alternatively, the goal can be long-term like: retirement. For each goal, figure out how long you have to save for it and set your monthly savings target towards that amount. There is a facility in mutual funds called SIP (Systematic Investment Planning) which sets up automatic transfers from your savings account to the designated investment. As is rightly said – if you don’t see it, you won’t spend it!

Investments should beat inflation: If our savings are meant for very long term goals like children’s education, children’s weddings, retirement, etc., then it would make more sense to ensure that the returns from our investments should beat inflation. If they fail to do so, then the whole purpose is defeated. We may consider bank FDs safe but if they don’t help reach the target amount, then what is the purpose of having it in the first place? This is where equity investments like direct equity, equity MFs or equity ULIPs can give better inflation-adjusted returns in the long term, than the popular fixed income instruments.

Conclusion: Finally, I would like to conclude by a quote from by Ron Lewis: “It’s never too early to encourage long term savings.” I would advice every investor to start saving and investing at least 10% of their monthly income towards their goal. The earlier you start saving, the more time your money has to benefit from ‘the power of compounding.’

Source: http://investmentinsights.bajajallianz.com/insights/index.php/articles/254/?utm_source=savingsPlan&utm_medium=link2B&utm_content=article&utm_campaign=articleonlandingpage

Limited Premium Saving Plans Gaining Popularity

Limited premium policies have become one of the best selling products of the life insurance sector. With single premium plans fading out in the retail segment, limited premium plans have been able to help life insurers to sustain their growth in the non-single premium segment.

In limited premium plans, customers pay premium for a shorter span of time for a longer period of insurance cover.

These plans are very useful for those people who prefer to be relieved from the commitment of paying insurance premiums for a longer duration.

There has been significant growth in these plans, as most customers have a limited horizon for investment and require funds for specific needs such as increase in childrenâs school or tuition fees or any other financial requirement at regular intervals.

Insurance companies also enjoy higher persistency levels if the limited premium paying product is suitable to the long-term financial goals of the policyholder.

For the past few years, limited premium products have been able to gain significant market share in India. Although its market share was 5-10% in the initial phases, it has increased to 15-20% in the past few quarters.

The factor that single premium products have become unattractive due to lower tax benefits has also contributed to the popularity of limited premium products.

The last budget (2012-13) had proposed that a life insurance policy would be eligible for tax benefits only if the sum assured was at least ten times the annual premium. This, too, impacted single premium products, as the sum assured on death is less then ten times the single premium in these products.

While yield-to-maturity does not vary much between limited premium and single premium, the total premium paid towards a limited pay policy can be higher then that of a single premium policy, leading to a higher maturity value.

Also, with a limited premium plan, a customer can link his change in income to the premium payment and can plan relatively bigger saving plans and sum assured as compared with a single premium plan. Further, tax benefit is limited to one year. Riders, too, are generally unavailable under single premium plans. However, they can be purchased under regular or limited premium plans.

Non-single premium income of life insurers has seen an 8.1% rise for April-December 2012 period in the retail segment. The new business premium for non-single segment rose to Rs 30,169.57 crores from Rs 27,892.84 crores in the last financial year.

On the contrary, single premium is seeing a decline of 6.4%. Single premium for the individual segment fell to Rs 10,518.48 crores for the April-December 2012 period, compared to Rs 11,238.48 crores in the same period last financial year.

Source: https://www.policymantra.com/blog/limited-premium-plans-gaining-popularity/

Have you saved enough for your family?

Life is a beautiful journey that comes along with various important milestones you aspire to achieve for a happy and secured family life. These milestones could be your house, your child’s education and marriage, your retirement plans, business plans etc. However, with the growing inflation rates, improved lifestyle measures, high-end socializing and for getting best of the amenities just dreaming and saving some money in your piggy bank won’t work. For this you need a careful planning and a regular savings approach. A savings plan is a non–participating limited pay endowment assurance plan that allows you to enjoy the benefits of a long term savings plan ensuring that you and your family are free of any financial worries. Savings plan helps individuals secure financial protection and attain their financial goals. The suitability of savings plans vary from person to person, as it depends on factors like budget, age, income sources, needs and wants of an individual.

The article guides you through some of the savings plan that we all require at different stages of life. 

Emergency Savings Plans: This fund is much desperately needed when there are unexpected events, such as car and home appliance repairs and medical expenses etc. It is advisable since it is a small term goal you could use savings accounts to grow your emergency fund.  The good point is that it allows you to withdraw money quickly. One could set a maximum limit for emergency savings. When that limit is crossed, the excesses can be transferred to goal-oriented savings plan.

Retirement Plans: Retirement Plan is investment insurance plan which allows you to save systematically and build up the much needed lump sum to provide yourself a regular income after your retirement. A person pays fixed amount, known as the premium, to the insurance company, over a pre-determined period of time, known as the term of the policy. The premium will be invested by the insurance company in various instruments to earn returns and build a corpus over the term of the policy. The amount paid as premium is also eligible for tax benefits.  

Goal-Oriented Savings Plans: These savings plan are aimed at generating funds for meeting a specific goal, such as the purchase of a car, a house, going for a holiday etc.  Such plans typically involve savings funds in financial instruments such as equities, debt and mutual funds that yield high returns.

Child Savings Plans: As the name suggest it is for the better future of your child. In this highly unpredictable  world it is extremely important that you keep no stone unturned for secured future of your child right from the day he or she arrives. You can opt for growth oriented child plans which are tax free products built for child safety and secured future aspect.

Short-term saving plans usually meet your needs which arrive in a span of one to two years while you work, run a business or earn in any form. These could be setting up a savings account, Certificates of Deposit, Money Market Deposit Accounts, Government Tax-Saving Bonds etc.

However, when you wish to achieve your long-term goals especially thinking about the day your earning machine comes to halt or you perish from this world then the only solution lies is guaranteed Best savings plan. This savings plan enables you to save money for the long term, while receiving the benefits of a life insurance. The assured sum is paid out in addition to bonuses accrued over the years, as a lump sum either when the plan matures or in the event of the death of the insured person.

Pradhan Mantri Suraksha Bima Yojana and Jeevan Jyoti Bima Yojana differences

Pradhan Mantri Suraksha Bima Yojana and Jeevan Jyoti Bima Yojana are social security schemes launched for the common man of India. Both these schemes are insurance scheme. Many people get confused between these insurance schemes as both schemes are more or less similar. So, what is the difference between Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima yojana (PMJJBY)? Why two schemes are required? Let’s try to figure out the differences and similarities between these schemes.

What is Pradhan Mantri Suraksha Bima Yojana?

Pradhan Mantri Suraksha Bima Yojana is accidental death insurance scheme.

Pradhan Mantri Suraksha Bima Yojana is available to the people in the age group from 18 years to 70 years.

Bank account linked to Aadhar Card is mandatory for this insurance scheme.

The Premium of this scheme is 12 Rs/- per year.

Pradhan Mantri Suraksha Bima Yojana provides accidental death risk cover of 2 Lac.

Default term of this insurance scheme is 1 year which can be extended year on year.

What is Pradhan Mantri Jeevan Jyoti Bima Yojana?

Pradhan Mantri Jeevan Jyoti Bima Yojana is low-cost life insurance policy.

Pradhan Mantri Jeevan Jyoti Bima Yojana is available to the people in the age group from 18 years to 50 years.

The Premium of this scheme is 330 Rs/- per year.

Pradhan Mantri Jeevan Jyoti Bima Yojana provides insurance coverage of 2 Lac. 2 Lac will be paid to the nominee in case of natural or accidental death.

Risk coverage can continue up to 55 years.

Aadhar card is required in order subscribe to this scheme.

Premium paid under this scheme is eligible for tax deduction under 80C.

Difference between Pradhan Mantri Suraksha Bima Yojana and Jeevan Jyoti Bima Yojana

Pradhan Mantri Suraksha Bima Yojana

Similarities between Pradhan Mantri Suraksha Bima Yojana and Jeevan Jyoti Bima Yojana

Pradhan Mantri Suraksha Bima Yojana

Conclusion -

Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) are very Best Saving Plan insurance available for Indian. Total sum assured offered by these insurance schemes is not sufficient. You can purchase these policies, however, it is recommended to purchase additional term plan along with sufficient risk coverage.

Source : http://moneyexcel.com/12278/pradhan-mantri-suraksha-bima-yojana-jeevan-jyoti-bima-yojana    

A saving plan that suits you

The first step on the road to fabulous wealth is saving. But faced with inflation and escalating living costs, it can be difficult just to make ends meet, much less saving money. So, where should we start?

Work towards a goal

We need a concrete goal if we want to get anywhere, and the same is true for our savings. You could be aiming to save $50,000 within 2 years to tour around Europe, $100,000 within 5 years to cover the cost of your studies, or $150,000 before the age of 30 for your wedding banquet. Having a target and timeline to aim for allows you to calculate how much you need to set aside each month or year as you move ahead. Then it’s simply a matter of finding the best way to work towards that goal, including possibly enrolling in a saving deposit plan at the bank to achieve it.

Save before you spend

Most people live pay cheque to pay cheque, paying bills and making necessary purchases first and then worrying about saving any money that’s left. They often find that there simply is none, or even that they have to spend money saved from previous months to get by. But there is a budget hack that may help!

Try setting aside 10-30% of your monthly income as savings immediately, in a location relatively inaccessible to withdrawals like a bank deposit plan or investment product with low risks and steady returns. That way, when you go to pay bills and adjust your budget you will be working with a smaller sum already – saving money while also tightening your spending!

Compound interest – let your money work for you

Saving is hard when you work hard for every cent. That’s why you need to let your money work for you. The earlier you begin saving your money, the more powerful the effect of compounding is! Make the best of time deposit and savings insurance plans as early as you can! The money growth in your accounts can make budgeting much easier.

Explore income sources and reduce expenses

We only live once, so it’s important to seize the day. An overly strict Best savings plan, however, could limit our chances to see the world. What’s worse is very often when working with a rigid plan, the potential rebound could be going on spending sprees and quickly use up all their savings. In view of this, perhaps we could consider seeking more income sources, such as freelance jobs or online trading, to earn a little more outside the office.

When you draw up your savings plan, you should take into account the financial burden you can bear, and make sure you have enough cash for emergencies. Fresh graduates should also consider the fact that their parents could retire anytime, so they could soon become the bread winner for the whole family.

Source: http://blog.fwd.com.hk/en_US/2015/09/09/saving-plan-suits-you/   

Money Savings and Deposits

The Reasons You Want Insurance Coverage – Top Reasons for getting life Assurance

You unquestionably want to know no matter whether lifestyle insurance policy can be a advantageous financial commitment you aren’t. The fact is it has a lot of rewards in your case and then for your household. Find out the reasons why you want like insurance plan and ways in which it will also help you and your loved ones.

A life insurance policy bushes the ones you love from monetary risks if you happen to perish. If you ever are among the breadwinners inside a household, you will definitely not want to keep all your family with no your wages in the occurrence of passing. This sort of protection will pay out a lump sum payment to your heirs. Countless uses for flash for something. All your family members can use it to spend any loans and lending products, to cover their living expenses for a time and to invest in their education and exercising.

Lasting living insurance cover permits you to not spend as much within your life and provides for funds price expansion. In paying a limited high grade each year or regular towards insurance policy firm. They control your hard earned cash, in order that it can develop. Essentially, this sort of insurance policy coverage can be used for saving while not having to store a considerable slice of you salary.

You’ve got a number of plan solutions available. In addition to Best Savings Plan the permanent insurance plan, you can decide on lasting complete, common and changing worldwide existence insurance policies and also for a term scheme. All of these answers are produced to take care of your personal demands but for the fiscal wants of your family at any point over time.

Having an expression insurance policy, you can find further financial safeguards during times when you have insurance coverage probably the most; say for example a home loan payment term or perhaps a toddler bringing up phase. Which has an adjustable worldwide scheme; you possibly can use some financial commitment options and increase the produced cash price even more.

You should utilize the gathered cash benefit from whole and widespread handles for just about any requirements within your lifetime time. It is possible to take away a slice of it and employ it to protect any vital expenses. It’s also possible to borrow up against the cash importance of your policy. These adaptable selections enable you to take care of your finances more effectively all through your daily life time.

Lifetime insurance policy is affordable. In spite of the common belief, you do not have to cover huge prices around the coverage you obtain. You possibly can easily look around to obtain the best and affordable deal. Moreover, that has a entire permanent scheme, your high grade will likely be preset, settle down! Spending budget will never be harm by imbalances and boosts.

You now know the reason why you require lifestyle insurance and in what way it may help you.

[Source: http://lifeinsurance-blog.net/the-reasons-you-want-insurance-coverage-top-reasons-for-getting-life-assurance/24/]

Top 10 tax Saving Investment Options

Apart from the regular investment options under Section 80C of the income tax act, this year investors have an added advantage of investing in infrastructure bonds and enjoy an additional deduction in tax under section 80CCF of the Income Tax Act.

SECTION 80C DEDUCTIONS: Investment options under Section 80C can be broadly categorised as market linked, fixed income and insurance. The fixed income category includes investment options such as the Public Provident Fund (PPF), Employee Provident Fund (EPF), tax-saving bank fixed deposits, National Savings Certificate (NSC) and senior citizens savings schemes.

While it is the most popular tax saving category, market-linked instruments including tax-saving equity mutual funds (ELSS) and unitlinked insurance plans (ULIPs) are gradually catching up.

PUBLIC PROVIDENT FUND (PPF): One of the oldest investment options, PPF scores on all grounds as it is one of the very few investment options that fall under EEE (exemptexempt-exempt) tax regime.

This implies that not only the investor can enjoy deduction on the amount invested in this scheme but the interest received on maturity is also exempt from tax.

PPF offers an interest rate of 8% compounded annually, with the maximum investment restricted to Rs 70,000 a year and mandatory investment tenure of 15 years.

An investment of Rs 70,000 every year in PPF for 15 years will amount to a taxfree maturity sum of Rs 20.5 lakh at the end of the 15 year tenure.

EMPLOYEE PROVIDENT FUND (EPF): Under the current norms, 12% of the employee’s salary is contributed towards EPF, which is exempt from income tax. Any contribution over and above the 12% limit by the employee towards EPF is consider as voluntary provident fund (VPF) and the same is also exempt from tax, subject to the overall 80C limit of Rs 1 lakh per annum.

Like PPF, EPF, also falls under the EEE tax regime wherein the interest received (on retirement from service) is tax-free in the hands of the investor. The interest payable on EPF is determined each year by the Employee Provident Fund Organisation (EPFO). After having maintained a steady interest rate of 8.5% per annum for quite some time, the EPFO has enhanced the rate of interest to 9.5% for the financial year 2010-11.

While it is still not sure whether such an attractive interest rate will continue in the following years, those who have been contributing to EPF for quite some time now and have accumulated a large corpus are bound to benefit immensely with this year’s higher interest as interest is compounded annually.

NATIONAL SAVINGS CERTIFICATE: Similar to PPF, NSC also earns an interest rate of 8% per annum and investment up to Rs 1 lakh is exempt from tax under section 80C. However, unlike PPF, interest received on NSC, at the time of maturity, is taxable in the hands of the investor which makes it comparatively less attractive.

On the positive note, however, NSC has a relatively shorter lock-in period of just about 6 years and the interest here is compounded halfyearly. Thus, every Rs 100 invested into NSC will grow to Rs 160.10 on maturity.

TAX SAVING BANK FDS: Investment up to Rs 1 lakh in these special tax saving bank fixed deposits also entails an investor tax deduction under Section 80C.

These fixed deposits mandate a lock-in period of five years and interest is compounded quarterly, just like any other ordinary bank fixed deposit.

The drawback is taxability of interest income upon maturity. As most banks are currently offering attractive interest rates, tax-saving bank fixed deposits are currently offering interest rates as high as 8.5% to its investors.

SENIOR CITIZENS SAVING SCHEME: Indian citizens who have attained 60 years of age or those who have attained at least 55 years of age and have opted for voluntary retirement scheme are eligible to invest in senior citizens saving scheme, which offers a fairly attractive interest rate of 9% a year, payable on quarterly basis.

While investment in this scheme is eligible for tax deduction under Section 80C, interest earned shall be taxable in the hands of the investor.

EQUITY LINKED SAVINGS SCHEME (ELSS): These tax saving plans schemes do carry an embedded market risk and calls for investor prudence before making an investment decision. However, their returns are equally rewarding and tax free in the hands of the investor.

As ELSS has a mandatory lock-in period of three years, they are positioned as long-term equity assets and thus returns are tax free in the hands of the investor. And though these schemes mandate a three year lock-in period, investors are likely to be better off if they continue to stay invested for a longer term as equities generate best returns over a longer time frame.

For instance, on an average, ELSS category of funds has returned about 22% compounded (CAGR) returns per annum over the past 10 year period. Some of the better performing schemes in this category include Canara Robeco Equity Tax Saver, Fidelity Tax Advantage and HDFC Tax saver for investors to choose from.

LIFE INSURANCE PREMIUM: Any premium payable by an investor to provide cover to his life is also eligible for deduction under Section 80C, subject to a maximum of Rs 1 lakh. The life insurance policy may be purchased either from LIC or from any other private player in the insurance industry.

Investors should, however, make sure that premium payable is not more than 20% of the sum assured (amount of life cover) in order to avail Section 80C deduction.

UNIT LINKED INSURANCE PLANS (ULIPS): Ulips, or market inked insurance schemes, are also eligible for deduction under Section 80C. As these schemes provide investors the benefit of both life cover and investment in equity and debt markets, these are highly popular with investors.

Investors would, however, do well to check the premiums charged by these schemes before making an investment decision as most Ulips charge high premiums.

SECTION 80CCF DEDUCTION: A new Section 80CCF has been inserted in the Finance Bill 2010-11, which provides an additional deduction of Rs 20,000 to investors for investing in infrastructure bonds issued by notified organizations.

This deduction is over and above the Rs 100,000 deduction available under Section 80C. In the latest tranche, infrastructure bonds offer an attractive interest rate of about 8% to investors with a minimum lock-in period of five years.

[Source: http://webcash.in/2012/06/29/top-10-tax-saving-investment-options/]

Endowment And Insurance Saving Plan

Recently, I have met up with one of my friends for lunch. Over the lunch, he talks about whether do I have financial planning for my future? Well he is not an insurance agent or something like that. I told him that I have just a simple financial planning for myself. I told him about my portfolio whereby 25% of my money goes to stocks and the rest of my money, which is 75% of my money, parked at my OCBC 360 account for the 3.05% interest. 

I was wondering why he asked me this question so in return I asked him back about his financial plan and why he suddenly talked about this topic. He told me that he was told by one of his insurance agent about an investment plus insurance plan where the investment will be invested in secure shares. He didnt told me about what kind of shares that the plan will be invested by I presume that it would be blue chips (Correct me if I am wrong). 

I myself have went to NTUC income to asked more about endowment plan because it is better to diversify my portfolio in this area as well. But when my girlfriend and I went down and hear the agent's explanation, we felt that it is not really that worth it. Okay, not say totally because in the end, you will be able to gain some money out of the 10 or 20 years of "investment". We did see the chart and saw that for more than first half of the investment period, we will be losing money, so in any case whereby we need cash urgently, we will be losing some of our capital. Of course, this is the penalty but would be too harsh if it eats up our capital instead of just forfeiting our interest.

Well, I do not have much understanding about Best Saving Plans yet, but if I am going for one, it will not be for me but will be for my children so that after 20 years, my children will have enough money for his university education without me having to crack my head to pay for it. After that he/she will be on his/her own (after graduation).

So what is your view on these two plans? Will you be going for it?

[Source: http://jyklmoneyblog.blogspot.in/2015/04/endowment-and-insurance-saving-plan.html]

10 Best Tax-Saving Investments

The Public Provident Fund (PPF), though it does not give a very big return in the tax saving plan, but due to its flexibility of investment, its smoothness in field of loans and withdrawals and its tax-free status makes it a winner in this race for the best tax saving investments. With the same qualities of flexibility, smoothness, high returns and tax-free status, Equity-Linked saving schemes hold the second spot. However, the most loved, preferred and the favorite of Indian taxpayers are the traditional investment policies that hold the meager ninth place. It is because they offer very little return and have poor rigidity.

This might come as a very big surprise package for some readers because the much criticized and hated ULIPs are at third spot. The ULIP tax saving plans are hardly ever checked or scrutinized, thus they still remain a mystery. When Morningstar’s data was tracked on ULIPs it was found that in the past 1 to 5 years the returns had not been very nice. But those investors with some insight, who shifted their money between debt and equity without incurring any taxes, the ULIPs proved to be a very useful instrument.

All of us have tried our level best to get the tax saving plans to divide the poor investments from the best ones by giving a star grade to the many tax saving plan options. This star grade system is very useful for the new investors as well as seasoned investors. This system will act as a guide for the investor while clearing his doubts and help him a gain superb financial position.

Choose the convenient

around the globe, most Best Savings Plan in the top ten sectors and top ten stocks. These investments give the investors an option of worthy returns that can be earned. But a relatively minor amount of risk is attached to these funds with these investments; one of the main reasons is that the investments are made in a highly diversified nature. There is presence of a system which provides tax saver funds much better stability in comparison to other risky investments.

The perfect way of saving money

the perfect way for you to invest your money in the economy markets is the tax saver mutual funds. In other words, it is a way of conserving your future while assuring you of getting a tax break, from the entire tax burden without breaking any fiscal law. Thus, under comparatively zero risk situations, you are creating a situation of good wealth for yourself. Thus, by selecting a tax saving plan you have a far better chance with economical freedom. Moreover, you are greatly increasing your success graph

[Source: http://onlinelifeinsurance1.weebly.com/blog/10-best-tax-saving-investments]

Best Saving Plans - Tips to save money effectively

Best Saving Plans - Tips to save money effectively from Gaurav Kadam

Visit to know more on Saving Plans

Insurance Policy for Beneficial Financial Decisions

This post will surely give you an idea about how to manage these expenses without any worries. Below mentioned information certainly empowers readers to take control of their big financial decisions.

Savings plans are designed to help you grow your savings, provide you with life insurance cover and help you save tax efficiently.

Health Insurance

Buyers never know how much health insurance policy in India is adequate if they don’t even know the current medical treatment rates in their preferred hospitals. Various online sources can definitely help you out to understand your suitable health insurance coverage.

While buying a mediclaim policy online, you just need to consider few important factors such as medical costs in your city as well as the illnesses that you and your loved one’s respective age group and gender are most likely to experience. In fact, you can also get additional coverage by opting for an insurance policy rider.

Life Insurance                            

Buying too much life insurance policy in India is almost like having none at all. Insurance policyholder might be wasting his hard-earned money. So, take enough time to know how much you require, budget and what options you have before start searching for the affordable option. In life insurance there are so many best savings plan options which are beneficial for policy holder.

Children Education

Parents can’t save properly for their children because they don’t know what their children are going to be when they grow up. So, it is good to buy online child insurance policy in India and save enough money to fulfill your child’s dreams.

Retirement Planning

Some financial advisors may try to scare people about retirement planning by telling them regarding fluctuating inflation rates. But, purchasing a pension plan helps insurance policyholder to take away all your worries related post-retirement phase.

If person thoroughly consider above mentioned factors, then he or she will get good financial results in future. Once you know your needs, budget and options, then you can easily make a fruitful decision.

[Source: http://blog.policyboss.com/insurance-policy/insurance-policy-beneficial-financial-decisions/]

Tax Savings and Benefits in Budget 2015-16

The FM has extended tax concessions mostly for senior citizens in this Budget without doing any changes in Income Tax Slabs and there are no changes in Section 80C limits for the salaried. The FM also went all out to fight against black money announcing a string of stringent tax measures for concealment of foreign income or non-disclosure of foreign assets in Income Tax Returns.

For Senior Citizens

Section 80D limit raised to Rs 30,000 – Deductions under section 80D are allowed on health insurance premium paid. In case of premium paid for senior citizens the deduction allowed shall be up to Rs 30,000. This is a great relief to Senior Citizens who may have to shell out a higher premium. This limit was Rs 20,000 earlier.

Under Section 80DDB – Deduction towards medical treatment for senior citizens suffering from specified diseases raised from Rs 60,000 to Rs 80,000. If actual expenses incurred for treatment are lower, such lower amount shall be allowed as a deduction. This saving plans are beneficial for senior citizens.

Deduction for Medical Expenses for Super Senior Citizens up to Rs 30,000: Individuals who are more than 80 years old shall be allowed a deduction for medical expenses of up to Rs 30,000 from their total income.

Service Tax Exemption on premium paid by Senior Citizens for Varishtha Bima Yojana – Senior citizens shall not be required to pay for service tax component on insurance premium of this bima.

Want to know how much tax you will pay in FY 2015-16? Download our app to calculate your tax.

For those less than 60 years old

Increased deduction under section 80D to Rs 25,000 from Rs 15,000 – when you pay health insurance premium for self or spouse or children (allowed for dependent children) you can now claim a deduction of Rs 25,000 instead of Rs 15,000 allowed earlier. This increase is a great encouragement to tax payers to insure their health if they haven’t already.

Higher Income Tax Deductions for the differently abled – In order to provide tax benefit to those who are differently abled or those caring for dependents who may be differently abled, the FM increased the deduction – Under Section 80DD and Under Section 80U – where disability is 40% or more but less than 80% the fixed deduction. The deduction earlier allowed was Rs 50,000 which is now raised to Rs 75,000. And in case of more than 80% disability deduction allowed was Rs 1,00,000 which is now raised to Rs 1,25,000.

Transport Allowance now Rs 1600 pm up from Rs 800 pm – Total exemption that will be allowed on transport allowance is now Rs 19,200 annually instead of Rs 9,600 earlier. This limit has been revised after several years and will be a welcome relief for low income earners.

Tax free Infrastructure Bonds – The FM announced that tax free infrastructure bonds shall be announced to support the government’s plan for investing more money into roads and railways.

100% deduction under Section 80G for contributions to Swaach Bharat Abhiyaan and Clean Ganga Fund

Interest earned on Sukanya Samridhi Account to be fully tax free – Under this scheme a minimum amount of Rs 1,000 has to be deposited each year for the girl child account. A maximum Rs 1,50,000 can be invested in each financial year. The amount deposited in this account shall be eligible for deduction under section 80C. The FM announced that interest payments shall be fully exempt from tax.

Additional deduction of Rs 50,000 towards contributions to Pension Funds – The FM emphasized the government is committed to ensuring pension for the common man and towards this effort they enhanced the deduction under section 80CCD by Rs 50,000 for contribution to pension funds.

How much tax will you actually save on your income? Download our app to calculate the tax you will pay in financial year 2015-16. You can also check the status of your income tax refund status here.

[Source: http://blog.cleartax.in/tax-savings-and-benefits-in-budget-2015-16/]