Mutual Fund Application Forms Download Any Applications
Invest in Tax Saving Mutual Funds Invest Online
Infrastructure Bond Application Forms Download Applications

Tuesday, March 4, 2014

Investment for Tax Savings under Sction 80C

Download Tax Saving Mutual Fund Application Forms

Invest In Tax Saving Mutual Funds Online

Buy Gold Mutual Funds

Leave a missed Call on

94 8300 8300

 

Around this time of the year, our investment decisions are more linked to what Section 80C of the Income Tax Act, 1961 (‘Act’) says than by the historical trends of the investment. For the uninitiated, Section 80C lists down certain investments / expenses which can be deducted by an individual (or a Hindu Undivided Family) in computing his taxable income. This deduction, clubbed with investments under sections 80CCA, 80CCB and 80CCD of the Act, is subject to a limit of Rs.1,00,000/- per financial year (‘FY’). Simply put, if Mr. Nayak earns an income of Rs.10,00,000/- in FY 2013-14 and invests / spends Rs.1,00,000/- in products eligible for Section 80C deduction, he would be liable to pay taxes only on the balance Rs.9,00,000/-.

Thus, an individual / HUF can save taxes up to Rs.30,900/- for taxable income up to Rs.1 crore in FY 2013-14. Tax savings would be Rs.33,990/- in case the taxable income exceeds Rs.1 crore.

Here we have identified the appropriate investments under sections 80C, 80CCA, 80CCB and 80CCD.

A. Mandatory Investments / Expenses

1. Contribution to Employee’s Provident Fund (‘EPF’) – For a salaried person, this is an automatic deduction from the salary. And if you are lucky enough that this amount exceeds Rs.1,00,000/-, fret no more as your investment for 80C is done! EPF deposits yielded tax free interest of 8.75% per annum in FY 2013-14.

2. Repayment of Home Loan – Repayment of the principal portion of a home loan to any institutions specified u/s 80C is eligible for Section 80C deduction and should be accounted for before deciding on further 80C investments. Such a house cannot be sold for 5 years from the end of the FY in which it was purchased; else the 80C deduction claimed in earlier years will be taxed in the year of sale.

Institutions specified u/s 80C include banks, LIC, National Housing Bank, public companies providing long term finance to construct / purchase residential houses, housing finance companies or your employer, if it is established under any law.

3. Children’s Education – Tuition fees to any educational institution in India for full time education of any 2 children is eligible for 80C deduction.

B. Voluntary (but necessary) Investments / Expenses
If after the above investments, 80C limit still remains, look at the following expenses which are necessary but can be entirely planned by you.

1. Public Provident Fund – PPF is an important retirement planning tool, especially if you are not eligible for EPF. PPF yielded a tax free interest of 8.70% in FY 2013-14 and is subject to a lock in of 15 years but can be partially withdrawn after 5 years or borrowed against. One can annually invest up to Rs.1,00,000/- in PPF.

2. LIC Premium – You haven’t planned smart if you and your family members aren’t insured. The premium, if it is less than 10% of the actual sum assured, is eligible for 80C deduction. In certain cases, premium up to 15% of the sum assured can be used.

3. Senior Citizens Savings Scheme (‘SCSS’) – For persons above 60 years or those who have taken voluntary retirement and are older than 55 years, this is the safest investment avenue. Deposits in SCSS earned a pre-tax interest of 9.2% in FY 2013-14. Lock in period is 5 years but account can be closed prematurely after 3 years.

4. Equity Linked Savings Scheme (‘ELSS’) – While SCSS is best suited for senior citizens, ELSS offers to youngsters the potential to earn high returns; albeit with higher risks. Lock in period for 80C purpose is 3 years and dividends and capital gains are tax exempt. CRISIL-AMFI ELSS Fund Performance Index computes a 3-year annualized return of 2.73% as at 31st December 2013 from ELSS schemes forming its part.

4. National Savings Certificate (‘NSC’) – NSCs, which earned an annual pre-tax interest of 8.5% and 8.8% on 5 and 10 year certificates respectively, with a lock in of 5 years, are also a good alternative.

C. Other Voluntary Investments / Expenses
Apart from the above, investment options available are Fixed Deposits, NABARD Bonds, ULIPs, Post Office Time Deposits, etc.

 

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

 

 

Leave a missed Call on 94 8300 8300

 

Leave your comment with mail ID and we will answer them

OR

You can write back to us at

PrajnaCapital [at] Gmail [dot] Com

 

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

 

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

---------------------------------------------

 

Best Performing Mutual Funds

    1. Largecap Funds             Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds         Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds          Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds   Invest Online

      1. DSP BlackRock MicroCap Fund

2.       Franklin India Smaller Companies

E. Sector Funds          Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds      Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds        Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds         Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

No comments:

Mutual Fund Application Forms Download Any Applications
Invest in Tax Saving Mutual Funds Invest Online
Infrastructure Bond Application Forms Download Applications
Related Posts Plugin for WordPress, Blogger...

Popular Posts