Thursday, February 26, 2009

TAX PLANNING MADE EASY


Nobody likes the tax man, but dues have to be paid. With a little intelligent planning though you could and should save as much tax as you're allowed to. The sales pitch has already started, insurance and mutual fund agents are beginning the annual product push. But tax saving is more than just PPF and life insurance. Let’s find out what else you can do for that 80C tax kick.

 

Bank Deposits

Notified 5-year tax saving FDs

Interest: Average 9 per cent

Tenure: 5 years

 

National Savings Certificate (NSC)

Interest: 8 per cent

Tenure: 6 yrs

 

Senior Citizens Savings Scheme (SCSS)

Interest : 9 per cent

Tenure: 5 yrs

 

Post office time deposits

Interest : 7.5 per cent

Tenure: 5 yrs

 

Public Provident Fund (PPF)

Interest : 8 per cent (at present)

Tenure: 15 yrs

(Maximum allowed to be put away every year by each earning member of the family is Rs 70,000)

 

Employee Provident Fund (EPF)

Interest: 8.5 per cent (at present)

Tenure: Till you retire

 

Of course the best investment products under section 80C are where interests that you get at the end of the tenure is tax fee as well.

 

ELSS recommended:

Birla Sun Life Tax Relief: 5-year returns is 11.47 per cent

Principal Tax Savings: 5-year returns id 13.91 per cent

 

Cheapest ULIP funds                              

Birla Sun Life' Classic Life Premier: 1.93 (cost %)

# Bajaj New Unit Gain: 2.18 (cost % - is what the fund charges out for managing your money)

 

 

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