Tax Savings is a magical word in India. It is easy to sell a financial product with a tag of "Tax Savings". Sometimes i fail to understand whether we invest to save tax or save tax by investing. I think it is former. It will not be an extrapolation to state that we are over obsessed to save tax. Here i am not suggesting that we should not save income tax. The pain point is when we select products for tax savings without financial calculations. In other words, most of the times we compromise on returns to save tax. Because of this reason, the traditional insurance plans like Money Back / ... Read More
Small Savings Schemes – Why Govt should cut interest rates
Small Savings Schemes are more of social welfare schemes. Recently govt mooted idea to cut interest rate of small savings schemes. Any revision in the interest rates of such schemes faces opposition from various quarters. The worst part is that this protest is without any logic and reasoning. As a citizen of India, we should understand the mathematics behind the decision. After thorough understanding, we can debate and discuss the merits or shortcomings. Also, we should review each and every decision 360 degrees. Any myopic view of the same will give biased approach. This post is not a ... Read More
How to Transfer PPF Account?
Not many people are aware that they can transfer PPF account from Post Office to Bank and vice versa. In fact, you can transfer PPF from one bank to another. In short, there is complete portability of Public Provident Fund (PPF) between RBI Authorized Banks and Post Office. In my post on Public Provident Fund (PPF), i highlighted the benefits of PPF Account. PPF is the only tax savings tool, which is popular among people who are investing only for retirement planning. They don't avail tax benefits u/s 80C but open PPF account because of inherent features and high interest rate. Though process ... Read More
Voluntary Provident Fund
Voluntary Provident Fund or VPF is most useful yet most neglected tax saving option. Financial Planners or Relationship Managers will not suggest this as there are no commissions, no targets and no incentives. This option is available only to salaried individuals who are member of EPF or Employee Provident Fund. Every month, 12% of basic salary is compulsory deduction towards contribution to EPF. Ref to EPF contribution, not many people are aware that EPF is eligible for dedcution u/s 80C and is part of overall capping of Rs 1.5 lakh u/s 80C. For example, if you are contributing Rs 50,000 ... Read More
7 Benefits of Sukanya Samriddhi Account
Sukanya Samriddhi Account is another welcome step from Govt of India. Honorable Prime Minister of India, Sh. Narendra Modi Ji launched Sukanya Samriddhi Account "A Small Savings Scheme" on 22nd January 2015. It is part of "Beti Bachao - Beti Padhao" initiative of Government of India (GOI) also known as BBB. Despite sincere efforts from Govt of India, Sex ratio in India is still a grave concern and it shows the backwardness of the country. It's commendable that Govt of India is taking steps to change the mindset of people towards Girl Child. Recently i saw few TV ads of GOI with a message that ... Read More
Public Provident Fund (PPF)
PPF or Public Provident Fund is most popular tax saving tool. One of the main reason behind its popularity is that PPF is most tax efficient savings instrument therefore real returns are high. Moreover being a long term investment, it is very useful for Retirement Planning or achieving long term objectives like Child's marriage or Education. How to open PPF account Earlier, only Post Offices were allowed to open PPF account but recently Govt allowed selected banks to open PPF account. Good news is that you can transfer your Public Provident Fund Account from Post Office to Bank & vice ... Read More