Jan 202016
 

Save your money in the right way

At times tax planning could be a challenge but if you can manage it according to your needs it would surely be rewarding. If you invest your money at a wrong place then you cannot pull it out before 3-5 years. Our ranking of various investment schemes can also be an aid for you. These assessments are made on behalf of returns, safety, flexibility, liquidity, costs, transparency and taxability of income. We have measured each parameter and given it the right weightage. Here are the pros and cons of all the options:

Save your money in the right way

ELSS FUNDS

It is the top ranked fund in our rating as it has high liquidity and amazing potential. The ELSS funds have generated 17.8 % returns in last 3 years. According to section 80C 3 years is the minimum period for these funds. You can invest online as well. Even if you are investing for the first time, then your documents can be picked up and also proper guidance is given to you. These are not equity schemes and even the most highly rated equities you can lose your money. Though all these are its shortcomings, but the rate of gain is also very high. SIP is the right channel for investing in equity.

Since there is not much time left before 31 march, you can invest higher value in one SIP.

ULIP

The online Ulips are even cheaper than the direct mutual funds. These funds give you a lot a flexibility and are unlike other investments. You can switch from debt to corpus and vice versa. Moreover, you can also enjoy the benefits gained as it is tax exempt under section 10 (10d).

NPS

In the last budget there was an additional tax deduction of Rs. 50000 on the NPS. Moreover, pension fund managers can also invest in bulk. There is also tax that applies on the maturity amount. Moreover, more than 40% of the amount gained should be invested in any annuity. This is a sore point of this investment.

PPF AND VPF

The rate of interest on PPF is constant and the government has also revealed that it will revise the interest rates of saving schemes like PPF. You can also opt for VPF as there are the same interest rates and there is no limit for investing. The deductions are calculated and deducted from the person’s salary only.

SUKANYA SAMRIDDHI SCHEME

If you have a young daughter who is less than 10 years in age, then there is nothing better than Sukanya Samriddhi Scheme. You can get your account opened only with 1000 rupees and you can invest till 1.5 lakhs every year for 14 years. You can withdraw half of the amount once she turns 18 and rest when she is 21 years.

SENIOR CITIZENS’ SCHEME

Retirees can save tax by enjoying 9.3 % interest in this scheme. The tenure for this scheme is 5 years and interest is paid quarterly. The limit for this investment is 15 lakhs.

BANK FDS AND NSCs

The investments in banks like FDs and NSCs are fully taxable and is only beneficial for tax payers who lie in the 10% basket and senior citizens.

PENSION PLANS

You should invest in Pension plans launched by mutual funds as they have low charges. But these plans are not exempt from tax deductions like equity plans. Do not invest with life insurers and only go with Mutual Funds.

INSURANCE POLICIES

Insurance policies are the last and the least advisable means for saving tax. There might be a lot of fancy promises that you might be pleased with from the insurance agents. Moreover they are like milestones once you sign them.

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