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INVESTMENTSÂ Â Â STOCKS Â Â MUTUAL FUNDSÂ STOCK STRATEGIESÂ IT RETURNS Â Â
INCOME TAX REBATE ​FOR FY 2018-19
&Â POPULAR TAX SAVING SCHEMES
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3,00,000  PAGE VIEWS  THANK ALL READERS , WELL WISHERS WHO HAVE HELPED US TO REACH  THE MILESTONE BUDGET PROPOSALS FOR FY 2018-19 AFFECTING PERSONAL FINANCE , CLICK HERE The Article on  " TAX PLANNING FOR FY 2018-19 CONTAINS  5 PARTSÂ
​ PART I: MAJOR CHANGES IN TAX RULES FOR FY 2018-19 CLICK HERE PART 2: TAX RATES  / SLABS FOR FY 2018-19 CLICK HERE   PART 3: INCOME TAX REBATES  AND POPULAR TAX SAVING SCHEMES    ​                        READ THIS PART BELOW ​      PART 4 : ESTIMATE YOUR INCOME TAX /ADVANCE TAX FOR FY 2018-19  CLICK HERE             :                                  ​PART 5: TAX ON RETIREMENT BENEFITS  CLICK HERE   FOR INCOME TAX NEWS CLICK HEREADVT
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INSTRUMENTS QUALIFYING UNDER Â 80CCC, Â 80CCG AND Â 80DÂ
Instruments qualifying under 80CCC
Payment of premium for annuity plan of LIC or any other insurer.
Instruments qualifying under 80 CCG
Listed Equity shares or listed units of a fund in accordance with Rajiv Gandhi Equity Savings Scheme  Subject to following conditions :
Resident Individual  being a new retail investor  with not more than 10.00 lakhs income and  investing with a lock in period of 3 years Â
Instruments qualifying under 80 D
​Health Insurance policies
Payment of premium for annuity plan of LIC or any other insurer.
Instruments qualifying under 80 CCG
Listed Equity shares or listed units of a fund in accordance with Rajiv Gandhi Equity Savings Scheme  Subject to following conditions :
Resident Individual  being a new retail investor  with not more than 10.00 lakhs income and  investing with a lock in period of 3 years Â
Instruments qualifying under 80 D
​Health Insurance policies
POPULAR Â TAX SAVING SCHEMESÂ
 For  the current interest rate on various SMALL SAVINGS Instruments ,  visit our page " NEWS ON INTEREST RATES "
Array of products  from  Â
1.Guaranteed return schemes like PPF Â AND NSCÂ
2.Insurance schemes  which cover life  risks  with units linked to market  or otherwise
3.Equity linked  mutual funds  which have high risk  and return probabilities like ELSS  Â
are available for the investors to utilize the rebates  on income tax  offered by the government .Â
PPF is  a fixed income long term investment  while NSC is fixed return medium term  investment .Insurance policies which cover life risk are available in unit linked market related schemes  and otherwise also .On the other hand ELSS is totally market related mutual fund which carry all the risks of an equity market and have given good returnsÂ
Details of Each scheme is given below :Â
PUBLIC Â PROVIDENT FUNDSÂ
SALIENT FATURES :
NATIONAL SAVINGS CERTIFICATES
SOURCE OF INFORMATION Â INDIA POSTÂ
NSC VIII Issue
NSCS ARE AVAILABLE ONLY IN POST OFFICES Â ALL OVER INDIAÂ
LIFE INSURANCE POLICIES
Life insurance policies  are   the financial instruments which cover Life Risks of the insured along with Tax relief .  Various  types of life insurance policies are available  with wide ranging terms  . Some are unit linked policies whose Net Asset value depends up on the  equity market and hence carry market risks .  For full details on Life Insurance  and tips for purchasing such policies , please go the page LIFE INSURANCE  Â
​Under 80 C  of Income tax  Act , life insurance premium paid  on life insurance policies  is  one of the eligible instruments for total tax exemption up to Rs 1,50,000 only  .   However  be cautious and confirm with policy issuers whether the contribution made to the particular policy is eligible for such exemption . The reason is there are riders for contributions made to be eligible for exemption .Â
As per Income tax law ,Â
quote ; Â "Â
 Life Insurance premium is part of gross qualifying amount for the purpose of deduction under section  80 C . Payment of premium which is in excess of 10 percent  ( if policy is issued on or after 1-4-2013 , 15 % in case of insurance on life of person with disability referred to in section 80U  or suffering from disease or ailment specified in section 80 DDB/ rule 11DD )  of actual capital sum assured shall not be included in gross qualifying amount . The value of any premiums agreed to be returned or of any benefit by way of bonus or otherwise , over the sum actually assured , which is to be or may be received under the policy by any person , shall not be taken in to account for the purpose of calculating the actual capital sum assured .The limit of 10 per cent will be applicable only in the case of policies issued on or after 1-4-2012. In respect of policies issued prior to 1-4-2012, the old limit of 20 per cent of actual sum assured will be applicable.
With effect from 1-4-2013, 'actual capital sum assured' in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account--
 (i) the value of any premium agreed to be returned; or
(ii) any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.  "  unquote  Â
 For full page  of Income tax website  relevant to  the above rule  , CLICK HERE  Â
Hence premia paid  one time premium policies may not be eligible to qualify for exemption  as  the insured amount may not be ten times the premium .  Further amount received under those policies may be treated as  Taxable Income and tax calculated .  Hence double check  with insurance companies before purchasing  as selling agents may not reveal you correctly .Â
EQUITY LINKED SAVING SCHEME Â ( Â ELSS Â ) Â
Is another popular scheme under which investors can  invest in stock market mutual fund while enjoying tax benefits under 80C of Income Tax act .Â
TAX SAVING FIXED DEPOSITS ISSUED BY COMMERCIAL BANKS Â :
Key highlights of Tax Saver FDs:
Array of products  from  Â
1.Guaranteed return schemes like PPF Â AND NSCÂ
2.Insurance schemes  which cover life  risks  with units linked to market  or otherwise
3.Equity linked  mutual funds  which have high risk  and return probabilities like ELSS  Â
are available for the investors to utilize the rebates  on income tax  offered by the government .Â
PPF is  a fixed income long term investment  while NSC is fixed return medium term  investment .Insurance policies which cover life risk are available in unit linked market related schemes  and otherwise also .On the other hand ELSS is totally market related mutual fund which carry all the risks of an equity market and have given good returnsÂ
Details of Each scheme is given below :Â
PUBLIC Â PROVIDENT FUNDSÂ
SALIENT FATURES :
- Ideal investment option for both salaried as well as self employed classes.
- Non-Resident Indians (NRIs) are not eligible.
- Investment up to INR. 1,50,000 per annum qualifies for IT Rebate under section 80 C of IT Act.
- The rate of interest varies quarter to quarter  as per announcements made by Government .
- Loan facility available from 3rd financial year upto 5th financial year. The rate of interest charged on loan taken by the subscriber of a PPF account on or after 01.12.2011 shall be 2% p.a. However, the rate of interest of 1% p.a. shall continue to be charged on the loans already taken or taken up to 30.11.2011.
- Withdrawal permitted from 6th financial year.
- Free from court attachment.
- An individual cannot invest on behalf of HUF (Hindu Undivided Family) or Association of persons.
- Public Provident Fund(Individual account on his behalf or on behalf of minor of whom he is the guardian)INR. 500/- in a financial yearINR. 1,50,000/- in a financial year
- The public provident fund is established by the central government.
- Â One can voluntarily open an account with any nationalized bank,selected authorized private bank or post office.Â
- SAFE , SECURE , TAX EFFICIENT Â AND Â LIMITED LIQUIDITY AVAILABLE Â FROM 3RD YEAR Â BY WAY OF LOAN FACILITY
NATIONAL SAVINGS CERTIFICATES
SOURCE OF INFORMATION Â INDIA POSTÂ
NSC VIII Issue
- Scheme specially designed for Government employees, Businessmen and other salaried classes who are Income Tax assesses.
- No maximum limit for investment.
- No Tax deduction at source.
- Certificates can be kept as collateral security to get loan from banks.
- Investment up to INR 1,00,000/- per annum qualifies for IT Rebate under section 80C of Income Tax Act.
- Trust and HUF cannot invest.
- No maximum limit for investment.
- Minimum INR. 100/- No maximum limit available in denominations of INR. 100/-, 500/-, 1000/-, 5000/- & INR. 10,000/-.
- A single holder type certificate can be purchased by an adult for himself or on behalf of a minor or to a minor.
- Buy National Savings Certificates (NSCs) every month for Five years – Re-invest on maturity and relax - On retirement it will fetch you monthly pension as the NSC matures.
NSCS ARE AVAILABLE ONLY IN POST OFFICES Â ALL OVER INDIAÂ
LIFE INSURANCE POLICIES
Life insurance policies  are   the financial instruments which cover Life Risks of the insured along with Tax relief .  Various  types of life insurance policies are available  with wide ranging terms  . Some are unit linked policies whose Net Asset value depends up on the  equity market and hence carry market risks .  For full details on Life Insurance  and tips for purchasing such policies , please go the page LIFE INSURANCE  Â
​Under 80 C  of Income tax  Act , life insurance premium paid  on life insurance policies  is  one of the eligible instruments for total tax exemption up to Rs 1,50,000 only  .   However  be cautious and confirm with policy issuers whether the contribution made to the particular policy is eligible for such exemption . The reason is there are riders for contributions made to be eligible for exemption .Â
As per Income tax law ,Â
quote ; Â "Â
 Life Insurance premium is part of gross qualifying amount for the purpose of deduction under section  80 C . Payment of premium which is in excess of 10 percent  ( if policy is issued on or after 1-4-2013 , 15 % in case of insurance on life of person with disability referred to in section 80U  or suffering from disease or ailment specified in section 80 DDB/ rule 11DD )  of actual capital sum assured shall not be included in gross qualifying amount . The value of any premiums agreed to be returned or of any benefit by way of bonus or otherwise , over the sum actually assured , which is to be or may be received under the policy by any person , shall not be taken in to account for the purpose of calculating the actual capital sum assured .The limit of 10 per cent will be applicable only in the case of policies issued on or after 1-4-2012. In respect of policies issued prior to 1-4-2012, the old limit of 20 per cent of actual sum assured will be applicable.
With effect from 1-4-2013, 'actual capital sum assured' in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account--
 (i) the value of any premium agreed to be returned; or
(ii) any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.  "  unquote  Â
 For full page  of Income tax website  relevant to  the above rule  , CLICK HERE  Â
Hence premia paid  one time premium policies may not be eligible to qualify for exemption  as  the insured amount may not be ten times the premium .  Further amount received under those policies may be treated as  Taxable Income and tax calculated .  Hence double check  with insurance companies before purchasing  as selling agents may not reveal you correctly .Â
EQUITY LINKED SAVING SCHEME Â ( Â ELSS Â ) Â
Is another popular scheme under which investors can  invest in stock market mutual fund while enjoying tax benefits under 80C of Income Tax act .Â
TAX SAVING FIXED DEPOSITS ISSUED BY COMMERCIAL BANKS Â :
Key highlights of Tax Saver FDs:
- Deposits are opened for  a period  of 5 years.
- Maximum  tax deduction up to Rs.1, 50,000.
- Deduction is available to individuals, members of Hindu undivided family (HUF), senior citizens and NRIs.
- The interest earned from tax saver fixed deposits is taxable. Tax will deducted at source.
- Premature withdrawal is not allowed .
-  No  loan against tax saver fixed deposits.
- Tax saver deposits can be opened both singly and jointly. In case of a joint account, tax benefit will be availed by first holder of the deposit as per the section 80C of the Income Tax Act, 1961.
WHAT IS AN ELSS SCHEME Â ?
Subscription to certain  notified securities/notified deposits schemes are eligible instruments under  section  80C for claiming deductions from  taxable income . One such popular investment is  tax saving mutual funds or Equity Linked Savings Scheme (ELSS). In this  equity diversified fund , investors enjoy the benefits of capital appreciation as well as tax benefits. With  recent positive movements in equity market , more interest is being generated in the public on the scheme .Â
ELSS is basically an equity based diversified Mutual Fund with a lock in period of 3 years .  It has got same risk and reward function of any other equity based mutual fund  .While under national saving certificate , funds are locked in a period of 6 years ,  ELSS has lock in period of 3 years only .One who is willing to take market risk , ELSS is a good option as  investment  is tax free under 80C as also all the returns .Some ELSS funds have been reported giving good tax free returns over  a long period of time . One has to carefully study the past performance  of the fund  as well as fund manager's performance before investing . As returns or principal is not  guaranteed and classified as high risk investment ,Risk averse  persons may avoid such investment . Â
Persons interested in investing in ELSS may understand Mutual Funds and go to the websites of  Mutual fund IssuersÂ
ELSS is basically an equity based diversified Mutual Fund with a lock in period of 3 years .  It has got same risk and reward function of any other equity based mutual fund  .While under national saving certificate , funds are locked in a period of 6 years ,  ELSS has lock in period of 3 years only .One who is willing to take market risk , ELSS is a good option as  investment  is tax free under 80C as also all the returns .Some ELSS funds have been reported giving good tax free returns over  a long period of time . One has to carefully study the past performance  of the fund  as well as fund manager's performance before investing . As returns or principal is not  guaranteed and classified as high risk investment ,Risk averse  persons may avoid such investment . Â
Persons interested in investing in ELSS may understand Mutual Funds and go to the websites of  Mutual fund IssuersÂ
 For Tax on Retirement  Benefits CLICK HEREÂ
The Article on  " TAX PLANNING FOR FY 2018-19 CONTAINS  5 PARTSÂ
PART I : MAJOR CHANGES IN TAX RULES FOR FY 2018-19Â CLICK HEREÂ
PART 2: TAX RATES Â / SLABS FOR FY 2018-19Â CLICK HEREÂ
PART 3: TAX REBATES   FOR FY 2018-19 READ THE ABOVE  PART  ​     Â
PART 4: ESTIMATE YOUR INCOME TAX / ADVANCE TAX FOR FY 2018-189Â CLICK HEREÂ
            :                                 Â
PART 5: TAX ON RETIREMENT BENEFITSÂ CLICK HEREÂ Â
PART I : MAJOR CHANGES IN TAX RULES FOR FY 2018-19Â CLICK HEREÂ
PART 2: TAX RATES Â / SLABS FOR FY 2018-19Â CLICK HEREÂ
PART 3: TAX REBATES   FOR FY 2018-19 READ THE ABOVE  PART  ​     Â
PART 4: ESTIMATE YOUR INCOME TAX / ADVANCE TAX FOR FY 2018-189Â CLICK HEREÂ
            :                                 Â
PART 5: TAX ON RETIREMENT BENEFITSÂ CLICK HEREÂ Â
FOR DETAILS ON AAYKAR SETHU ,
NEW MOBILE APPLICATION FROM INCOME TAX DEPT , CLICK HERE Â
​                             NEW  ARTICLES ON
  Â
SMALL FINANCE BANKSÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â PAYMENT Â BANKS Â Â Â
                                    Â
UNIFIED Â PAYMENT INTERFACEÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â BHARAT BILL PAYMENT SYSTEMÂ Â Â
BHIM APPÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â AADHARÂ Â Â
e-INSURANCE Â Account ( eIA Â )
NEW MOBILE APPLICATION FROM INCOME TAX DEPT , CLICK HERE Â
​                             NEW  ARTICLES ON
  Â
SMALL FINANCE BANKSÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â PAYMENT Â BANKS Â Â Â
                                    Â
UNIFIED Â PAYMENT INTERFACEÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â BHARAT BILL PAYMENT SYSTEMÂ Â Â
BHIM APPÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â AADHARÂ Â Â
e-INSURANCE Â Account ( eIA Â )
FOR INTEREST RATE NEWS , CLICK HERE                  FOR INCOME TAX NEWS ,   CLICK HERE
TO READ OUR Â POPULAR ARTICLE ONÂ FINANCIAL PLANNING FOR YOUNGÂ ,CLICK HEREÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â PLAN YOUR INVESTMENTS Â Â Â Â Â
                            SYSTEMATIC INVESTMENT PLANS  ( SIP )         TOOL  TO AVOID  MARKET HICCUPS       Â
                                                   CLICK HERE TO KNOW  ​
TO READ OUR Â POPULAR ARTICLE ONÂ FINANCIAL PLANNING FOR YOUNGÂ ,CLICK HEREÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â PLAN YOUR INVESTMENTS Â Â Â Â Â
                            SYSTEMATIC INVESTMENT PLANS  ( SIP )         TOOL  TO AVOID  MARKET HICCUPS       Â
                                                   CLICK HERE TO KNOW  ​
FOR AUTHENTIC INFORMATION Â AND Â TIPS ON INCOME TAX Â MATTERS
Income tax dept of Govt of India has  a very useful portal  which churns out valuable guidance for tax payers . One can go through and understand the basics  .
Link to the portal is  http://india.gov.in/spotlight/filing-income-tax-returns#itr2
Further there are practical tips for computing tax  which can be read and used . For example  , the link how to compute other income. One can make use of  the portal in understanding law, making payment and also to file returns . Â
Link to the portal is  http://india.gov.in/spotlight/filing-income-tax-returns#itr2
Further there are practical tips for computing tax  which can be read and used . For example  , the link how to compute other income. One can make use of  the portal in understanding law, making payment and also to file returns . Â