With the beginning of a financial year, it is time for investors to arrange a meeting with his Investment Advisor and agree on an investment policy, keeping in mind the changes proposed in the last budget. A personalised tax saving tweaked with a good return based on increase in salary and/or bonus in current. year’s taxable income needs a careful planning.
A higher voluntary contribution (>> 12%) to Provident Fund will help in earning higher tax-free returns as most returns on debt funds are already moderated. You can opt for Voluntary Provident Fund by giving a request to your company at the start of every financial year.
Registering a SIP in the early months of a financial year in the equity- linked savings scheme (ELSS) with a lock-in for three years continues be a good option considering the volatility expected during the current year. It also disciplines savings under Sec 80C without a compelling investment of lumpsum at the end of the year.
It is important to dis- cuss with your advisor the new tax treatment status of existing investment for a tweaking, if necessary. Considering the introduction of taxation on long- term capital gains on equities and dividends. received from mutual funds an investor can choose to liquidate the units under ELSS invested earlier than 3 years and recycle the funds.
Capital gains up to Rs 1 lakh per annum is tax- free. Investments made in mutual funds scheme with dividend payout for regular income may be switched to Growth Plans and opt for Systematic Withdrawal Plan.
National Pension Scheme, also known as NPS, is a voluntary defined contribution retirement scheme for those who have not yet opened the account. In addition to exemptions under Sec 80C an additional tax benefit of Rs 50,000 under Sec 80CCD is provided under NPS. It is considered as one of the best low-cost tax savings instrument.
Mutual Fund Distributors are sure to skip this product due to no incentive offered to them. Contributions to NPS after attaining 60 years of age can be extended further by an approval from PFRDA. Look out for Registered Retirement Advisor who will help in getting a Permanent Registered. Account Number (PRAN) for you.
There are more smiles for senior citizens who moved out from bank de- posits and Post Office MIS. The increase of tax-free interest income from bank deposits and post office savings schemes from Rs 10,000 to Rs 50,000 is a good case to relook at these defensive investment products.
Without any exception all senior citizens should top up their health insurance plan with the in- creased tax exemption limit enhanced to Rs 50,000. Most insurance companies are reluctant to enhance the limit, but Star Health Insurance has special plans with extended no claim periods.
The new Income Tax Return (ITR) forms give some relief to NRIs. They can now provide details of their foreign bank accounts.
to claim credit or refunds. Earlier, they could only provide details of bank accounts held India.
This article was published in Indian print media
