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POSTED BY ON February 6, 2012 12:14 pm COMMENTS (13)
I AM 25 YRS OLD I HAVE ONLY ULIP OF 15000 invested and 12000 postal 5 year plan and i need to invest another 70000 so what would be better for me to invest in as a one time deposit like ppf/nsc/fd/infrastructure bonds
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Dear Manikanta, for the urgency & for the fact that till date you have not invested in PPF or MFs, my take ‘ll be to go for tax saving bank FDs. You may do it with your bank & within 15 min or so, the proof in the form of bank Fds ‘ll be there to submit to your account department to complete that 1L limit. You have the option to receive the interest either at the time of maturity or yly or 1/2 yly or qtly or mly. As the interest rates are on a high. You may get anywhere from 9 to 9.5%. Please do note interest received from these bank Tax saving FDs is taxable.
From next FY i.e. 2012-2013, please think to open a PPF account in the month of march 2012 itself & deposit the max. possible amount to you within that 1L Rs. limit. in the month of april between 1st to 5th april.
Thanks
Ashal
Dear Manikanta, I’m still waiting for your answer. Do you have PPF account & do you have invested any amount in MF till date.
Thanks
Ashal
i dont have ppf ormf as such i want ot redeem that 46 odd into investment so can you tellme a one timeinvestment rather than paying everyyear for this term atleast
Dear Manikanta,
I agree with Ashal’s point whereby you are required to invest only Rs. 46,600 and not 70K towards tax investments.
If you just need one time investments to go ahead with your Tax oriented investments, then I would strongly advise you not to start any new investment which shall require you an ongoing investment for several years. The reason being – from April 2012, new Income Tax act may abolish all / many kinds of 100,000 related investments. Hence if you started a new ULIP this year to fulfill your tax requirements, from next year onwards they may not be eligible for tax rebated.
Hence looking into the uncertainity of this year, I would suggest you to go for PPF investment. If you have already got ELSS mutual funds which you may be doing for past few years, you may want to top them up by additional 10-20K and remaining amount into your PPF account.
Regards
BFA
thanks banyan
Dear Manikanta, Now it’s clear to me as I tried to dig a little in to you. As your total income is 4.8L Rs. in the current FY. You are in 10% Tax slab. Also you are having PF amount of 26400 Rs. which is also eligible for tax saving under the over all limit of 1L Rs. under section 80C.
So your PF, ULIP & that postal investment (I assume it’s 5Y Post Office Term Deposit) totals up to around 53400 Rs. So your short fall is around 46600 Rs. & not 70000 Rs.
You forget to mention in your reply for your PPF account as well as MF investment if any.
By the way ELSS stands for Equity Linked Saving Schemes.
Thanks
Ashal
Dear Manikanta, everybody has advised a solution, but on my part, I first want to pin point your problem. May I know your current yly income. Do you have any PF facility with your employer? Do you have an active PPF account? Have you invested in any MF earlier? By the way, can you elaborate on your postal 5Y plan. Do you mean NSC?
Thanks
Ashal
4.8l per annum and pf is 26400 and what elss stand for how to apply for it
All – I think Manikanta’s dilemma is this. It is end of FY 2011-12 and he has realized that the 80c limit of 1 Lac has not been utilized and there is a need to save tax!
Manikanta – I see you have already invested 27000 for tax saving this year (I dont endorse the ULIP though).You are looking at investing the balance 70,000 just for the sake of maximizing your 80c. The best way out is this:
Start with an ELSS for 5000 (minimum amount for ELSSS anyways). Start weekly SIP of 1000 or monthly SIP of 4000 -5000 for Feb and March 2012. Any balance amount towards 1 lac may be invested in PPF.
If you are absolutely short of time to submit the proof to your office in the next few days the safest, best, easiest avenue to park that 70,000 will be a PPF account (NOT NSC/NOT anything else). The money is locked for 15 years (depending on how long you have had a PPF account) – but that is fine as the proceed are tax free. If employed you can consider your EPF contributions as well to reduce the overall investment this year. However if you can afford just maximize your PPF every single year going forward -not just for tax purposes but as an investment.
And yes – in any case open an ELSS soon and start the SIPs. The investments will be handy for you next year while your money grows (assuming ELSS is not abolished in the upcoming budget session. With DTC gone into snooze I see less reason for ELSS being scrapped in the budget though).
Hi Manikanta
Thanks for your enquiry.
Before looking to invest, you need to take proper life and health insurance. You can consider an online pure term plan and a mediclaim plan for that purpose, respectively. Next, you should keep 3-6 times your monthly living expenses as contingency fund and keep it as a Fixed Deposit.
Next comes investments. In case you do not have short term liabilities, you can start investing for long term through equity mutual funds route.
Since investing in mutual funds in one shot is not advisable, while for this year, you can invest in PPF, from next year (i.e. April 2012 onwards, start a SIP of Rs. 5000 in good equity MFs.
Do let me know in case you have any other queries.
All the best!
for next year i will plan as the time is very less for me to submit i need a one shot investment r else i will better pay the tax and leave help me out if so what r the best opportuniities i have to invest right now
1. Do not even think of paying tax.
2. If you want a one-shot tax saving investment, just buy an ELSS for the required amount. Simple and better than any of the other vehicles available. You can either opt for Fidelity Tax Advantage or HDFC Taxsaver. The former is very easy to do online also, do not know about the latter in terms of opening a new account but otherwise, once you have opened an account, their working is also very good.
3. Do not go with infra bonds (less than inflation returns with a long lock-in).
4. In my opinion, opting for PPF is also not the best use of your 80C limit, when you have ELSS available, and at your current age.
This is certainly not an alternative to a proper financial plan.
Why not ELSS?
And a proper financial plan.