31 January 2011
To claim deduction u/s 80 c whether investment in ppf is beneficial or investment in tax saving bonds for 5 yr in bank is beneficial.(tax planning wise) also mention rate of interest for ppf investment.
31 January 2011
Current rate of PPF interest is 8 % compounded ,to be credited to the account at the end of every financial year and payable at the time of withdrawal.
31 January 2011
As per existing tax provisions, Interest earned on investments in PPF is tax free whereas Interest earned on Tax Saving Bank FD for 5 years is subject to tax.
It therefore appears to me that investment in PPF is more advantageous.
The position may be different if you will retire from service within next 5 years and not likely to have taxable income by the time of maturity of Tax Saving Bank FD (in case of cumulative interest option).
Normally a youngster having more than 15 years of left over service only considers PPF option. I suppose you belong to this category, if so, investment in PPF is more advantageous
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