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Tax benefit

Poornima Kamath (Employee) (40 Points)

04 January 2013

Hi,

I am working in a company, monthly around Rs.1000 are getting deducted from my salary.

So pls suggest me how much to invest p.a to get full tax exemption & also suggest whether to invest in LIC policy , PPF, etc. whic one is better?

Regards,

Poornima K

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4 Replies

Ankit (CA, CS) (3064 Points)
Replied 04 January 2013

Poornima,

you can invest in LIC/PPF, but the maximum allowable deducation is Rs. 100000. in addition, you can also invest in Infra bonds, for which deduction of 20000 is allowed u/s 80CCF.

you can also, instead of LIC/PPF, invest in Tax saver Mutual funds or in FDs for more than 5 years with a scheduled bank

Ankit

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CA Manish (Job) (5264 Points)
Replied 04 January 2013

Originally posted by : Ankit
	Poornima, you can invest in LIC/PPF, but the maximum allowable deducation is Rs. 100000. in addition, you can also invest in Infra bonds, for which deduction of 20000 is allowed u/s 80CCF. you can also, instead of LIC/PPF, invest in Tax saver Mutual funds or in FDs for more than 5 years with a scheduled bank Ankit

Deduction u/s 80CCF is not available form F Y 2012-13.

@VaibhavJ (Believe!! Live your dreams!) (33516 Points)
Replied 04 January 2013

While investing you should always know:

- Purpose: (when you want money back) if you are planning to save money for marriage, child education, capital investment like purchase of House etc. So this will determind tenure for which you will be investing money.

- Tax is Saved or not: Of your money invested whether sam counts for tax saving purpose or not? Also return on the same is whether exempted or taxable.

- Return on Investment: How much return is generated from your investment?

- Security of Amount Invested: Is amount invested is safe or not. Investment in Shares are giving high return but risky.

So covering all above pints you should invest according to your requirements. You can invest in LIC or Equity link saving schemes of LIC which has lesser locking period so that after 5 yrs you can stop investing & take away with fund for your capital expenditure. PPF is also very easy option that should be excercised wisely.

Hope i am able to sove your doubts.

Thanks!!