Investment Planner

PLAN YOUR INVESTMENTS AND TAX ALSO Name of Investment Who can Invest Yield Life / Lock-in period Issuer Tax benefits (see notes below) Min./Max. amount (see notes below) Liquidity Capital Appreciations Nomination / Joint Names 1. Public Provident Fund (PPF) Individuals *HUFs (Now NRIs not allowed though old accounts may continue on non- repartriation basis) 8% p.a. w.e.f. 1-3-2003 calculated on monthly balance and credited annually. (Compounded annually) 15 years. Optional extension for block of 5 years at a time Govt. of India through Nationalized Banks and Post Office Sections 10 and 80C No TDS from interest and withdrawal Min. Rs. 100 p.a. Max. Rs. 70,000 p.a. in respect of individual and minors taken together No withdrawal till expiry of 6th F.Y. Then one withdrawal up to lower of 50% of the balance at the end of 4th preceding year or the year immediately preceding the year of withdrawal Loan (of up to 25% of amount at credit at the end of 2 preceding years) can be applied for after 2 years but before 5 years from the end of year in which initial subscription is made. None. Accumulation of interest Nomination possible except for minors 2. National Savings Certificates VIII Issue (NSC) (Available in demat form at select post offices) Any Entity 8% p.a. w.e.f. 1-3-2003 compounded half yearly. Maturity value shall be Rs. 160.10 principal and int. for every Rs. 100/- 6 years Premature encashment possible after 3 years with lower yield as per Rule 16 of National Savings Certificates (VIII issues) Rules, 1989 Govt. of India through Post Office Section 80C. Investment and Accrued int. eligible u/s. 80C except 6th year. No TDS from interest and withdrawal Min. Rs. 100 Max. No Limit Can be transferred (but not encashed) after one year Premature encashment after 3 years with discounted interest None. Joint ownership and nomination possible 3. 8% Savings Bonds, 2003 (Taxable) Individuals, HUFs, Charitable Institutions and Universities, Hospitals (NRIs not allowed) 8% p.a. Interest on Non Cumulative bonds will be received half yearly (on 1st August & 1st February) and interest on cumulative bonds will be compounded with half yearly rests. (1000 becomes 1601 in 6 years) 6 years Govt. of India None. TDS is applicable Min. Rs. 1000 Max. No. Limit Not Transferable Premature encashment not possible None Accumulation of interest in case of cumulative bond Joint ownership and nomination possible for single holder only and not available for joint holdings or minor investors 4. Kisan Vikas Patras (KVP) (Now available in demat form at select post offices) Individuals and Trust. Government of Maharashtra has declared KVP as a public security under the provision of Mumbai Public Trust Act, 1950 8.4% annually compounded of certificate issued on or after 1-3-2003 Every Rs. 1000 will become Rs. 1170.51 after 2½ years or more but less than 3 years; & Rs. 1850.93 after 8 years or more but less than 8 years & 7 months 8 years & 7 months purchased on or after 1-3-2003 Encashment possible after 2½ years Govt. of India through Post Office None No TDS from interest Min. Rs. 100 Max. No Limit Easily Encashable after 2½ years None Accumulation of interest Doubles in 8 years & 7 months. Joint ownership and nomination possible 5. Post Office Recurring Deposit Individuals 7.25% p.a. compounded quarterly (Rs. 10 deposited monthly becomes Rs. 728.90) Five years. Extension for another 5 years possible Govt. of India through Post Office None Min. Rs.10 per month or any amount in multiples of Rs. 5 Max. No Limit One withdrawal up to 50% of the balance will be allowed after one year and if up to 12 deposits have been made None. Accumulation of interest Joint Account & nomination possible 6. Post Office Monthly Income Scheme Individuals 8% for deposits made on or after 1-3-2003 payable monthly. In addition bonus of 10% payable on maturity only on a/c opened till 13-2-2006 6 years Govt. of India through Post Office No TDS from interest Min. Rs. 1000 Max. Rs. 3,00,000 Single Account Rs. 6,00,000 Joint Account One time deposit only Can be withdrawn at any time after 3 years with 1% reduction but no bonus and also after one year with a reduction of 2% from deposit amount None Joint ownership and nomination possible 7. Post Office Time Deposit Individuals Trust Regimental Fund Welfare Fund 6.25% - 7.5% p.a. payable on maturity for deposits made on or after 1-3-2003. Interest payable annually but calculated on quarterly basis Either 1 year, 2 years, 3 years or 5 years Govt. of India through Post Office None No TDS from interest Minimum Rs. 200 and its multiples Maximum No limit Can be withdrawn at any time after 6 months but within one year without any interest. Premature withdrawal after one year entails reduction of 2% interest Scheme to Scheme None. Accumulation of Interest Joint ownership and nomination possible 8. Certificates of Deposits Any Entity [NRIs] can invest only on non-repatriable basis] Varies from time to time from bank to bank Between 91 days and 365 days Scheduled Commercial banks excluding Regional Rural Banks None Minimum Rs. 5,00.000 Max. No Limit Tranferable by endorsement and delivery after 30 days None. Accumulation of Interest Joint ownership possible 9. Financial Institutional Bonds Any Entity Varies from time to time as per the market and other conditions Generally 3 to 7 years period Financial Institutions— Both Public and Private Section 80C for invest- ment in Infrastructure bonds No Limit Illiquid, though saleable in the open market (can be in demat form also) Joint ownership and nomination allowed 10. Listed Shares of Limited Companies Any entity other than firms and trusts Dividend rate varies Shares continue till the dissolution of issuer company Limited Companies Section 10 for dividend. Short term capital gain tax @ 10% and long term capital gain tax NIL - conditions apply. No Limit Very Liquid Max. scope for capital appreciation by increase in market values Joint ownership and nomination possible 11. Equity/Debt Oriented Schemes of Mutual Funds Any entity Variable returns (Dividend or Growth option) No lock-in-period Certain funds carry exit load if exist within certain specified period Mutual Funds Section 10 for income. Concessional capital gain tax benefit as above for equity oriented schemes. Varies from scheme to scheme Can be withdrawn at any time subject to exit load which varies from scheme to scheme Equity Scheme Max. scope for capital appreciation Joint ownership and nomination possible 12. Senior Citizen Saving Scheme 2004 (SCSS) Individuals above 60 years. (In certain cases above 55 years) (NRIs are not allowed) 9% p.a. payable quartely It will be a 5 years account and extendable by another 3 years, on extension, interest rate as of that time shall be applicable) 5 years Govt. of India through Post Office and Nationalised Banks None TDS applicable Min. Rs. 1,000 Max. Rs. 15,00,000 Deduction of 1.5% if account is closed after 1 year and 1% if it is closed after 2 years Joint ownership and nomination possible 13. Equity Linked Saving Scheme Any entity Variable returns (Dividend or Growth Option) 3 years Mutual Funds Section 10 for dividend & Section 80C benefit up to 1 lakh. Conce- ssional capital gain tax benefit. Min. Rs. 500/- Max. No Limit Can be withdrawn at any time after 3 years Equity Scheme Max. scope for Capital Appreciation Joint ownership and nomination possible 14. Term Deposits Individual or HUF Varies from time to time from bank to bank a) For a fixed period of not less than five years with a scheduled bank and b) which is in accordance with a scheme framed and notified by the Central Government in the Official Gazette for the purposes of this clause. No TDS Scheduled Banks Sec. 80C Benefit within the overall limit of Rs. 100000 TDS is applicable if interest exceeds Rs. 10,000 per annum per branch of each bank. No limit For a fixed period of not less than five years with a scheduled bank Joint ownership and nomination possible Pension Funds: 15. Pension Plans of Mutual Funds (Currently only U.T.I. and Templeton) Individual , HUF Variable returns (Dividend or Growth Option) 3 years Mutual Funds Section 10 for dividend & Sec. 80C benefit up to 100000 Min. Rs 500 Max. No Limit Can be withdrawn at any time after 3 years Not more than 40% in equities Scope for Capital appreciation Joint ownership and nomination possible 16. Pension Schemes Individual above 18 years In Traditional Schemes as per bonus rate announced & in unit linked schemes as per market conditions. As per policy term LIC & other private Life Insurance Companies Sec. 80CCC benefit up to Rs. 100,000/- & within the overall limit of Rs. 1,00,000 of Section 80CCE Minimum as per policy Max. No Limit On maturity. An Individual can withdraw 1/3rd of the accumulated value as per policy term which will be Tax free u/s. 10 & Balance should be commuted for pension. In case of traditional schemes accumulation as per current bonus rate & In case of unit linked Plans equity scheme Max. scope for Capital appreciation. Nomination Possible NOTES: 1 Tax Benefits i. Section 80C —- Deduction in respect of investments up to Rs. 1 lakh in specified securities. (Govt. yet to notify increase in investment limits for PPF.) ii. Section 10 —- Exemption in respect of income.