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Tax Saving Investment Options Under Section 80C
Are you looking for the tax saving options under 80C?! Visually you want to understand?! You are in the right place. I have given the top possible options with maximum details;
Parents can open up to two such accounts for girls. (SSAAO)
Employer should be eligible. (EPFE)
No Limits
Maximum Account Opening Age
None
None
None
None
None
10
58
None
Risk Percentage
100%
Zero
Zero
Zero
50%
Zero
Zero
Zero
Place of Purchase
Online Market
Bank / Post Office
Bank / Post Office
Post Office
(PoP) / enps.nsdl.com
Bank / Post Office
EPFO
LIC, Bank and Provider
Tax On Return
> ₹ 1 lakh return. 10 % Tax. (ELSSTR)
Tax Free
Interest > ₹ 40,000, TDS @ 10%. (FDTR)
Taxable
Taxable
Tax Free
Tax Free on maturity. (EPFTX)
Taxable
Investment Mode
Lump Sum / Systematic Investment Plan (SIP)
Lump Sum / 12 Installments
Lump Sum
Lump Sum / Installments
Lump Sum / Installments
Lump Sum / Installments
Monthly. Working people only
Monthly, Quarterly, Half-Yearly, Yearly
Loan Against
Not Available
3rd and 5th Year. Max 25% of the 2nd year. Second loan at 6th year.(PPFLA)
70% to 95% of total FD value. Loan interest rate 1% to 3%.
Flat loan, EMI
In the form of Withdrawal
Not Available
In the form of Withdrawal
Available after 3 years
Minimum Investment (PA)
₹ 500
₹ 500
₹ 1000
₹ 100
₹ 500
₹ 1000
₹ 1800
₹ 3037
Maximum Investment (PA)
No Limits
₹ 1.5 lakhs
No Limits
No Limits
No Limits
₹ 1.5 lakhs
Employer/Employee 12% of Basic Pay + D.A. (EPFCNT)
No Limits
Tax Exemption (PA)
₹ 1.5 lakhs
₹ 1.5 lakhs
₹ 1.5 lakhs
₹ 1.5 lakhs
₹ 2 lakhs
₹ 1.5 lakhs
₹ 1.5 lakhs
₹ 1.5 lakhs
Premature Withdrawal
Not Available
After 5 years
Not Available
Not Available
25% only ,3 times during the Tenure. Minimum gap of 5 years.(PWNPS)
Up to 50%, after girl age 18, Higher education / Marriage.(PWSS)
75 % on 1 month of unemployment. Remaining 25% after 2 months of unemployment. (EPFPM)
Available after 3 years
Legend Information
(E): Expected
(G): Guaranteed
(M): Maximum
(Y): Years
(TR): Till Retirement
(UGA): Upto Girl Age
(PM): Per Month
(Lump Sum): One Time Investment
(SIP): Systematic Investment Plan
(EPFO): Employees’ Provident Fund Organization
(PoP): PoP Point(it could be a bank too)
(EPFCNT): Employee's Contribution: 12% of Basic + Dearness Allowance. Employer's Contribution: 8.33% towards EPS and 3.67% towards EPF.
(EPFTX): Withdrawal made at maturity or post completion of 5 years of having availed the scheme is 100% tax free. If the amount is being withdrawn prematurely (within 5 years) it is not free of tax.
(EPFPM): 75% of EPF amount after 1 month of unemployment. Remaining 25% after 2 months of unemployment.
(EPFE):Any organization employing a minimum of 20 workers is liable to give EPF benefits to the workers. The employer can open behalf of the employee.
(SSAAO): Parents or legal guardian of a girl child is allowed to open two accounts for maximum two girls. One can open a third account in the name of a girl child in a scenario birth of twin girls, as a second birth, or if the first birth itself results into three girl children.
(OPP): Only one account allowed per person. Opening of joint accounts and multiple account is not allowed.
(PPFLA): Loan can be taken against your PPF account between the 3rd and 5th year. The loan amount can be a maximum of 25% of the 2nd year. A second loan can be taken before the 6th year, if the first loan is fully repaid.
(FDTR): 10% tax (TDS) from the interest on FD is applied, If the interest income for the year is more than ₹ 40000.
(ELSSTR): Returns will be taxable at a rate of 10% if gains are over and above ₹ 1 lakh.
(Premature Withdrawal NPS: PWNPS): Investor can withdraw only 3 times during the tenure. Investor should maintain a minimum gap of 5 years between ant 2 withdrawals. This gap can be reduced only during medical emergencies. Investor can withdraw only 25% of his contributions towards this scheme. Investor should have been a member of this scheme for at least 10 years in order to be eligible for partial withdrawal. Partial withdrawal is allowed only in certain exceptional cases, like education of his/her children, marriage expenses, house construction or medical emergencies.
(Premature Withdrawal Sukanya Samriddhi: PWSS): Partial withdrawal up to 50% of account balance can be claimed, once the account holder turns 18. In case of higher education and marriage.
Equity Linked Savings Scheme (ELSS)
Criteria
Value
Interest
12-15% (Expected)
Rate of Return (Appx)
18% (Maximum)
Lock-in period
3 (Years)
Account Holder
All
Account Opening Restriction
No Limits
Maximum Account Opening Age
None
Risk Percentage
100%
Place of Purchase
Online Market
Tax On Return
Returns will be taxable at a rate of 10% if gains are over and above ₹ 1 lakh.
Investment Mode
One Time Investment / Systematic Investment Plan (SIP)
Loan Against
Not Available
Minimum Investment (PA)
₹ 500
Maximum Investment (PA)
No Limits
Tax Exemption (PA)
₹ 1.5 lakhs
Premature Withdrawal
Not Available
Public Provident Fund (PPF)
Criteria
Value
Interest
8% (Guaranteed)
Rate of Return (Appx)
8%
Lock-in period
15 (Years)
Account Holder
All
Account Opening Restriction
Only one account allowed per person. Opening of joint accounts and multiple account is not allowed.
Maximum Account Opening Age
None
Risk Percentage
Zero
Place of Purchase
Bank / Post Office
Tax On Return
Tax Free
Investment Mode
One Time Investment / 12 Installments
Loan Against
Loan can be taken against your PPF account between the 3rd and 5th year. The loan amount can be a maximum of 25% of the 2nd year. A second loan can be taken before the 6th year, if the first loan is fully repaid.
Minimum Investment (PA)
₹ 500
Maximum Investment (PA)
₹ 1.5 lakhs
Tax Exemption (PA)
₹ 1.5 lakhs
Premature Withdrawal
After 5 years
Fixed Deposits (FD)
Criteria
Value
Interest
7-9% (Guaranteed)
Rate of Return (Appx)
8.25% (Maximum)
Lock-in period
5 (Years) for tax saving
Account Holder
All
Account Opening Restriction
No Limits
Maximum Account Opening Age
None
Risk Percentage
Zero
Place of Purchase
Bank / Post Office
Tax On Return
10% tax (TDS) from the interest on FD is applied, If the interest income for the year is more than ₹ 40000.
Investment Mode
One Time Investment
Loan Against
70% to 95% of total FD value. Loan interest rate 1% to 3%.
Minimum Investment (PA)
₹ 1000
Maximum Investment (PA)
No Limits
Tax Exemption (PA)
₹ 1.5 lakhs
Premature Withdrawal
Not Available
National Savings Certificate (NSC)
Criteria
Value
Interest
7-8% (Guaranteed)
Rate of Return (Appx)
8%
Lock-in period
5 (Years)
Account Holder
All
Account Opening Restriction
No Limits
Maximum Account Opening Age
None
Risk Percentage
Zero
Place of Purchase
Post Office
Tax On Return
Taxable
Investment Mode
One Time Investment / Installments
Loan Against
Flat loan, EMI
Minimum Investment (PA)
₹ 100
Maximum Investment (PA)
No Limits
Tax Exemption (PA)
₹ 1.5 lakhs
Premature Withdrawal
Not Available
National Pension Scheme (NPS)
Criteria
Value
Interest
8-10% (Expected)
Rate of Return (Appx)
10%
Lock-in period
60 (Years)(Till Retirement)
Account Holder
All
Account Opening Restriction
No Limits
Maximum Account Opening Age
None
Risk Percentage
50%
Place of Purchase
PoP Point(it could be a bank too) / enps.nsdl.com
Tax On Return
Taxable
Investment Mode
One Time Investment / Installments
Loan Against
In the form of Withdrawal
Minimum Investment (PA)
₹ 500
Maximum Investment (PA)
No Limits
Tax Exemption (PA)
₹ 2 lakhs
Premature Withdrawal
Investor can withdraw only 3 times during the tenure. Investor should maintain a minimum gap of 5 years between ant 2 withdrawals. This gap can be reduced only during medical emergencies. Investor can withdraw only 25% of his contributions towards this scheme. Investor should have been a member of this scheme for at least 10 years in order to be eligible for partial withdrawal. Partial withdrawal is allowed only in certain exceptional cases, like education of his/her children, marriage expenses, house construction or medical emergencies.
Sukanya Samriddhi Account (SSA)
Criteria
Value
Interest
8-9% (Guaranteed)
Rate of Return (Appx)
8.5%
Lock-in period
18(Girl Age Upto) / 21 (Years)
Account Holder
Girl Child only.
Account Opening Restriction
Parents or legal guardian of a girl child is allowed to open two accounts for maximum two girls. One can open a third account in the name of a girl child in a scenario birth of twin girls, as a second birth, or if the first birth itself results into three girl children.
Maximum Account Opening Age
10
Risk Percentage
Zero
Place of Purchase
Bank / Post Office
Tax On Return
Tax Free
Investment Mode
One Time Investment / Installments
Loan Against
Not Available
Minimum Investment (PA)
₹ 1000
Maximum Investment (PA)
₹ 1.5 lakhs
Tax Exemption (PA)
₹ 1.5 lakhs
Premature Withdrawal
Partial withdrawal up to 50% of account balance can be claimed, once the account holder turns 18. In case of higher education and marriage.
Employee Provident Fund (EPF) / Provident Fund (PF)
Criteria
Value
Interest
8-9% (Guaranteed)
Rate of Return (Appx)
8.55% (Guaranteed)
Lock-in period
5 (Years)
Account Holder
Employees only
Account Opening Restriction
Employer should be eligible. Any organization employing a minimum of 20 workers is liable to give EPF benefits to the workers.
Maximum Account Opening Age
58
Risk Percentage
Zero
Place of Purchase
Employees’ Provident Fund Organization (EPFO). The employer can open behalf of the employee.
Tax On Return
Withdrawal made at maturity or post completion of 5 years of having availed the scheme is 100% tax free. If the amount is being withdrawn prematurely (within 5 years) it is not free of tax.
Investment Mode
Monthly.
Loan Against
In the form of Withdrawal.
Minimum Investment (PA)
₹ 1800
Maximum Investment (PA)
Employee's Contribution: 12% of Basic + Dearness Allowance. Employer's Contribution: 8.33% towards EPS and 3.67% towards EPF.
Tax Exemption (PA)
₹ 1.5 lakhs
Premature Withdrawal
75% of EPF amount(Corpus) after 1 month of unemployment. Remaining 25% after 2 months of unemployment.
Life Insurance (LI)
Criteria
Value
Interest
4-6% (Guaranteed)
Rate of Return (Appx)
6%
Lock-in period
5 (Years)
Account Holder
All
Account Opening Restriction
No Limits
Maximum Account Opening Age
None
Risk Percentage
Zero
Place of Purchase
LIC, Bank and Provider
Tax On Return
Tax Free
Investment Mode
Monthly, Quarterly, Half-Yearly, Yearly
Loan Against
Available after 3 years
Minimum Investment (PA)
₹ 3037
Maximum Investment (PA)
No Limits
Tax Exemption (PA)
₹ 1.5 lakhs
Premature Withdrawal
Available after 3 years
Rate of Return (Appx)
Lock-in Period(Years)
Minimum Investment (PA)
Maximum Investment (PA)
ELSS, FD, NSC, NPS and LI has no Limits.
EPF/PF - Employee's Contribution: 12% of Basic + Dearness Allowance. Employer's Contribution: 8.33% towards EPS and 3.67% towards EPF.
Tax Exemption(Per Annum)
Risk Profile Meter
Equity Linked Savings Scheme (ELSS) Returns
Invest ₹ 1000 Per Month. 15 % Interest.
Years
Invested Amount
Maturity Amount
3 Years
36000
45116
5 Years
60000
88575
10 Years
120000
275217
15 Years
180000
668507
20 Years
240000
1497239
25 Years
300000
3243530
30 Years
360000
6923280
Invest ₹ 12500 Per Month. 15 % Interest.
In 30 Years expected returns will be more than ₹ 8.6 Crores, But ELSS returns are subject to market risk. Under 80C tax saving options, highest returns possible only in ELSS.
Years
Invested Amount
Maturity Amount
3 Years
450000
563944
5 Years
750000
1107181
10 Years
1500000
3440213
15 Years
2250000
8356334
20 Years
3000000
18715494
25 Years
3750000
40544120
30 Years
4500000
86540995
Public Provident Fund (PPF) Returns
Invest ₹ 1000 Per Month. 8% Interest.
Years
Invested Amount
Maturity Amount
15 Years
180000
351891
20 Years
240000
593075
25 Years
300000
947453
30 Years
360000
1468150
Invest ₹ 12500 Per Month. 8% Interest.
In 30 Years guaranteed returns will be more than ₹ 1.83 Crores. Under 80C tax saving options, second highest returns possible after ELSS will be PPF.
Years
Invested Amount
Maturity Amount
15 Years
2250000
4398642
20 Years
3000000
7413438
25 Years
3750000
11843162
30 Years
4500000
18351880
Fixed Deposits (FD) Returns
Invest ₹ 36000 One time. 7% Interest.
Years
Invested Amount
Maturity Amount
5 Years
36000
51034
10 Years
36000
72347
Invest ₹ 150000 One time. 7% Interest.
Years
Invested Amount
Maturity Amount
5 Years
150000
212643
10 Years
150000
301449
National Savings Certificate (NSC) Return
Invest ₹ 36000 One time. 8% Interest. Compounded half yearly.
Years
Invested Amount
Maturity Amount
5 Years
36000
53289
10 Years
36000
78880
Invest ₹ 150000 One time. 8% Interest. Compounded half yearly.
Years
Invested Amount
Maturity Amount
5 Years
150000
222037
10 Years
150000
328668
National Pension Scheme (NPS) Returns
Monthly contribution towards NPS. 8% Interest.
Current Age: 30
Retirement Age: 60
Total Investment Period: 30
NPS
₹ 1000
₹ 2000
₹ 3000
₹ 4000
₹ 5000
Invested Amount
360000
720000
1080000
1440000
1800000
Maturity Amount
1124304
2248609
3372914
4497219
5621523
Pension per month post retirement
7916
15832
23748
31665
39581
Lumpsum Withdrawn Amount
296861
593722
890583
1187444
1484305
NPS
₹ 1000
₹ 3000
₹ 5000
Invested Amount
360000
1080000
1800000
Maturity Amount
1124304
3372914
5621523
Pension (PA)
7916
23748
39581
Lumpsum Amount
296861
890583
1484305
Sukanya Samriddhi Returns
Invest ₹ 1000 Per Month. 8.5% Interest.
Years
Invested Amount
Maturity Amount
1 Years
12000
12559
3 Years
36000
41010
5 Years
60000
74565
10 Years
120000
187203
14 Years
168000
317491
21 Years
168000
565640
Invest ₹ 12500 Per Month. 8.5% Interest.
In 21 Years guaranteed returns will be more than ₹ 70.7 lakhs. Under 80C tax saving options, third highest returns possible after PPF will be Sukanya Samriddhi.
Years
Invested Amount
Maturity Amount
1 Years
150000
156987
3 Years
450000
512626
5 Years
750000
932065
10 Years
1500000
2340042
14 Years
2100000
3968640
21 Years
2100000
7070506
Employee Provident Fund (EPF) / Provident Fund (PF) Returns
Criteria
Value
Current Age
30
Retirement Age
58
Current EPF Balance
₹ 0
Rate of Interest
8.55%
Your Contribution to EPF
12%
Employer's Contribution to EPF
3.67%
Contribution made for
28 Years
Maturity after
28 Years
Average Annual Increase in Salary: 5%
Monthly Basic Salary
Maturity Amount
₹ 10000
3643021
₹ 50000
23768638
₹ 100000
49168276
Average Annual Increase in Salary: 10%
In 30 Years guaranteed returns will be more, but the investment amount will vary based on the salary. Other tax saving options will have the control over investment amount.
Monthly Basic Salary
Maturity Amount
₹ 10000
7727640
₹ 50000
44555080
₹ 100000
90741016
Life Insurance (LI) Types
Policy Types
Purpose
Endowment Plans
Insurance+ Savings
Money Back Plans
Insurance with periodic(Monthly, Annulay, Quaterly, Half Quaterly) returns
Term Plans
Risk cover
Whole Life Insurance
Lifetime Coverage
ULIPs
Insurance + Investment
Child Plans
For childrens education, wedding etc.
Retirement Plans
Post retirement for financial independence
Endowment Plan Returns
Criteria
Value
Type
Endowment Plan
Current Age
30
Maturity age
45
Payment Mode
Monthly
Policy Term
15 Years
Premium Paying Term
10 Years
Premium Per Month
₹ 2500
₹ 5000
₹ 10000
Invested Amount
300000
600000
1500000
Guaranteed Maturity
264822
535929
1084728
Non Guaranteed Maturity
238340
482336
976255
Total Maturity
503162
1018265
2060983
Money Back Plan Returns
Criteria
Value
Type
Money Back Plan
Current Age
30
Policy Completion Years
21
Maturity age
41
Payment Mode
Monthly
Policy Term
11 Years
Premium Paying Term
10 Years
On Maturity, Guaranteed Income Annual will be paid from age
42th Year to 51th Year.
Premium Per Month
₹ 2500
₹ 5000
₹ 10000
Invested Amount
300000
600000
1500000
Sum Assured
367857
735715
1408010
Guaranteed Income Annualy from 12 th Year
58857
117715
235428
Total Amount in 12th to 21th Year
588570
1177150
2354280
Term Plan Returns
Criteria
Value
Type
Term Plan
Current Age
30
Payment Mode
Monthly
Tobacco Use
No
City
Bangalore (Karnataka)
Monthly Income
₹ 1 Lakh
Sum Assured: ₹ 1 Crore
Total Payout: ₹ 1.696 Crore
Cover Upto Age
Premium Per Month
Policy / Pay Term
80
1672
50 Years
75
1475
45 Years
70
1319
40 Years
65
1194
35 Years
Sum Assured: ₹ 2 Crores
Total Payout: ₹ 3.392 Crores
Cover Upto Age
Premium Per Month
Policy / Pay Term
80
3344
50 Years
75
2949
45 Years
70
2638
40 Years
65
2388
35 Years
Sum Assured: ₹ 2.5 Crores
Total Payout: ₹ 4.24 Crores
Cover Upto Age
Premium Per Month
Policy / Pay Term
80
4180
50 Years
75
3686
45 Years
70
3297
40 Years
65
2985
35 Years
Term Plan Summary
Cover Upto Age
Policy / Pay Term
Premium Per Month ₹ 1Cr
Premium Per Month ₹ 2Crs
80
50 Years
1672
3344
75
45 Years
1475
2949
70
40 Years
1319
2638
65
35 Years
1194
2388
Conclusion
(ELSS) - Equity Linked Savings Scheme
(PPF) - Public Provident Fund
(SSA) - Sukanya Samriddhi Account
(LIE) - Life Insurance - Endowment Plan
(LIM) - Life Insurance - Money Back Plan
Option
Waiting Years
Invested Amount
Maturity Amount
(ELSS)
30
₹ 45 Lakhs
₹ 8.6 Crores (Expected)
(PPF)
30
₹ 45 Lakhs
₹ 1.83 Crores Guaranteed
(SSA)
21
₹ 21 Lakhs
₹ 70.7 Lakhs Guaranteed
(LIM)
21
₹ 15 Lakhs
₹ 23.5 Lakhs (Expected)
(LIE)
15
₹ 15 Lakhs
₹ 20.6 Lakhs (Expected)
Now you have the understanding of different tax saving options under 80C. So plan your secure future now only. You can choose the best option which will fit for you. Soon I will be posting a separate post on the individual options. You can leave the comments if you have any queries. If you liked this article, then please share with others, using the share link below. Thank you so much for reading and have a great day.
Very nice and informative Article. I would like to know in which proportion we need to invest 1,50000 . I can understand it will be individuals choice based on the risk a person can take, but still I would like to read your thoughts on this.
What is Employee Provident Fund (EPF) / Provident Fund (PF)? Employee Provident Fund (EPF) and Provident Fund is same. Employee Provident Fund (EPF) is a retirement benefit scheme available to all salaried employees. The EPF scheme promoting savings to be used post retirement by employees. This fund is maintained and overseen by the Employees Provident Fund Organisation of India (EPFO). Any organization employing a minimum of 20 workers is liable to give EPF benefits to the workers. Why to invest in Employee Provident Fund (EPF) / Provident Fund (PF)? The principal and interest in the EPF/PF account are guaranteed by the Government. Equal contributions from employer also add's up the investment amount. 8.33% from employer's contributions is diverted to your EPS (Employee’s Pension Scheme).A retired person gets the lump sum EPS money along with PF. Wha...
What are Equity Linked Savings Scheme (ELSS) funds? Equity Linked Savings Scheme (ELSS) funds are tax saving mutual funds. Majority of the funds are invested in equity schemes. Why to invest in ELSS? Investments in ELSS or tax-saving mutual fund schemes qualify for tax deductions of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. ELSS come with a mandatory three years lock-in period. Tax free on returns. What is the return expected in ELSS? Normaly 12-15% return expected. Maximum 18+% as per the last 3 years records. About Equity Linked Savings Scheme (ELSS) Criteria Value Interest 12-15% (Expected) Rate of Return (Appx) ...
Nice workout bro
ReplyDeleteThank you bro
DeleteSimple super
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ReplyDeleteBest article to understand 80C Tax investment plans. Good one Mahesh!
ReplyDeleteThank you. Have a great day.
DeleteGood work..
ReplyDeleteThank you
DeleteBest Article super Mahesh. Easily understand the tax investment plans. Please continue like this good topics.
ReplyDeleteThank you for your valuable feedback.
DeleteVery nice and informative Article.
ReplyDeleteI would like to know in which proportion we need to invest 1,50000 . I can understand it will be individuals choice based on the risk a person can take, but still I would like to read your thoughts on this.
Really good work. No words enough for this hard work you have done to prepare this article in statistic form. Keep it up.
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