INVESTMENT IN PUBLIC PROVIDENT FUND

PUBLIC PROVIDENT FUND SCHEME – 1968

The Scheme introduced by the National Savings Organization in 1968 to mobilize small savings. The Scheme offers an investment avenue with decent returns coupled with income tax benefits. Salient features of the Scheme are as follows:

1.        ELIGIBILTY – Individuals in their own name as well as on behalf of a minor can open the account at any Branch. As per extant instructions, opening of PPF accounts in the name of Hindu Undivided Family is not permitted.

2.        INVESTMENT LIMITS - With effect from 01.12.2011, a minimum of Rs.500.00 (thereafter in multiples of Rs.5.00)subject to a maximum of Rs.1 lac per annum may be deposited. The subscriber should not deposit more than Rs.1 lac per annum as the excess amount will neither earn any interest nor will be eligible for rebate under Income Tax Act. The amount can be deposited in lump sum or in a maximum of 12 installments per year.

        

       In case the subscriber is not in a position to invest during a particular year(s), the account may be revived on payment of penalty @ Rs.50.00 per year along with arrears of subscription.

3.        DURATION OF SCHEME - Original duration is 15 years. Thereafter, on application by the subscriber, it can be extended for 1 or more blocks of 5 years each.

4.        RATE OF INTEREST- 8.70% per annum with effect from 01.04.2013. Interest will be paid on 31^st March every year. Interest is calculated on the minimum balance between 5^th day and end of the month.

5.        LOANS AND WITHDRAWALS - Loans and withdrawals are permitted depending upon the age of the account and balances as on the specified dates.

6.        TAX BENEFITS- Income Tax benefits are available under Sec 88 of IT Act. Interest income is totally exempt from Income Tax. Amount outstanding to the credit is fully exempted from Wealth Tax also.

7.        NOMINATION- Nomination facility is available in the name of one or more persons. The shares of nominees may also be defined by the subscriber.

8.        TRANSFER OF ACCOUNT- The account can be transferred to other branches/ other banks or Post Offices and vice versa upon request by the subscriber. The service is free of charges.

Source:www.sbi.co.in

Protection/ Term Insurance Plans

             The term insurance is life cover that provides a death benefit to the beneficiary of the insured one if the insured dies during the specified policy period. If the insured survives until the end of the policy term, the coverage ceases without value and a payout or death claim cannot be made.These are the cheapest insurance plans with high cover.

            Term life insurance provides one with a high cover at very low premium and cover one  for large periods of time. The plans are simple to understand and give you choice to choose your plan, inclusions, premiums and payment frequency . Life insurance gives you tax benefits under section 80(C). 

            One should choose the cover from 10 to 20 times of the annual income depending upon the age group of the insured person. The cover multiplier selection may be lower if the insured one is elder.

            Nowadays almost all the premier insurance companies are providing the term insurance in both offline as well as online mode. Online term insurance plans are available generally at lower cost.

            Few online term insurance plans are listed below:

1. SBI Life-eShield
2. Aviva - iLife
3. HDFC-Click 2 Protect
4. ICICI Pru- i Care
5. Kotak eTerm
6. Bajaj Allianz iSecure

The Policies may be compared on www.policybazaar.com

See also: 
IDA FROM OCTOBER 2013

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Income Tax Rates in financial year 2013-14 in india

Income Tax Rates during financial year 2013-14 in india is listed as below:-

1. Income Upto    Rs 2,00,000/-                                        :  0%   
2. Income Above Rs 2,00,000/- and upto 5,00,000/-           :  10%  
3. Income Above Rs 5,00,000/- and upto 10,00,000/-         :  20%  
4. Income Above Rs 10,00,000/-                                       :  30% 

Income Tax (say) : X
Rebate on TAX : Rs 2,000/-
Edu. Cess: 02% on IncomeTax
H.Edu. Cess: 01% on IncomeTax

Net Income Tax : (X-2000)*1.03

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