Professional Documents
Culture Documents
Mutual Funds
Collects the money of a large number of investors The money that is collected is then used by the fund manager to buy securities like bonds and stocks The securities that are purchased are called the portfolio of the fund The different kinds of mutual funds in India are Closed- End Funds, Large Cap Funds, International Mutual Funds, Value Funds, and Tax Saving Funds Offers several benefits to an investor such as:
Potential return Liquidity Transparency Income growth Good post tax return &
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Tax Benefits
All dividends, declared by mutual funds are taxfree in hands of the investor The mutual fund has to pay a dividend distribution tax of 12.5% The amount invested in tax-saving is eligible for deduction u/s 80C The aggregate amount deductible under this section CANNOT exceed Rs 100,000 Pension Schemes are allowed as deduction u/s 88 of the Income Tax Act, 1961
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Saving Schemes
Various saving schemes are framed by Central Government under:
Government Savings Bank Act, 1873 Government Saving Certificates Act, 1959 Public Provident Fund Act, 1968
Risk Free Investment as Small Savings Schemes are fully secured by GOI High rate of interest Invest Rs. 5000/- or more in any Small Savings Scheme to get Lucky Coupon and win prizes. Tax on these prizes will be paid by the State Govt. Nomination facility
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Scheme
Interest Rates
3.5%
Tenure
Investment
Tax Rebate
Post Office Savings Account 5-year post office recurring deposit A/c
Not fixed
5 years
No Tax Rebate
6.25%
6.5% 7.25% 7.5%
1 year
2 years 3 years 5 years 6 years
8%
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Scheme
Tenure
Investment
Tax Rebate
15 years
No Limits, Denominations: Rs 100, Rs 500, Rs 1000 Rs 5000, Rs 10000, Rs 50000 Min: Rs. 100 Max: No Limit
6 years
Investment as well as the interest deemed to be re-invested Investment qualifies for deduction 13
5 years
Bonds
A Bond is a loan given by the buyer to the issuer of the instrument Bonds can be issued by companies, financial institutions, or even the government Tax-saving bonds are designed to partially or fully release a bond holder from the burden of taxes Bonds can be broadly classified into:
Tax-Saving Bonds Regular Income Bonds
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The other commercial as well as private sector banks which provide the 6.5 % Savings Bonds, 2003 are:
Central Bank of India UTI Bank Ltd. Dena bank HDFC Punjab National Bank ICICI Bank of Maharashtra IDBI Indian Overseas Bank Canara Bank Bank of Baroda Indian Bank Union Bank Syndicate Bank Allahabad Bank
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Fixed Deposits
Fixed Deposit for 5 years in banks is allowed as a tax saving scheme by the government The maximum amount eligible under a tax saver fixed deposit is Rs. 100,000 for a financial year Other fixed deposits have no tax rebate and the income has to be added as other sources of incomes But assesse has the option to pay the tax on a yearly basis or together after maturity
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Certificate of Deposit
CDs are not glamorous investments but are stable ones Investing money for a fixed period of time while receiving interest
Tax Benefits
Deducting Interest Delayed Tax Tax-deferred
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Bibliography
www.tax4india.com http:/business.mapsofindia.com www.thinkplaninvest.com www.rupeetimes.com www.valueresearch.com
Preksha Shah 49 Jigar Jain 24 Harsh Thariani 57 Juhi Bulchandani 9 Dhaval Manek 31 Anushri Jain 20
Credits
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