PerFin India » tax saving

Post Office Interest Rates 2012

Shiva — Tue, 24 Jan 2012 02:28:06 +0000

Unlike the previous two years where the post office interest rates did not see much change there is a slight difference for this year 2012 where we did see some increase in interest rates for most of the schemes available at the post offices in India like their regular saving account, Time Depost, recurring deposit, MIP, NSC and most importantly the Public Provident Fund (PPF) which all witnessed an increase in rates from this year onwards. While the other schemes do not help you save on tax, while NSC and PPF remain the best option in terms of safe investments which can help you save tax till this year.

All the below mentioned interest rates are applicable throughout from January 2012 to December 2012 until and unless the government decides to change it in between

Post Office Savings Account:

The interest rate has been raised for the regular Post Office Savings Account on par with the bank saving accounts. Now the new interest rate being 4% p.a. The interest from this account is tax free unlike the bank saving accounts.

Post Office Time Deposit

The post office time deposit or fixed deposit has the following interest rates for various tenure

1 year – 7.70% p.a.

2 years – 7.80% p.a.

3 years – 8.00% p.a.

5 years – 8.30% p.a.

The rates mentioned on the above mentioned fixed deposits from post offices are slightly lesser when compared with the bank fixed deposits.

5 year post office Recurring deposit:

The Rs. 10 if deposited in the recurring deposit per month will fetch you Rs. 738.62 after the 5 year tenure and you can calculate the yields according to your deposits.

PostOffice Monthly Income Account Scheme

The interest rate for the Monthly Income Scheme (MIS) is 8.20% p.a. Minimum Rs. 1500 and maximum Rs. 4.5 lakhs. The date of maturity will be 5 years from start.

National Savings Certificate (NSC) 5 years

The tenure for this scheme has been reduced to 5 years against the 6 years previously. The interest rate being 8.4% p.a. The interest rate Your Rs. 100 invested in this NSC scheme will grow to Rs. 150.90. The lock-in period is 5 years.

National Savings Certificate (NSC) 10 years

This is a new scheme introduced from last year. The rate of interest being 8.7% p.a. The lock-in period is 10 years.

Public Provident Fund (PPF) 15 years

The all time popular tax saving scheme till now PPF interest rate is increased to 8.6% p.a. from December 2011 and will continue throughout 2012 as well and hence the best tax saving scheme among others available till now. The minimum amount for investment is Rs. 500 per year. The maximum amount has been revised recently to Rs. 1 lakh as against Rs. 70,000 previously.

Senior Citizen Savings Scheme

The interest rage for this scheme is 9.0% p.a. The minimum amount deposit is Rs. 1000 and in multiples. The lock-in period is for 5 years.

Met Protect Term Plan from Met Life Review

Shiva — Sun, 06 Mar 2011 14:53:45 +0000

After online version of the term plans from ICICI Prudential and Kotak Life Insurance namely iProtect Term and eTerm Plan respectively, another life insurance company the MetLife has come up with the Met Protect Term Plan which works like the regular term plans but the only difference being that you can buy this plan online and hence the premium that you pay for these kind of plans are comparatively less.

As we all know that term plans are pure protection plans which does not have any survival benefit attached to but can only be benefited by your family in case of unfortunate death of the insurer during the policy term. This is the pure form insurance that one should definitely have unlike the endowment plans, money back plans or even the much hyped ULIP plans which are nothing but investment cum insurance plans where you get to enjoy the benefit upon your survival.

Why Term Plan

Unlike the other insurance policies, term plans should definitely feature in everyone’s portfolio allocated for the insurance. These term plans are ideal for anyone who have dependents who are living out of your income and cannot survive without it in case of sudden demise. If you have term plan, the amount insured will be given to your family who can use it.

How to Buy Met Protect

Just visit the Met Life Insurance website and choose the MetProtect plan and then choose the amount that you desire which you would feel would be ideal for your protection of your family in case of unfortunate death of the insurer.
Choose the duration for the cover of the term plan (ideal to choose the maximum years for better protection)
Just fill in the proposal form given with all your details truthfully and correctly
Pay the premium via credit card/debit card, cheque or even the IVRS.
Just get the documents required (will be told at the time of buying the plan online) ready so that the representative from MetLife will come and collect it.
After that you will need to undergo medical tests at your place without any additional charges in which a medical personnel or tem authorized by MetLife will come and visit you depending upon your availability.
Finally after everything is done successfully you will be sent the policy documents via the courier and you are now officially the insurer of the Met Protect Term Plan from MetLife.

Features of Met Protect

Lowest premium since brought online
Even lower premium for the non-smoker
Different premiums for female insurers
Tax benefits under section 80C on premium
Minimum and maximum entry ages 18 and 60
Maximum expiry of policy 70 years
There is no limit for the sum assured amount
Flexible premium payment option (Single/annual/half yearly)
Death benefit for the beneficiary
No maturity or surrender value benefits

Free Look in Period

After buying the Met Protect Term Plan online you find some of the terms not in line with what you had expected or didn’t want to continue with your policy you can just cancel the policy within 15 days by returning the same to Met Life within that time frame and you will get the premium refund minus the medical exam expenses and stamp duty charge, etc.

Exclusions with MetProtect

There are some exclusions applicable for this pure term insurance plan as well like suicide within 1 year of the policy start. There are also exclusions on certain travel where travel advisory had been advised.

Verdict

If you have not brought any term plan for yourself yet and looking to buy one, then you can surely try out this pure term plan, Met Protect from MetLife which on the whole looks like a very promising term plan and the premium that you are going to pay for the happiness of your family during your absence too seems to be reasonable. It is a must to have a regular term plan rather than buying those useless endowment, ULIP or money back insurance plans.

But try to be as truthful and frank when filling the insurance claim form as well as with your medical examination as you don’t want your family to be denied of the claim during your absence simply due to the fact that you have hidden or given wrong information regarding your health or other habits (read smoking or other bad habits) you may have!

Power Finance Corporation (PFC) Long Term Infrastructure Bonds

Shiva — Thu, 24 Feb 2011 04:00:39 +0000

Just like the L & T Infrastructure Bonds and IIFCL Bonds, which are still open for investments, the Power Finance Corporation Ltd has come up with their own PFC Long Term Infrastructure Bonds which guarantees returns up to 8.5% p.a. as well as offer you tax savings via the 80CCF option under the current income tax law. With this launch of the tax saving infrastructure bond PFC is planning to raise Rs. 5300 crore. These bonds will be issued in two tranches and each will have a face value of Rs. 5000.

About PFC

Power Finance Corporation Limited (PFC) is one of the leading financial institutions in India which targets the infrastructure segment. It is a Govt. of India undertaking company. It is an infrastructure finance company with the NBFC-ND-IFC status. As of September 30, 2010 they have the NPAs of 0.01% of the total loan portfolio.

Issue Open and Close

The current tranche of bond issue from PFC is open to public from February 24, 2011 and the issue closes on March 22, 2011.

Interest Rate
The rate of interest will be 8.3% for the 10 year tenure bonds while it will be 8.5% for the 15 year tenure. Both the option comes with the cumulative of interest and hence the interest earned will be much higher in that case. These PFC Bonds come up with a lock-in period of 5 years which means that the investor can sell it back to the Power Finance Corporation after 5 years.

Safety & Rating

Since being a Government of India Undertaking, Power Finance Corporation Infrastructure Bonds surely scores high on safety part and the investors can surely invest in it without fearing about the same. And also these Power Finance Bonds come with the following credit rating namely, AAA/Stable from CRISIL and LAAA with stable outlook from ICRA. And hence this means they are highly secure to invest.

Holding Option

The Power Finance Corporation Long Term Infrastructure Bonds can be held in physical or demat form. While for the physical format you will need to furnish all the KYC document but those were not needed for those opting for the DEMAT option.

Tax Saving

As we all know that the infrastructure bond comes with the additional option of saving up to Rs. 20,000 over and above the 1 lakh cap that was available till last year and this current bond qualifies for the same. You can save up to Rs. 6180 if you invest Rs. 20,000 in this PFC Infrastrucure Bond for tax saving purpose.

If you have still not invested in any of the previous infra bonds issued by L&T, IDFC, or IIFCL yet, then this is a great opportunity to invest in these bonds solely for the purpose of saving tax. Otherwise for the investment purpose you don’t have to restrict to just Rs. 20,000 only, instead you can invest over and above that as well but those investments will not attract any tax benefit though.

The Best Tax Saving Options 2011

Shiva — Thu, 10 Feb 2011 04:32:27 +0000

Come March, people will start scrambling to look for options to start their investment options for this financial year 2010-2011. Although it is not always advisable for anyone to look for the tax saving options or instruments at the last moment, i.e., during February-March, if still you have not done your tax saving investments yet, you can do it even now. There are various instruments available in the market which can cater to this need of tax planning or investment planning dedicated to tax exemptions.

Apart from the employees provident fund (EPF) where the deduction and investment part is done by the employers there are some saving options as mentioned below which you can consider for your tax saving purposes.

Public Provident Fund: This is one of the oldest and yet effective investment plan available under section 80C in which you can invest up to Rs. 70,000 per year for the tax savings purpose. This has a lock-in period of 15 years. The rate of interest is 8% p.a. cumulative annually.

National Savings Certificate (NSC): This instrument is one of the popular one till some years ago until other options like ELSS and others taken over it. The minimum investment is Rs. 100 and there is no maximum limit. There is a lock-in period of 6 years and you can withdraw before that and the interest rate is 8% p.a.

5 Year Bank Deposits: With this option one can just invest at the conventional fixed deposits offered by various banks, but the only difference being that there is a 5-year lock-in period for the same. The interest rates various from bank to bank. The least you can expect form these tax saving fixed deposits are at least 8% and above.

Equity-Linked Savings Scheme (ELSS): This is the much newer yet the most effective and best tax saving option available for you this year. You can invest up to Rs. 1 lakh in this to claim the appropriate tax benefit in investing in it. These are nothing but the equity based mutual funds but comes with a lock-in period of 3 years. You can invest right from Rs. 500 and above in ELSS. This option gives the best result due to the equities involvement but still there are risks involved equally and hence invest at your own discretion.

Unit Linked Insurance Plans (ULIP): These are the investment plans that comes along with the insurance add-on to it. But this option is not widely recommended by the experts as the fact remains that we should not mix investment and insurance together and it is best advised to avoid these plans unless you know the implications and understand such schemes.

Life Insurance Plans: Your regular insurance that comes in the form of term insurance, endowment plans, whole life plans etc.

Tax Saving Infra Bonds: This option of tax saving under section 80CCF was introduced only in last budget. You can save Rs. 20,000 under this scheme to save tax up to Rs. 6158. The interest rate ranges from 8 to 8.3% with 5 years to 10 years lock-in period.

I have mentioned only some of the many options available like the health insurance plans (under section 80D) and home loan premiums, etc. I have also given only the briefing of them just to get to know the above plans in concise format. The more elaborate and explained version will follow soon on individual options mentioned above.

Come 2012, most of the above mentioned plans like ULIP, ELSS, NSC will lose their tax saving benefits and only the PPF and NPS among others will only be eligible for tax saving purposes though.

IIFCL Infra Bonds to Save Tax

Shiva — Sun, 06 Feb 2011 14:20:19 +0000

Just like L&T Infra Bonds, Indian Infrastructure Finance Company (IIFCL) too has announced their infrastructure bonds which comes under the tax benefit criteria under the section 80CCF. Just like any other infrastructure bonds this one from IIFCL too can be claimed for income tax exemption up to an investment of Rs. 20,000 and can help you save tax of Rs. 6158 if you are falling under the 30% tax bracket. This current issue is open from February 4, 2011 and the issue closes on March 4, 2011.

This IIFCL or Indian Infrastructure Finance Company is wholly owned by the Indian government and hence the safety part is well taken care of on your investment. Apart from these tax saving infrastructure bonds, IIFCL have come up with many other infrastructure bonds even before it was announced in the last budget and brought under the tax saving option.

Ratings:

This IIFCL Long term Infrastructure bond comes with the credit rating of AAA/Stable by CRISIL, the rating agency as well as CARE AAA by CARE rating agency which means they are very secure to invest in.

Investment Limit:

The face value for this bond issue is Rs. 1000. You can invest up to Rs. 20,000 if your sole aim is to save tax otherwise you can invest any amount in it.

Interest Rate:

You can earn up to 8.3% of interest rate per annum for this infrastructure bond from IIFCL and just like its predecessors, the total duration to hold these bonds is 10 to 15 years but you have the option of selling it back to the company after 5 years or 7 years accordingly set forth by them. The interest rate for the 10 years series is 8.15% while for the 15 years series is 8.30%!

If you are planning to go for any of the infrastructure bond issue to save tax, you can safely park it with IIFCL. But the general consensus has been that it is not wise to go for these bonds considering the interest earned from these infra bonds are taxable and if you calculate them, the benefits of investing on these bonds are miniscule instead you can park that money elsewhere better! If you are looking to invest in this IIFCL Bond, just contact your investment adviser for application form and submission as there it is not clearly or not at all mentioned at their website about the same.

L&T Infra Tax Saving Bonds 2011 A Series

Shiva — Fri, 04 Feb 2011 03:39:28 +0000

The additional tax saving option of Tax Saving Bonds from L&T is back and open for public from February 7, 2011 and will be open till March 7, 2011 so that you can catch up on the tax saving of up to Rs. 6180 on investments of Rs. 20,000 in it. If you have missed the bus last time, you can utilize this time to buy the L&T Infra Bonds. This time the L&T Infra Tax Saving Bonds 2011 A Series can be held in either demat or the physical form, you have the option to choose. You can get up to 8.3% p.a. on parking your money in these special tax saving bonds, provided you fall on the 30% tax bracket. You can read all the details about this L&T Bond issue from my previous post in the above link which says Tax Saving Bonds. If you are planning to invest in this bond, just call L&T Infra at 1800 102 2131 to get started on your extra tax saving option under section 80 CCF of the new Tax Law. You can also visit www.ltinfrabond.com for more details.

Interest Rate:

This bond series comes with the buyback option at the end of 5 years and 7 years exactly. The frequency of interest is either annual or cumulative and the interest rate effectively is 8.20% p.a. and 8.30% p.a. respectively.

How To Invest:

To invest visit the above mentioned website and download the application form, print it and fill all the details as well as attach the necessary documents required for KYC documents like the address proof, ID proof and your PAN Card Copy and finally submit the application at the nearest L&T Infra Bond collection centre listed on the website. Or to avoid all the hard work call the above number and they will help by contacting you directly including giving the application form and collecting it from your place.

IFCI Long Term Infrastructure Bonds– SERIES II

Shiva — Fri, 03 Dec 2010 03:37:52 +0000

The tax saving cum investment bonds, i.e., the IFCI Long Term Infrastructure Bonds – Series II is open for public from November 16, 2010 and closes on December 31, 2010. The deemed date of allotment will be January 31, 2011. The buy back date of these Series 2 bonds will be January 31 from 2016 till the year 2020. This bond issue is the 2nd in the series whereas the first bond was released to public in around September 2010. This is after a spate of infrastructure bond issues from the other players like the L&T Infrastructure Bond as well as the IDFC Bonds.

As per the last budget, these infrastructure bonds are eligible for tax savings under the section 80CCF for up to Rs. 20,000 per year.

Rating:

Brickwork Ratings India P LTD has rated this bond issue from IFCI Limited as BWR AA.

Registrars and Trustees:

Registrar to this IFCI issue is Beetal Financial & Computer Services (P) Ltd. And the trustee is Axis Trustee Services Limited.

Face Value:

Rs. 5,000/- per bond

Issue Price:

At par of Rs. 5,000/- per bond. Minimum subscription is Rs. 5000 and in multiples of Rs. 5000 (1 bond) thereafter. The buy back date being January 31, 2016 and every year thereafter up to January 31, 2020. The interest for these bonds, if chosen the non-cumulative option, will be made via ECS, cheques or demand drafts as per the applicant’s choice.

Subscription Options:

Option I – Non-cumulative and Buyback after 5 years
Option II – Cumulative and Buyback after 5 years
Option III – Non-cumulative and no Buyback
Option IV – Cumulative and no Buyback

Interest Rate:

For Option I and II – 8% p.a.
For Option III and IV – 8.25% p.a.

These bonds are proposed to be listed on BSE and you will definitely need a demat account to buy these special IFSI Infrastructure bonds for tax saving purposes. Since being unsecured yet redeemable non-convertible bonds, this IFCI Long Term Infrastructure Bonds– SERIES II do have its own adherent risks when investing and hence think and go ahead and buy them. Also these special infrastructure bonds are useful for those only in the 30% tax brackets and the maximum tax benefit you can claim is Rs. 20,000 via these 80CCF bonds. Else you can just ignore these and stick with your existing tax saving instruments or if you still want to go for it due to additional savings options, just go ahead and subscribed to these IFSI Bonds, they are almost worth it.

PerFin India » tax saving

Post Office Interest Rates 2012

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