National Savings Certificate (IX Issue)

Interest payable, Rates, Periodicity etc.

• Rate of interest 8.90%.
• Maturity value of a certificate of INR.100/- purchased on or after 1.4.2012 shall be INR. 238.87 after 10 years. 

Investment limits and Denominations

• Minimum INR. 100/-
• No maximum limit.

  • Denominations available - INR. 100/-, 500/-, 1000/-, 5000/- & INR. 10,000/-.

Salient features including Tax Rebate

1. A single holder type certificate can be purchased by an adult for himself or on behalf of a minor or to a minor.
2. Interest on these certificates shall be liable to tax under the Income-Tax Act, 1961 (43 of 1961, on the basis of annual accrual specified in rule15, but no tax shall be deducted at the time of payment of discharge value.

National Savings Certificate (VIII Issue)

Interest payable, Rates, Periodicity etc.

• Rate of interest 8.60%.
• Maturity value of a certificate of INR.100/- purchased on or after 1.4.2012 shall be INR. 152.35 after 5 years.  

Investment limits and Denominations

• Minimum INR. 100/-
• No maximum limit.
• Denominations available - INR. 100/-, 500/-, 1000/-, 5000/- & INR. 10,000/-.

Salient features including Tax Rebate

1. A single holder type certificate can be purchased by an adult for himself or on behalf of a minor or to a minor.
2. Deposits qualify for tax rebate under Sec. 80C of IT Act.

   
   
3. The interest accruing annually but deemed to be reinvested will also qualify for deduction under Section 80C of IT Act.

Post Office Time Depost Account

Interest payable, Rates, Periodicity etc.

Interest payable annually but calculated quarterly.

Period          Rate
1 yr. A/c      8.20%
2 yr. A/c      8.30%
3 yr. A/c      8.40%
5 yr. A/c      8.50%
w.e.f. 01.04.2012 


Investment limits and Denominations

• Minimum INR 200/- and in multiples thereof.
• No maximum limit.

 

Salient features including Tax Rebate

1. Account may be opened by individual.  
2. The investment in the case of  5 years TD qualify for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.

5 Year Post Office Recurring Deposit

Interest payable, Rates, Periodicity etc.

 

• Rate of interest 8.40%.
• Maturity value of a 5 Years RD account opened on or after 1.4.2012 with monthly deposit of INR.10/- shall be INR.746.51.
• Can be continued for another 5 years on year to year basis.

 

Investment limits and Denominations

 

• Minimum INR 10/- per month or any amount in multiples of INR 5/-.
• No maximum limit.

Salient features including Tax Rebate

 

1. One withdrawal upto 50% of the balance allowed after one year.
2. Full maturity value allowed on R.D.
3. Accounts restricted to that of INR. 50/- denomination in case of death of depositor subject to fulfillment of certain conditions. 6 & 12 months advance deposits earn rebate.

Post Office Savings Account

Interest payable, Rates, Periodicity etc.

4.0% per annum on individual/ joint accounts.

Investment limits and Denominations

Minimum INR 50/-.

Salient features including Tax Rebate

1. Cheque facility available.  
2. Interest Tax Free.

15 year Public Provident Fund Account

Interest payable, Rates, Periodicity etc.

• 8.80% per annum   w.e.f. 01.04.2012
   

Investment limits and Denominations

• Minimum INR. 500/-
• Maximum INR. 1,00,000/- in a financial year.
• Deposits can be made in lumpsum or in 12 installments.

Salient features including Tax Rebate

1. Deposits qualify for deduction from income under Sec. 80C of IT Act.
2. Interest is completely tax-free.
3. Withdrawal is permissible every year from 7th financial year.
4. Loan facility available from 3rd Financial year.
5. No attachment under court decree order.

Tax Planning - Deduction with respect to House Rents

House Rent is a major component of expenditure in personal financial planning.

In case of individuals working in a company, house rent is evaluated under House Rent Allowance (as per Section 10(13A) read with rule 2BA).

In case of individuals with business or profession, the following rule applies:

Rent paid (furnished/unfurnished) by the individual must be in excess of 10% of the total income.

Allowable deduction:

1. Excess of rent paid over 10% of total income
2. TWO thousand rupees per month
3. 25% of total income

Least of the above is allowed

Example - A sole proprietor trader's annual business turnover is 14,50,000. He pays annual rent of 2,40,000 and an additional maintainance of 18,000/-. His claim of deduction under section 80 GG.

 

Excess of rent paid over 10% of total income = 95000

TWO thousand rupees per month                  = 24000

25% of total income                                      = 362,500

Least of the above = 24000

Deductable under section 80 GG for Sole Propietor = 24000

Net Taxable income = 14,50,000 - 24,000 = 14,26,000