JAN FEB MARCH THE SEASON OF WORRIES FOR TAX PLANNING Do I invest - - PowerPoint PPT Presentation

JAN – FEB – MARCH THE SEASON OF WORRIES FOR TAX PLANNING…

Do I invest

• nly to save

tax?

Where do I invest to

How much tax I can save? I do not have enough money right now to invest.

invest to save tax?

Invest under sec. 80 C

• f IT Act to save tax

Save up to Rs. 46,350/‐ P b d S

Illustr ation on Inve stme nts ac r

• ss T

ax Slab T b fit d S 80C f IT A t 1961

f upto Rs. 46350/‐

Per annum by investing in under Section 80C of the Income Tax Act, 1961

T ax be ne fit unde r Se c 80C of IT Ac t, 1961 Not Availe d (Rs.) Availe d (Rs.) Not Availe d (Rs.) Availe d (Rs.) Not Availe d (Rs.) Availe d (Rs.) Gr

• ss Inc ome

5,00,000 5,00,000 10,00,000 10,00,000 15,00,000 15,00,000

Inve stme nt in E L SS unde r Se c tion 80C

• 1,50,000
• 1,50,000
• 1,50,000

Ne t T axable Inc ome

5,00,000 3,50,000 10,00,000 8,50,000 15,00,000 13,50,000

Gr

• ss T

ax L iability

25,000 10,000 1,25,000 95,000 2,75,000 2,30,000

L e ss: Re bate if Inc ome is up to 5,00,000

2,000 2,000

• Inc ome T

ax R ate Applic able

10% 10% 20% 20% 30% 30%

Ne t T ax L iability

23 000 8 000 1 25 000 95 000 2 75 000 2 30 000

Ne t T ax L iability

23,000 8,000 1,25,000 95,000 2,75,000 2,30,000

E duc ation Ce ss at 3%

690 240 3,750 2,850 8,250 6,900

T

• tal T

ax L iability

23,690 8,240 1,28,750 97,850 2,83,250 2,36,900

T ax Save d Nil 15,450 Nil 30,900 Nil 46,350

15,450 30,900 46,350

I nc o me e stima te s fo r a n individual le ss tha n 60 ye a rs o f a g e . T he a b o ve simula tio n is fo r illustra tio n purpo se o nly. As pe r the pre se nt ta x la ws, e lig ible inve sto rs (individual/ HUF) a re e ntitle d to de duc tio n fro m the ir g ro ss to tal inc o me , o f the a mo unt inve ste d in e q uity linke d sa ving sc he me (E L SS) upto `1,50,000/ - (alo ng with o the r pre sc rib e d inve stme nts) unde r Se c tio n 80C o f the I nc o me T a x Ac t, 1961. T a x b e ne fits a re sub je c t to the pro visio ns o f the I nc o me T a x Ac t, 1961 a nd a re sub je c t to a me ndme nts, fro m time to time .

You can save tax and…

WHAT YOU CAN ACHIEVE BY INVESTING TO SAVE TAX?

E quity Hybr id F ixe d Inc ome Othe r s

Unit Linked Insurance Plan (ULIP) Insurance Premiums, Pension Premiums, National Pension PPF/EPF/VPF/NSC Tax Saving Bank FDs, Post Office Time Deposits, Senior Citizen Savings Equity Linked Savings Schemes (ELSS) Scheme etc. g Scheme

CHOOSE THE CORRECT OPTION?

Pr

• te c tion

Pr

• te c tion

We alth Cr e ation Inc ome Ge ne r ation

*As pe r the pre va iling ta x la ws fo r F

ina nc ial ye a r 2016, e lig ible inve sto rs (I ndividua l/ Hindu Undivide d fa mily(HUF)) a re e ntitle d to de duc tio n fro m the ir g ro ss to ta l inc o me , o f the a mo unt inve ste d in e q uity linke d sa ving sc he me (E L SS) upto 1,50,000/ - (a lo ng with o the r pre sc rib e d inve stme nts) unde r Se c tio n 80C o f the I nc o me T a x Ac t, 1961. T a x b e ne fits a re sub je c t to the pro visio ns o f the I nc o me T a x Ac t, 1961 a nd a re sub je c t to a me ndme nts, fro m time to time . PPF = Pub lic pro vide nt fund, E PF = E mplo ye e pro vide nt F und, VPF = Vo lunta ry Pro vide nt F und,NSC= Na tio na l sa ving c e rtific a te , F Ds= F ixe d De po sits

CHOOSE THE CORRECT OPTION?

WHAT MAKES ELSS RIGHT TOOL FOR YOU ??

T ax Be ne fits unde r Se c tion 80C O l 3 Y f L k i i d Only 3 Ye ar s of L

• c k in pe r

iod Be ne fit fr

• m L
• ng T

e r m Capital Gains High r e tur n Pote ntial* Syste matic Inve stme nt Plan(SIP) F ac ility

* Sub je c t to ma rke t risk.

Sc ope for tax fr e e divide nd**

**T a x fre e divide nds a s pe r the pre va iling ta x la ws, pursua nt to pa yme nt o f divide nd, the NAV o f the re spe c tive o ptio ns

• f the Sc he me s wo uld fa ll to the e xte nt o f pa yo ut a nd sta tuto ry le vy (if a pplic a b le )

E L SS – E q uity L inke d Sa ving Sc he me , SI P – Syste ma tic I nve stme nt Pla n T a x b e ne fits u/ s 80C unde r the I nc o me T a x Ac t, 1961, e xe mptio ns a re sub je c t to pre va iling ta x la ws

ELSS v/s OTHER INVESTMENT OTHER INVESTMENT OPTIONS

Minimum Tenure / Lock Interest / Maturity Amount Tax Saving options Investment Amount (Rs.) Tenure / Lock in period Interest / Return SIP Facility Maturity Amount Taxability Equity Linked Savings Scheme (ELSS) 500/‐ 3 Years Market linked * Yes Dividends & Long Term Capital gains are tax free, subject to STT subject to STT Public Provident Fund (PPF) 500/‐ 15 Years** Fixed# Not available Interest accrued is Tax‐free Tax‐Saving Term Deposit 100/‐ 5 Years Fixed Not available Interest is added to income and Taxed with Scheduled Banks 100/ 5 Years Fixed Not available income and Taxed accordingly Infrastructure Bonds 5000/‐ 3‐10 Years Fixed Not available Interest is added to income and Taxed accordingly National Savings Certificate (NSC) 100/‐ 5 Years Fixed# Not available Interest is added to income and Taxed accordingly##

* Ma rke t linke d – Re turns a re sub je c t to ma rke t risk. ** Pre ma ture withdra wa l unde r PPF is a va ila b le fro m 6th fina nc ia l ye a r Ho we ve r the full a mo unt c a n b e withdra wn a fte r 15 ye a rs ** Pre ma ture withdra wa l unde r PPF is a va ila b le fro m 6th fina nc ia l ye a r. Ho we ve r, the full a mo unt c a n b e withdra wn a fte r 15 ye a rs.

# Re vie we d pe rio dic a lly. # # T

he inte re st po rtio n re inve ste d is a lso e lig ible fo r ta x re b a te u/ s 80C o f I T Ac t , 1961 T a x b e ne fits a re sub je c t to the pro visio ns o f the I nc o me T a x Ac t, 1961 a nd a re sub je c t to a me ndme nts, fro m time to time . F

• r mo re info rma tio n o n the ta x pro visio ns, ple a se re fe r to pre va iling I

T la ws . SI P – Syste ma tic I nve stme nt Pla n, ST T

• Se c uritie s T

ra nsa c tio n T a x

DO I HAVE ENOUGH MONEY RIGHT NOW TO INVEST

Choose the lump‐sum

• ption to Invest in ELSS,

up to Rs. 1.50 lakhs to avail the tax exemption avail the tax exemption u/s 80C of IT Act, 1961 If Yes, Invest Now!

Invest small amounts at regular intervals rather than investing

If No, Plan SIP!

lump sum amount at

• ne time.

PLAN YOUR TAX INVESTMENTS TODAY, NOT IN MARCH

The Benefits of Systematic Monthly Investment through SIP The Benefits of Systematic Monthly Investment through SIP

Lighter on the wallet

Sa ving re g ula rly is e a sy a s yo u tre a t yo ur inve stme nt a s pa rt o f One do e sn’ t ha ve to wo rry a b o ut whe n to inve st c o nside ring da ily T he risk o f ma rke t vo la tility g e ts ne g a te d with mo re units b e ing Whe n yo u she ll o ut lump-sum mo ne y in a sing le do se , yo u a re Auto de b it fa c ility a va ila b le a c ro ss Ba nks

Takes out the risk of market timing

SIP is Simple Inve stme nt Plan,

inve stme nt a s pa rt o f yo ur mo nthly b udg e t. As inve stme nts thro ug h a SI P c a n b e a s lo w a s

• Rs. 500 pe r mo nth

inve st c o nside ring da ily ma rke t mo ve me nts, a s syste ma tic inve sting re duc e s the risks sig nific a ntly. purc ha se d whe n the fund NAV is lo w a nd fe we r units b e ing b o ug ht whe n the fund NAV is hig h mo re tha n like ly to b e c a sh-stra ppe d in the mo nth o r two a fte r. SI P will he lp yo u to pla n we ll a va ila b le a c ro ss Ba nks, no ne e d to fo llo w up fo r inve stme nts o n mo nthly b a sis.

Rupee Cost Averaging No Liquidity Crisis

take the SIP r

• ute

for Pote ntial We alth Cr e ation

NAV is hig h we ll.

Ease of Investment

SIP ‐ BENEFIT FROM RUPEE COST AVEREGING

F

• r

illustr ation pur pose only Month Inve stme nt Amount (Rs.) NAV (Rs.) Unit Bought Ac c umulate d Units Inve stme nt Value

1 1000 16 63 63 1000 2 1000 17 59 121 2063 3 1000 16 63 184 2941 Ave r age NAV pe r unit ove r 12 months = (16+17+16+15+15+16+17+18+20+19+18+18)/ 12 o r 4 1000 15 67 250 3757 5 1000 15 67 317 4757 6 1000 16 63 380 6075 7 1000 17 59 438 7454 8 1000 18 56 494 8893 (16 17 16 15 15 16 17 18 20 19 18 18)/ 12 o r

• Rs. 17.08

8 1000 18 56 494 8893 9 1000 20 50 544 10881 10 1000 19 53 597 11337 11 1000 18 56 652 11740 12 1000 18 56 708 12740

T t l 12000 708

Ave r age Cost pe r unit ove r 12 months = 12000/ 708 o r

• Rs. 16.95

T

• tal

12000 708

Ave r age Cost pe r unit will always be le sse r than the Ave r age NAV pe r unit, r e gar dle ss of the mar ke t move me nts, whe n the SIP amounts ar e same in a give n pe r iod

SIP BENEFIT OF STARTING EARLY.

I n the b e lo w c a se , I nve stme nt o f Rs. 1.50 la kh inve ste d in a ye a r (F Y) thro ug h SI P a nd c o st o f de la y b y e a c h mo nth is illustra te d Va lua tio n a t the e nd o f 5 ye a rs a t a g ro wth ra te o f 12% is

251141 170000 190000 250000 260000

Dual Benefits of SIP Investment

de la y b y e a c h mo nth is illustra te d . Va lua tio n a t the e nd o f 5 ye a rs a t a g ro wth ra te o f 12% is c o nside re d .

239388 9 8 x 7 0 x 6 00 x 5 500 x 4 0000 x 3 75000 x 2 90000 110000 130000 150000 230000 240000 nt Value (Rs.) 12500 x 12 13636 x 11 15000 x 10 16667 x 9 18750 x 21429 x 25000 3000 37 50 7 10000 30000 50000 70000 200000 210000 220000 Investmen 10000 200000 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Cumulative Investment Value Installment Amount

Being early helps to save less and also increases the return potential.

Above is pure ly fo r illustr atio n purpo se s, I nve stme nt Value is arrive d at the growth rate of 12% p.a. at the e nd of 5 Ye ars,. Ple ase note in the ac tual sc e nario, r e turns may var y signific antly. Mutual F und inve stme nts are subje c t to marke t r isks, re ad all sc he me re late d do c ume nts c are fully.

g y p p

ACT NOW BE FEARLESS OF MARCH BE FEARLESS OF MARCH

SAVE ON TAX AND MAKE YOUR LIFE SAVE ON TAX AND MAKE YOUR LIFE MAKE YOUR LIFE GOALS COME TRUE MAKE YOUR LIFE GOALS COME TRUE INCREASE YOUR INVESTMENT VALUE INCREASE YOUR INVESTMENT VALUE EVERY YEAR EVERY YEAR MAKE IT EASY WITH SIP MAKE IT EASY WITH SIP START YOUR INVESTMENT IN ELSS START YOUR INVESTMENT IN ELSS START TAX PLANNING START TAX PLANNING INVESTMENT IN ELSS INVESTMENT IN ELSS EARLY EARLY

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