Voluntary PF

Salaried Tax payers comes under Employees’ provident fund can put more than the voluntary 112 percent of the basic in the voluntary provident fund. This instrument gives almost the same return and tax benefits as PPF without enforcing any investment limit. They also have the same interest rate for 2014-15 which is 8.75 percent. Its returns are not linked to the market, but are decided by the Central Board of Trustees of the Employee Provident Fund Organization in consultation with the government. The liquidity of VPF is low, and one can’t withdraw that until he has any kind of medical emergency, child’s marriage or buying a property. Informing the employers about their deducting VPF at the beginning of the year, has now become compulsory for some taxpayers.

SCSS

For senior citizens above 60 this senior citizens saving scheme is an ideal tax saving option, with safe money and good liquidity. It has a sufficiently high investment limit up to 15 lakh, but the interest income from the scheme, however, is fully taxable. Even though one has a large amount to invest, the deduction rate per year is 1.5 lakhs. In order to make full use of the deduction under section 80C, one can distribute the investment throughout 2 to 3 financial years. One can open an SCSS account in any post office or banks.

NPS

Despite its low charges, the new pension scheme is yet to become people’s choice. Because of the complex procedures involved in it, this scheme has not attracted many investors. In a post office or a bank the investors himself has to get all the work done begging and requesting. The investors who could overcome all those barriers got a real benefit out of it. According to some financial planners, the NPS puts the investor in a confinement.

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