Seven Product Combinations for Different Financial Needs


BANGALORE: Tax Planning

While choosing products under Section 80C, opt for one that preserve capital and save tax. ELSS gives the benefit of superior wealth accretion coupled with tax saving, with a low three year lock-in period. PPF offers guaranteed interest income, with a 15 year lock-in.

Based on your risk appetite and time horizon, decide whether to put more in ELSS or PPF. This can be supplemented with Rs 50,000 in NPS under Sec 80CCD (2), which is entirely tax deductible.

Total tax saving: Up to Rs 61,800 for a person in highest tax bracket

Post-Retirement Income

For those about to retire without the benefit of NPS or government pension, there are several options for generating income. The Senior Citizen Savings Scheme is the ideal fit with an assured return of 9.2 percent (currently) for five years, coupled with a tax break of up to Rs 1.5 lakh under Section 80C.

Any surplus should be parked in a 5-year tax-saving fixed deposit offered by banks at interest rates similar to traditional bank FDs. The interest on SCSS investments are paid on a quarterly basis, i.e. on the first working days of January, April, July and October.

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