7 Ways to Become a Crorepati
2. Provident Fund, PPF
Monthly savings required: 27,641
Returns: 8.5 Percent
Advantage: Tax-free corpus on maturity and the investment is very safe. You are eligible for tax deductions and can also withdraw money in case of emergencies.
Disadvantage: PF contribution is linked to your basic salary and it has a limit of maximum investment up to 1 lakh annually in the PPF.
Keep in Mind: You can increase your investment by opting for a voluntary PF contribution besides continuing your regular employee provident fund, but this is also subject to limits.
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3. Debt Funds
Monthly savings required: 26,427
Returns: 9 Percent
Advantage: During the investment period, no tax will be charged on your income and gains. A lower tax rate will be imposed at the time of withdrawal. It is would prove to be a safe investment only if you choose a fund house wisely.
Disadvantage: Returns are market linked. They can be very good when market interest rates go down, but could turn negative or stay flat when market rates are rising.
Keep in Mind: You can get tax benefit by set off losses from other assets against the gains from debt funds. For instance If you had incurred short-term losses on stocks and equity funds when the markets drooped in December 2011, you can adjust those losses against the gains from your debt fund investments till 2019-20.
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