I have almost spent the last six months taking advice on where and how to invest my little savings.Now the calendar year is almost coming to an end however the financial year still has some time to come to a closure.
After a lot of research and speaking to friends who have invested money, speaking to CAs who are friends, here are the top 5 last minute investment options for an individual.
ELSS – Equity Linked Saving Scheme
This is one of the best investment options with shorter lock in period and 100% tax exemptions. It is an open-ended Equity Mutual Fund that not only helps you save tax but presents you with options to grow your money. They qualify for tax deductions upto Rs 1.5 lakh under Section 80C of the Income Tax Act. In lay man terms, equity is the difference between assets owned and the value of liabilities.Some of the ELSS that you can invest in are Franklin India Taxshield , HDFC Long Term Advantage Fund,ICICI Prudential Long Term Equity Fund ,L&T Tax Advantage Fund etc.
The second-best investment option is a health insurance plan. Besides giving you a tax exemption, it covers your health and medical costs too. The premium paid on a health plan is tax exempted. If you haven’t yet purchased a health plan for your family, you should do so now. Always opt for a health policy that doesn’t make a pre-policy health check up mandatory. You also have the option for taking a cover for your family in the health plan.
PPF is nothing but the Public Provident Fund. It’s a small saving scheme backed by the government. This is limited to Indian residents only. Only PPF account can be opened by an individual. The interest rate on PPF is compounded annually. It also provides you with a partial withdrawal facility.
This is financial security offered to your family.An online term plan is the best way to insure your family incase you are underinsured. The premium paid towards a term plan is exempted from tax.It is always advisable to buy an online term plan however thorough research needs to be carried out before buying one.
Other tax saving instruments for tax benefits are, Tax Saver FD, Home Loan Repayment, Children’s School Fees, LIC, ULIP, NSC, PF. These instruments are distributed in various categories of equity, fixed income, insurance and expenses.
I am still researching and learning about the various tax saving and investment options available to me.
I hope you find this article useful and persuades you to do some research and investment yourself.