- At early age if the person manage to have his own residence house. He would prefer to go for that first. It will not only give the benefit of tax, but vis-à-vis offers security in life. He would also think of the following option available to him. If it is not possible to purchase / acquire the residential house, followings are good way to have tax savings and future’s financial security.
- He should prefer to go for the investments which gives the insurance to cover risk of life vis-à-vis tax savings. But be sure that the premium is fixed and to be paid annually. Some insurance company offers one time premium. Various option to be taken into account. Do not just sign the document what the insurance agent gives to you. Study the various scheme by various companies. Further, do not only think about the income tax, there are many factor other than that. Determine the social liability you will face in near and long term future. Like marriage of your younger brother or sister, Social responsibility to be tackle, Medical emergency of your parent, education of your child. Think all of these, also see the sources of income. Like pension of parent, spouse’s income, other income deriving from the rent / dividend ect. And than finally decide the investment in various schemes.
- The income tax rates are changing every year. The basic exemption limit during the 1990 was around 28,000/-, increased to Rs. 35,000/- during the year 1994, Rs. 40,000/- during 1997, today it is Rs. 1,00,000/- and the percentages on excess of the basic exemption is reduced to 10%. And the span of next slab was increases. So, when ever you think of the investment, think that the rates are not final. You might automatically covered in below taxable limit or have very nominal tax to pay.
- Person should think for investments in mutual funds, which ultimately gives more returns than just fixed deposits.
- Go for pension fund scheme by LIC of other insurance company, in early stage of carrier. And retirement is vary far. By doing that the yearly payment will be lower than the later stage.
- If you are near to retirement, go for the inc\vest scheme which immediately saves the tax and returns on the investments are tax free, like PPF. Please note that the interest on NSC is now taxable, as the section 80L is abolished. So, investing in NSC will not serve the purpose of tax saving, next year the interest portion will be added to your total income.
- Invest in such a security, which gives you the return which covers the inflation rate. No financial plan by the companies / Banks / Insurance companies are capable of gives you the return to tackle the future price hike. So, investment in property, where the rent is increases with the inflation. So, in your old age, you will have enough to enjoy. At least your bread and butter. You will reduce the burden on your child.
- Also invest little bit in shares, where the prices is increases, dividend by the companies are also increases. The dividend is also tax free.
- Last but not least, do not put all your eggs in one basket. The same be with inform of fixed deposit (security ) [30 to 40% of savings.], limited risk like mutual funds, where the return are more than rate of fixed deposits. [25 to 30% of savings.], Remaining [30 to 40% of savings.] invest in high risk area where the return are very high but loosing the savings are also high. The Investment are to be decide on the base that whether you own a house, who many children you have and what will be their liability, Other social factor, that any property you get in inheritance, other co-owner (Brother and sister) will co-operate in distribution of the property. Any dispute with brother / brother of father etc are to be consider to take a wise decision.
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