deduction u/s 80 c

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Querist : Anonymous

Querist : Anonymous (Querist)

31 January 2011 To claim deduction u/s 80 c whether investment in ppf is beneficial or investment in tax saving bonds for 5 yr in bank is beneficial.(tax planning wise) also mention rate of interest for ppf investment.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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31 January 2011 Current rate of PPF interest is 8 % compounded ,to be credited to the account at the end of every financial year and payable at the time of withdrawal.

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K V Subba Rao

K V Subba Rao (Expert)
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31 January 2011 As per existing tax provisions, Interest earned on investments in PPF is tax free whereas Interest earned on Tax Saving Bank FD for 5 years is subject to tax.

It therefore appears to me that investment in PPF is more advantageous.

The position may be different if you will retire from service within next 5 years and not likely to have taxable income by the time of maturity of Tax Saving Bank FD (in case of cumulative interest option).

Normally a youngster having more than 15 years of left over service only considers PPF option. I suppose you belong to this category, if so, investment in PPF is more advantageous

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