Investments

Dear Sir / Madam , I am having doubts in issues 1.) As my income for the F.Year 2007-08 is going to be taxable . Could you please suggest me to avoid tax . Also i require your advise to save tax atleast for the next two years by investing once . For Eg: By making an investment in Public Provident fund / National saving certificate for 2 years in that case can i avail the deduction for both the years( Currebt Financial year & the next Financial year ) 2.) I am expecting the Provident from both of my previous employers during this financial year (or) next Financial year . In this regard, The income that i receive will be taxable only for that year (or) all the financial years . Could you please look into this & advise me on both these issues Thanking You With warm regards, Ramesh

Dear Ramesh, You can not avail tax exemption for two years by investing in one year. You need to make separate investments in both the years in order to claim exemption. Some of the ways to claim exemption under sec 80C are 1. NSC 2. PPF 3. Mutual Funds (ELSS) 4. LIC 5. Principal paid towards home loan. Inspite of going for PPF, I would suggest ELSS as it gives good return.

I suggest ELSS is the best among all investment avenues specified U/s.80C. Both dividend and long term capital gains are tax-free, if STT being paid. Invest in close-ended ELSS which has minimum 3 year lock-in-period. At the end of yr.3, u will receive the maturity proceeds of 1st yr. ELSS which can be re-invested in 4th yr. and likewise 2nd for 5th yr. Hence u can avoid tax on dividend, LTCG (if STT paid) and cash outflow starting from 4th yr. ELSS is subject to market risk. if u r risk averse person, try for another option.