<ul><li>How to save <keyword id="45031" type="General" weightage="20" keywordseo="tax" source="Orion">tax</keyword> while investing wisely is a crucial part of every working person’s life.</li><li>Let’s make it easy for you and here are a set of options to spread your investments for <keyword id="35453" type="General" weightage="20" keywordseo="tax-saving" source="Orion">tax saving</keyword> purposes.</li><li>Check out our <a href="https://www.businessinsider.in/bi-newsletter">weekly explainers</a> on the hottest topics and <a href="https://www.businessinsider.in/newsletters_signup.cms">sign up</a> if you like them</li></ul>The best time to start your tax saving investments is at the beginning of a calendar year or a financial year. While tax planning is important, getting aware of all tax saving schemes and choosing the right one is crucial. Tax saving schemes ensure you don’t pay more taxes and make money in the long run by investing in savings-oriented schemes. Here are some of the best tax saving options with a deduction of up to ₹1.5 lakh in your income tax for the year. Here are a few options of tax saving schemes: ELSS Mutual Fund Equity-linked saving scheme (ELSS) is a type of mutual fund scheme that primarily invests in equity funds. ELSS offers tax benefits to investors. The investments in the scheme are eligible for tax deduction under section 80C of the Income Tax Act, 1961 up to a maximum of ₹1.5 lakh. One can invest through both lump sum and systematic investment plans (SIP) to avail the tax deduction. This way, ELSS offers both investment and tax saving benefits. Here are the five top performing ELSS funds in the industry: <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"><colgroup></colgroup><col /><col /><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Funds </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">% return in last 3 years </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Quant Tax Plan </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">37.52% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">BOI AXA Tax Advantage </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">30.92% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Mirae Asset Tax Saver </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">26.53% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Canara Robeco Equity Tax Saver </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">26.19% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">IDFC Tax Advantage (ELSS) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">24.54% </td></tr></tbody><tbody></tbody></table>Source: <a href="https://www.valueresearchonline.com/funds/best-tax-savers/?return-period=3Y">Value Research</a> National Savings Certificate (NSC) NSC is a fixed income tax-saving investment plan that you can open with any post office branch. The scheme is an initiative of the government of India and hence is relatively safer. The investment in NSC qualifies for deduction under section 80C of the income tax act of up to ₹1.50 lakh. These certificates earn an annual fixed interest of around 6.8% per annum (revised every quarter by the government), thus guaranteeing a regular income for the investor. The scheme has two types of certificates -- 5-year and 10-year. National Pension Scheme (NPS) NPS is a pension cum investment scheme launched by the government of India to provide old age security to citizens of India. The scheme offers tax saving options to both government and private employees. Any citizen between the age of 18-60 can invest in it. The amount invested by the depositor is invested in several schemes including the equity markets. Again the basic amount of deduction offered by the fund is up to ₹1.5 lakh on the same amount of investment. However, NPS allows one to get an additional ₹50,000 deduction under section 80CCD (1B), taking the overall tax deduction amount to ₹2 lakh. Unit Linked Insurance Plan (ULIP) ULIP is offered by insurance companies that, unlike a pure insurance policy, gives investors both insurance and investment under a single integrated plan. A portion of the premium paid by the policyholder is utilised to provide insurance coverage to the policyholder and the remaining portion is invested in equity and debt instruments. ULIP also provides tax deduction up to ₹1.5 lakh. Here are the top 5 best performing ULIP plans in the industry: <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"><colgroup></colgroup><col /><col /><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ULIP plans by insurance companies </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">% returns in last 3 years </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">PNB MetLife - Met Pension Plus </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">27.40% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">AEGON Life iMaximize Plan - Opportunity Fund </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">23.40% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Bharti AXA Life - Future Secure Pension - Growth Opportunities Pension Plus </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">23.30% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Future Pension Advantage Plan - Future Pension Active </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">21.80% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Kotak Platinum Edge - Frontline Equity Fund </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">21.40% </td></tr></tbody><tbody></tbody></table>Source: <a href="https://www.moneycontrol.com/personal-finance/top-performing-ulips">Moneycontrol</a> Public Provident Fund (PPF) PPF is one of the safest <keyword id="381673" type="General" weightage="20" keywordseo="investment-options" source="Orion">investment options</keyword> to start with that can help you secure your retirement and save tax as well. The PPF has a minimum tenure of 15 years with as little as ₹500 to open an account. You can open a PPF account through a post office or in any nationalised bank. Income tax exemptions are applicable on the principal amount invested in a PPF account. The interest rate for PPF is set and paid by the government for every quarter which is currently at 7.1%, more than the savings rate in banks. Taxpayers can claim a maximum deduction up to ₹1.5 lakh. Sukanya Samridhi Yojana This is a small deposit scheme by the government of India targeted for the parents of a girl child as part of ‘Beti Bachao, Beti Padhao’ campaign. The scheme encourages parents to build a fund for the future education and wedding expenses for their female child. Sukanya Samridhi Yojana scheme offers interest rate of upto 7.6% along with tax deduction of up to ₹1.5 lakh. The account can be opened at any post office in India or at a branch of any authorised commercial bank. Home loan If you have taken a home loan to buy a new house, you are also allowed to claim a deduction of up to ₹1.5 lakh under section 80C of the income tax. The deduction can be claimed on the principal amount repaid in the particular financial year. Check your home loan interest certificate for EMI payment details. However, note that even if you put more money i.e ₹1.5 lakh each in any of the above tax saving options like ULIP, ELSS MF, your maximum deduction from taxable income will still be a total of ₹1.5 lakh only. However, investing in NPS can get you an additional ₹50,000 deduction, taking the overall tax deduction amount to ₹2 lakh. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/spicejet-is-finding-difficult-to-survive-with-rising-costs-low-cash-and-new-players-with-deep-pockets/articleshow/88742146.cms">It’s not just COVID-19 ⁠— SpiceJet’s survival is getting challenged by rising costs, low cash, and new players with deep pockets</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/indias-epassport-what-it-is-and-how-to-apply/articleshow/88750026.cms">India’s ePassport — What it is and how to apply</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/shares-of-hinduja-global-solutions-tanks-20-as-street-expected-two-times-the-dividend-announced/articleshow/88751657.cms">IT firm Hinduja Global Solutions tanks as street expected two times the dividend announced</a>

Best tax saving investment options in 2022

We live in a fast changing world which has made it necessary for everyone to be financially adept to learn ways of saving in order to generate additional income. However, planning and executing a financial plan needs to stay up with the economic realities of the times. Here are some financial practices that can ensure your financial wellbeing. <cmsannotation type="cmsannotation" annotationid="1. Invest early" comment="subhead" text="1. Invest early">1. Invest early</cmsannotation> The foundation of a good financial plan is saving. However, to build on this, one needs to diligently invest as early in life as possible. It can start with simple low-risk instruments but should a good investor who gets comfortable always upgrade to high-yield instruments soon. Starting at a young age also ensures that one is confident of taking advantage of better opportunities by the time one starts making bonuses and increments in their professional life. Those who start late tend to make costly mistakes than the former. Equities is possibly the best investment class that there is for retail investors. They offer good results and tend to move with greater economic trends like inflation and much more, to offer extra income at the end of the cycle. While real estate investments are a necessity for most people, parallel equity investments too have turned into a norm, taking over from bank deposits and gold. <cmsannotation type="cmsannotation" annotationid="2. Diversify your portfolio" comment="subhead" text="2. Diversify your portfolio">2. Diversify your portfolio</cmsannotation> Ensure that there is always a good mix of long-term and short-term investments. While long-term instruments like index-linked passive funds can provide good yields and are more secure, short-term investments in other forms of mutual funds can help improve the liquidity of one’s portfolio. Trading individually too can be much more rewarding and accessible since they do not involve the fees that mutual funds do. However, it also tends to take up a lot of time and effort. However, online trading has made it much simpler and real-time. Trading platforms like<a href="https://binomo.com/en/promo/l88?a=da7c9a65ffbc&amp;ac=222&amp;sa=businessinsider222"> Binomo</a> make it hassle-free for investors to monitor their portfolio with alerts and advanced tools. <keyword id="13184181" type="General" weightage="20" keywordseo="ftt-on-binomo" source="Orion">FTT on Binomo</keyword> gives results on a short-term basis involving a 60 second to 60 minute time frame to make a forecast. It is one of the rare platforms that allow users to practice before venturing into real time trading with a Demo account. The investors can access their accounts 24x7. Funds always stay safe during any transaction as it uses SSL protocol to ensure that all data is encrypted. <cmsannotation type="cmsannotation" annotationid="3. Create a safety net" comment="subhead" text="3. Create a safety net">3. Create a safety net</cmsannotation> A good financial plan should not bet against the odds, but should be sturdy enough to survive them. This form of security net can be provided by insurance. One should also plan against many things that could go wrong with term insurance, health insurance, critical illness insurance and personal accident insurance. While the payouts might weigh in on the annual budgets, they can come in handy when things go wrong. <cmsannotation type="cmsannotation" annotationid="4. Plan for tax" comment="subhead" text="4. Plan for tax">4. Plan for tax</cmsannotation> A good investment provides good results after tax. Since tax tends to be an after-thought for most investors, their income might be slashed after an IT filing or a demand. To avoid untowards surprises, account for tax in every investment and manage the diversity based on the same. The tax department tends to be benign on long-term investments in equity too, so include a good mix of such instruments in your portfolio to ensure your results beat the markets and taxation alike. Make sure you include instruments that provide for tax deduction under Section 80C and Section 80D - like life insurance premium, ULIPs, PPF, EPF, health insurance and more. <cmsannotation type="cmsannotation" annotationid="5. Have a good retirement plan" comment="subhead" text="5. Have a good retirement plan">5. Have a good retirement plan</cmsannotation> For the last few generations, buying or building a home is the best retirement plan especially for those with pension payouts. However, very few who have started working in the 90s and after have the luxury. Most private sector jobs do not offer pensions, and even those who offer such might not account for much due to inflation, and can only work as a supplementary income. An equities-based additional income can offer the cushion against time, for those who have to retire or intend to retire early. Most investment advice hence comes back to equities and while investing one must be wary of frauds in the process. <a href="https://binomo.com/en/promo/l88?a=da7c9a65ffbc&amp;ac=222&amp;sa=businessinsider222">Binomo</a> is a category “A” member of the <keyword id="1182831" type="General" weightage="20" keywordseo="financial-commission" source="Orion">Financial Commission</keyword> which makes it reliable and also guarantees transparency in services. It also has a Compensation Fund in place which offers protection up to €20,000 per case, if a member refuses to follow a Financial Commission judgement, in case of an issue. The platform is present in 133 countries and also offers training and financial knowledge for beginners. Disclaimer:This content is created by Times Group's Mediawire on behalf of Dolphin Corp. Operations with over-the-counter (OTC) financial instruments are associated with significant risks. Before trading on the platform, one needs to analyse their financial capabilities.

Five financial management tips to avoid common pitfalls

New Delhi, Jan 16 () Mutual funds industry body Amfi has requested the government to allow low cost debt-linked saving schemes, with tax benefits, to deepen bond market, and lower holding period in gold and commodity ETFs to one year from existing three years for LTCG purposes.
 In its Budget proposals to the Finance Ministry, the industry body has also demanded that the government recognise mutual funds (MFs) as specified long-term assets, qualifying for Long-Term Capital Gains (LTCG), as well as bring ULIPs of life insurance companies and equity MF schemes on par.
 The mutual fund body has also asked for dividend distribution tax (DDT) exemption for EPFO, NPS and insurance companies investing in MF schemes and pass-through status for income tax purpose to those Category III AIFs which make 65 per cent investments in listed equities.
 "Amfi's suggestions have been in the Budget proposal list for a few years. We are hoping this time our long pending submissions get addressed, which would help take the Indian MF industry not only to the next level of growth but also help in contributing to making economy stronger, especially with deepening of bond market, making long term availability of funds for infrastructure growth, and reducing the fiscal deficit by shifting investments from pure gold to gold ETFs," Amfi Chief Executive N S Venkatesh said.
 Some of the proposals are also aimed at bringing parity with comparable investment avenues and making mutual funds more retail investor friendly, he added.
 The Association of Mutual Funds in India (Amfi) said that mutual funds should be allowed to introduce low-cost, lower-risk tax-exemption-linked debt-linked savings schemes (DLSS) on the lines of equity linked saving schemes (ELSS).
 It further proposed that investments up to Rs 1.5 lakh under DLSS be eligible for tax benefit, subject to a lock in period of 5 years.
 At present, equity-linked savings schemes qualify for tax benefits under Section 80 CCC of the Income Tax Act for an investment limit of up to Rs 1.5 lakh in a fiscal year.
 In order to make gold and commodity ETFs more attractive, the industry body has proposed to lower the holding period for LTCG purposes from 3 years to 1 year, as is the case for listed debt securities.
 Besides, Amfi has requested clarity in respect of creation of segregated portfolio in mutual fund schemes, on capital gains tax treatment upon sale of mutual funds units with regard to the treatment of the units allotted consequent on segregation of portfolio.
 In addition, it has proposed that the threshold limit in equity oriented mutual fund schemes be restored to 50 per cent. Reducing the threshold limit of equities from 65 per cent to 50 per cent for being regarded as 'equity-oriented fund' would encourage more investors with lower risk appetite to invest in such funds.
 Amfi has also proposed that the definition of equity oriented funds be revised to include investment in Fund of Funds schemes, which invest predominantly in units of equity oriented mutual fund schemes. SP 
RVK

Amfi pitches for debt-linked saving schemes with tax benefits in Budget proposal

Mumbai, Apr 25 () Private sector ICICI Prudential Life on Saturday said a staggering Rs 18,898 crore loss on its investments and a robust growth in the cash-burning protection policy sales have led to an over 31 per cent dip in net income for the March quarter at Rs 179.5 crore.The city-based insurer, which recorded an over 12.5 per cent growth in the high margin new businesses (VNB) at Rs 470 crore, said its losses from market investments stood at Rs 18,898 crore against a profit of Rs 5,839 crore a year ago as the key market indices plunged more than 35 per cent in March alone.Even otherwise, its net premium income rose a tepid 4.17 per cent to Rs 10,475 crore from 10,056 crore a year ago.Protection premium jumped 55 per cent in the year taking the overall share of this to 15 per cent of total business up from 5 per cent a year ago. The rise in protection policy sale has also led to a the fall in net income as regulation demands upfront full cover for each policy sold.However, for the full fiscal, the company reported a net profit of Rs 1,069 crore, still down 6.31 per cent from a year ago as the total value of new business income, which is the high margin business for an insurer, rose over 21.7 per cent to Rs 1,605 crore and the VNB margin increased from 17 in FY19 to 21.7 per cent in FY20.With an average premium equivalent of Rs 7,381 crore the margin of value of new business was 21.7 per cent compared to 17 per cent for FY2019, primarily on account of increase in protection business, which grew in high double digits, chief executive and managing director N S Kannan told in a post-earnings concall.Its average premium equivalent came in at Rs 7,381 crore for FY20, a drop of 5.36 percent from Rs 7,799 crore for FY19.The solvency ratio declined to 194.1 from 214.9 for the quarter and to 194.1 from 214.9 for the full year which Kannan described as of higher maturities and also due to a marginal increase in claim settlements including two COVID-19 death claims.On the impact of the pandemic, Kannan said the company has seen a massive spike in protection covers since the March and April and also use of the digital platforms for claims and servicing. Whether they will retrench people given the gloomy market and economic condition at least in the first and second quarters due to the pandemic Kannan answered in the negative."No, we have no plans to retrench anyone, nor we are planning salary cuts for anyone. While the management and senior staff will not seek an increment, we will be offering a marginal hike to junior employees, especially the sales force, "Kannan said.He said digital sales are in double-digits since the lockdown and they have seen 40-50 per cent jump in digital transactions in terms of queries etc. While our chatbot usage is up 42 per cent Whatsapp usage is up 65 per cent and mobile app login has gone up by 94 per cent, he said. On the outlook for the full fiscal, he said "demand will come back, as there is huge demand for protection policy."Kannan also said the share of their Ulips came down to 65 percent in March 2020 from 80 per cent earlier. New business received premium grew at a healthy rate of 20 per cent from Rs 10,252 crore in FY19 to Rs 12,348 crore in FY20. Annuity new business premium registered grew 52 per cent from Rs 685 crore in FY19 to Rs 1,043 crore in FY20.Protection policies registered a healthy growth of 55 per cent from Rs 722 crore in FY19 to Rs 1116 crore in FY20. The protection mix improved from 9.3 per cent of APE in FY19 to 15.1 per cent of APE for FY20. Kannan also said ICICI Prudential is the first private life insurer to cross the Rs 1 lakh crore mark in AUM at Rs 1,52,968 crore and a total sum assured of around Rs 14.80 lakh crore. BEN KPM MKJ

ICICI Pru Life Q4 net profit slips 31% to Rs 179.5 crore

Unlike you might imagine, filing <keyword id="6374875" type="UNKNOWN" weightage="20" keywordseo="itr">ITR</keyword> is a straightforward and user friendly process. When you set out to file your ITR, here are the documents you need to keep ready by your side. Choose the right ITR form Go through the options and choose the right kind of ITR form applicable in your case. Link your Aadhaar with PAN It is compulsory for all taxpayers to link their Aadhaar with their PAN before filing the ITR. Salaried Employees Salaried employees must keep these documents ready while e-filing the income tax returns. PAN Form-16 issued by your employer Salary slips (month wise) Starting from the AY 2019-20, it is necessary to have all the information ready on the taxable allowances you have received and the amounts you have claimed except the ones towards house rent, leave travel and others. You need to disclose the same while filing. Documents pertaining to income through interests Bank statement/passbook for the interests earned on <keyword id="114757" type="PERSON" weightage="20" keywordseo="Savings-Account">savings account</keyword>. Interest <keyword id="7135061" type="UNKNOWN" weightage="20" keywordseo="Income-statement">income statement</keyword> regarding the fixed deposits. TDS certificate issued by the banks and other financial institutions. Form 26AS We can say Form 26AS is a kind of summary of the taxes deducted behalf of you and the taxes you have already paid. The Income Tax Department provides the necessary data on this. The details you will get from the IT department will show the taxes deducted behalf of you by the deductors, the details about the tax the taxpayers have deposited the tax refunds you received in a given financial year. All this information can be gathered from the IT official website. Section 80 Investments Documents related to Section 80C investments. This will include investments done under PPF, NSC, ULIPS, ELSS, and LIC which are all eligible for deductions under Section 80C. Documents needed for claiming some expenses as deductions Get ready with the following documents with you for claiming the following expenses as deductions. Contribution to Provident Fund School tuition fees of your children Life insurance premium payment Stamp-duty and registration charges Repayment of the principal on your home loan Savings schemes related to equity and mutual funds investment The maximum amount you can claim under Section 80C is Rs 1.5 lakhs. Other Investment Documents you will need The interest amount paid towards housing loan: Note that the interest amount paid towards housing loan is eligible for a tax saving up to a maximum limit of Rs 2,00,000. This is pertaining to a self-occupied home. In case of let out or deemed property, there is no upper limit on the interest amount on the housing loans that are eligible for saving tax till the FY 2016-17. Starting from FY 2017-18, the total loss from the property that is found available for setting against other kinds of income has an upper limit of Rs 2 lakhs. So, the interest on housing loan can be considered eligible for saving on taxes for an upper limit of Rs 2,00,000 even in case of property that is let out. Interest payments on education loans Statement on stock trading: the statements regarding the stock trades you accomplished in the year which will be considered under the capital gains.

Which documents are required to file income tax returns

<img class="gwt-Image" src="/photo/49981136.cms" />Section 80C of the Income Tax of India allows a deduction of certain investments and expenditures up to a maximum of Rs 1,50,000 from the gross total income of an individual in a given financial year. So, if your total investment is say Rs 2,50,000 in a financial year, you can claim tax deduction up to Rs 1,50,000 under Section 80C. 
 
This deduction is provided by the government to encourage household savings. The benefit of Section 80C tax deduction is applicable to individuals (service, profession and business) and Hindu Undivided Family (HUF). 
 
<table align="left" border="0" cellpadding="0" cellspacing="0" width="385">
	<tbody>
		<tr>
			<td colspan="2">
				Tax Savings Under Section 80C</td>
		</tr>
		<tr>
			<td>
				Taxable Income</td>
			<td>
				Tax Saving Up to</td>
		</tr>
		<tr>
			<td>
				2,50,000 – 5,00,000</td>
			<td>
				15,450</td>
		</tr>
		<tr>
			<td>
				5,00,001- 10,00,000</td>
			<td>
				30,900</td>
		</tr>
		<tr>
			<td>
				Above 10,00,000</td>
			<td>
				46,350</td>
		</tr>
	</tbody>
</table>
 
 
 
 
 
 
 
 
 
 
<img class="gwt-Image" src="/photo/49981064.cms" /> 
(<a href="http://www.fingyan.com/tax-planning-to-claim-deduction-under-section-80c/">Source</a>) 
 
Here are the top <a href="http://www.businessinsider.in/10-best-tax-saving-investments/articleshow/28474526.cms">tax saving instruments</a> below: 
<h2>
	Personal Provident Fund (PPF)</h2>
PPF is considered one of the safest tax saving instruments for those who have a conservative risk appetite. The interest rate is linked to the Government of India bond, and hence fluctuates every year. Presently, PPF offers an annual interest of 8.70% compounded annually. Any individual can open a PPF account in any nationalized bank, notified private sector bank or post office for a period of 15 years. Minimum of Rs 500 to a maximum of Rs 1,50,000 can be deposited yearly. Loan can also be availed against PPF after the 3rd year, excluding the year of deposit. Interest earned on PPF during the financial year is <a href="file:///C:/Users/akanksha.jain/Desktop/edits/%E2%80%A2%09http:/articles.economictimes.indiatimes.com/2015-01-05/news/57705269_1_ppf-public-provident-fund-dividend-option">also tax free</a>. You can partially withdraw money from the sixth year of the date of opening the account. 
 
National Saving Certificates (NSC) 
NSC is again a safe investment instrument as the interest is linked to the government bond yield. NSC can be purchased at any post office for a period of 5 years or 10 years. Minimum amount of Rs 500 can be invested in NSC to earn an annual interest of 8.5% and 8.75%, if purchased for 5 years and 10 years respectively. Interest on NSC is taxable, but since the interest in reinvested in NSC, it’s eligible for deduction under section 80C. There are penalty charges if you withdraw funds before the expiry of the duration of the certificate. However, you can avail loans against NSC. 
 
Tax Saving Fixed Deposits 
One of the most popular investment options among conservative investors in the lowest tax bracket is the tax saving fixed deposits. It is similar to regular fixed deposits with an exception. There is a lock in period of 5 years on tax saving FDs. It can be opened with any scheduled bank. There is no premature exit option, but loan can be availed against these FDs. The interest earned on these deposits is taxable as regular income of the individual. 
 
National Pension Plans (NPS) 
NPS is a government backed investment plan managed by Pension Fund Regulatory Development Authority, which aims to provide post-retirement income to all Indian citizens. NPS can be availed by employees of government, private institution, organized and unorganized sector. The contributory amount is invested in the markets. At the time of retirement, investors get a lump sum amount depending on the performance of the fund. While NPS contribution has tax benefits under Section 80C, the annuity amount is taxable. 
 
Life Insurance Plans 
The premium paid for the life insurance plans is eligible for deduction under Section 80C. Life insurance plans provide a security to the family members of the insured person. It makes sure that they have a handsome amount of money to lead a decent life in case of death of the insured person. One can have more than one insurance policy and the aggregate premium paid on all the policies paid during the financial year, including premium paid on policies taken for spouse and children (dependent or not) is eligible for deduction. The maturity amount is also tax free. 
 
Home Loans 
The tax saving on buying a property is available on two components – principal and interest amount. While Section 80C gives a deduction on repayment of principal, Section 24 gives a deduction on the interest. The first time buyers can claim an additional deduction of Rs 1,00,000. 
 
Equity Linked Saving Scheme (ELSS) 
ELSS is the kind of mutual fund that are specially designed for the purpose of tax saving. These funds have a lock in period of 3 years, which is least in comparison to all other investment options eligible for 80C. These funds are suitable for the investors with high risk tolerance to market volatility. These funds beat inflation and provide higher returns in the long term, but there is no premature withdrawal option until you pay an exit load. 
 
Unit Linked Insurance Plans (ULIPs) 
ULIPs are a category of goal-based financial solutions that combine the safety of insurance protection with strong wealth creation opportunities. A ULIP can be referred to a hybrid insurance plan that combines the benefit of insurance as well as the investment. In case of ULIPs, the premium is divided into two parts – one part goes towards life cover and other is invested in market-linked funds of your choice. For taxation purposes, unit linked insurance plans are considered as life insurance policies. At the time of investment, there is a deduction of tax that is available on premium paid on life insurance policies under Section 80C. Even the maturity and death benefit amount is tax free under Section 10 (10D). 
 
<img class="gwt-Image" src="/photo/49981081.cms" /> 
(<a href="http://timesofindia.indiatimes.com/business/india-business/Why-you-should-invest-in-Ulips-now/articleshow/44458163.cms">Source</a>) 
 
ULIPs tend to give higher returns in comparison to all the fixed income investments For companies like <a href="http://www.iciciprulife.com/public/plans.htm#Wealth-Plan?UID=1313">ICICI Prudential</a>, close to 96% of their <a href="http://timesofindia.indiatimes.com/topic/ULIP">ULIP</a> funds have outperformed respective benchmarks since inception, across debt, equity and balanced funds. ULIPs also has following features. 
 
· An investor has an option of partial withdrawals of up to 20% the fund value every year from the 6th year onwards. 
· An investor has an option to make unlimited fund switches based on market fluctuations or investment goals. He has a control over his investments. 
 
 A Snapshot Summary of Section 80C Investment Options 
 
<img class="gwt-Image" src="/photo/49981105.cms" /> 
(<a href="http://timesofindia.indiatimes.com/business/mf-simplified/mf-news/Best-ways-to-cut-tax-under-Sec-80C/articleshow/40035217.cms">Source</a>) 
 
Planning of investments for claiming deductions under <a href="http://taxguru.in/income-tax/all-about-deduction-under-section-80c-and-tax-planning.html">Section 80C provides</a> gives investors two opportunities - the investor can save tax and the invested money gives returns in future. Based on your financial goals and the features of the above mentioned plans, take an informed decision regarding where you want to invest under Section 80C. 
 
(This article is written by Utkarsh Sahu. He writes for various tech mags and admires technology with paradigm-shifting attributes.)

Top 80C tax saving instruments of the year

<img class="gwt-Image" src="/photo/56624270.cms" />Investors in India and abroad have been grappling with changing laws on equity investors. Amid the uncertain environment, there are possibilities of an increase in capital gains tax on equities. It is to see whether <a href="http://www.businessinsider.in/searchresult.cms?query=arun+jaitley&amp;sortorder=effectivedate">Finance Minister Arun Jaitley </a>will announce tax measures in favour of investors or not in <a href="http://www.businessinsider.in/searchresult.cms?query=budget+2017&amp;sortorder=effectivedate">Budget 2017</a>. 
 
"A possible resolution of the tax issues in favour of investors this time around may drive outperformance in Indian equities after the Budget. If not resolved favourably, investor sentiment will be impacted negatively,” CLSA said in a note. 
 
As per the CLSA, tightening tax treaties will have a negative impact on <a href="http://www.businessinsider.in/searchresult.cms?query=indian+stock+market&amp;sortorder=effectivedate">Indian markets</a>. In May 2016, the government moved to tighten the India-Mauritius tax treaty, after which foreign portfolio investors (FPIs) ended up paying at the same short-term gains tax rate of 15% on Indian equities. Similar changes were made to the tax treaties with Cyprus and Singapore by the end of 2016. 
 
"Renegotiation of tax treaties with Mauritius, Singapore and Cyprus would raise taxes from April 2017 for investors using those routes,” CLSA said in a note. 
 
"We hope these issues are resolved in the Feb 1 Union Budget. If resolved in favour of investors, the underperformance of the domestic market would reverse, in the same way it did last year when similar concerns existed,” the note said. 
 
Also, the retrospective FPI tax fear is back again. The Indian Government had issued clarifications on indirect tax provisions that bring end-investors in a foreign fund under Indian tax laws. 
 
The clarifications impact those FPIs with over 50 per cent of AUMs in India with a concentrated end-investor base i.e. end-investor with less than 5 per cent of the AUM. 
 
"Some of the India-dedicated funds will likely be impacted. Large end-investors in these funds may be subject to double taxation with this development," said the CLSA note. 
 
Besides, if increased capital gains tax on equities in general happens, unit-linked insurance plans (Ulips) may see larger inflows. 
 
Listed shares in India attract long-term capital gains (over 1 year holding, LTCG) tax at 0 per cent and short-term (less than 1 year holding) capital gains tax at 15 per cent. This is against a 30 per cent top tax bracket on interest and personal income. 
 
The global brokerage firm is of the view that there is a possibility that short-term capital gains tax on equities which is partly being offset by the Securities Transaction Tax currently may be raised. "If any of the above happens, Ulips may gain prominence as they enjoy a tax advantage," it said.

Indian market may see red due to these tax uncertainties

<ul><li>We bring to you a series of columns from industry experts, looking back at the last 10 years.</li><li>The columns will explore how the media, marketing and advertising industry has transformed in the last decade.</li><li>Tarun Chugh, MD and CEO, <keyword id="151079" type="COMPANY" weightage="20" keywordseo="Bajaj-Allianz-Life-Insurance">Bajaj Allianz Life Insurance</keyword> tries to decode evolving consumer behaviour and shares a few ways in which the BFSI sector is reaching out to them in today's digital era.</li></ul>New-age Indians are unlike their previous generations. As a demographic, India’s population is getting younger and with more exposure to the world, the demands of the younger generation are changing. This change is forcing all industries to innovate, and the shift is more visible in the insurance space than anywhere else. For instance, young people are considering life insurance not simply for protection but to achieve their life goals. Ambitions such as entrepreneurship, world travel, preventive healthcare and having a parallel career demand financial planning by young people. According to a recent survey conducted by Kantar IMRB, 2 in 5 Indians have retirement related goals and the number is even higher in the metros with every second person wishing for a comfortable retirement as one of their life goals. In fact, retirement related life goals feature in the list of top 5 life goals for Indian millennials as well. This has led to a paradigm shift in the way financial planning has been so far. Indians are now looking at planning their retirement early on in life to maintain their standard of living and achieve life goals even post retirement. There’s a lot more interest towards long term life insurance products and the appearance of new-age online ULIPs has really helped the takeoff for these products as they offer transparency and convenience. Customers’ expectations from insurance products are rapidly changing as they demand more efficient service which match their lifestyle and needs example, Digital touchpoints, self-service apps and automated payment reminders. Increasingly, the product demand is also shifting towards new-age products which can be bought and redeemed online, have more transparency and don’t tangle the customers in complex terms and conditions. It’s not hard to see that the industry is responding to these shifts comprehensively. And regulatory changes by the Insurance Regulatory Development Authority of India have also helped. For instance, IRDAI’s regular interventions have meant that products in the market are transparent and customer-friendly with more benefits than the terms and conditions attached to them. The intervention has also ensured that new products are innovative in terms of their structures and payouts rather than refurbished old schemes launched with newer names. This has led to renewal premium collections going up recently which has greatly helped affirmed people’s faith in life insurance as a product. Insurance premiums as a percentage of GDP have been steadily climbing up as it reached 3.69% in 2017 from 2.71% in 2001. Gross premiums in India reached Rs 5.53 trillion in FY18, with Rs 4.58 trillion contributed by life insurance and Rs 1.51 trillion coming from non-life insurance. Even though it’s a significant development, the penetration level at 3.69% of the total addressable population remains quite low and provides itself as an opportunity for companies to innovate and reach the last mile. The way to reaching new consumers is largely going to be phygital -- physical + digital. A recent research survey by PwC stated 47% of people research insurance online before making a buying decision as compared to 22% relying on agents. Moreover, 49% of consumers said that they prefer digital mode as their preferred channel for purchasing insurance followed by 32% who still prefer to call an agent. Interestingly, 18% of people want their insurance companies to communicate with them through emails – clearly emphasizing the increasing importance of two-way communication rather than a one-time sale model. The life insurance sector is set for a big boost with the increase in digital proliferation and customer awareness. According to the Kantar IMRB survey, Indians choose life insurance as their preferred investment option for 60% of their life goals. This is a clear signal of the latent demand in the country which the insurance industry is eager to fulfil with innovative products, tech-enabled seamless services and newer distribution channels. Further, with the right pace of technology adoption and customer-centric business processes, India’s life insurance sector is poised to be the fastest growing sector. - By Tarun Chugh, MD and CEO, Bajaj Allianz Life Insurance

How consumer behavior has evolved in the life insurance sector

Here’s how the advertising and marketing industry reacted to Union Budget 2021

<img class="gwt-Image" src="/photo/46552115.cms" /> The approval of a long-pending bill to raise the <keyword id="44528" type="ORGANIZATION" weightage="60" keywordseo="FDI">FDI</keyword> slab in <keyword id="35450" type="COMPANY" weightage="60" keywordseo="insurance">insurance</keyword> sector comes as bliss for insurance agents. The bill passed yesterday in the Rajya Sabha is being seen as the Modi govt’s major economic reform. This ensures that <keyword id="6580745" type="ORGANIZATION" weightage="60" keywordseo="Insurance-Regulatory-Development-Authority">Insurance Regulatory Development Authority</keyword> (<keyword id="6361421" type="ORGANIZATION" weightage="60" keywordseo="IRDA">IRDA</keyword>) will get more teeth once the <keyword id="235396" type="ORGANIZATION" weightage="60" keywordseo="Insurance-Reforms">insurance reforms</keyword> begin to attract more foreign funds in the sector, reports The Economic Times. 
 
Empowering the regulator to impose heavy penalty and set a ceiling on expense management, this bill aims at fixing remunerations for the insurance agents as well. Also, the Bill has discarded two Sections, that include 40 and 40 B, where limits can be prescribed by the IRDA. 
 
In November last year, TS Vijayan, chairman of IRDA had advocated fixing a minimum wage of Rs 10,000 a month for the agents. Citing example that many countries pay 160% of the first year premium as commission to the agents, he had mentioned that the companies should be considerate while paying commissions. 
 
The ET report informs that the commission on traditional insurance plans is capped at 40% of the first year's premium. However, commission on unit-linked insurance plans (Ulips) is capped since 2010, when the regulator had imposed a ceiling on the overall charges, including policy administration and premium allocation charges. As on March 31, 2013, there were 21.2 lakh agents, according to the latest data provided by the insurance regulator. 
 
Amending Section 45, the bill states that the companies can no longer refuse to accept claims for any reason after three years of commencement of risk/date of reinstatement/date of issuance. 
 
 
The bill adds that the regulator can penalise the companies for various violations. The ET news adds, for non-compliance, companies will have to shell out Rs 25 crore, up from Rs 5 lakh now. The penalty would be similar to violations of rural and social sector noncompliance. Agents or corporate agents mis-selling will have to cough up Rs 1 crore per case, up from Rs 1 lakh at present. 
 
(Image: BCCL)

​Insurance bill: IRDA is tightening its reins on insurance groups

<img class="gwt-Image" src="/photo/48213549.cms" /> 
Welcome to the wonderful world of <a href="http://www.businessinsider.in/JACK-BOGLE-An-Elegantly-Simple-Formula-Shows-Why-Passive-Investing-Will-Earn-Higher-Returns-Than-Active-Investing/articleshow/22086333.cms">investments</a>! 
 1. Nominate, Nominate, Nominate: It's presumed that you have an investible surplus either in the form of cash lying idle in the bank account, via salary payments, or you’ve come into money. Either way, the first thing to do is to ensure that you have a nominee in place in your bank account, <keyword id="35450" type="COMPANY" weightage="100" keywordseo="insurance">insurance</keyword> policy, trading-cum-demat account, <keyword id="114854" type="ORGANIZATION" weightage="100" keywordseo="Employee-Provident-Fund">Employee Provident Fund</keyword> account (with your employer) and the Public Provident <a href="http://www.businessinsider.in/Which-One-Is-Better-InvestmentIn-Mutual-Funds-Or-Direct-Investment-Into-Stocks/articleshow/27116001.cms">Fund</a> (with the government). 
 
You may or may not have all of these <a href="http://www.businessinsider.in/If-youve-made-your-first-Mutual-Fund-investment-here-is-what-you-should-do-next/articleshow/47176866.cms">investment</a> avenues, but the ones that you have require a nominee and its best to review the nominee’s name once you get married and later, have a child. Better still, make a will. 
 
2.Pay-Off Debt: You should be assuming as little debt as possible, and <a href="http://www.businessinsider.in/Mortgage-Protection-6-ways-to-come-out-of-a-loan-trap/articleshow/47097827.cms">paying off</a> outstanding credit card bills is of paramount importance. The amount of penal interest that credit card companies charge puts even seasoned money lenders to shame. Have NIL outstanding balance on your credit card. 
 3.Get Term Insurance: If you have dependents, then do ensure that they have at least two years’ worth of expenses to pay for in case something untoward happens to you. Calculate 24 months’ worth of expenses, add 20 percent to them and get a term cover for that amount. Keep adding to your term cover every two years as both your salary and certainly your expenses rise each year. Remember not to confuse insurance with investment. If your advisor tries to lure you into a ULIP or a monthly <keyword id="35471" type="ORGANIZATION" weightage="100" keywordseo="SIP">SIP</keyword>, from an insurance company, masquerading as a Life cover, then you should abandon that advisor immediately. 
 
4.Get Medical Insurance: In addition to the one that your employer offers. Often, people leave an organization in a huff, only to 
realise that they and their family are bereft of any medical <a href="http://www.businessinsider.in/6-pre-marriage-financial-decisions-everyone-should-take-before-saying-I-Do/articleshow/47865034.cms">insurance</a>. The same happens when there are sudden job losses announced by companies. Hence, it is always best to have a parallel medical insurance paid for by yourself. In any case you get a tax benefit in your annual <keyword id="6354751" type="COMPANY" weightage="100" keywordseo="Income-Tax">income tax</keyword> returns. 
 
In addition, keep money worth 5-6 months of expenses in a money market liquid fund so that if you have an unforeseen run-in with your boss, or you decide to go your own way then at least half-year’s worth of expenses are arranged for. Welcome to investing now that most risks are taken care of. 
 5.Public Provident Fund: The government pays you 8.5 percent compounded interest on your PPF <keyword id="6362476" type="ORGANIZATION" weightage="100" keywordseo="investments">investments</keyword>. They also help you save tax. Investments worth 100,000 rupees a year are allowed. These funds are locked in for at least five years and the government allows only a certain amount of money to be withdrawn from the account as it is meant for your old age, when income will dwindle but expenses will keep on rising. 
 There is a lot of debate among <keyword id="143983" type="POSITION" weightage="100" keywordseo="investment-advisors">investment advisors</keyword> whether PPF should be maintained or not considering that the rate of interest often falls below the rate of <keyword id="22195" type="COMPANY" weightage="100" keywordseo="Inflation">inflation</keyword>. However, its best to have some sort of fixed interest bearing income in your investment portfolio and this should be encouraged. 
 
6.Equity Funds: Just run a simple monthly Systematic Investment Plan into a well-diversified equity fund at the start of your professional life. Increase the SIP by 5-10 percent each year as that is what your average annual increment will be. And don’t look at that money till you retire. The best time to start your SIP is today! Do not go into sector specific funds, no matter what your broker tells you. 
 
7. Buying a House: If you can afford one, certainly do so. But do not invest into multiple homes across many cities. It’s a waste of investible surplus, its tax-inefficient, it is relatively ill-liquid and the average returns via rentals over years are much below those earned from equities. 
 
Lots of people feel investing is a very difficult thing to master and hence, prefer to keep money in fixed deposits. While FDs ensure that your capital remains protected, the returns via interest income are taxed, beyond a certain amount of interest earned, and in any case the rate of interest is below inflation rate. It’s a non-efficient way of utilising your money. 
 
If you take these 7 steps then you are cruising on the investment highway! 
 
(Image credits: Indiatimes)

Top 7 things to do as you start to invest

<img class="gwt-Image" src="/photo/26139602.cms" /> The relationship between income and affordability for various income groups follows a nonlinear trend. Owning a house means investing a substantial amount of money – probably the single largest investment made by any person aspiring to purchase a house. It is obvious that many people may not have the means to buy a house and may have to look out for possible <keyword id="6357455" type="EVENT" weightage="40" keywordseo="Funding">funding</keyword> resources. Availing loans from banks or other financial institutions in the form of home loans or mortgages is one of the ways to fullfil your dream if you have a regular source of income. 
 Earlier the gap between middle-class income and cost of houses was huge, which made buying a house near to impossible. But during the last decade, the gap between the income level and the housing cost has come down significantly and more people are now interested in acquiring properties. That’s why there is increasing demand for middle-income housing. Moreover, <keyword id="6371181" type="UNKNOWN" weightage="40" keywordseo="interest-rates">interest rates</keyword> have also come down significantly, compared to what they were a few years ago. 
 
1) Avoid incurring more debts that you can handle. Since a mortgage loan involves a huge sum and a longer repayment period, it is crucial to take your repayment obligation seriously. Always remember that your home – your most important property – is at stake. Avoid applying for other loans that can be an additional burden. Keep your credit card spending in check. Whenever possible, try to pay more for your mortgage. The sooner you can complete your payments, the better. 
 
2) Arrange a fixed <keyword id="37018" type="UNKNOWN" weightage="40" keywordseo="interest-rate">interest rate</keyword> on your <keyword id="6354730" type="UNKNOWN" weightage="40" keywordseo="Home-loan">home loan</keyword>. It is recommended to choose a home loan with a fixed interest rate. Although a fixed-rate loan may start out with a higher rate, compared to a variable-rate loan, you can be assured that your monthly payment won’t change, regardless of the increased prime rate in the market. 
 
3) Consider getting a debt consolidation loan. If you are managing two or more types of loans, consider consolidating your debts for easier repayment. Consolidating or ‘merging’ your debts into a single loan can significantly lower the interest rate you are paying. 
 
4) Consider refinancing your loan. If you are in <keyword id="1009187" type="UNKNOWN" weightage="40" keywordseo="the-middle">the middle</keyword> of repayment, consider refinancing your current mortgage to lower your rate. Refinancing a loan is recommended, especially if you notice a considerable improvement in your credit score. 
 
5) Make a lump sum payment. If your finances allow you to pay your mortgage completely, do so. This way, you can be secure about your investment. 
 
6) Put in a large payment on your loan whenever possible. Instead of paying just the minimum due, try to pay more of your mortgage to cut down your balance more quickly. 
 
7) Don’t go for a loan just because it offers a very low rate. Do not sign up for a home loan just because it is offering a low interest rate. Keep in mind that a variable-rate loan is bound to change at any time during your repayment term. Half-way through your loan term, you may find that you are stuck with balloon payments, which can make repayment very difficult. 
 
8) Obtain a loan that gives you more options and flexibility. Look for a mortgage lender that offers flexible repayment options. Make sure that modification of your loan’s term is possible just in case anything unexpected takes place (for example, <keyword id="6358907" type="ORGANIZATION" weightage="40" keywordseo="unemployment">unemployment</keyword> or sickness). 
 
9) Go for a long-term mortgage. A home loan with a fixed interest rate and a reasonable repayment period will be less of a burden than a short-term loan with variable interest. 
 
10) Save for down payment. Submitting a higher down payment can reduce your loan interest rate by 20-25%. Therefore, prepare your down payment prior to acquiring a mortgage loan. 
 
11) List of savings/investments. Make a list of all the loans and savings/investments that you have made. Do you find instances where the savings/investments are giving lesser returns than the loan rates? This can typically be seen in endowment <keyword id="35450" type="COMPANY" weightage="40" keywordseo="insurance">insurance</keyword> plan, EPF and PPF, postal deposit and even ULIP. Why should you <keyword id="47916" type="UNKNOWN" weightage="40" keywordseo="invest">invest</keyword> in something when you are paying higher interest to somebody else? It is better to close all or most of these lesser returns savings/investments and divert the funds to close the home loan. 
 
12) There are ways to come out of the EMIs and make your loan tenure shorter. These include: 
1. Partial pre-payment 
2. Switching to a lower rate 3. Increasing the <keyword id="6357050" type="COMPANY" weightage="40" keywordseo="EMI">EMI</keyword> 
 
Now let us look at these options in more detail. The best part is – these options do not, in any way, add to your existing budget. 
 
13) Partial pre-payment. This is the easiest way to close a housing loan faster. The method is to make use of any one-time income such as bonus, salary arrears, gifts from friends/relatives, any windfall from the <keyword id="6357040" type="UNKNOWN" weightage="40" keywordseo="Share-Market">share market</keyword>, money from a property sold, deposits closed, tax-saving <keyword id="6362476" type="ORGANIZATION" weightage="40" keywordseo="investments">investments</keyword> maturing, closure of <keyword id="25450" type="UNKNOWN" weightage="40" keywordseo="savings">savings</keyword> that are giving you lesser returns than the housing loan, etc., to partially close the housing loan. 
 
These one-time payments help reduce the principal balance in the loan. And when the EMIs continue, they have to cover less principal. 
 
So the same EMIs require less time to close the loan. The earlier and more frequently these partial pre-payments happen, the faster you can close the loans. 
 
The author Brijesh Parnami is the CEO, Distribution at Destimoney.

13 Ways To Manage Your Housing
Finances Better

You are in a good job, earn a fat salary and have a bright future. Yet, none of this is evident when you look at your <keyword id="25450" type="UNKNOWN" weightage="40" keywordseo="savings">savings</keyword>. This is because young people often find it difficult to save in the initial years of their careers. Studies reveal that discretionary spending can be as high as 18-20% of the income for young people. A 2011 study by Assocham revealed that almost 35% of the urban youth spend up to Rs 5,000 a month on clothing alone. This is one of the reasons most young people have such low savings. 
 “Gen Y focuses on their EMIs, but ignores their <keyword id="159805" type="COMPANY" weightage="80" keywordseo="SIPs">SIPs</keyword>. They want to splurge on the latest smartphones and the newest cars but not save for their future,” says Sudipto Roy, business head, Principal Retirement Advisors. 
 
Discipline and self-regulation are the cornerstones of a successful investment plan. We know it is difficult to salt away money when everyone around you is spending as if there is no tomorrow. There is tremendous peer pressure and even the most level-headed youngsters can stumble. Our cover story this week looks at 8 secret mantras that can help transform a spendthrift into a saver. 
 
MANTRA 1: SAVE BEFORE YOU SPEND 
 Many people are not able to save enough because they don’t have anything left after all their expenses. Their financial equation is: Income - Expenses = Savings. Legendary investor <keyword id="6358963" type="PERSON" weightage="40" keywordseo="Warren-Buffett">Warren Buffett</keyword> offers a simple solution. He says the equation should be changed to Income - Savings = Expenses. Instead of saving what is left after expenses, you should spend what is left after you are done with your savings for the month. 
 
We know controlling expenses is easier said than done. However hard you may try, there will be some expense that will gobble up the surplus and prevent you from saving. The solution lies in automating your savings. 
 If you give an ECS mandate to your bank for an SIP, the money will automatically flow into your mutual fund even before you can withdraw it. Ideally, the savings should flow into an investment option that does not allow easy withdrawals. This is one of the reasons that make the <keyword id="45028" type="ORGANIZATION" weightage="40" keywordseo="Provident-Fund">Provident Fund</keyword> such an effective tool for long-term savings. Every month, the employee’s contribution is deducted from the salary and deposited into his PF account. The money keeps growing till the person retires. He can access the corpus before retirement only in certain circumstances. 
 
MANTRA 2: WAIT BEFORE YOU SPLURGE 
 
The urge to buy something you like can be overwhelming. Easy financing options and plastic money prevent an individual from distinguishing his wants from his needs. Whenever you want to buy something expensive but not essential, follow the 30-day rule. Just postpone the purchase by 30 days. 
 
During that period, think hard whether you really want the item. At the end of the month, if you still want to buy it, go ahead and purchase it. However, if the item was not really essential, you will get over the urge to buy and will probably junk the idea. 
 
This simple rule works very effectively in case of gadgets, apparel, footwear and accessories. It’s also not very difficult to follow because you don’t actually deny yourself the item. You merely postpone the purchase by a month. As a fringe benefit, you also get to research the item over the next 30 days. 
 
<div style="page-break-after: always;">
	&#xa0;</div>
There is another guideline that can help you know the difference between wants and needs. The 30-minute rule says that if you are unlikely to use an item for a least 30 minutes a day on average, you should not buy it. The fancy coffee maker is really no use if you take it out once a month. Of course, this rule is only for gadgets and appliances and should not apply to other essential household items. 
 
MANTRA 3: AVOID USING PLASTIC MONEY 
 
Credit and debit cards are essential because an increasing number of our financial transactions take place online. However, plastic can be dangerous in the hands of a reckless spender. Studies show that even normal people tend to overspend if they use a credit card for a purchase. If they have to make the payment in cash, they will feel the pinch more. Since the credit card user only signs on the slip, the full impact of the purchase is not felt. 
 
To suppress the shopaholic inside you, leave your debit and credit cards behind when you go to the mall. Take cash instead. Mumbai-based IT professional Vaibhav Pandya (see picture) has followed this simple rule for the past 6-7 years and seen his savings shoot up. He says paying cash makes him think twice before he makes a purchase. 
 
<img class="gwt-Image" src="/photo/36424982.cms" style="margin: 5px;" /> 
Experts recommend some extreme measures for serious shopping addicts. Some say you should just note down the card details and then cut the card into pieces so that you can’t use it anymore. Others suggest you keep the card in a paper sleeve and stick pictures of your kids or spouse on it. You will be reminded of the other goals you may be jeopardising when you swipe the card for an unnecessary purchase. 
 
“Keep in mind that every craving sets you back when it comes to reaching your long-term goals,” says P V Subramanyam, financial trainer, Iris. One bizarre idea is to literally freeze your card inside a block of ice. It won’t damage the card, but the user will have to wait for the ice to melt before he can access it. However, we believe the average spender won’t have to resort to such extreme measures. Just keeping the card in a safe place instead of carrying it around in the wallet is good enough. 
 
MANTRA 4: START SMALL TO SAVE BIG 
 
At the beginning of your career, your income is not very high. In many cases, there is a very small investible surplus after the expenses. Still, this does not hold you back from saving. Delhi-based Sanjay Koul (see picture) was not able to save much in his initial years of earning because his income was low and there were too many financial responsibilities. 
 
<img class="gwt-Image" src="/photo/36424990.cms" style="margin: 5px;" /> 
Yet, he managed to put away a small amount every month. For a young investor, the low quantum of investment is more than made up by the long period available for the money to grow. The magic of compounding ensures that even a small sum grows into a gargantuan amount over the long term. The investment can be scaled up as the income grows in the coming years. Turn to page 18 to know how even a modest investment of Rs 3,000 a month in an option that gives a conservative 8.5% can balloon to over Rs 1.5 crore in 30 years if you just keep increasing the investment by 10% every year. 
 
<div style="page-break-after: always;">
	&#xa0;</div>
However, it is difficult for the average investor to maintain the discipline required for this approach over a long period of time. Mutual fund investors start SIPs but don’t enhance the amount every year. Ulip investors pay the same premium year after year without any top-ups. Investors in recurring deposits and fixed deposit don’t even have the option to increase their investment in the same account. 
 
MANTRA 5: DON’T BE PRESSURED TO SPEND 
 
Everybody’s financial situation is different. Just because your colleague has bought a new car or booked a flat in a fancy location does not mean you should follow suit. Bangalore-based Rajesh Prasad (see picture) learnt this early in his career. “When I started working, there was a lot of peer pressure to go out and splurge. However, my father and senior colleagues advised me against blowing away my entire income,” he says. 
 When it comes to big-ticket items like cars and houses, do the math carefully before committing expenses. For instance, the total cost of ownership of a car is much higher than the price quoted by the dealer. You also have to include the cost of fuel, insurance, servicing, spares and repair. There are a few rules for buying a car. The price of the car should not be more than 60% of your annual household income. The <keyword id="6357050" type="COMPANY" weightage="40" keywordseo="EMI">EMI</keyword> should not be more than 15% of your monthly income or 30% of your investible surplus after expenses. 
 
<table align="center" cellpadding="1" cellspacing="1">
	<tbody>
		<tr>
			<td>
				<img class="gwt-Image" src="/photo/36424997.cms" /></td>
		</tr>
		<tr>
			<td>
				<img class="gwt-Image" src="/photo/36425005.cms" /></td>
		</tr>
	</tbody>
</table>
 
Besides, a new car should be used for at least 8 years for complete return on investment. Similarly, assess how much you really need the new smartphone before upgrading. 
 
MANTRA 6: LEVY LUXURY TAX ON YOURSELF 
 
The intention of this article is not to make you deny yourself the very luxuries that you have worked hard to attain. Every now and then, you need to treat yourself to some as well. 
 
Pune-based Vikas Mathur (see picture) has found a novel way to boost his savings everytime he spends. No, we are not talking about credit card reward points here. Every time Mathur indulges in some discretionary spending, he socks away an equal amount for his savings. If a dinner and movie with the family costs him Rs 2,000, another Rs 2,000 is put into savings. 
 
<img class="gwt-Image" src="/photo/36425011.cms" style="margin: 5px;" /> 
There is another advantage of this rule. The luxury tax that Mathur levies on himself helps him get over the guilt of spending on discretionary items. 
 
<div style="page-break-after: always;">
	&#xa0;</div>
MANTRA 7: DON’T SPEND TO DE-STRESS 
 
For many people, spending can be therapeutic. It is a way to unwind after a stressful day and gives the person a sense of control. However, the aftermath of this de-stressing can be even more stressful if it burn a big hole in your wallet. Worse, if the bills you pile up remain unpaid, it will hurt your credit score. 
 “Use your credit card wisely. If you use more than 30% of your total available credit card limit, it will affect your credit score adversely,” says Nitin Vyakaranam, Founder &amp; <keyword id="5645" type="POSITION" weightage="40" keywordseo="CEO">CEO</keyword>, ArthaYantra.com. 
 
Do you also frequently head to the mall and pick up stuff to fight depression and anxiety? Get a grip on the situation and look for healthier (and less costlier) alternatives to unwinding. When you feel overwhelmed by the urge to go on a shopping spree, go for a stroll in the park or do some light exercise. This will act as a distraction and ease the urge to spend. 
 
MANTRA 8: FIX A BUDGET AND STICK TO IT 
 
This should have been the first mantra, but has been deliberately brought up at the end because Gen Y is put off by the B word. The fact is that setting up a budget is the first step towards prudent financial planning, and it’s not too difficult. Just set a limit for how much you can spend on clothes, travel and movies in a month and stick to your budget. Budgeting also helps you keep tabs on the itsy-bitsy expenses, such as casual shopping for clothes, eating out, gifting, and entertainment. 
 
Most of the time, these smaller items go unnoticed even though they take up a large portion of the total monthly expenditure. In the good old days, financial planners advocated the ‘envelope’ method, where the outlay for each head was put in separate envelopes. 
 
Now you can sign up with a money management portal. These websites aggregate all your finances, from savings bank accounts and credit cards to loan payments and mutual fund SIPs. They help you keep track of your money, alerting you when a payment is due or when you have overspent under a certain head. 
 
 
Must read story: <a href="http://economictimes.indiatimes.com/wealth/savings-centre/analysis/ET-Wealth-Eight-saving-ideas-that-can-cost-you-money/articleshow/36194419.cms">Eight saving ideas that can cost you money</a>

You Searched For "Ulips" and got 13 results

Best tax saving investment options in 2022

Bhakti Makwana

Five financial management tips to avoid common pitfalls

Insider Studios

Amfi pitches for debt-linked saving schemes with tax benefits in Budget proposal

PTI

ICICI Pru Life Q4 net profit slips 31% to Rs 179.5 crore

PTI

Which documents are required to file income tax returns

BI India Bureau

Top 80C tax saving instruments of the year

Guest Author

Indian market may see red due to these tax uncertainties

BI India Bureau

How consumer behavior has evolved in the life insurance sector

Guest Author

Here’s how the advertising and marketing industry reacted to Union Budget 2021

BI India Partner

Insurance bill: IRDA is tightening its reins on insurance groups

BI India Bureau

Top 7 things to do as you start to invest

Shailendra Bhatnagar

13 Ways To Manage Your Housing Finances Better

Brijesh Parnami

Eight Mantras To Control Spending And Start Saving

Economic Times

You Searched For "Ulips" and got 13 results

Best tax saving investment options in 2022

Bhakti Makwana

Five financial management tips to avoid common pitfalls

Insider Studios

Amfi pitches for debt-linked saving schemes with tax benefits in Budget proposal

PTI

ICICI Pru Life Q4 net profit slips 31% to Rs 179.5 crore

PTI

Which documents are required to file income tax returns

BI India Bureau

Top 80C tax saving instruments of the year

Guest Author

Indian market may see red due to these tax uncertainties

BI India Bureau

How consumer behavior has evolved in the life insurance sector

Guest Author

Here’s how the advertising and marketing industry reacted to Union Budget 2021

BI India Partner

​Insurance bill: IRDA is tightening its reins on insurance groups

BI India Bureau

Top 7 things to do as you start to invest

Shailendra Bhatnagar

13 Ways To Manage Your Housing Finances Better

Brijesh Parnami

Eight Mantras To Control Spending And Start Saving

Economic Times

Insurance bill: IRDA is tightening its reins on insurance groups