Best printers for Home

Best Mixer Grinder

Best wired Earphones

Best 43 Inch TV in India

Best Wi Fi Routers

Best Home Theatre in India

Smart Watch under 5000

Best Laptops for Education

Best Laptop for Students

The <keyword id="47209" type="ORGANIZATION" weightage="100" keywordseo="Finance-Ministry">Finance Ministry</keyword> today has said that subscribers of the Public Provident Fund (<keyword id="76579" type="CITY" weightage="100" keywordseo="PPF">PPF</keyword>) can prematurely close their deposit scheme once they have completed five financial years, citing reasons like higher education or expenditure towards medical treatment. 
 
"A subscriber shall be allowed premature closure of his account or account of a minor of whom he is the guardian on ground that amount is required for treatment of serious ailments or life-threatening diseases of the account holder, spouse or dependent children on production of supporting documents from competent medical authority," said a notification from the Finance Ministry. 
 
It added that the allowance will be applicable to the requirement of higher education of the account holder or the minor account holder when the documents and fee bills are produced, confirming admission in a recognised institution in India or abroad. 
 
<a href="http://www.enemyofdebt.com/wp-content/uploads/2015/10/EOD_SavingsLoanPic.jpg">Image source</a>

Finance ministry has decided the terms for premature PPF withdrawal

In assuring convenience and safety over several other kinds of investments, Fixed Deposit (FD) and PPF (Public Provident Fund) are highly popular investment options. Though both of them are investment instruments, there are some stark differences between them that are worth considering for the purpose of making the right choice. If you are wondering which one is the right kind of investment option for you, the discussion hereunder will give you some useful points to weigh their pros and cons. <keyword id="8078727" type="UNKNOWN" weightage="20" keywordseo="fd-and-ppf">FD and PPF</keyword> differ substantially from each other Both these modes of investments offer a great degree of convenience to the investors. Nevertheless, the differences between them are substantial. Each of them come with their own unique set of characteristics that are important for customers. Here we compare the different features of FD and PPF. FD and PPF - Comparison Tenure PPF comes with a rigid tenure. This means the investment you make will be locked in for 15 years. There are no other flexible tenures offered to the customers when it comes to PPF. On the other hand, FDs come with flexible tenures ranging from 12 months to 60 months. While the investor can choose the tenure of his investment in case of FD, it is not possible to do so with regard to PPF. Premature withdrawal The amount invested in PPF can be withdrawn only after 5 years. Even then the amount you can withdraw is limited. Hence for all practical purposes, you can say you have no control over the amount invested in PPF for the entire tenure of the investment. On the other hand, it is possible for you to withdraw the amount invested in FD during any point of time when you come across a need. You can close a FD prematurely or can avail of a loan against them. Tax benefits Section 80C of the taxation laws in India makes it possible to earn tax benefits on both PPF and FDs. In order to avail of the tax benefit for investing in FD, you must invest the amount for a specific period of time. Loans The investor can avail of loans against PPF only after the PPF investment completes 3 years. However, you can get a loan against FD during any point of time. You can get loans up to 75% on cumulative FDs and up to 60% on non-cumulative FDs. Limit on deposits In PPF, you can invest only up to 1.5 lakhs in a year. There is no upper limit on how much you can invest in a FD in a year. Rate of interest In case of PPF, the rate of interest is set by the government. The rate of interest of FDs are set by individual banks NFBC. Final word As an investment instrument, FD offers more flexibility than PPF. If you are keen to take advantage of the benefits of FD, do some research to find out which bank is offering the best interest rate on a FD and make your investment decision.

FD and PPF which is better?

Both Public Provident Fund (PPF) and Equity Linked Savings Scheme (ELSS) are saving schemes that are eligible for tax benefits. Hence investors are often confused on which one to choose among these two. Are they similar? No doubt PPF has been popular among the investors for so long. However, these days, ELSS seems to be picking up fast due to the higher returns it promises. In fact, it is important to know that there is nothing similar between these two investment vehicles beyond the tax benefits they carry. When you know the About PPF Public Provident Fund (PPF) is a savings scheme created by the government that assures guaranteed returns and some attractive tax benefits under Section 80C. The government revises the interest rates of this scheme during every quarter. For example, the interest rate for the current quarter Q 2 (July-September), FY-19 is fixed at 7.9%. About ELSS <keyword id="3832316" type="PERSON" weightage="20" keywordseo="Equity-Linked-Saving-Scheme">Equity Linked Saving Scheme</keyword> (ELSS) can be described as a type of <keyword id="6354820" type="DEFINITION" weightage="20" keywordseo="mutual-fund">mutual fund</keyword> that carries tax benefits under the section of 80C of the Income Tax Act, 1961. Currently, it has become immensely popular due to its high returns and the lowest lock-in period. PPF Features Low-Risk Since PPF is a government-backed savings scheme, it is considered as a safe investment option available in India. Since the capital and returns are safe, it is one of the most popular investment options. Tax Benefits Since the investments in PPF fall under the exempt-exempt-exempt (EEE) category, the PPF deposits are never taxed at any point. The investment up to a limit of 1.5 lakhs per annum, the monthly interest and the maturity amount is completely tax exempt. Lock-in Period Deposits in PPF are characterized by a mandatory lock-in period of 15 years. Nevertheless, it is possible to take a loan on PPF deposits starting from the 3rd to 6th financial year from the date of opening the account. From the 6th year, partial withdrawal is possible. Fixed Returns In an average, the investments in PPF have invited 8% interest over the past. Also since the government decides the interest rate during every quarter, PPF assures fixed returns. Investment and Withdrawal The minimum and maximum investment you can make in a PPF investment account is Rs 500 and Rs 1.5 lakhs respectively. In case of serious ailments, premature closure is allowed. Partial withdrawals are permitted from the 6th year. ELSS Features High Returns Studying the history, we find that ELSS has always assured one of the highest returns among the tax-saving instruments. In the past, it has generated about 11-14% returns in a time frame of 3-years and 5-years. However, since the returns under ELSS are market-linked, they are not market guaranteed. Tax Benefits Section 80C allows tax benefits on ELSS investments up to Rs. 1.5 lakhs per year. However, while PPF is tax-free during all stages, the gains from ELSS scheme is taxable if it exceeds Rs. 1 lakh in a given year. Lock-in period Among the different tax-saving investment options, ELSS comes with the lowest lock-in period of only 3 years. Hence it carries a high degree of liquidity. SIP Option An investor can start investing in ELSS with an amount as low as Rs. 500 per month through <keyword id="6359303" type="DEFINITION" weightage="20" keywordseo="systematic-investment-plan">Systematic Investment Plan</keyword>. Whenever convenient, you can either start or stop the SIP. How to choose between PPF and ELSS PPF suits investors who do not want to take risks and can afford the lock in period of 15 years. Those investors who want to take only moderate risk and want to earn a higher interest can go for ELSS.

Comparison between PPF and ELSS, which is better?

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>
 
 
 
 
 
 
 
 
 
 
 
(<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). 
 
 
(<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 
 
 
(<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.)

You Searched For "premature PPF withdrawal" and got 5 results

Finance ministry has decided the terms for premature PPF withdrawal

BI India Bureau

FD and PPF which is better?

BI India Bureau

Comparison between PPF and ELSS, which is better?

BI India Bureau

Top 80C tax saving instruments of the year

Guest Author

10 best tax-saving investments

Economic Times

Popular Keywords

Buying Guides