Direct Taxes

Investment Planner

Name of Investment Who can Invest Yield Life / Lock-in period Issuer Tax benefits (see notes below) Min./Max. amount (see notes below) Liquidity Capital Appreciations Nomination /Joint Names
1 Public Provident Fund (PPF) Individuals *HUFs (Now NRIs not allowed though old accounts may continue on non-repatriation basis) 8.1% p.a. for 01-04-2016 to 30-06-2016 8.7% p.a w.e.f.
1-4-2013 calculated on monthly balance and credited annually. (Compounded annually) 		15 years. Optional extension for block of 5 years at a time Govt. of India through Nationalised Banks and Post Office Sections 10 and 80C within the overall limit of ₹ 1,50,000 No TDS from interest and withdrawal Min. ₹ 500 p.a. Max.
₹ 1,50,000/- p.a. w.e.f. 1-09-2014 in respect of individual and minors taken together 		No withdrawal till expiry of 6th F.Y. Then one withdrawal up to lower of 50% of the balance at the end of 4th preceding year or the year immediately preceding the year of withdrawal Loan (of up to 25% of amount at credit at the end of 2 preceding years) can be applied for after 2 years but before 5 years from the end of year in which initial subscription is made. None. Accumulation of interest Nomination possible except for minors
2(a) National Savings Certificates VIII Issue (NSC) (Available in demat form at select post offices) Resident Individuals 8.1 % p.a. for 1-4-2016 to 30-6-2016 8.5% p.a w.e.f
1-4-2013 compounded half yearly. 		5 years. If purchased after 1-12-2011 6 years Premature encashment possible after 3 years with lower yield as per Rule 16 of National Savings Certificates (VIII issues) Rules, 1989 Govt. of India through Post Office Section 80C. Investment and Accrued int. eligible u/s. 80C except 6th year. within the overall limit of
₹ 1,50,000 No TDS from interest and withdrawal 		Min. ₹ 100 Max. No Limit Can be transferred (but not encashed) after one year. Premature encashment after 3 years with discounted interest. Can be pledged against loan. None. Accumulation of interest Joint ownership and nomination possible
Discountinued w.e.f.
1-12-2015
3 Kisan Vikas Pata (KVP) Resident Individuals 7.8 % p.a. for 01-04-2016 to 30-06-2016 Double in 9 years & 2 months 8.5% p.a w.e.f
1-4-2015 Double in 8 years & 4 months 		8 Years & 4 months Premature encashment possible after 2 & ½ years with lower yield Govt. of India through Post Office Section 80C. Benefit not available No TDS from interest and Withdrawal Min. ₹ 1000 Max. No Limit Certificate can be transferred from one person to another and from one post office to another can be encashed after 2 & 1/2 years None. Accumulation of interest Joint ownership and nomination possible
4 8% Savings Bonds, 2003 (Taxable) Individuals, HUFs, Charitable Institutions and Universities, Hospitals (NRIs not allowed) 8% p.a. Interest on Non Cumulative bonds will be received half yearly (on 1st August & 1st February) and interest on cumulative bonds will be compounded with half yearly rests.(1000 becomes 1601 in 6 years) 6 years Govt. of India None. TDS is applicable Min. ₹ 1,000 Max. No Limit Not Transferable Premature encashment not possible None Accumulation of interest in case of cumulative bond Joint ownership and nomination possible for single holder only and not available for joint holdings or minor investors
5 Post Office Recurring Deposit Resident Individuals 7.4 % p.a. for 01-04-2016 to 30-06-2016 8.4% p.a w.e.f.
1-4-2014 Compounded quarterly
Five years. Extension for another 5 years possible Govt. of India through Post Office None Min. ₹ 10 per month or any amount in multiples of ₹ 5 Max. No Limit One withdrawal up to 50% of the balance will be allowed after one year and if up to 12 deposits have been made. Premature closure of accounts is permissible after three years, interest @ applicable to post office savings a/c. None. Accumulation of interest Joint Account & nomination possible
6 Post Office Monthly Income Scheme Resident Individuals 7.8 % p.a. for 01-04-2016 to 30-06-2016 8.4% p.a w.e.f.
1-4-2013 1-4-2012 No Bonus 		5 years. After
1-12-2016 years 		Govt. of India through Post Office No TDS from interest. Min. ₹ 1,500 Max.
₹ 4,50,000 Single Account
₹ 9,00,000 Joint Account One time deposit only Minor can invest with separate limit of  ₹ 3 lakhs 		Can be withdrawn at any time after 3 years with 1% reduction but no bonus and also after one year with a reduction of 2% from deposit amount but no Bonus. None Joint ownership and nomination possible
7. Post Office Time Deposit Resident Individuals 7.1 % to 7.9% p.a. for 01-04-2016 to 30-06-2016 8.4% - 8.5% p.a. w.e.f.
1-4-2014 Interest payable annually but calculated on quarterly basis 		Either
1 year,
2 years,
3 years or
5 years 		Govt. of India through Post Office Section 80C Benefit within the overall limit of
₹ 1,50,000 if held for 5 years. No TDS from interest 		Minimum
₹ 200 and its multiples Maximum No limit 		Can be withdrawn at any time after 6 months but within one year with interest rate applicable to saving account. (w.e.f.
1-12-2011) Premature withdrawal after one year entails reduction of 1% interest Scheme to Scheme (w.e.f.
1-12-2011) 		None. Accumulation of interest Joint ownership and nomination possible
8 Certificates of Deposits Any Entity [NRIs] can invest only on non-repatriable basis Varies from time to time from bank to bank Between 91 days and 365 days Scheduled Commercial Banks excluding Regional Rural Banks None Minimum
₹ 5,00.000 Max. No Limit 		Transferable by endorsement and delivery after 30 days None. Accumulation of Interest Joint ownership possible
9 Sukanya Samriddhi Accounts In the name of girl child. Max two. Girl child Account can be opened up to age of 10 years only from the date of birth. For initial operations of Scheme, one year grace has been given. With the grace, Girl child who is born between 2-12-2003 & 1-12-2004 can open account up to1-12-2015. 8.6 % p.a. for 01-04-2016 to 30-06-2016 9.2% p.a w.e.f
1-4-2015 compounded yearly		 Account can be closed after completion of 21 years Partial withdrawal, maximum up to 50% of balance standing at the end of the preceding financial year can be taken after Account holder’s attaining age of 18 years. Normal Premature closer will be allowed after completion of 18 years /provided that girl is married Govt. of India through Post Office & Banks Sections 10 and Section 80C. Investment within the overall limit of
₹ 1,50,000 No TDS from interest and withdrawal 		Min. ₹ 1000 Max. 1,50,000 Partial withdrawal, maximum up to 50% of balance standing at the end of the preceding financial year can be taken after Account holder’s attaining age of 18 years. Normal Premature closer will be allowed after completion of 18 years /provided that girl is married None. Accumulation of interest Nomination possible after she becomes major
10. Financial Institutional Bonds Any Entity Varies from time to time as per the market and other conditions Generally 3 to 7 years period Financial Institutions— Both Public and Private Section 80C for investment in Infrastructure Bonds Discountinued from A.Y. 2013-14 No Limit Illiquid, though saleable in the open market (can be in demat form also) None Accumulation of interest in case of cumulative bond Joint ownership and nomination allowed
11. Listed Shares of Limited Companies Any entity other than firms and trusts Dividend rate varies Shares continue till the dissolution of issuer company Limited Companies Section 10 for dividend. Short term capital gain tax @ 15% and long term capital gain tax NIL - conditions apply. No Limit Very Liquid Max. scope for capital appreciation by increase in market values Joint ownership and nomination possible
12. Equity Oriented Schemes of Mutual Funds Any entity Variable returns (Dividend or Growth option) No lock-in-period Certain funds carry exit load if exist within certain specified period Mutual Funds Section 10 for income. Concessional capital gain tax benefit as above Varies from scheme to scheme Can be withdrawn at any time subject to exit load which varies from scheme to scheme Equity Scheme Max. scope for capital appreciation Joint ownership and nomination possible
13 Senior Citizen Saving Scheme 2004 (SCSS) Individuals above 60 years. (In certain cases above 55 years) (NRIs are not allowed) 8.6% p.a . w.e.f. 01-04-2016 9.3% p.a . w.e.f. 01-04-2015 interest payable quarterly. It will be a 5 years account and extendable by another 3 years, on extension, interest rate as of that time shall be applicable) 5 years Govt. of India through Post Office and Nationalised Banks Sec. 80C Benefit within the overall limit of
₹ 1,50,000 TDS applicable 		Min. ₹ 1,000 Max.
₹ 15,00,000 		Deduction of 1.5% if account is closed after 1 year and 1% if it is closed after 2 years None. Accumulation of Interest Joint ownership and nomination possible
14. Equity Linked Saving Scheme Any entity Variable returns (Dividend or Growth Option) 3 years Mutual Funds Section 10 for dividend & Section 80C benefit within the overall limit of
₹ 1,50,000 . Concessional capital gain tax benefit. 		Min. ₹ 500/- Max. No Limit Can be withdrawn at any time after 3 years Equity Scheme Max. scope for Capital Appreciation Joint ownership and nomination possible
15. Term Deposits (Tax Saving) Individual or HUF Varies from time to time from bank to bank a) For a fixed period of not less than five years with a scheduled bank and b) which is in accordance with a scheme framed and notified by the Central Government in the Official Gazette for the purposes of this clause Scheduled Banks Sec. 80C Benefit within the overall limit of
₹ 1,50,000 TDS is applicable if interest exceeds
₹ 10,000 per annum per branch of each bank 		No limit For a fixed period of not less than five years with a scheduled bank. No premature withdrawal allowed & cannot be pledged to secure any loans None Accumulation of interest Joint ownership and nomination possible
16. Rajiv Gandhi Equity Saving Scheme New Retail Investor Variable returns (Dividend or Growth Option) 3 years. (one year fixed lock in & 2 year flexi lock in) Mutual funds Income tax deduction u/s. 80CCG (Over & above Deduction u/s. 80C) of 50 per cent to new retail investors, who invest up to
₹ 50,000 directly in equities or in units of MF and whose annual income is below 12lakh. Exempt from Wealth tax. 		Max.
₹ 50,000/- 		Can be withdrawn at any time after 3 years Investment in Equity Shares / ETF/Mutual Funds Max. scope for Capital Appreciation Joint ownership and nomination possible
17. Company Deposits Any Entity (NRI Not Allowed) Varies from time to time as per the market and other conditions Generally between 10% and 13% As per Co. Policy Generally 6 months to 5 years Companies None Varies from Co. to Co. Generally Min –
₹ 5000/- 		Premature withdrawal Varies from co. to co. Generally not allowed till 6 months & thereafter allowed at 2% to 3% reduced rate of interest None Accumulation of interest in case of cumulative Deposit Joint ownership and nomination allowed
18. Pension Plans of Mutual Funds Individual, HUF Variable returns (Dividend or Growth Option) 3 years Mutual Funds Section 10 for dividend & Sec. 80C benefit up to ₹ 1,50,000 Min. ₹ 500 Max. No Limit Can be withdrawn at any time after 3 years Not more than 40% in equities Scope for Capital appreciation Joint ownership and nomination possible
19(a). National Pension Schemes Individual, Contribution made by Employer is also eligible for deduction u/s 80CCD(2) up to 10% of salary of employee. In Traditional Schemes as per bonus rate announced & in unit linked schemes as per market conditions. As per policy term LIC & other private Life Insurance Companies Sec. 80CCD (1B benefit up to ₹ 50,000 over & above limit of ₹ 1,50,000 U/S 80C w.e.f. 2016-17 but restricted to 10% of salary for employee or GTI for others over & above limit of ₹ 1,50,000 U/S 80C Minimum 6000/- p.a. for Tire –I & 2000/- p.a.for Tire – II Max. No Limit On maturity at the age of 60 years An Individual can withdraw 60% of the accumulated value as per policy term which will be Taxable Balance should be commuted for pension. Under annuity scheme & monthly pension will also be taxable. In case of traditional schemes accumulation as per current bonus rate & In case of unit linked Plans equity scheme Max. scope for Capital appreciation. Nomination Possible
19(b). Pension Schemes Individual above 18 years In Traditional Schemes as per bonus rate announced & in unit linked schemes as per market conditions. As per policy term LIC & other private Life Insurance Companies Sec. 80CCC benefit up to
₹ 1,50,000 within the overall limit of ₹ 1,50,000 		Minimum as per policy Max. No Limit On maturity. An Individual can withdraw 1/3rd of the accumulated value as per policy term which will be Tax free u/s. 10 & Balance should be commuted for pension. In case of traditional schemes accumulation as per current bonus rate & In case of unit linked Plans equity scheme Max. scope for Capital appreciation. Nomination Possible
20. Unit Linked Insurance Premium (ULIP) Individual Variable returns with Risk cover 5 years LIC & other private Life Insurance Companies Section 10 for dividend & Section 80C benefit up to ₹ 1,50,0001 lakh. Concessional No tax on maturity u/s. 10(10D) Minimum as per policy Max. No limit Can be withdrawn at any time after 5 years Various options but under Equity Scheme Max. scope for capital appreciation Single holding and nomination possible
21. Tax Free Bonds Any Entity (NRI Allowed) 7.00% to 7.5% . Generally 10 to 20 years Infrastructure Financial Institutions/Companies— Both Public and Private None. Interest is tax free u/s 10 Min.
₹ 5,000/- Max. No Limit 		Liquid as Bonds are generally listed in the stock exchange. (can be in demat form also) None Accumulation of interest in case of cumulative bond Joint ownership and nomination allowed
22. Inflation Indexed National Saving Securities- Cumulative (IINSS-C) Individual, HUF, Charitable Institute regd U/S 25 of Co.s Act, & Specified Universities (NRI Not Allowed) Interest rate would be linked to Consumer Price Index (CPI). Rate would comprise two parts -- fixed rate (1.5 per cent per annum) and inflation rate based on CPI. The same will be compounded in the principal on half-yearly basis. After 10 Years Prematured withdrawals – after 1 year for senior citizen above 65 years & after 3 years for others Banks & Stock Holding Corporation of India None Min.
₹ 5,000/- Max.
₹ 5,00,000/- 		Prematured withdrawals – after 1 year for senior citizen above 65 years & after 3 years for others None Accumulation of interest Linked to inflation Joint ownership and nomination allowed
23. Debt Oriented Schemes of Mutual Funds Any entity Variable returns (Dividend or Growth option) No lock-in-period Certain funds carry exit load if exist within certain specified period Mutual Funds Section 10 for income. In case of redemption between
01-4-2014 to 10-7-2014 - if held for more than 12 months LTCG @ 20% tax with indexation & @10% Tax without Indexation. In case of redemption after
10-7-2014 - if held for more than 36 months then only LTCG @ 20% tax with indexation & if held for less than 36 months STCG without any concessional rate of Tax. 		Varies from scheme to scheme Can be withdrawn at any time subject to exit load which varies from scheme to scheme Equity Scheme Max. scope for capital appreciation Joint ownership and nomination possible
 

PPF, A/c opened by HUFs, Trusts, Provident Funds, guardians on behalf of minors (through single or joint accounts on or after 13-5-2005 shall be treated as void ab initio. Existing accounts shall continue as per old rules, [Circular No. CO dt. 15-2-2001/H-9866/2004-05 dated 25-5-2005 (145 Taxmann (St) 51) Some of the subscribers of PPF (HUF) accounts had closed the accounts on maturity or thereafter between 13th May, 2005 to 7-12-2010 were not paid interest at PPF rates on the deposits retained beyond the maturity period (without further subscriptions). Interest at PPF rate would be paid on those PPF (HUF) accounts, which had attained the maturity after 13-5-2005 but closed by the subscribers before 7-12-2010, subject to the conditions that the accounts had not been extended thereafter and the deposits were retained in such accounts without further subscriptions. LETTER [F.NO.7/4/2008-NS.II], DATED 1-6-2011

NOTES:

  1. Tax Benefits i. Section 10 — Exemption in respect of income.
  2. Nomination rules are prescribed under relevant Act/Rules. Please go through the same before making nominations.