|
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)
|
8.7% p.a w.e.f
1-4-2013
8.8% p.a w.e.f
1-4-2012 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 No TDS from interest and
withdrawal
|
Min.
` 500 p.a. Max.
` 1,00,000/- p.a. w.e.f.
1-12-2011 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
|
8.5% p.a w.e.f
1-4-2013
8.6% p.a w.e.f
1-4-2012 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. 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
|
|
b)
|
National Savings Certificates IX Issue (NSC)
(Available in demat form at select post offices)
|
Resident Individuals
|
8.8% p.a w.e.f
1-4-2013
8.9% p.a w.e.f
1-4-2012
|
10 Years Premature encashment possible after 3
years with lower yield
|
Govt. of India through Post Office
|
Section 80C. Investment and Accrued int. eligible
u/s. 80C except 6th year. 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
|
|
3
|
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.
` 1000 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
|
|
4
|
Post Office Recurring Deposit
|
Resident Individuals
|
8.3% p.a w.e.f.
1-4-2013
8.4% p.a w.e.f.
1-4-2012 compounded quarterly (`
10 deposited monthly becomes
` 728.90
|
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
|
|
5
|
Post Office Monthly Income Scheme
|
Resident Individuals
|
8.4% p.a w.e.f.
1-4-2013 8.5% p.a w.e.f 1-4-2012 No Bonus
|
5 Years. After
1-12-2011
6 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
|
|
6.
|
Post Office Time Deposit
|
Resident Individuals
|
8.2% - 8.4% p.a. w.e.f. 1-4-2013 8.2% - 8.5% p.a.
w.e.f. 1-4-2012. 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
` 100000 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
|
|
7
|
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
|
|
8
|
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
|
|
9
|
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
|
| 10 |
Equity/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. Concessional capital gain
tax benefit as above for equity oriented schemes
|
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
|
| 11 |
Senior Citizen Saving Scheme 2004
(SCSS)
|
Individuals above 60 years. (In certain cases
above 55 years) (NRIs are not allowed)
|
9.2% p.a w.e.f 1-4-2013
9.3% p.a w.e.f 1-4-2012 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 `
100000 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
|
| 12 |
Equity Linked Saving Scheme
|
Any entity
|
Variable returns (Dividend or Growth
Option)
|
3 years
|
Mutual Funds
|
Section 10 for dividend & Section 80C benefit
up to 1 lakh. 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
|
| 13 |
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 `
1,00,000
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
|
| 14 |
Rajiv Gandhi Equity Saving Scheme
|
New Retail Investor
|
Variable returns (Dividend or Growth
Option)
|
3 years
|
Govt. of India Has not yet notified the
issuer
|
Income tax deduction of 50 per cent to new retail
investors, who invest up to
`50,000 directly in equities and whose annual income is
below `12 lakh
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
|
|
15
|
Company Deposits
|
Any Entity (NRI Not Allowed)
|
Varies from time to time as per the market and
other conditions Generally between 10% to 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
|
|
Pension Funds
|
|
16
|
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 100000
|
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
|
|
17
|
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
` 100,000/- & within the
overall limit of
`
1,00,000 of Section 80CCE
|
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
|
|
18
|
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 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
|
* 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 dt. 25-5-2005 (145 Taxman (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
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.
