Investment Planning for Middle Class Family – A.Y. 2022-23 & 2023-24

1.  Investment in Sukanya Samriddhi Yojana for Tax Saving for AY 2022-23 & 2023-24

Sukanya Samriddhi Account is a Government of India backed saving scheme targeted at the parents of girl children. The scheme encourages parents to build a fund for the future education and marriage expenses for their female child.

The Sukanya Samriddhi Yojana (SSY) was launched by PM Narendra Modi in 2015, as part of his Beti Bachao, Beti Padhao campaign.

The SSY is a savings scheme backed by the Centre for parents of a girl child, it provides a good interest rate along with several other benefits.

The Following is the historic rates of this government Scheme for the girl child:

Financial Year (Date Range)	Interest Rate
2021-22(1 April 2021 to 31 March 2022)	7.6%
2020-21 (1 April 2020 to 31 March 2021)	7.6%
2019-20 (1 July 2019 to3l March 2020)	8.4%
2019-20(1 April 2019 to 30 June 2019)	8.5%
2018-19 (1 October2018 (031 March2019)	8.5%

Eligibility for SSY Account :

For the child (account holder)

• Only a girl child can avail the benefits of Sukanya Samriddhi Yojana saving scheme.
• The maximum age of this child should be 10 years. However, a grace period of 1 year is granted.

For the parents-

• Only biological parents or legal guardians of a girl child can open the account on the child’s behalf.
• One parent or legal guardian can open up to two accounts for their girl children.
• In case of twins or triplets the parent or legal guardian can open up to three accounts.
• The account holder has to be an Indian citizen and resident in India at the time of account opening and has to remain so until maturity or closure of account.

Opening of Sukanya Samriddhi Yojana Account

(1)       The account may be opened by one of the guardians in the name of a girl child, who has not attained the age of ten years as on the date of opening of the account.

(2)       Every account holder shall have a single account under this Scheme.

(3)       The application in Form-i for opening an account shall be accompanied by birth certificate of the girl child in whose name the account is to be opened, along with required documents of guardian.

(4)       An account under this Scheme may be opened for a maximum of two girl children in one family:

Provided that more than two accounts may be opened in a family if such children are born in the first or in the second order of birth or in both, on submission of an affidavit by the guardian supported with birth certificates of the twins/triplets regarding the birth of such multiple girl children in the first two orders of birth in a family:

Provided further that the above proviso shall not apply to girl child of the second order of birth. if the first order of birth in the family results in two or more surviving girl children.

Benefits of Investing in Sukanya Samriddhi Yojana

Sukanya Samriddhi Account is launched with the sole objective of financial planning for the marriage of Girl Child. Social Message is that Marriage or Education of a Girl Child is not a financial burden if parents plan well in advance.

Sukanya Samriddhi Yojana was introduced as part of Beti Bachao, Beti Padhao Yojana which provides with a range of benefits Some of the key benefits of this scheme for the benefits of the girl child are as follows:

• Sukanya Samriddhi Account provides a higher rate of interest than other Savings Plans that offer financial security for the girl child.
• Each financial year, the Government declares the applicable interest rate for that year, while the interest on your investments is compounded yearly.
• Your contributions towards the Sukanya Samriddhi Yojana for your daughter’s future are eligible for tax deductions under Section 80C of the Income-tax Act, 1961. Thus, you can claim tax deductions up to Rs 5 lakh invested in the scheme.
• Upon maturity, your account balance under the Sukanya Sarnriddhi Yojana, including the accumulated interest, will be paid directly to the girl child (or policyholder).
• Investing under Sukanya Samriddhi Yojana is that your accumulated savings continue to accrue compounding interest even after maturity until it is finally closed by the account holder.

Minimum and Maximum Amount of Investment

A Sukanya Samriddhi Account can be opened any time after the birth of a girl child till she turns 10, where you will have to deposit a minimum of Rs. 250. In subsequent years, a minimum of Rs. 250 and a maximum of Rs. 1.5 Lakh can be deposited during the ongoing financial year.

Thereafter the account will continue to earn interest till maturity.

Tenure of SSY Account

The account will attain maturity 21 years after it is created. At this time, the maturity amount will be payable to the person in whose name the account was made.

The payment period for SSY accounts is 15 years, while the maturity period of the account is a minimum of 21 years.

Taxation on SSY Scheme

SSY is a completely Exempt (EEE) Investment hence the principal amount invested, the interest earned as well as the maturity amount are all tax-exempt. Investments made in the SSY scheme are eligible for deductions under Section 80C, subject to a maximum cap of Rs. 1.5 lakh. The interest that accrues against this account which gets compounded annually is also exempt from tax. The proceeds received upon maturity/withdrawal are also exempt from income tax.

Partial Withdrawal from SSY Account

The account allows partial withdrawal. The Sukanya Samriddhi account holder can withdraw up to 50% of the total savings for fulfilling the purpose of marriage or higher education of his/her girl child. The Sukanya Samriddhi account allows partial withdrawal only after the girl reaches the age of 18.

Loan against SSY Account

Currently, no loans can be borrowed against this policy as per the existing rules and regulations. Any investment made towards the account cannot be held as security for loan purposes. This provision is currently non-existent for Sukanya Samriddhi Yojana.

Transfer of Sukanya Samriddhi Yojana account

The Sukanya Samriddhi Account can be transferred to anywhere in India. It works both ways – you can transfer it either form a post office to a bank or from a bank to a post office. The transfer can be carried out between listed commercial banks and Indian post offices.

Even contributions to Sukanya Samriddhi account can be done through this App. Write your SSA Account Number and then DOP Customer ID. Choose the installment amount. IPPB will then notify you of a successful payment transfer made through IPPB mobile application.

2.  Investment in Post Office Savings Account for Tax Saving for AY 2022-23 & 2023-24

A Post Office Savings Account is one of the most popular and accessible savings accounts in India.

• The minimum opening amount as well as maximum balance that can be retained is Rs. 500.
• The interest rate being offered for this account is 4.00% p.a.

It can also be opened by a minor above the age of 10 in their own name.

Only one account can be opened as a single account by the individual. There is no limit on the maximum amount that can be deposited in a post office savings account.

It is also eligible for tax exemption for interest of up to Rs. 10,000 earned in a financial year (for all savings accounts combined) under the Income Tax Act. 80TTA.

Eligibility to Open Post Office Savings Account

The following individuals are eligible to open a Post Office savings account

• Minors with a minimum age often years.
• A guardian on behalf of a minor.
• A person of unsound mind.
• Two or three adults can open a joint account.
• Group Accounts, Institutional Accounts and other accounts like Security Deposit Accounts & Official Capacity Accounts are not permissible.

Benefits of Post Office Savings Account

Cheque facility is available and can be request for existing accounts as well.

• Account holders who have maintained the prescribed minimum balance on the day of issuance of the debit card. CBS Post Offices can grant ATM/Debit cards.
• Customers can make withdrawals and deposits through any electronic mode in CBS Post offices.

In order to keep the account active, you only need to carry out one transaction of a deposit or withdrawal in 3 financial years. The account will not be deemed inactive unless there are no transactions for 3 financial years.

Two or three adults are allowed to hold an account together under the joint account facility. A single account can be convened to a joint account and vice versa.

The account holder can also choose to nominate a person to receive the proceeds of this account after their demise at any time.

Post Office Savings Accounts Interest Rate

Post Office savings account interest rate is decided by the Central Government from time to time and is generally between 3% to 4%. Interest is calculated on monthly balances and credited annually.

3.  Investment in Post Office FD for Tax Savings for A.Y. 2022-23 & 2023-24

The Government of India’s Department of Posts, Ministry of Communications, offers fixed deposit accounts that oiler attractive interest rates with tenures that range from 1 year up to 5 years. The interest is payable annually with the minimum deposit being Rs.1,000 and no maximum limit.

Post Office Fixed Deposit Rates

Deposit Tenure	Post Office FD Rates (P.a.)
1 Year	5.50%
2 Year	5.50%
3 Year	5.50%
4 Year	6.70%

Post Office Time Deposit Account

The post office Time Deposit (TD) Account, also known as the post office Fixed Deposit (FD) account, can be opened with a minimum of Rs. 1,000 in multiples of Rs. 100, with no maximum limit.

Features of Post Office Fixed deposit

• Account can be transferred from one post office to another anywhere in the country.
• Any number of accounts can be opened in any post office anywhere in the country.
• A single account can be converted into a joint account and vice versa.
• Nomination facility is available at the time of opening the account and afterwards too.
• Account can be opened by cheque or cash.
• Minimum amount is Rs. 1,000.
• There is no maximum limit to the deposit.
• A minor’s account has to be convened after attaining majority.
• The tenure can he extended by making an application.
• Interest is payable annually.
• Interest is credited into the holder’s savings account.

Who can open a Fixed Deposit Account?

A Time deposit account with India Post can he opened by:

• A single adult
• Maximum of three adults (in the case of a joint account)
• A minor who is above 10 years of age
• A guardian on behalf of an individual who is a minor or a person of unsound mind

Premature Withdrawal of Post Office FD

Premature withdrawal of a Post Office FD or Term Deposit can be made between 6 months to 1 year of the date of opening the account. However, if withdrawal is not allowed before 6 months from the date of opening the account.

TDS Deduction on Post Office FD

You can avail a tax deduction under Section 80C of the Income-tax Act, 1961. for deposits with a tenure of 5 years. This rule is applicable from 1 April 2007.

Rates for Tax-Saving Post Office 5-year Fixed Deposit

If you open a fixed deposit with the post office for a tenure of 5 years. you will be eligible to claim tax benefits under Section 80C of the Income-tax Act., 1961.

4.  Investment in Post Office Time Deposit Account (POTD) for A.Y. 2022-23 & 2023-24.

Is one of the most well-known investment schemes offered by the India Post. While the scheme is open to all individuals, it is particularly popular in rural and remote areas of the country that are relatively under-banked and have limited access to investment products.

Post Office Time Deposit Scheme Interest Rates

The Indian Finance Ministry reviews the interest rates on the scheme in the beginning of every quarter of the financial year. The interest rate is decided based on the yield on Government securities and usually has a spread over the Government-sector yield.

Following are the interest rates of the post office time deposit account applicable from 1 st.  Jan 2019 to 31^st. March 2019:

Account Tenure	Applicable Interest Rate
1 Year	5.50%
2 Year	5.50%
3 Year	5.50%
4 Year	6.70%

In case you do not wish to withdraw the interest annually, you can instruct the post office to redirect it to your post office savings account, that earns 4% interest p.a. However, this cannot be done in case of POTD with 1 year tenure.

Alternatively, you may also choose to redirect this interest to 5 years recurring deposit account in the same post office or bank in lieu of payment of 12 monthly installments. In this case, the depositor will be required to give a fresh application to the office or bank before the due date on which interest falls due for payment.

Features of Post Office Time Deposit Scheme

• Deposits under post office time deposit schemes can have tenure of 1, 2, 3 or 5 years, and only one deposit can be made in one account.
• This post office scheme promises assured returns on the account holder’s investments.
• The time deposit accounts can be easily transferred from one post office to another.
• Time deposit accounts can he either solely operated or jointly held.
• Account holders can extend the duration of a time deposit account upon its maturity.
• If proceeds of a mature account are not withdrawn, the account will be automatically renewed for the original deposit tenure at applicable interest rates as on the date of maturity.
• There is no cap on the number of time deposit accounts that can be opened.
• Minimum deposit required to invest in the Post Office Time Deposit scheme is Rs. 200. However, it must be noted that the amount to be deposited should be in multiples of Rs. 200 only. If not, the amount in multiples of Rs. 200 will be retained in the account and the balance will be refunded without any interest.
• The Central Government has recently authorized all public sector banks and some private banks like ICICI Bank. Axis Bank, and HDFC Bank to allow investors to open POTD accounts.
• Investors may consider POTD investments as alternates to Bank Fixed Deposits.

Eligibility Criteria

In order to be eligible to open a Post Office Time Deposit Account, the following criteria must be taken into account-

• All resident Indians can open and operate this account either singly or jointly.
• A minor aged 10 years or more can open and also operate this account.
• A parent/guardian can open a Post Office Time Deposit account on behalf of a minor.
• Non-resident Indians are not allowed to open a Post Office TD account.

The following groups/funds are not allowed to avail the Post Office Time Deposit Scheme-

• Institutional account holders.
• Trust funds.
• Regimental funds.
• Welfare hinds.

5. Investment in Post Office Monthly Income Scheme (POMIS) for A.Y. 2022-23 & 2023-24.

The Post Office has been a trusted place for depositing and transacting with money. This is especially true for the elder generation. A number of saving schemes are offered by branches of the Post Office across the country.

Post Office Monthly Income Scheme is one such scheme where you invest a certain amount and earn a fixed interest every month. As the name suggests, you can invest in this from any post office.

Post Office offers POMIS among a host of banking products and services, under the purview of the Finance Ministry. Hence, it is highly reliable. It is a low-risk MIS and generates a steady income.

You can invest up to Rs. 4.5 lakh individually or Rs. 9 lakhs jointly, and the investment period is 5 years. Capital protection is its primary objective. For the quarter ending 30 September 2021, the interest rate is 6.6% per annum, payable monthly.

Features & Benefits of Post Office Monthly Income Scheme

Capital protection:

Your money is safe until maturity as this is a Government-backed scheme.

Tenure:

The lock-in period for Post Office MIS is 5 years. You can withdraw the invested amount when the scheme matures or reinvest it.

Guaranteed returns:

You earn income in the form of interest every month. The returns are not inflation-beating but are higher compared to other fixed-income investments like FD.

Tax-efficiency:

Your investment is not covered under Section 80C; TDS is not applicable either

Reinvestment:

You may reinvest the corpus post maturity in the same scheme for another block of 5 years to continue earning benefits.

Multiple account ownership:

You can open more than one account in your name. But the total deposit amount cannot exceed Rs. 4.5 lakhs in all of them together.

Joint account:

You can open a joint account with 2 or 3 people. In this case, an aggregate sum of up to Rs. 9 lakhs can be invested in this account.

Fund movement:

The investor can move the funds to a Recurring Deposit (RD) account, which is a feature Post Office has added recently.

Nominee:

The investor can nominate a beneficiary (a family member) so that they can claim the benefits and corpus if the investor passes away during the account’s term.

Ease of money/interest transaction:

You may collect the monthly interest directly from the post office or get it transferred automatically to your savings account. Reinvesting the interest in a SIP is also a lucrative option.

Eligibility criteria to open a POMIS account

Only a resident Indian can open a POMIS account.

NRIs cannot enjoy the benefits of this scheme.

Any adult can open an account.

You can open an account on the behalf of minor who is aged 10 years and above.

They can avail the fund when they become 18 years old.

A minor, after attaining majority, has to apply for conversion of the account in his name.

Account Type	Maximum Deposit Amount Allowed
Single Account	Rs. 4.5 lakhs
Joint Account (2 or 3 adults)	Rs. 9 lakhs

6. Investment in Senior Citizen Savings Scheme (SCSS) for A.Y. 2022-23 & 2023-24.

SCSS is a savings product available for senior citizens aged 60 or above. On the date of opening an SCSS account, the subscriber must be 60 years old or above. However, age relaxation is provided to certain categories of individuals.

With the SCSS account, senior citizens can receive quarterly interest on deposits up to Rs. 15 lakhs.

Where to Open SCSS Account

A senior citizen can open an SCSS account with Post Office and at some banks.

SCSS Income Tax Benefit

The deposit / Investment made in an SCSS account qualify for deduction under Section 80C of the Income Tax.

According to the official Post Office website, the interest is taxable if the total interest in all SCSS accounts is more than 50,000 in a financial year. In such cases, TDS is deducted from the total interest paid.

However, no TDS is deducted if the account holder submits form 15G / 15H and the accrual interest is not more than the prescribed limit.

SCSS Interest Rate 2022

Currently, the SCSS interest rate is 7.4%. The Government of India revises the SCSS interest rate, along with other savings schemes, on a quarterly basis. The SCSS Interest Rate 2022 (for the first quarter of the New Year 2022) has remained unchanged.

SCSS Term / Maturity Period

The amount deposited in the SCSS account cams interest for a term of five years. An account holder can apply for a one-time extension of three years within one year of the maturity of the account.

The deposit in an extended SCSS account will earn interest at the rate applicable on the date of maturity.

Also, the deposit made at the time of opening of an SCSS account is paid to the account holder on or after the expiry of five years from the date of opening the account, or 8 years in cases of an extended account.

SCSS Joint Account Rule

A senior citizen can hold an SCSS account in his/her individual capacity or jointly with the spouse. Both spouses can open a single SCSS account and joint accounts with each other. However, in the case of a joint account, age restriction will apply only to the first holder. The whole amount of deposit is attributable to the first account holder only in joint accounts.

Benefits OF SCSS

If the deposit is in excess to the ceiling amount, the excess amount shall be refunded to the account holder immediately.

Interest on the deposit will be paid once every quarter.

Interest can be drawn through auto credit into the savings account held at the same Post Office branch or through ECS.

The account can be prematurely closed at any time, after the date of opening.

The account may be extended for a Further period for 3 years from the date of maturity.

The extension can be done within 1 year from the date of maturity.

7.  Investment in Public Provident Fund (PPF) for A.Y. 2022-23 & 2023-24.

The Public Provident Fund (PPF) scheme is a very popular long-term savings scheme in India because of its combination of tax savings, returns, and safety. The PPF scheme was launched in 1968 by the Finance Ministry’s National Savings Institute. The main objective of the scheme is to help individuals make small savings and provide returns on the savings. The PPF scheme offers an attractive rate of interest and no tax is required to be paid on the returns that are generated from the interest rates.

PPF Information

Tenure	15 years (Can he renewed in blocks of 5 years)
Interest rate	7.1%
Investment Amount	Minimum Rs.500, Maximum Rs. 1.5 lakh p.a.
Maturity Amount	Depends on the investment tenure

Eligibility to open a PPF account

You can invest in the PPF if you meet these criteria:

• You are a citizen of Indian
• You can open only one PPF account unless your second PPF account is in the name of a minor.
• You cannot invest in PPF is you are an NRI or HUF.

Features of a PPF account

The main features of the PPF account are mentioned below:

Investment Limits:

For a PPF, you should have a minimum investment of Rs.500 and your maximum investment is Rs. 1.5 lakh for every financial year.

Tenure of the PPF:

The minimum tenure of a PPF is 15 years. This can he extended in sets of 5 years.

Deposit Frequency:

Your deposits into the PPF account have to be made once every year for a tenure of 15 years.

Opening Balance:

You can open a PPF account with Rs. 100 and annual investments over Rs. 1.5 lakh will not earn any interest.

Nomination:

As a PPF account holder, you can have a nominee for your account when you open the account or after.

Mode of deposit:

You can make a deposit into the PPF account via cheque, cash, demand draft, or online fund transfer.

Risk factor:

The PPF is backed by the Indian Government, and so, it is risk-free and offers guaranteed returns.

Joint accounts:

You can hold a PPF account in only one individual’s name.

PPF Interest Rate

Currently, PPF interest rate has been reduced from 7.9% to 7.1% and it is compounded on an annual basis. The interest is paid on March 31 and the PPF interest rate is set by the Finance Ministry on a yearly basis. The calculation of interest is based on the minimum balance that is available between the close of the fifth day and the last day of the month.

Tax Benefits you get When you Invest in Public Provident Fund

• Public Provident Fund is an investment which comes under the Exempt-Exempt-Exempt (EEE) category.
• This means that the deposits that you make in the Public Provident Fund will be deductible (Section 80C of the income Tax Act).
• The amount that you accumulate and the interest will be exempt from tax when you withdraw the money.
• You should note that you cannot close a Public Provident Fund account before maturity.
• You cannot close a Public Provident Fund account prematurely.

Investments that are made under a PPF account come under the Exempt-Exempt-Exempt (EEE) category. Therefore, under Section 80C of the Income Tax Act, all deposits made towards a PPF account are tax exempt. The amount that has been saved as well as the interest that has been generated are also exempt from tax when the individual withdraws the amount from the PPF account.

8. Investment in Kisan Vikas Patra Yojana for A.Y. 2022-23 & 2023-24.

Kisan Vikas Patra is a certificate scheme from the Indian post office. It doubles a one-time investment in a period of approximately 10 years & 4 months (124 months) if you purchase the certificate between 1 July 2021 and 30 September 2021.

A savings certificate scheme, Kisan Vikas Patra (KVP) was originally launched in the year 1981 by India Post. This is basically the Indian Government’s initiative to encourage small savings in the country for the investor’s secure fixture.

Kisan Vikas Patra Information

Tenure	124 months
interest Rate	6.9%
Investment Amount	·        Minimum: Rs. 1,000 ·        Maximum: No Upper Limit
Tax Benefits	You can avail tax benefits under Section 80C of the Income-tax Act, 1961

Kisan Vikas Patra Eligibility

The following are the Kisan Vikas Patra eligibility:

• The applicant must be an adult and a resident Indian.
• The applicant can apply for Kisan Vikas Patra in their own name or on behalf of a minor.
• Trusts are eligible to invest in Kisan Vikas Patra. HUFs (Hindu Undivided Family) and NRIs are not eligible to invest in KVP.

Taxation

It doesn’t come under the 80C deductions, and the Returns are completely taxable. However, Tax Deducted at Source (TDS) is exempt from withdrawals after the maturity period.

Kisan Vikas Patra Types

A Kisan Vikas Patra comes in the following types.

• Single Holder Type Certificate: This type of KVP is issued to an adult individually for self or on behalf of a minor.
• Joint A Type Certificate: This type of KVP is issued to 2 adults jointly and is payable to both the owners or to the survivor.
• Joint B Type Certificate: This type of KVP is issued jointly to two adults and is payable to either of the owners or to the survivor.

KVP, when of Type A and Type B. is released to both the combined owners. in case the adulthood is due to both the heir and owners or due to either of the heirs, it is released to combined owners.

Kisan Vikas Patra Interest Rate

The current interest rate was reduced from 7.6% to 6.9%. The maturity period was also increased from 113 months to 124 months. The principal amount can be withdrawn after this period only.

Here is an example of how interest accrues and doubles at maturity upon investment of Rs. 1,000 in KVP on 1^st. October 2016 at an interest rate of 7.7%.

Interest Rates of KVP

Quarter / Financial Year	2016-2017	2017-2018	2018-2019	2019-2020	2020-2021	2021-2022
April-June	7.8% (will mature in 110 months)	7.6% (will mature in 113 months)	7.3% (will mature in 118 months)	7.7% (will mature in 112 months)	6.9% (will mature in 124 months)	6.9% (will mature in 124 months)
July-September	7.8% (will mature in 110 months)	7.5% (will mature in 115 months)	7.3% (will mature in 118 months)	7.6% (will mature in 113 months)	6.9% (will mature in 124 months)	6.9% (will mature in 124 months)
October – December	7.7% (will mature in 112 month)	7.5% (will mature in 115 months)	7.7% (will mature in 112 months)	7.6% (will mature in 113 month)	6.9% (will mature in 124 months)	Yes, to announce
January-March	7.7% (will mature in 112 month)	7.3% (will mature in 118 months)	7.7% (will mature in 112 months)	7.6% (will mature in 113 month)	6.9% (will mature in 124 months)	Yes, to announce

9.  Investment in National Pension Scheme (NPS) for A.Y. 2022-23 & 2023-24.

National Pension System (NPS) is a retirement benefit Scheme introduced by the Government of India to facilitate a regular income post retirement to all the subscribers. PFRDA (Pension Fund Regulatory anti-Development Authority) is the governing body for NPS.

The scheme encourages people to invest in a pension account at regular intervals during the course of their employment. After retirement, the subscribers can take out a certain percentage of the corpus. As an NPS account holder, you will receive the remaining amount as a monthly pension post your retirement.

Earlier, the NPS scheme covered only the Central Government employees. Now, however, the PFRDA has made it open to all Indian citizens on a voluntary basis.

Features & Benefits

PRAN which is allotted to every subscriber. In order to encourage savings, the Government of India has made the scheme reassuring from security point of view and has offered some attractive benefits for. NPS account holders.

An NPS Account offers the following benefits:

Regulated:

NPS is regulated by PFRDA (Pension Fund Regulator under Ministry of
Finance, Govt. of India.) which ensures transparent norms governing the activities. NPS Trust ensures adherence to the guidelines through regular monitoring.

Voluntary:

It is a voluntary scheme for all citizens of India. You can invest any amount in your NPS account and at any time.

Flexibility:

You have the flexibility to select or change the POP (Point of Presence). investment pattern and hind manager. This ensures that you can optimize returns as per your comfort with various asset class (Equity, Corporate Bonds. Government Securities and Alternate Assets) and hind managers.

Economical:

NPS is one of the lowest cost investment products available.

Portability:

NPS account or PRAN will remain same irrespective of change in employment, city or state.

Superannuation Fund transfer:

NPS account holders can transfer their Superannuation funds to their NPS account without any tax implication. (Post approval from relevant authorities)

Tax Benefits:

NPS offers Triple Tax Benefits which are as follows:

Tax benefits for Salaried Individual	Tax Benefits for Self Employed Individual
You can claim tax exemption up to Rs. 50,000 under section 80CCD (1B). This benefit is over an above limit of Rs. 1,50,000 under section 80C.	You may invest upto 20% of your gross annual income and claim tax exemption on the invested amount under section 80CCD(1). This tax exemption is subject to a limit of Rs. 1,50,000 under section 80C of Income Tax Act, 1961.

Types of NPS Accounts

NPS accounts are primarily of two types, Individua NPS account (All Citizens Model) and Corporate NPS account.

All Citizen Model

In an Individual NPS account, the subscriber (Account holder) is the only contributor. All selections pertaining to Scheme preference, Investment choice, Annuity Service Provider, etc. are done by the subscriber alone. Any citizen of India can voluntarily choose to open an Individual NPS account to avail tax benefits on investments and to ensure regular income post retirement. Entry age is from 18 to 70 years.

Corporate Model

In Corporate NPS account, the subscriber and the employer can both contribute to the subscriber’s NPS account. A corporate entity will have to register for corporate NPS for the employees to be able to avail corporate NPS benefit. Know more about corporate NPS.

Tires in NPS

You have the option to open two sub accounts under the same Permanent Retirement Account Number (PRAN). These sub accounts arc called as tiers in NPS:

• Tier-I: It is also called as pension account. Contributions upto Rs. 50,000 made in this account are eligible for additional deduction from taxable income under section 80CCD (1B). This is over and above limit of Rs 1.5 lakhs under section 80C. Withdrawals are restricted and subject to terms and conditions.
• Tier-II: You can invest an additional amount in Tier-II NPS account. Subscriber is free to withdraw his entire accrued corpus under Tier-II at any point of time. In case you have not contributed even the initial contribution towards Tier-II a/c, it will be automatically deactivated as per process. No tax benefits are available in this account. Funds from Tier-li can be transferred to Tier-I

* Funds from Tier-I cannot be transferred to Tier-II.

You have the option to open two sub accounts under the same Permanent Retirement Account Number (PRAN). These sub accounts are called as tiers in NPS:

NPS Account Opening Contribution: Particulars	Tire-I	Tire-II
Minimum Contribution required at the time of account opening	Rs. 500	Rs. 1,000
Minimum Subsequent Contribution amount required	Rs. 500	Rs. 250
Minimum number contributions required in a year	I	NIL

The Tier-I account is mandatory for everyone who opts for the NPS scheme. The Central Government employees have to contribute 10% of their basic salary. For everyone else, the NPS is a voluntary investment option.

How much deduction available under section 80C for investment in insurance policies

The Income-tax Act, 1961 offers tax-saving benefits on investment instruments such as savings plans, life insurance premium, PPF and much more under Section 80C and its sub-sections. Section 80C deduction enables you to reduce your taxable income by up to Rs. 1.5 lakh every financial year.

Eligible premium under sub-section (3) and (3A) of section 80C on IT ACT, 1961 for life insurance policies (other than contract for deferred annuity)

Section 80C of the Income-tax Act prescribes several instruments that not only offer income tax saving benefits, but also provide financial returns throughout the policy period. Total 80C limit as per the Income-tax Act, 1961 is Rs. 1.5 lakh per financial year.

Issued from 01.04.2012 — premium paid not in excess of 10% of Capital Sum Assured

(a)       a person with disability or a person with severe disability as referred to in section 80U,

(b)       suffering from disease or ailment as specified in the rules made under section 80DDB.

Therefore, it is clear from section 80C (3) that whatever insurance premium is paid for any insurance policy (other than deferred annuity) or ULIP, the maximum allowable is fixed at 10% of the sum assured.

10. Investment in TERM LIFE INSURANCE for A.Y. 2022-23 & 2023-24.

Term life insurance, also known as pure life insurance, is a type of life insurance that guarantees payment of a stated death benefit if the covered person dies during a specified term. Once the term expires, the policyholder can either renew it for another term, convert the policy to permanent coverage, or allow the term life insurance policy to terminate.

• Term life insurance guarantees payment of a stated death benefit to the insured’s beneficiaries if the insured person dies during a specified term.
• These policies have no value other than the guaranteed death benefit and feature no savings component as found in a whole Life insurance product.
• Term life premiums are based on a person’s age, health, and life expectancy.
• Depending on the insurance company, it may be possible to turn term life into whole life insurance.
• You can often purchase term life policies that last 10, 15, or2O years.

Benefits of Term Life Insurance

Term life insurance is attractive to young people with children.

Parents may obtain large amounts of coverage for reasonably low costs. Upon the death of a parent, the significant benefit can replace lost income.

These policies are also well-suited for people who temporarily need specific amounts of life insurance.

Navigating the ins and outs of all the different types of life insurance can seem intimidating, especially if you’re buying your first policy. That’s why many shoppers choose term Life insurance. It’s a good fit for most people, particularly young families on a budget looking for temporary coverage.

Here are some advantages to term life insurance:

1. Less expensive

On average, life insurance rates are more affordable for term than whole life insurance because term policies offer coverage for a predetermined time.

2. More flexible

You have many options when choosing how long your term life insurance should last. Typically, you can buy coverage for 1, 5, 10, 15, 20, 25 or 30 years.

3. Good for young families

Because term life covers only a specific period and is generally less expensive than permanent life insurance, it’s a great choice for young families Looking for temporary coverage.

4. Simplicity

Term life insurance is easy to understand, which makes it simple to shop for and compare life insurance quotes.

Tax Benefits of term Life Insurance

Term insurance plans are of great help when it comes to individuals who are looking to save on tax. Any policyholder of a term insurance is eligible to receive tax benefits as per the Income-tax Act. 1961. Typically, all term insurance policies offer customers tax deductions under Section 80C of the Income-tax Act, 1961. along with further deductions up to an amount of 1.5 lakhs. Policyholders can also avail of exemptions under Section 10(10)D for receiving any amount as part of maturity benefits from their insurance policy.

Deductions and Tax Benefits Under Sections 80C and 80CCC

The following are the tax benefits that policyholders can claim under Section 80C

• Individual assessees as well as HUFs (Hindu Undivided Families) are eligible for tax deductions under this section. For individual assessees, the following persons are eligible to receive tax benefits.
• The individual himself
• The wire or husband of the individual assessee.
• The individual assessee’s children.
• In the case of Hindu Undivided Families, any member who is a part of the family is eligible to receive tax benefits under this section.
• Tax deductions can be claimed on premium up to 20% of the Sum Assured if the premium amount paid for a policy by the assessee over the course of a financial year is more than 20% of the agreed Sum Assured.
• An assessee can claim tax benefits and deductions if the premium he or she has paid is not more than 10% of the actual Sum Assured, if the policy has been issued to the assessee on or post April 1st 2012.
• For any person with a specific ailment or severe disabilities, tax benefits or deductions can be claimed if the premium he or she has paid is not more than 10% of the actual Sum Assured, if the policy has been issued to the assessee on or after April 1st 2012.
• Under Section 80CCE, an assessee can claim tax deductions up to a maximum amount of Rs. 1.5 lakhs under Sections 80C and 80CCC.

Term insurance Tax benefit 80D

Traditionally, Section is reserved only for health insurance policies. If offers a deduction on health insurance policies taken for self, spouse, children, or parents with different deduction limits under different conditions.

However, certain term plans can also avail the tax benefits under Section 80D. Policyholders who have opted for a health-related rider (such as Critical Illness, Surgical Care, Hospital Care Rider) with their term insurance policy, can also avail deductions. Conditions for term insurance benefit 80D include:

• Deductions under Section 80D can be availed for an amount that doesn’t exceed Rs. 25,000.
• If you have taken an insurance policy for your parents, you can avail additional deductions of Rs.25,000.
• II’ your parents are senior citizens; the deduction limit goes up to Rs.50,000.

Conditions for Term Insurance Tax Exemption under Section 10(10D):

• Term plan tax benefit under Section 10(10D) is applicable if the premium is less than 10% per cent of the sum assured or the sum assured is at least 10 times the premium.
• If the payout exceeds Rs. 1,00,000, and the policyholder’s PAN is available to the insurer, a TDS (Tax Deducted at Source) of 1% is applied.

In order to avail all the tax benefits that come with a term plan, Canara HSBC Oriental Bank of Commerce Life Insurance’s iSelect Star Term Plan proves to be a lucrative option. Policyholders can take their pick of the various riders available – Accidental Death Benefit, Accidental Total and Permanent Disability Benefit or even the Child Support Benefit.

They can also customize their payout options and choose to receive their payout in the form of a lump sum, a monthly income or a part lump sum part monthly income. They choose from 3 plan variants, which, each, offer unique benefits like return of premiums, spousal cover and more. Thus, in addition to tax benefits, policyholders can benefit from a whole bunch of advantages by opting for a term plan.

11. Investment in National Saving Certificate (NSC) for A.Y. 2022-23 & 2023-24.

The National Savings Certificate (NSC) is a fixed Income Investment scheme that you can open with any post office branch. The scheme is a Government of India initiative. It is a savings bond that encourages subscribers mainly small to mid-income investors — to invest while saving on income tax.

A fixed income scheme that can be opened at a post office is the National Savings Certificate. The scheme is a low-risk product and is secure.

Tenure	5 years
Rate of Interest	6.8% p.a.
Minimum Amount	Rs. 1,000
Tax Benefits	Under Section 80C of the Income Tax Act.

NSC Eligibility

The eligibility criteria for investors to purchase the NSC are mentioned below;

• The individual must be an Indian citizen.
• There is no age limit for individuals in order to purchase a certificate.
• Non-resident Indians cannot invest in NSC.
• Investments can be made with another adult or individuals can buy an NSC on behalf of a minor.
• Under NSC VIII Issue, HUFs and Trusts are not eligible to invest in the scheme.

NSC Features

The main features of the scheme are mentioned below:

Minimum investments:

The minimum amount that a certificate can he purchased for is Rs.100. The different denominations that the certificate can be purchased for are Rs.10,000, Rs.5,000, Rs.1,000, Rs.500, and Rs.100. Initially, small investments can be made, and individuals can increase investments when feasible.

Maturity tenure:

5 years and 10 years are the two maturity periods of the scheme that individuals can choose from.

Rate of interest:

Currently, the rate of interest has been reduced from 7.9% to 6.8%. and it is compounded on an annual basis. However, the interest is payable only at maturity. For example, investment of Rs.100 will get the subscriber Rs.146.93 after 5 years of investment.

Nominations:

Family members including minors can be added as nominees by the investor. In case the investor passes away during the tenure of the scheme. the nominee will be able to inherit the scheme.

Different types of NSC:

Initially, the NSC IX issue and the NSC VIII Issue were the two types of certificates available. However, as of December 2015, the Government of India stopped the NSC IX Issue. Therefore, only the NSC VIII issue is available.

Loans against NSC:

The NSC can be used as a security or collateral and can be provided to banks to avail loans. However, the respective post master must authorise the transfer of the certificate to the bank.

Purchase of NSC:

Upon submitting the required documents, the scheme can be purchased at post offices.

Transfer of certificate:

Transfer of NSC is possible from one post office to another. Transfer of certificate from one individual to another is also possible. However, the certificate will remain the same and the name of the new owner shall be written on the certificate and the name of the old owner will be rounded.

Tax benefits provided by the NSC

Given below are the NSC tax benefits that individuals can avail by investing in the NSC:

• Under Section 80C of the Income-tax Act, 1961, tax benefits of up to Rs. 1.5 lakh can be availed by investing towards the NSC.
• The interest that is generated on a yearly basis by investing in the NSC is considered as a new investment for tax benefits.
• Tax Deducted at Source (TDS) is not applicable under The National Savings Certificate. However, as per the marginal income tax rates, the tax must be paid for the interest that is earned.

Interest Rate on National Savings Certificate (NSC)

The National Savings Certificate interest rate is subject to periodic change as per the decisions communicated by the Finance Ministry. The applicable NSC interest rate for Q4 FY 2021-22 (January to March) is 6.8%. The NSC rate in the previous quarter (October to December 2021) was also 6.8%. Interest is compounded annually. The following are the historic rates of interest for the scheme*

Period	Interest Rate
Q3 FY 2021-22	6.8%
Q2FY2021-22	6.8%
Q1 FY 2021-22	6.8%
Q4 FY 2020-21	6.8%
Q4 FY 2019-20	7.9%
Q1 FY 2018-19	7.6%
Q2 FY 2018-19	7.6%
Q3 FY 2018-19	8.0%
Q4 FY 2018-19	8.0%
Q1 FY 2018-19	8.0%
Q2 FY 2019-20	7.9%
Q3 FY 2019-20	7.9%

* interest earned from NSC is compounded annually but payable only at maturity.

Key benefits of investing in NSCs

Backed by the Government of India, the National Savings Certificates serve as the safest means of investment and come with a lot of attractive benefits. Listed below are the benefits offered by NSC:

Attractive interest Rates:

NSCs offer attractive rates of interest on your savings. YOU can receive interest up to 8.5%.

Assured returns:

Investors can receive assured returns by investing in NSC for 5 to 10 years.

Minimum/maximum limit of investments:

You can invest as minimum as Rs.100. However, there is no maximum limit for investment under NSCs.

Loan against NSCs:

Banks allow loans against NSC certificates. Individuals can use National Savings Certificates as collateral to get loans.

NSC Denominations:

National Savings Certificates are issued in different denominations such as Rs.100, Rs.500, Rs.1,000, Rs.5,000 and Rs.10,000. A person is free to purchase any number of NSC as per his/her convenience.

NSC Certificate Transfer:

The NSC can be transferred from one individual to another, if the certificate holder intends to transfer.

Maturity Period and Premature Withdrawal under the NSC

Under most scenarios, the amount that has been invested towards the NSC cannot be withdrawn before the maturity period of 5 years. However, under certain cases, premature withdrawal is allowed. Given below arc the cases where premature withdrawal is allowed under the NSC scheme:

• In case the certificate holder passes away.
• On the forfeiture of the certificate. However, the pledgee must be a Gazette Government Officer.
• If ordered by the court of law that the invested amount can be withdrawn.

However, certain documents must be submitted by the certificate holder for the withdrawal of the funds. Given below are the list of documents that must he submitted:

• The original National Savings Certificate must be submitted.
• The NSC encashment form will need to be submitted.
• Proof of identity.
• The attestation of the guardian is compulsory in ca.se the NSC was purchased on behalf of a minor.
• In case the certificate holder passes away, the nominee can encash the invested amount by submitting

the Annexure 1 (registered at a post office) and the Annexure 2 (legal evidence) forms.

In case the amount is withdrawn within a year, no interest will be paid. A penalty will be charged in case of early withdrawals as well. The maturity amount is paid by the post office by cheque.