My company has NPS tied with ICICI Fund and asked employees to join it to save additional tax.
My Salary and other investment in brief
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Total Earned: 57,000 ( Basic :32,935.69, no VDA and HRA, recently they combined to basic)
Deductions:
PF------------------- 3,952 (my contribution)
VPF-----------------13,174
ITAX----------------3,728
PTAX---------------300
>> LIC policies of 12,722 (half yearly) and 6,000(yearly)
>> PPF 12,000 yearly ( so far fixed myself to the amount)
I stopped to renew (buy new) NSC-five year as interest rates were very down.
I have MFs, Stocks, RD, FD, I have not gone to ELSS
Given are my above earnings, savings and investment.
Please let me know, how much NPS amount that can be allocated to it, given that i already have PF+VPF+PPF+LIC amount going to tax relief
Should i change VPF, PPF amount ?
Your suggestions are needed.
Thanks
5 Answers
Hi,
First thing first, kindly do not invest in any financial product just because you can save on some taxes.
If your 80C is not full, you may consider investing in an ELSS fund for any of your long-term goal + tax saving purposes.
I believe that NPS is not a great choice though it may offer you some additional tax saving over and above 80C bracket.
Kindly go through below articles;
http://www.relakhs.com/think-beyond-tax-investing-tax-planning/
http://www.relakhs.com/national-pension-scheme-nps-drawbacks/
http://www.relakhs.com/income-tax-deductions-fy-2016-17-ay-2017-18-tax-exemptions-benefits-rebates/
May I know the details of your LIC policies (Plan name, commencement date & tenure)?? and also your financial goals.
Sorry for the late reply, was not in City,
My LIC polices are
- LIC Money Back policy for 20 years from Nov-2008 - Rs 12,722 half yearly.
- LIC Health Plus for 60 years from Jan-2009 - Rs 6,000 yearly.
- Will be marrying shortly.
- Need buy a Car (second hand arond 4 - 5 lakhs
Hi,
Considering your profile, you may consider reducing your VPF contribution and invest in Equity oriented mutual funds for your long-term goal (ex-retirement).
You may consider buying a Term insurance plan (as you are planning to have your own family soon) and discontinue LIC money-back plan.
Kindly read:
http://www.relakhs.com/traditional-life-insurance-plan/
http://www.relakhs.com/new-money-back-policies-lic-review-features/
http://www.relakhs.com/best-online-term-insurance-plans-india/
Thanks,
I have attached cropped (for security reasons)salary slip.
https://drive.google.com/open?id=0B9UrUXqf0g_vRHFSbDJQbUNJb1U
I have taken company RD deposit of 8.5 % pa for Rs 17,500 (to buy car or a furniture) it matures next year August.
I have planned to rearrange my portfolio like this.
As I'm staying in rented house my rent mounts to Rs 13,500 per month i can utilize this in 80 C (right ?)
then I can reduce my VPF percentage from 40% to 15% or stopped it and put the money to Equity.
Hi,
You can claim rent paid u/s 80GG as you are not receiving HRA.
Below are few details about Section 80GG;
If you are paying rent for the accommodation occupied by you for your own residence, but do not receive HRA from your employer, you can claim deduction under section 80GG.
Conditions that must be fulfilled to claim this deduction -
- You can be a self employed or salaried person.
- You have not received HRA at any time during the year for which you are claiming 80GG
- You or your spouse or your minor child or HUF of which you are a member - do not own any residential accommodation at the place where you currently reside, perform duties of office, or employment or carry on business or profession.
- Rs 2,000 per month
- 25% of total income
- Actual Rent less 10% of Income
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