No, I am not going to tell you about where you should invest or if some stocks are hot / cold. This post is more about the year end 80C investment planning that most of us ought to take somewhat seriously.
Presently we can invest up to 1.5 lacs in specified saving instruments or other specified areas to reduce our net tax liability. Every year around Feb-March, I see so many of my friends and associates scrambling around to make that last minute investment. While some, especially C.A.s (most of those I know), just put all of the money in P.P.F. and sit back and relax.
So what are the best plans to invest? The best and the most critical idea is that you should first have a PLAN. And no, I am not talking about those investment ads that say you should have plans for every stage of life, increasing insurance cover after every major event and all - that is all secondary. First things first, before the beginning of the year, you should have a plan about where you will invest. It makes a whole lot of difference.
And it is not such a difficult thing to do - check out your priorities and decide what kind of risks you are willing to take and what returns you want. If you want to be extremely safe and be able to see where your money is sitting - then go for PPF or NSCs. For lesser tenures, 5yr Bank FDs are available. If you want to start planning for retirement, NPS is also a good idea - and now it has a separate deduction, and has also gone online.
If you think your family will need some compensation if suddenly something were to happen to you or your income earning ability, then buy insurance. If you are young, and willing to take some risks, wish for a taste of the stock markets - go for tax saving mutual funds or Equity Linked Savings Schemes as they are called. And if you want a balance of everything - go for it!
For those who have PF deducted from their salaries, a part of the 80C limit gets already covered by it, count that too if you are short of funds. And if your home loan principal repayment covers most part of your 80C limit, then in case of limited savings, that can come to your rescue.
The point is that - you know what you want and what you have. Start at the beginning of the year. Save and invest regularly. You do not really need an investment consultant to tell you that. And most of these investments can be done online now. It cannot get simpler than that.
Presently we can invest up to 1.5 lacs in specified saving instruments or other specified areas to reduce our net tax liability. Every year around Feb-March, I see so many of my friends and associates scrambling around to make that last minute investment. While some, especially C.A.s (most of those I know), just put all of the money in P.P.F. and sit back and relax.
So what are the best plans to invest? The best and the most critical idea is that you should first have a PLAN. And no, I am not talking about those investment ads that say you should have plans for every stage of life, increasing insurance cover after every major event and all - that is all secondary. First things first, before the beginning of the year, you should have a plan about where you will invest. It makes a whole lot of difference.And it is not such a difficult thing to do - check out your priorities and decide what kind of risks you are willing to take and what returns you want. If you want to be extremely safe and be able to see where your money is sitting - then go for PPF or NSCs. For lesser tenures, 5yr Bank FDs are available. If you want to start planning for retirement, NPS is also a good idea - and now it has a separate deduction, and has also gone online.
If you think your family will need some compensation if suddenly something were to happen to you or your income earning ability, then buy insurance. If you are young, and willing to take some risks, wish for a taste of the stock markets - go for tax saving mutual funds or Equity Linked Savings Schemes as they are called. And if you want a balance of everything - go for it!
For those who have PF deducted from their salaries, a part of the 80C limit gets already covered by it, count that too if you are short of funds. And if your home loan principal repayment covers most part of your 80C limit, then in case of limited savings, that can come to your rescue.
The point is that - you know what you want and what you have. Start at the beginning of the year. Save and invest regularly. You do not really need an investment consultant to tell you that. And most of these investments can be done online now. It cannot get simpler than that.
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