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Some golden tax-saving tips

March 05, 2010 15:02 IST

A business newspaperThe Budget announcements have been made. The finance minister changed the tax slabs giving more money in the hands of the people. However, he also hiked duty on petroleum leading to a fuel price rise.

The entire Opposition walked out of the Lok Sabha in protest terming the Budget 'inflationary'.

What effect will the Budget have on the taxpayers? Has the FM given with one hand and taken away from the other?

In an hour-long chat on rediff.com on Friday, financial planning expertTrideep Choudhary offered some valuable tips. Here is the transcript:

TRIDEEP says, Hi all this is Trideep Choudjary Welcoming you to today's chat.

HRC asked, I am Hiten chaudhari from Bharuch.My que. is well comparition between PPF & VPF.
TRIDEEP answers,  at 2010-03-05 12:57:23Salary deductions of private sector companies, whose provident funds are recognised by the Commissioner of Income Tax, are invested in Recognised Provident Funds (RPF). In addition to the RPF contribution an employee can, at the beginning of the financial year, give a declaration to the company to participate in the VPF. In a VPF, he will contribute to the provident fund an amount in addition to what he already contributes to RPF, by way of further salary deduction. This amount will form part of his RPF and will enjoy all benefits as his original contribution. The VPF has stricter withdrawl procedures PPF is a providend fund open to the general public and provides section 88 benefits. PPF has relatively relaxed withdrawl norms with a lock in of 15 years extendable by periods of 5 years
ssp asked, Sir, I am 28 years old & willing to take Term Insurance Policy of SA 15 Lacks for 20 Years. Pl suggest about the best company for term insurance.
TRIDEEP answers, LIC Amulya Jeevan or Aegon Religare's I term would be suitable for you
ravid asked, I am thinking investing Rs 5 lakhs one time investment for period 15yrs, suggest best policy
TRIDEEP answers, Assuming that you do not need the money for the next 15 years the best policy is to split it into equity debt and gold. The portfolio would be equity heavy in the initial years and would move towards debt as you approach 15 years. We could begin with an allocation of 70% equity, 10% debt and 20% gold.
ssp asked, Sir, I have SIP in HDFC Top 200-growth : Rs 2000, HDFC Prudence-growth: Rs.1000 & Sundaram Select Mid Cap-growth: Rs.1000. Is MF selection OK or Should I switch to other MF.
TRIDEEP answers, stay invested
Sushil asked, Is invenstment in PPF a good deal in this new finanicial year, what will be expected return
TRIDEEP answers, the new draft tax code provides PPF as EET status, in that case instead of considering PPF as a tax efficient option you would do well to consider it as one of the safest avenue for corpus building to satisfy goals.
INDRANIL asked, WILL POST OFFICE SAVINGS IN MIS THE BEST OPTION FOR INVESTMENT????
TRIDEEP answers, Post office MIS is good for people who need monthly income. For investments chose a mix of equity, debt and gold.
aditi asked, hi how much to invest p.m. to get corpus of 20 lacs after 10 year
TRIDEEP answers, at a growth rate of 10% p a you would need to invest Rs 11000 per month to arrive at 20 lacs
kings asked, should i withdraw from uti infrasrtuctyres invested in may 2007
TRIDEEP answers, Yes
MJ2 asked, What is your idea on LIC's Jeevan Saral Policy. They are claiming it's better than any other policy of LIC due to its Loyalty addtion?
TRIDEEP answers, It is amongst the better endowment plans of LIC and as it is a with profit policy so the loyalty additions are higher than normal LIC policies.
jpnsingh12 asked, i have invested in icici prudential pension plan(pinacle)and amount of rs/75000/year.is it worth to continue for 10 years?
TRIDEEP answers, I am in favor of creaing a customized pension plan which is suitable to your unique needs. Please understand that off the shelf plans give you a nominal amount ( say rs 15000 every year) but they do not do anything to factor inflation and your unique needs.
AB asked, LIC has a policy which is a combination of profit plus & jeevan anand. LIC agent claims that if we pay a premium of 1 lac per year for 5 years (Total 5 lacs), we would get a lump amount of Rs.59 lacs (approx) after 20 years. Is this really possible? Kindly answer as I am very tempted by this scheme as it is backed by LIC.
TRIDEEP answers, IF your agent has given you the correct numbers then the returns are to the tune of 15%, As Profit plus is a ULIP it cannot guarentee such a high return for this long tenure. I would advise you to consider term insurance like LIC Amulya Jeevan and a customized investment portfolio unique to your requirements.
piyushg1 asked, What is the prospect for LIC Wealth Plus Policy
TRIDEEP answers, This is one of the new breeds of ULIPS with the carrot of highest NAV guarenteed. I would advise you to open a PPF account of the same term and you would get higher returns.
suppandi1 asked, Sir, I took Max New York Life ULIP - LIFE MAKER and paying quaterly from 3.5 yrs. Fund performance is below avg and I'm in loss. Shall i proceed with this or exit. Please advice
TRIDEEP answers, you should exit as soon as possible. buy a term plan instead, for your insurance needs.
ankit asked, I have invested in rs.5000/- ril eqvity advantage fund and rs.5000 rnrl fund,rs.5000 HDFC mid cap two years ago and ril growth fund dividend option sip rs.1000 last five year ago. pls suggest
TRIDEEP answers, shift your portfolio to large cap funds like HDFC top 200 and Franklin Blue Chip.
MJ2 asked, Hi Sir.. recently had a child and would like to take some policy for her financial security. which is better?
TRIDEEP answers, the best policy is to go for a combination of equity and Debt MF and gold ETF via SIPs. and purchase for yourself a term plan equivalent to your goals.
guest asked, dear sir, i am investing in these funds, should i continue, Franklin India Tax Shield (D) , HDFC MIP - LTP (G) , HDFC Tax Saver (D) , HDFC Top 200 Fund (D) , ICICI Pru Tax Plan (G) , Reliance MIP (G) , SBI Magnum Tax Gain (D) , Sundaram Tax Saver (D)
TRIDEEP answers, exit Fund (D) , ICICI Pru Tax Plan (G) , Reliance MIP (G) rest all is fine
ykraj asked, Sir, I am investing through SIP in HDFC Top 200: Rs 1000, HDFC Prudence: Rs.1000, DSP Top 100:Rs. 1000, DSP Balance Fund: Rs. 1000, IDFC perimier Equity Fund:Rs. 2000 and Birla Sunlife Front line equity:Rs. 1000.All are growth options and planning to continue for 10 years.Kindly advice if any changes required.
TRIDEEP answers, stay invested, good selection too.
raj asked, which is the best one in current going scheam which are offering highst NAV of 7 years for the investment, ICICI pinacle, LIC wealth plus; Tata AIG scheme or the Birla one. There minimum amount to be invested is rs.50000. So please suggest?
TRIDEEP answers, try PPF its better than all of the above schemes.
rjk151177 asked, Hi Trideep, I have Invested in LIC Market Plus 40000/- 3 years ago, Also Invested in LIC Money Plus 10000/- around 3 years ago. I also invested in UTI MF for 5000&6000 4 years back and Tata Tax Advantage fund for 5000 also 4 years ago. Which one you suggest that i should retain or i can quit. Looking forward for your reply Thanks Rajesh Khurana
TRIDEEP answers, exit all, go for a combination of term plan and large cap equity funds
Deven asked, Sir I have invested in SBI Magnum Tax Gain - Dividend payout, considering most of the Fund Houses have already declared their dividend, does it mean that there would not be any dividend payout now. Also are dividend paid out once in a year or quarterly. Thank you.
TRIDEEP answers, SBI Tax Gain has declared 40% dividend today itself.
ROHIT asked, , I am investing Rs 1000 each SIP in Sbi magnum Contra,Reliance growth fund,Uti wealth builder series II,Hdfc top 200.Should i stay invested or switch to some other fund.Time period is 10 years.Kindly advice.
TRIDEEP answers, exit SBI Contra and invest in DSP top 100 instead.
sree asked, i am having jeevan chaya policy of lic... is it good policy... for the future...
TRIDEEP answers, This is an Endowment Assurance plan that provides financial protection against death throughout the term of the plan. Besides payment of Sum Assured immediately on death, one-fourth of Sum Assured is payable at the end of each of last four years of policy term whether the life assured dies or survives the term of the policy. However i would adivse that you consider their term plan LIC Amulya Jeevan for your insurance needs.
Abhijit asked, I have been investing Rs.2000 each in SIP of DSPBR Top 100, Kotak 30 and SBNPP select focus since 2007. I plan to invest through SIP in these plans for another 15 years. IS my choice right? How much can I earn by the end of 15 years?
TRIDEEP answers, although its impossible toarrive at an exact number, however if we assume that equities have broadly given 12% post tax over the years then the returns could be close to Rs 35 lacs.
aish1 asked, Pls answer this ques: Hello, the new slabs introduced will be applicable to the texable income OR teh total income.
TRIDEEP answers, taxable income
Vinay asked, Please suggest some good equity/balanced/MIP's mutual funds for 3-5 yrs time horizon through SIP
TRIDEEP answers, HDFC MIP - Long Term Plan, Birla Sun Life MIP - Savings Plan, Principal MIP Plus
rjk151177 asked, Thanks for your reply Trideep, Which term plan and large cap equity funds do you suggest? Rajesh Khurana
TRIDEEP answers, aegon religare iTerm or LIC Amulya Jeevan. For funds go with HDFC Top 200 and DSP 100.
Dinesh asked, Sir, I am 33 Yrs old and looking for investing in SIP etc ...currently I have invested in PPF & have LIC's various endowment & term policy of Rs. 20L....pls advise the best way to start the investments in other otions where I can get good return without much of risk.
TRIDEEP answers, go for balancde funds like HDFC Prudence, DSP ML Balanced
ROHIT asked, I have an ulip Policy of Bajaj allianz which is not giving good returns.Surrender charges are 20% of the first premium amount.should i continue or exit this ploicy.Ploicy term is for 20 years.
TRIDEEP answers, consider ti as stop loss and exit as soon as you can. go for a combination of term plan and investment in diversified MFs
vivek asked, Is the interest earned from Post office Saving account taxable?
TRIDEEP answers, interest above Rs 10,000 is taxable.
skumar asked, I am investing Rs 500 SIP in Sbi magnum Equality in growth , for 3 years ,any change is required , and i want to invest another monthy Rs1000 sip , were to invest ?
TRIDEEP answers, go for franklin blue chip
Ramesh asked, I have two houses (1. apartment 2.independent house). I live in the apartment and rented out the independent house, I get an rent of around Rs. 3600pm . Do I need to add this under the other income heads and what are the deduction can I made like depreciation, wealth tax, colony maintenance etc)? Both the houses are under loan, one from SBI and other from LIC. Can I show both the houses loan amount for tax exemption (100000 and 1500000 interest)?
TRIDEEP answers, The rent needs to be specified under Income from house property, you can deduct maintenance charges. You can set off the interest component for the rented house against house property income.
Umashankar asked, Hi, I am software professional and my age is 25. I am looking for some short term investments (2 to 3 years). Could you suggest some mutual funds or any other investment options?
TRIDEEP answers, go fro hdfc top 200, sunderam select mid cap.
trideep asked, I had invested in JM funds - JM 11, JM contra and JM emerging leaders. I am still loosing most of the invested money in these funds. Should i remain invested or withdraw and invest some where? can you suggest some funds, in case you recommend for withdrawl from JM.
TRIDEEP answers, exit as soon as possible and invest in DSP top 100 instead.
Mahesh asked, How is SBI magnum tax gain as ELSS? Could you please suggest me the best ELSS I should invest in..?
TRIDEEP answers, its a good fund but fidelity tax advantage is doing better.
tridee asked, Is Aegon Religare i-Term trustworthy?
TRIDEEP answers, this policy has one of the lowest premium for sum assured, also its the flagship schem of the insurers, so the chances of them being fishy would be less.
TRIDEEP says, OK guyz we have come to the end of this informative session. for any queries feel free to call at 022-6136 1221/22 or e-mail at info@personalfn.com