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Is Interest Earned By Employee Provident Fund Taxable?

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Union Budget 2021 has proposed to impose income tax on interest earned by an employee/person on his/her contribution in excess of Rs 2.5 lakh in a financial year to a provident fund.  On a plain reading of the budget documents, it appears that tax will apply to the interest earned on contributions made to Employees' Provident Fund (EPF), Voluntary Provident Fund (VPF) as well as Public Provident Fund (PPF).  However, tax experts have clarified that there are separate limits for EPF/VPF and PPF . Which means contributions to PPF and EPF/VPF will not be aggregated for the purpose of calculating the Rs 2.5 lakh limit. Detailed Explanation Presently in EPF contribution consists of 12% of the basic salary from Employees account and additional 12% of the basic salary from Employers account. In total 24% of the basic salary will be added in EPF account every month. But Employees have an option to increase their contribution from 12% to 100% and the additional contribution also earns the

National Pension Scheme - NPS

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National Pension Scheme (NPS) India is a long-term investment plan for retirement under the purview of the  PFRDA - Pension Fund Regulatory and Development Authority  and Central Government.  Following things has been covered in this article What is NPS? Who can invest in the NPS? What are the features & benefits of investing in NPS? What are the Different types of NPS accounts? What Is NPS (National Pension Scheme) The National Pension Scheme is a initiative by the Government of  India. This is a pension plan which can be opted by employees from the public, private and even the unorganized sectors except those from the armed forces. In this scheme people have to invest in a pension account at regular intervals till their retirement. After retirement, the NPS holder can take out a certain percentage of the total accumulated amount. And the remaining amount will be received as monthly pension.  Initially, the NPS scheme was only for the Central Government employees. Now, the PFRDA

Know What Are The Types Of Mutual Funds Available In India And Where They Invest - Part - 2

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This article is continuation  of  Know What Are The Types Of Mutual Funds Available In India And Where They Invest. If you have not read Part-1 then Click here.. In last article we have covered about Equity mutual funds, in this article we will began with the second type of mutual fund i.e Hybrid mutual fund. Before that will list down all the types of mutual funds. Types of Mutual Funds Equity Mutual Funds Hybrid Mutual Funds Debt Mutual Funds Solution Oriented Funds Fund of Funds Index Funds / Exchange Trade Funds (ETF's) Hybrid Mutual Funds These types of fund basically invest in both  Equity and Debt in different ratios. The sub categories of this fund is explained below Arbitrage Funds:  It is One of the safest categories of mutual funds, most suitable for people who want low risk in there investment. It has lower tax than pure Debt funds hence adds as a benefit as taxation of equity is applicable. The returns generally tend to be in the range of 6–7% , with. These type of m

Know What Are The Types Of Mutual Funds Available In India And Where They Invest - Part - 1

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If you want to know completely about the Mutual fund industry in India, then this article is for you. As this topic is very wide and has lots of information to know and learn, we have decided to divide this article in Parts and this is Part - 1. In this article we going to explain about the types of mutual funds and there subcategories in detail (Only about Equity mutual Funds) so that one can get a compete information about Equity mutual Funds in a single article. First of all if you want to know what is Mutual Fund and how it Operates then Click here.. Types of Mutual Funds Equity Mutual Funds Hybrid Mutual Funds Debt Mutual Funds Solution Oriented Funds Fund of Funds Index Funds / Exchange Trade Funds (ETF's) Ok, now will understand each types of Mutual Funds in detail along with their sub-categories Equity Mutual funds  In this type of funds Asset management Company(AMCs) will invest primarily in Stocks listed on BSE/NSE.  The sub-categories of this funds are as follows. Lar

Does Investing In Mutual Fund Provide Income Tax Benefit? Yes it's ELSS Fund!

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Equity Linked Savings Scheme  If you are thinking to invest in mutual fund and also at the same time want to get tax benefits on your investments, Then ELSS (Equity Linked Savings Scheme) is the way to get it done! About ELSS An Equity Linked Savings Scheme (ELSS) is an open-ended mutual fund that doesn't just help you save tax, but also gives you an opportunity to grow your money.  It qualifies for tax exemptions under section (u/s) 80C of the Indian Income Tax Act up to 1.5 Lac investment. ELSS funds are a category of mutual fund promoted by the government in order to encourage long term equity investments. Under this scheme, most of the fund corpus is invested in equities or equity-related products.  There are two categories in ELSS mutual funds which are dividend and growth. Some key Features of Equity Linked Savings Scheme You can invest in ELSS through the way of Lump-sum investment or through SIP (Systematic Investment Plan)   Minimum Investment is as low as Rs. 500/- Lock-

Senior Citizen Saving Scheme

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Senior Citizen Saving Scheme SCSS is an excellent investment option for senior citizens looking for long-term saving schemes which offer security with other additional benefits. Senior Citizens Savings Scheme (SCSS) is a government-backed savings instrument offered to Indian residents having age over 60 years. This deposit will be matured after 5 years from the date of account opening but can be extended only once for additional 3 years (Total - 7 Years) .   You can avail the scheme from P ost offices and recognized banks all around India. Some Key Features of Senior Citizen Saving Scheme Minimum Investment - 1,000/- Per Person Maximum Investment - Rs. 15,00,000/- Per Person Minimum entry age - 60 Years Rate of Interest (From 01-04-2020) - 7.4% per annum (Interest paid quarterly) By investing Rs.15 lac one could earn Rs. 27,750 every quarter (1,10,000/ year) Benefits Of Senior Citizen Saving Scheme Highest Interest rate (7.4% per annum) among all the investment options available

Taxes on Mutual Fund - In India

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Tax on the Indian mutual fund is divided into Two categories Tax on Equity Mutual Fund If the investment is done for more than 1 year before withdrawal, then it will fall under Long Term Capital Gain. The tax will be 10% on the profit exceeding Rs-1 lakh. If the investment is done for less than 1 year before withdrawal, it will fall under Short Term Capital Gain. The tax would be flat 15% on the profit. Tax on Debt Mutual Fund If the investment is done more than 3 years before withdrawal, it will fall under Long Term Capital Gain. The tax would be 20% on the profit after indexation (indexation consider inflation and hence the effective tax will be less than 20%). If the investment is done less than 3 years before withdrawal, it will fall under Short Term Capital Gain. The tax would be deducted according to your tax slab. Note: If the mutual fund has more than 65% allocation in equities, it will fall under equity mutual fund. Let’s first understand the tax on equity mutual fund- Case 1