Guide to .. Tax Management ,Tax Planning and Tax Saving
 

Tax Saving Schemes at a Glance for the Assessment Year 2018-19 & 2019-20

 

Name of Securities

Rate of interest

Limits of Investment

Exemption under the IT Act.

Exemption under the Wealth Tax Act.

(1)

(2)

(3)

(4)

(5)

1, 2, 3 and 5-year Time Deposit

Interest @ 6.6%, 6.7%, 6.9% and 7.4% p.a. (calculated at quarterly compounding basis)

No limit on deposits (Minimum: Rs. 200); ac- count can be opened, in multiples of Rs. 50 in a single name or joint names; even a minor can open account

Interest chargeable to tax (no TDS). Deposit in 5 years Time Deposit Scheme qualifies for deduction under section 80C from the assessment year 2008-09

Not Chargeable to wealth-tax

5-year National
Savings Certificates VIII Issue

Compound (yearly) in
terest @7.6% p.a. payable on maturity

No limit on deposit

Investment and accrued interest (for first 4 years) qualify for deduction under section 80C. Interest chargeable to tax on accrual basis (no TDS).

Not chargeable

10-year National
Savings Certificates IX Issue (now discontinued)

Compound (half-yearly)
interest @ 8.8% p.a. payable on maturity

No limit on deposit

Investment and accrued interest (for first 9 years) qualify for deduction under section 80C. Inter es chargeable to tax on accrual basis (no TDS).

Not chargeable

5-year Post Office Recurring Deposit

Interest @ 6.9 % p.a. Compounded quarterly but payable on maturity.

No limit on deposits. Deposits can be made in multiples of Rs. 5 p.m. (minimum : Rs. 10 per month)

Interest chargeable to tax (no TDS)

Investment not chargeable to wealth-tax

15-year Public Provident Fund

Compound interest @ 7.6% every year but payable at the time of maturity

Minimum : Rs. 500 and maximum : Rs. 1,50,000
in every financial year

Interest totally exempt under section 10(11); investment qualifies for deduction under section
80C

Investment not chargeable to wealth-tax

Post Office Savings Bank Account

Interest @ 4 per cent p.a. credited annually

Minimum : Rs. 20 and maximum : Rs. 1,00,000 for an individual and Rs. 2,00,000 for two or more adults jointly in one or more accounts. No limit on group/institutional or official capacity accounts

Interest exemption under section 10(15)(t) is as follows Full exemption up to the assessment year 2011-12, Rs. 3,500 (in a single account)/ Rs. 7,000 (in a joint account) is exempt from the assessment year 2012-l3

Investment not chargeable to wealth-tax

Post Office monthly income account [6 year (if account opened before December 1, 2011)

5 year (if account opened on or after December 1,2011)]

Interest @ 7.3 per cent

One or more accounts can be opened but deposits cannot exceed Rs. 4,50,000 in single account and Rs. 9,00,000 in joint account. Only one deposit in the account in the multiple of Rs. 1,500 is permitted

Interest chargeable to tax (no TDS)

Investment not chargeable to wealth-tax

7.75% (7 year) Savings (Taxable) Bonds

7.75 per cent payable half-yearly or compounded with half- yearly rests

No maximum limit, amount can be invested in multiple of Rs. 1,000, open for investment by (resident) individual or by HUF

Interest chargeable to tax (tax to be deducted at source)

Investment not chargeable to wealth-tax

5 year Senior Citizen Savings Scheme, 2004 (Post office)

8.3 per cent per annum payable quarterly

Maximum deposit Rs. 15 lakh (account can be opened by a resident individual who is 60 years of age; or by a resident individual who is 55-60 years of age and who is retired under VRS)

Interest chargeable to tax. Investment qualifies for deduction under section 80C from the assessment year 2008-09

No wealth-tax

Sukanya Samriddhi Account

Compound (yearly) interest @ 8.1 per cent p.a.

Minimum Rs. 1,000, maximum Rs. 1,50,000 in a financial year (no limit on number of deposit in a month or in a financial year)

Interest totally exempt from tax under section 10(11A); investment qualifies for deduction under section 80C

Not chargeable

 
 
 
 
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