Page 13 - VP-MARCH 2016 final8

Time to

SAVE
TAXESand
CREATE
WEALTH

Comparison of popular tax savings instruments:

What is ELSS ? ELSS PPF NSC Tax
Saving
ELSS is a type of diversified equity mutual fund that Returns Market 8.70% 8.5% for
invests primarily in equity markets. It qualifies for linked 5 years, FD
tax deduction under section 80C of the Income Tax 15 years, 8.8% for 7.75-
Act, where investments upto Rs 1.5 lakhs are eligible Lock-in 3 years partial 10 years 8.25%
for deduction from total income. Tax Cap gains withdrawal 5/10 5 years
after 5 years years
Superior Returns – tax free, Interest and Interest
Div – tax maturity Interest taxable
Tax advantage free amount is taxable as per
tax free as per slab
Section 80C deduction of Rs 1,50,000 slab
Dividend tax-free
Long term capital gains exempt Tax Savings on investment in ELSS

Shorter lock-in Taxable Amount Taxable In- Total Tax
period Income invested in come after inv Savings (Rs)
(Rs) ELSS (Rs) in ELSS (Rs)

3,00,000 30,000 2,70,000 3,090

4,00,000 1,00,000 3,00,000 10,300

5,00,000 1,50,000 3,50,000 15,450

6,00,000 1,50,000 4,50,000 27,810

8,00,000 1,50,000 6,50,000 30,900

10,00,000 1,50,000 8,50,000 30,900

12,00,000 1,50,000 10,50,000 46,350

15,00,000 1,50,000 13,50,000 46,350

13 ARIHANT CAPITAL ¡ MARCH 2016