Investment Suggestions

I have no investment so for.Pls consider d below and compute how much invstment I have to do to avoid tax paying & also sugest best investment plans.

1 Salary Rs.
1.1 Basic 260,000 House Rent Allowance     (max 40% of Basic Salary) 1.2 Allowances 260,000 Allow.Break-up from Medical Reimbursement   (max 15000/- per annum) Total of Gross Salary(1) 520,000 Additional Food Coupons  (max 14400/- per annum) Leave Travel Assistance   (max 20000/- per annum) Balance of allowaces will be paid as Taxable Allowances 2 Retirals
2.1 Providend Fund 31,200 12% of Basic Salary Employee has to contribute similar amount 2.2 Gratuity 12,506 4.81% of Basic salary
Total of (2) 43,706
3 Other benefits
3.1 Lunch subsidy 12,000
3.2 Transport/Parking 16,800 Bus Pass/Parking Pass costs Rs.1400/-
3.3 Group Mediclaim 1,900 Spouse, Children, parents can be covered under this scheme
3.4 Group Per. Accident 386
Total of (3) 31,086
4 Variable Pay *
Variable Pay 43,333
Total compensation 638,125

Note: * Variable Pay:  You will be paid minimum of one month gross salary for the year 2011 on prorata basis provided a rating of “exceed expectations” is obtained during annual appraisal held during the year.  
***Shift Allowance    Rs. 250/- per shift 

asked Feb 06 '11 at 03:17 by Viki 11446


Using income tax calculator and considering following exemptions/deductions:
HRA: 1,04,000 (If you show Rent receipt of 11000 per month)
Gratuity: 12,506
LTA - 20,000 (If you show travel proof)
Medical - 15000 (If your provide medical bills)
Food coupons: 14400
Lunch subsidy: 12000
Transport: 16800
Group personal accident: 386
EPF deduction 80-C: 31200
Mediclaim deduction 80-D: 1900

Total income tax (including education cess) comes out to be: Rs 21046.

If you want to reduce it, I would advise you following:
1. Get term insurance for at-least 50 lakh sum assured (choose among LIC Amulya Jeevan, ICICI Pru iProtect, Kotak e-Preferred Term plan and Metlife Protect). Annual premium will come-out around 10-20K depending on your age.
2. Invest 30-35,000 into tax saving mutual funds.
3. Invest 20-25,000 into New pension scheme.
4. Get additional medical insurance for you and your family (Choose family floater policy from Star health, Apollo Munich or Max bupa)
5. Get additional medical insurance for your parents.
6. Invest 20,000 into long term infrastructure bonds.

All above things will only reduce your income tax by maximum 10-11000 only. As you fall into 10% income tax slab.
If you need money in near future and don't want to block money for so long duration, its advisable that rather than just investing this large amount into tax saving, You pay income tax at 10% and invest rest 90% income into hight return avenues like diversified equity mutual funds.

answered Feb 06 '11 at 04:50 by pankaj 5.0k317

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Asked: Feb 06 '11 at 03:17

Seen: 2,066 times

Last updated: Feb 06 '11 at 04:52