Tax Finance Info: Fixed Income

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<h2 style="text-align: center;">
Inflation Indexed National Saving Securities (IINSS) Salient Features</h2>
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<img border="0" height="187" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLrN9Axvak_5TJjZ8ADP6CMg3Fzg5I4R7raQ6FU9WkKDAWnr_8jK0aYXzbaATFiLTj2u9cVuUpvyRmrHF9-GaMpLB8OYeMi0ETax_saW7GCVnDMx21pU2wrfy_vKL8jN1Q8DDF3Mc6wbPy/s1600/Screenshot_6.jpg" width="320" /></div>
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<span lang="EN-US">As per the press release of the
<b>RBI</b>, dated 29<sup>th</sup> November, 2013 it published that the <b>Reserve Bank of
India (RBI)</b> was to launch <b>Inflation Indexed National Saving Securities (IINSS)</b>
in consultation with the government of India. And the same is launched
successfully. The Inflation Indexed National Saving Securities this time are
cumulative in nature.<o:p></o:p></span></div>
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<span lang="EN-US">The features of the Inflation
Indexed National Saving Securities are given below so that the interested
people can go for it and the issue is open from 23th December, 2013 to 31<sup>st</sup>
December, 2013. So here are the salient features of IINSS which will be helpful
for the people willing to subscribe the issue.<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">  </span></span><b><span lang="EN-US">Eligibility of Subscribers</span></b><span lang="EN-US">: The subscriber must be an
Indian Citizen. The Indian citizens who fall in the categories viz. Individuals,
Hindu Undivided Family (HUF), charitable institutions registered under section
25 of the Indian Companies Act and Universities incorporated by Central, State
or Provincial Act or declared to be a university under section 3 of the
University Grants Commission Act, 1956 (3 of 1956) are only eligible for
subscribing and investing in the security.<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">  </span></span><b><span lang="EN-US">Face value of the Security</span></b><span lang="EN-US">: Rs. 5000/-<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">  </span></span><b><span lang="EN-US">Maximum Investment per applicant</span></b><span lang="EN-US">: One applicant can invest upto
Rs. 5 Lacs i.e. maximum 100 securities can be purchased and minimum one
security is to be purchased it means the minimum investment amount is Rs. 5000.<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">  </span></span><b><span lang="EN-US">Form of Security: </span></b><span lang="EN-US"> The security will be in the form of Bond. The
amount of investment will be held in the Bond Ledger Account till the tenure of
the security.<b><o:p></o:p></b></span></div>
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<span lang="EN-US" style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">  </span></span><b><span lang="EN-US">Rules & Regulations: </span></b><span lang="EN-US">The provisions of the Government
Securities Act, 2006 will be applicable.<b><o:p></o:p></b></span></div>
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<span lang="EN-US" style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">  </span></span><b><span lang="EN-US">Tenure of the Security</span></b><span lang="EN-US">: The security is to be held for
tenure of 10 years.<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">  </span></span><b><span lang="EN-US">Interest on Securities</span></b><span lang="EN-US">: Real Interest Rate plus
Inflation Rate. Where Real Interest Rate is fixed @ 1.5% per annum and the
Inflated Interest rate depends upon the retail inflation rate. And the interest
will be compounded half yearly.<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">  </span></span><b><span lang="EN-US">CPI Linkage</span></b><span lang="EN-US">: For calculating Inflation, final combined CPI will be used
as the reference CPI with a lag of three months.<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">  </span></span><b><span lang="EN-US">Distribution of Securities: 
</span></b><span lang="EN-US">The
securities will be available at all agency banks like State Bank of India and
its branches, HDFC Bank, ICICI Bank, and Axis Bank, Stock Holding Corporation
of India Ltd (SHCIL).<b><o:p></o:p></b></span></div>
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<span lang="EN-US" style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">  </span></span><b><span lang="EN-US">Early Redemption provisions and charges: </span></b><span lang="EN-US">The Securities can be
redeemed before completion of tenure of 10 years but at the following
conditions:<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; mso-fareast-font-family: "Times New Roman";">-<span style="font-family: 'Times New Roman'; font-size: 7pt;">         
</span></span><span lang="EN-US">Securities can be redeemed only after completion of 3 Years
from the date of purchase of securities.<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; mso-fareast-font-family: "Times New Roman";">-<span style="font-family: 'Times New Roman'; font-size: 7pt;">         
</span></span><span lang="EN-US">Senior citizens above 65 years can redeem the same after
completion of 1 Year from the purchase of securities.<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; mso-fareast-font-family: "Times New Roman";">-<span style="font-family: 'Times New Roman'; font-size: 7pt;">         
</span></span><span lang="EN-US">The penal charges equal to 50% of the last coupon will be
payable for early redemption.<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; mso-fareast-font-family: "Times New Roman";">-<span style="font-family: 'Times New Roman'; font-size: 7pt;">         
</span></span><span lang="EN-US">The securities can be redeemed only on coupon dates.<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">  </span></span><b><span lang="EN-US">Documents required: </span></b><span lang="EN-US">In case where the investor
invests Rs. 50,000 or more have to provide the Permanent Account Number and
when the investor does not hold PAN declaration in Form No.60 or 61, whichever
is applicable is to be provided.<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">  </span></span><b><span lang="EN-US">Tax Applicability:</span></b><span lang="EN-US"> The interest on securities is
taxable under the head “Income from Other Sources” and will be taxed at an
applicable slab rate.<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">  </span></span><b><span lang="EN-US">Other Uses: </span></b><span lang="EN-US">The Security will be eligible to act as a collateral
security against availing finance from the banks financial Institutions and Non
Banking Financial Companies, (NBFC).<b><o:p></o:p></b></span></div>
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<span lang="EN-US" style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">  </span></span><b><span lang="EN-US">Other Features:<o:p></o:p></span></b></div>
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; mso-fareast-font-family: "Times New Roman";">-<span style="font-family: 'Times New Roman'; font-size: 7pt;">         
</span></span><span lang="EN-US">The IINSS are non transferable. But the same can be
transferred to the nominee in the case of death of the investor. <o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; mso-fareast-font-family: "Times New Roman";">-<span style="font-family: 'Times New Roman'; font-size: 7pt;">         
</span></span><span lang="EN-US">Nomination Facility is available. The investor can nominate
one or more nominees who will be the beneficial owner of the security in case
of death of the investor.<o:p></o:p></span></div>
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Inflation Indexed National Saving Securities (IINSS) Salient Features

Inflation Indexed National Saving Securities (IINSS) Salient Features As per the press release of the RBI , dated 29 th November, ...

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Ways to maximize your Interest on PPF Account</h2>
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<span lang="EN-US" style="font-family: "Calibri","sans-serif"; font-size: 11.0pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">The Public Provident Fund is a
very attractive investment plan. The investment in PPF provides you with lots
of benefit by securing your future along with reducing your tax liability. As
per the rules, the PPF investment for the year can not exceed Rs. 1,00,000. The
amount of investment made by you in PPF is allowed as a deduction from total
income under section 80C of the Income Tax Act. The investment in PPF, interest
on PPF and amount received on maturity of the PPF all this are tax free and so
more and more people opt for the investment in PPF.<o:p></o:p></span></div>
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<b><span lang="EN-US" style="font-family: "Calibri","sans-serif"; font-size: 11.0pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Method of calculation of Interest
on PPF and the tips to increase the same:<o:p></o:p></span></b></div>
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<span lang="EN-US" style="font-family: "Calibri","sans-serif"; font-size: 11.0pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">The method of calculation of
interest on PPF investment is very unique. The interest rate on Investment in
PPF Account is declared by the Government every year. At present the interest
on PPF Investment is 8.7% for the Fiscal Year (2013-14). The interest on PPF investment
is compounded on annual basis. <o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "Calibri","sans-serif"; font-size: 11.0pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">The loophole which helps to
increase the amount of interest on PPF investment lies in the amount and date
on which interest is calculated. The mechanism of calculating interest runs by
calculating the interest on the lowest balance in the month. The interest is
calculated at the end of every month and the same is credited to the account on
annual basis at the end of the year. The days’ during which the interest is
calculated is between the end of the previous month and 5<sup>th</sup> Date of
the month preceding it. Mathematically the interest calculation can be denoted
as follows:<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "Calibri","sans-serif"; font-size: 11.0pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Lowest Balance in the PPF Account
during the month * Interest Rate @ 8.7% at present * 1/12<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "Calibri","sans-serif"; font-size: 11.0pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Now the tip to increase the PPF
account interest is that you should deposit the PPF investment amount before
the 5<sup>th</sup> date of the month. For example if you want to deposit Rs.
10,000 for 10 months in the PPF Account, than deposit Rs. 10,000 before 5<sup>th</sup>
of every month so that the interest on such amount will be available for whole
month. And in case when you want to deposit a certain amount in one go than
deposit the same before 5<sup>th</sup> of the month at starting of the year.
This will help you to earn the interest on such amount for whole year. If we
understand the same by an example, in case you have spare money and you want to
deposit Rs. 80,000 for the Financial Year 2014 – 15 in the PPF account, keep
the same ready and deposit it before 5<sup>th</sup> April, 2014 so that the
interest will be calculated for whole year on Rs. 80,000. And you may not loose
that portion of interest.<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "Calibri","sans-serif"; font-size: 11.0pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">The above tip will have a
wonderful effect on interest amount of your PPF account. The effect of the same
can be understood by way of example. In case you deposit Rs. 20,000 for five
months and if you start depositing such amount in the month of April and that
too before 5<sup>th</sup> of the month than 8.7% interest on Rs. 20,000 for the
month amounts to Rs. 145 and for five such installments it amount to Rs. 725. So
if you fail to deposit the amount before 5<sup>th</sup> of the month, you may
loose Rs. 145 interest per month indirectly. So be punctual and try to deposit
the amount on or before 5<sup>th</sup> of the month.<o:p></o:p></span></div>
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Ways to maximize your Interest on PPF Account

Ways to maximize your Interest on PPF Account The Public Provident Fund is a very attractive investment plan. The investment in PPF...

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