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How much should I invest for tax savings with a Rs.21 lakh annual package?

Ramalingam

Ramalingam Kalirajan  |8284 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 22, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - Jul 03, 2024Hindi
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Hi My per annum package is around Rs. 21 lacs. I have a home loan EMI of Rs. Rs. 2.28 lacs. I have investment of Rs. 3.6 lacs in various insurance schems. Apart from that I have some investment of Rs. 200000 in MF. Please guide me how much investment I need to do for tax savings ?

Ans: Income and Existing Investments
Annual Package: Rs 21 lakhs
Home Loan EMI: Rs 2.28 lakhs per annum
Insurance Investments: Rs 3.6 lakhs
Mutual Fund Investments: Rs 2 lakhs
Tax Saving Investments Under Section 80C
To maximize tax savings under Section 80C, you can invest up to Rs 1.5 lakhs per annum. Here’s a breakdown:

Existing Eligible Investments
Home Loan Principal Repayment: Part of your home loan EMI goes towards principal repayment, which qualifies under Section 80C.
Insurance Premiums: The Rs 3.6 lakhs in insurance schemes might include premium payments that are eligible under Section 80C.
Additional Investments Required
Calculate Existing Deductions: First, identify the portion of your EMI and insurance premiums that qualify for Section 80C. Let's assume your home loan principal repayment is Rs 1 lakh per annum and the insurance premiums are Rs 50,000 per annum.
Investment Suggestions for Additional Tax Savings
To fully utilize the Rs 1.5 lakhs limit, you need to invest an additional Rs 50,000.

Equity-Linked Savings Schemes (ELSS)
Benefits: ELSS funds offer tax savings and have the potential for high returns.
Lock-in Period: They come with a 3-year lock-in period, the shortest among all tax-saving options under Section 80C.
Public Provident Fund (PPF)
Benefits: PPF offers tax-free returns and is a safe investment option.
Lock-in Period: 15-year lock-in, but partial withdrawals are allowed after the 7th year.
Sukanya Samriddhi Yojana (SSY)
Benefits: If you have a daughter, SSY is a good option with attractive interest rates and tax benefits.
Lock-in Period: Till the daughter turns 21 or gets married after the age of 18.
National Savings Certificate (NSC)
Benefits: NSC is a safe investment option with a fixed interest rate.
Lock-in Period: 5 years.
Voluntary Provident Fund (VPF)
Benefits: You can contribute more than your mandatory EPF contribution.
Returns: Similar to EPF returns and safe.
Other Tax-Saving Sections
Section 80D - Health Insurance Premium
Benefits: Deduction up to Rs 25,000 for self, spouse, and children. Additional Rs 25,000 for parents under 60 and Rs 50,000 if they are over 60.
Section 80E - Education Loan Interest
Benefits: Deduction on interest paid on education loans for higher studies.
Section 24 - Home Loan Interest
Benefits: Deduction up to Rs 2 lakhs on interest paid on home loan.
Review and Reallocate Existing Investments
Insurance Policies
Evaluation: Assess if your insurance policies are purely for investment or provide adequate life cover.
Reallocation: Consider surrendering or reducing investment-cum-insurance policies and reallocating to mutual funds.
Mutual Funds
Focus on Growth: Since your goal is wealth creation, consider allocating more to equity funds for higher growth potential.
Final Insights
Maximize Section 80C: Utilize the full Rs 1.5 lakh limit under Section 80C with a mix of ELSS, PPF, and SSY.
Diversify: Ensure your portfolio is diversified across different asset classes for balanced growth and risk management.
Regular Monitoring: Periodically review and adjust your investments to stay aligned with your financial goals.
Certified Financial Planner: Consider consulting a Certified Financial Planner for personalized advice and strategy.
Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Hardik

Hardik Parikh  |106 Answers  |Ask -

Tax, Mutual Fund Expert - Answered on Aug 22, 2023

Asked by Anonymous - Aug 21, 2023Hindi
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I work for a private company with annual CTC of Rs 17.6 lakh, What are the investments which I must do in order to save the tax, Currently I have 4 Life Insurance policies with premium Rs 1 lakh Senior Citizen health insurance of Rs 25k I have a 3 year old daughter, this year I m planning for Sukhanya Samruddhi of Rs 1.5 lakh
Ans: Hi,

Given your annual CTC of Rs 17.6 lakh and your current investments, here are some tax-saving investment options you can consider for the financial year 2023-24:

1. Equity Linked Savings Scheme (ELSS): This is a type of mutual fund that not only helps you save tax but also gives you an opportunity to grow your money. They have a lock-in period of 3 years.

2. Public Provident Fund (PPF): You've mentioned planning for Sukanya Samriddhi for your daughter, which is a great choice. In addition to that, you can also consider investing in PPF. It's a long-term investment option that offers tax-free interest.

3. Unit Linked Insurance Plan (ULIP): Since you already have life insurance policies, you might want to look into ULIPs. They offer both insurance and investment under a single integrated plan.

4. National Savings Certificate: This is another safe investment option that you can consider.

5. New Pension Scheme (NPS): It's a voluntary, long-term retirement savings scheme designed to enable systematic savings. It is a mix of equity, fixed deposits, corporate bonds, liquid funds, and government funds.

6. Fixed Deposits: Some fixed deposits offer tax-saving benefits. However, the interest earned might be taxable.

7. Senior Citizen Saving Scheme (SCSS): Since you've mentioned senior citizen health insurance, if you or your family members qualify, SCSS can be a good option. It offers a good interest rate.

Remember, the key is to diversify your investments and not put all your money into one basket. It's also essential to keep in mind the lock-in periods, returns, and tax implications of each investment option.

I hope this helps!

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Radheshyam

Radheshyam Zanwar  |1561 Answers  |Ask -

MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Apr 24, 2025

Career
Sir my daughter is doing Btech EEE at BIT Mesra Patna campus , she is securing 8 CGPA there . She is little bit upset due to poor placement there , what to do
Ans: Hello Alok.
Nothing will happen with an upset mood, and there is no point in blaming the institute at this stage. It is better to search for another path while completing the B.Tech. @ BIT Mesra. Here are a few suggestions for your daughter: (1) Start preparing for the GATE exam, which opens the doors for MTech at IITs/NITs or PSU jobs (like BHEL, NTPC, ONGC). (2) Focus on GRE and MBA (3) Join online Platforms: Coursera, NPTEL, Udemy, LinkedIn for advanced learning techniques related with EEE and CSE (4) Focus on Off-Campus Job Preparation, in which she can prepare for Aptitude, Coding, Core concepts etc (5) While in final year, create accounts on LinkedIn, Indeed, AngelList, naukri.com etc/ (5) If possible, join CDAC (Centre for Development of Advanced Computing) offer excellent 6-month PG diplomas with placement support (great ROI).(6) Talk to seniors/alumni for realistic inspiration and off-campus job guidance. (7) Consider a mock placement drive or aptitude training course in the final year.
Best of luck to your daughter for her upcoming bright future.
Follow me if you like the reply. Thanks
Radheshyam

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Nayagam P

Nayagam P P  |4454 Answers  |Ask -

Career Counsellor - Answered on Apr 23, 2025

Asked by Anonymous - Apr 23, 2025
Career
My daughter 90percentile in jee mains 2025,and puc board exam 95.6 percentage and kcet is 101 marks we are obc ncl and catgory 1 reservation can we get nit surathkal college for admission or other top 3 college in bangalore and she want to take jee advance 2025 , which branchas scope and high package
Ans: As far as KCET is concerned,? here are the some approximate expected KCET opening and closing ranks for the OBC-NCL category across four top engineering colleges in Bengaluru:?

RV College of Engineering (RVCE)
Computer Science & Engineering: Opening – 2,000 | Closing – 3,000
Electronics & Communication Engineering: Opening – 2,500 | Closing – 3,500
Electrical & Electronics Engineering: Opening – 3,000 | Closing – 4,500
Mechanical Engineering: Opening – 4,000 | Closing – 6,000
Civil Engineering: Opening – 5,000 | Closing – 7,000?

BMS College of Engineering (BMSCE)
Computer Science & Engineering: Opening – 2,500 | Closing – 4,000
Electronics & Communication Engineering: Opening – 3,000 | Closing – 5,000
Electrical & Electronics Engineering: Opening – 4,500 | Closing – 6,500
Mechanical Engineering: Opening – 6,000 | Closing – 8,000
Civil Engineering: Opening – 7,000 | Closing – 9,000?

M S Ramaiah Institute of Technology (MSRIT)
Computer Science & Engineering: Opening – 2,200 | Closing – 3,800
Electronics & Communication Engineering: Opening – 3,500 | Closing – 5,500
Electrical & Electronics Engineering: Opening – 5,000 | Closing – 7,000
Mechanical Engineering: Opening – 6,500 | Closing – 8,500
Civil Engineering: Opening – 7,500 | Closing – 9,500?

Dayananda Sagar College of Engineering (DSCE)
Computer Science & Engineering: Opening – 3,000 | Closing – 5,000
Electronics & Communication Engineering: Opening – 4,500 | Closing – 6,500
Electrical & Electronics Engineering: Opening – 6,000 | Closing – 8,000
Mechanical Engineering: Opening – 7,500 | Closing – 9,500
Civil Engineering: Opening – 8,500 | Closing – 10,500?

Note: The above ranks are indicative and based on available data for the OBC-NCL category. Every year, actual cutoffs may vary based on factors like seat availability, reservation policies, and candidate preferences.

?Regarding the chances of getting seats through JEE/JoSAA Counselling, here is, How to Predict Your Chances of Admission into NIT or IIIT or GFTI After JEE Main Results – A Step-by-Step Guide.

Providing precise admission chances for each student can be challenging. Some reputed educational websites offer ‘College Predictor’ tools where you can check possible college options based on your percentile, category, and preferences. However, for a more accurate understanding, here’s a simple yet effective 9-step method using JoSAA’s past-year opening and closing ranks. This approach gives you a fair estimate (though not 100% exact) of your admission chances based on the previous year’s data.

Step-by-Step Guide to Check Your Daughter's Admission Chances Using JoSAA Data
Step 1: Collect Your Daughter's Key Details
Before starting, note down the following details:

Her JEE Main percentile
Her category (General-Open, SC, ST, OBC-NCL, EWS, PwD categories)
Her Preferred institute types (NIT, IIIT, GFTI)
Her Preferred locations (or if you're open to any location in India)
List of at least 3 preferred academic programs (branches) as backups (instead of relying on just one option)
Step 2: Access JoSAA’s Official Opening & Closing Ranks
Go to Google and type: JoSAA Opening & Closing Ranks 2024
Click on the first search result (official JoSAA website).
You will land directly on JoSAA’s portal, where you can enter your details to check past-year cutoffs.
Step 3: Select the Round Number
JoSAA conducts five rounds of counseling.
For a safer estimate, choose Round 4, as most admissions are settled by this round.
Step 4: Choose the Institute Type
Select NIT, IIIT, or GFTI, depending on your preference.
If your daughter is open to all types of institutes, check them one by one instead of selecting all at once.
Step 5: Select the Institute Name (Based on Location)
It is recommended to check institutes one by one, based on your preferred locations.
Avoid selecting ‘ALL’ at once, as it may create confusion.
Step 6: Select her Preferred Academic Program (Branch)
Enter the branches you are interested in, one at a time, in your preferred order.
Step 7: Submit and Analyze Results
After selecting the relevant details, click the ‘SUBMIT’ button.
The system will display Opening & Closing Ranks of the selected institute and branch for different categories.
Step 8: Note Down the Opening & Closing Ranks
Maintain a notebook or diary to record the Opening & Closing Ranks for each institute and branch you are interested in.
This will serve as a quick reference during JoSAA counseling.
Step 9: Adjust Your Expectations on a Safer Side
Since Opening & Closing Ranks fluctuate slightly each year, always adjust the numbers for safety.
Example Calculation:
If the Opening & Closing Ranks for NIT Delhi | Mechanical Engineering | OPEN Category show 8622 & 26186 (for Home State), consider adjusting them to 8300 & 23000 (on a safer side).
If the Female Category rank is 34334 & 36212, adjust it to 31000 & 33000.

Follow this approach for Other State candidates and different categories.
Pro Tip: Adjust your expected rank slightly lower than the previous year's cutoffs for realistic expectations during JoSAA counseling.

Can This Method Be Used for JEE April & JEE Advanced?
Yes! You can repeat the same steps after your April JEE Main results to refine your admission possibilities.
You can also follow a similar process for JEE Advanced cutoffs when applying for IITs.

Want to Learn More About JoSAA Counseling?
If you want detailed insights on JoSAA counseling, engineering entrance exams, preparation strategies, and engineering career options, check out EduJob360’s 180+ YouTube videos on this topic!

Hope this guide helps! All the best for your daughter's admissions!

Follow RediffGURUS to Know more on 'Careers | Health | Money | Relationships'.

...Read more

Nayagam P

Nayagam P P  |4454 Answers  |Ask -

Career Counsellor - Answered on Apr 23, 2025

Asked by Anonymous - Apr 23, 2025
Career
I got 98.02%ile in JEE MAINS session 2 . (EWS) Can I get TOP NIT (CSE) ?? EWS RANK 4146
Ans: Here is, How to Predict Your Chances of Admission into NIT or IIIT or GFTI After JEE Main Results – A Step-by-Step Guide.

Providing precise admission chances for each student can be challenging. Some reputed educational websites offer ‘College Predictor’ tools where you can check possible college options based on your percentile, category, and preferences. However, for a more accurate understanding, here’s a simple yet effective 9-step method using JoSAA’s past-year opening and closing ranks. This approach gives you a fair estimate (though not 100% exact) of your admission chances based on the previous year’s data.

Step-by-Step Guide to Check Your Admission Chances Using JoSAA Data
Step 1: Collect Your Key Details
Before starting, note down the following details:

Your JEE Main percentile
Your category (General-Open, SC, ST, OBC-NCL, EWS, PwD categories)
Preferred institute types (NIT, IIIT, GFTI)
Preferred locations (or if you're open to any location in India)
List of at least 3 preferred academic programs (branches) as backups (instead of relying on just one option)
Step 2: Access JoSAA’s Official Opening & Closing Ranks
Go to Google and type: JoSAA Opening & Closing Ranks 2024
Click on the first search result (official JoSAA website).
You will land directly on JoSAA’s portal, where you can enter your details to check past-year cutoffs.
Step 3: Select the Round Number
JoSAA conducts five rounds of counseling.
For a safer estimate, choose Round 4, as most admissions are settled by this round.
Step 4: Choose the Institute Type
Select NIT, IIIT, or GFTI, depending on your preference.
If you are open to all types of institutes, check them one by one instead of selecting all at once.
Step 5: Select the Institute Name (Based on Location)
It is recommended to check institutes one by one, based on your preferred locations.
Avoid selecting ‘ALL’ at once, as it may create confusion.
Step 6: Select Your Preferred Academic Program (Branch)
Enter the branches you are interested in, one at a time, in your preferred order.
Step 7: Submit and Analyze Results
After selecting the relevant details, click the ‘SUBMIT’ button.
The system will display Opening & Closing Ranks of the selected institute and branch for different categories.
Step 8: Note Down the Opening & Closing Ranks
Maintain a notebook or diary to record the Opening & Closing Ranks for each institute and branch you are interested in.
This will serve as a quick reference during JoSAA counseling.
Step 9: Adjust Your Expectations on a Safer Side
Since Opening & Closing Ranks fluctuate slightly each year, always adjust the numbers for safety.
Example Calculation:
If the Opening & Closing Ranks for NIT Delhi | Mechanical Engineering | OPEN Category show 8622 & 26186 (for Home State), consider adjusting them to 8300 & 23000 (on a safer side).
If the Female Category rank is 34334 & 36212, adjust it to 31000 & 33000.

Follow this approach for Other State candidates and different categories.
Pro Tip: Adjust your expected rank slightly lower than the previous year's cutoffs for realistic expectations during JoSAA counseling.

Can This Method Be Used for JEE April & JEE Advanced?
Yes! You can repeat the same steps after your April JEE Main results to refine your admission possibilities.
You can also follow a similar process for JEE Advanced cutoffs when applying for IITs.

Want to Learn More About JoSAA Counseling?
If you want detailed insights on JoSAA counseling, engineering entrance exams, preparation strategies, and engineering career options, check out EduJob360’s 180+ YouTube videos on this topic!

Hope this guide helps! All the best for your admissions!

Follow RediffGURUS to Know more on 'Careers | Health | Money | Relationships'.

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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