#Tips to Earn Maximum Interest on PPF Account

[akshat-kapoor]

Maximize Your Returns: A Complete Guide to Using a PPF Calculator

Investing in a Public Provident Fund (PPF) is a popular choice for individuals seeking a secure and tax-efficient savings option in India. To make the most of your PPF investment, leveraging a PPF calculator is essential. This tool helps you estimate your returns and plan your investments strategically. Here’s a complete guide to using a PPF calculator and maximizing your returns.

Understanding the PPF Calculator

A PPF calculator is an online tool that computes the maturity amount and interest earned on your PPF investments. By inputting details such as the annual investment amount, interest rate, and tenure, you can get an accurate estimate of your total savings at the end of the investment period.

Benefits of Using a PPF Calculator

Accurate and Quick Results:

Manual calculations of PPF returns can be complex and prone to errors. A PPF calculator provides precise results instantly, saving you time and effort.

Effective Financial Planning:

By knowing the expected returns in advance, you can plan your finances better. This helps in aligning your investment strategy with your long-term financial goals, such as retirement planning, children's education, or buying a home.

Comparison and Decision-Making:

A PPF calculator allows you to compare different investment scenarios. You can adjust the annual deposit amount, tenure, and interest rates to see how they affect your maturity amount, helping you make informed decisions.

Flexibility:

The calculator provides flexibility by letting you experiment with various input values. This helps you determine the optimal investment strategy to maximize your returns.

How to Use a PPF Calculator

Using a PPF calculator is straightforward. Follow these steps to get the most out of it:

Enter the Annual Investment Amount:

Input the amount you plan to invest in the PPF account each year. The maximum permissible investment is ₹1.5 lakh per financial year.

Select the Tenure:

The default tenure for a PPF account is 15 years. However, you can extend the tenure in blocks of 5 years after maturity. Choose the tenure based on your financial goals.

Input the Interest Rate:

Enter the prevailing interest rate for PPF. The government revises this rate quarterly. Ensure you use the current rate for accurate calculations.

Compounding Frequency:

PPF interest is compounded annually. The calculator automatically considers this compounding frequency to provide accurate results.

Calculate:

Click the 'Calculate' button to get the estimated maturity amount and total interest earned over the chosen tenure.

Example Calculation

Suppose you decide to invest ₹50,000 annually in a PPF account with an interest rate of 7.1% per annum for a tenure of 15 years. By entering these values into the PPF calculator, you can instantly see that the maturity amount would be approximately ₹13,05,032, with a total interest earning of ₹5,55,032.

Tips to Maximize Your Returns

Invest Early in the Financial Year:

Investing at the beginning of the financial year ensures that your money earns interest for the maximum period, thereby increasing your overall returns.

Consistent Annual Investments:

Regular and consistent investments help in compounding your returns effectively. Try to invest the maximum permissible amount annually to take full advantage of the PPF scheme.

Extend the Tenure:

After the initial 15-year tenure, you can extend the PPF account in blocks of 5 years. Extending the tenure allows your investments to grow further, enhancing your returns.

Conclusion

A PPF calculator is an invaluable tool for anyone looking to invest in the PPF scheme. It simplifies the calculation process, provides accurate results, and aids in effective financial planning. By using a PPF calculator, you can make informed decisions, compare different investment scenarios, and ultimately maximize your returns. Start using a PPF calculator today to take control of your financial future and achieve your long-term savings goals.

[spinetechnologies]

How Much Tax Can Be Saved By A Salaried Person In India?

Income tax is the bitter reality that every salaried employee who falls in the taxable bracket has to swallow, it has to be paid. As the filing season closes by, every salaried class person gets anxious about the payable taxes he/she must take out for that financial year. The only question that is on everybody’s mind is, ‘How to lower down the tax outgo on the earned salary? ’ As per the government regulations, there are various tax saving opportunities, which when utilized in the right manner can cut a big chunk out of one’s tax outgo. The common sections of the tax act that can be utilized by the salaried employees to save on taxes are 80C, 80D, 80CCD (1B) and 24 (b).In order to do so, one should know their Pay Slips well and every component of it. The salaried employee should also have a sound understanding of their tax slab and should make wise and timely investment accordingly so as to minimize the impact of taxation on their salary. Ways to minimize the tax outgo on your salary House Rent Allowance (HRA) - HRA - the most significant part of one’s pay slip, as per the Indian Income Tax Act, is tax exempted. If an employee stays in a rented house, he can claim tax benefits on his HRA. This tax benefit can be claimed by filling out the rent details in the form 12BB at the end of the financial year and submitting the rent receipts along with it. Gratuity Pay - The gratuity pay that is received on separation from the corporate you are working with (can be due to retirement, becoming incapacitated, on termination or voluntarily leaving the job) is exempted from tax. The maximum exemption allowed per employee, on gratuity pay is INR 3,50,000. Meal Coupons - If you receive meal coupons from your employer as part of your payroll, these meal coupons are exempted from tax up to an amount of INR 2600 per month. Telephone/Internet expense - You should always save your telephone/internet bill payment receipts as it can help you later on. You can either get your telephone expenses reimbursed by your employer and if your company does not reimburses such expenses you can claim tax benefits on it. Home Loan - You can claim tax benefits on the interest payment of your home loan under section 24 of the Indian tax act,1961. The limit of deduction for home loan interest payment on your taxable income is INR 2,00,000. Benefits of tax saving on the second home loan: As per the tax act, if you get another home loan for a new house, while your first home loan is still running, there is no tax deduction limit on the interest paid for that second home loan. Investments under 80C - Certain investments that come under section 80C deductions give you tax rebate on your income. Whatever amount is invested by you is deducted from your taxable income. The maximum limit for 80C deduction is INR 1,50,000. List of investments that come under section 80C - PPF account - EPF account - Equity Linked Saving Scheme (ELSS) - Sukanya Samirddhi Yojna - Tax Saving FD - National Saving Certificate - Senior Citizen Saving Scheme Author’s Tip You should always follow the statutory HR policies to get tax deduction benefits. No fraudulent ways should be acquired. #HRMS #Spine #PayRoll #Assets #HR

[akankshasmishra]

Practical Ways to Increase Your Take-Home Salary

Firstly one needs to understand the meaning of take-home salary (pay). As the name indicates, the take-home salary is the actual sum that one receives in his/her account each month. The executive handed over after deducting all the taxes, PPF(public provident fund), public tax subtraction, and other deductions. The following paragraphs deal with the ways to increase your take-home salary and frequently asked questions.

Statistics prove that about 70% of people aren’t satisfied with their pay. Thus the most common question that everyone asks is how one can increase this pay.

Several Ways/Tips To Increase Your Take-Home Salary

1. Believe In Yourself

One always knows what he is capable of and should never let a corporation underestimate himself. Frequent job changes don’t hold the identical stigma they once did; hence, if your employment isn’t paying you a good salary, you should not be afraid to change jobs. A rise in the salary will definitely increase and boost the credited amount up to a limit. A replacement position definitely increases your pay rather more.

2. CTC Restructuring Must Be Done

CTC (Cost to company) is the total salary package that a company offers to the employee, including all the benefits. Nowadays, there aren’t any fixed rules on setting your CTC. Many companies nowadays offer employees the liberty to structure their salary by themselves. Therefore, it falls upon you to form the foremost of your current CTC structure and maximize your pay. It includes saving the maximum amount of tax amounts as possible through tax-saving components like EPF, health checkups, insurance, etc.

3. Some Favored Taxes Saving Options

i. Employee Provident Fund (EPF)

The EPF is largely considered to be a retirement benefits scheme. It also can be doubled as a tax-saving investment. The employee’s contribution to the EPF is either deducted by the government or by the company. This Fund helps you to save some part of your income for the longer term. Also, the Employer’s contribution to EPF is tax-free with certain terms and conditions. But if one feels that he can make better investments by getting a higher amount of pay, he can select not to invest in this scheme if the employer allows this.

ii. Full Advantage Of HRA Exemption Should Be Taken

Salaried employees who live to tell the tale of rent, that is, they live on rent for accommodation, can claim exemptions on House Rent Allowance (HRA). If you live in your own home belonging to your parents, you can still avail of HRA by showing that u pay the rent to your parents. This amount you pay towards your rent is eligible for partial tax exemption. One should claim this HRA exemption. This is often a no-brainer. HRA is sometimes the maximum amount as 50% of basic salary and offers a major tax break.

iii. Take A Leave, Claim Your Leave Allowance

Remember to use the total advantage of your travel-leave deductions. It’s of significant importance to take leave for you and your family’s recreation and also for the tax break. Your LTA are exempted from tax on condition that you are taking leave and make a claim.

There are 4 conditions that one should remember:

Travel needs to be within India only. International travel isn’t allowed.

You can claim this LTA twice within 4 years.

You should take leave and travel (which is obvious). Travel for self and family is allowed (where the family includes your spouse, children, and dependent parents, brothers, and sisters).

LTA is on the market just for traveling, .i.e. air, rail or carfare incurred, and not for the accommodation, food cost, etc.

iv. Remember To Use An 80C Deduction Of Rs.1.50 Lakhs

Section 80C of the revenue enhancement Act of India is a clause in the constitution that marks different expenditures and investments that are exempted, meaning expenses on which no tax is payable. Ensure you’re claiming this; it is one of the best tax-saving ways by using 80C deduction (Maximum- Rs.1.50 lakhs).

Deductions in 80C include the subsequent things:-

One’s contribution to the EPF

One’s insurance

One’s children’s tuition fees

Home Loan payment

If some balance amount (out of Rs.1.50 lakhs) is still left after considering the above expenses, one can invest in products like ELSS, NSC, etc.

v. Medical Insurance Exemptions (80D Benefit)

Remember to acquire the total advantage of 80D deduction (Medical insurance premium). Medical insurance helps you avoid a decent amount of tax and is also an important aspect of one’s life and after.

Deductions available are as high as Rs.25000/– for the medical premium, you get hold of yourself, spouse, and kids. Additional deductions also are available up to Rs.25000/– for premium acquired, ensuring your parents. This available benefit increases to Rs.50000/- if anyone of the insured parents could be an oldster (senior citizen). Hence it’s an excellent tax-saving deal.

vi. Go Regular Medical Examination Health Checkups

Most people miss out on this tax saving tactic. It’s within the limit of 80D, i.e., Rs.25000; you can claim a deduction of up to Rs.5000/- once a year for health checkup for yourself, spouse, children, and fogeys.

You can also avail of a tax rebate of Rs. 15 000 for any expenses made on medical expenses yearly. This includes your family member living with you, i.e., spouse, kids, and dependent mom and dad.

vii. Tax On Your Home Equity Loan

This can be another good tax saver if you’re paying interest on home equity credit or aiming to buy a house. The interest paid on home equity credit will be claimed as a deduction from your income up to 2 lakh each year (for your own house). One can save an enormous amount by claiming this benefit and getting a rebate.

 There could also be a situation where you’ve purchased a house under construction, and you stay in rental accommodation during this era. During this case also, you’ll get the good thing about both.

viii. Education Loan For Higher Study (80E), A Topic To Save Lots Of Tax

If you’re curious about an educational activity or already pursuing it, you’ll be able to get a deduction under section 80E of taxation for your education loan. Interest paid on education loan taken for teaching is allowed as a deduction with none limit. It is often claimed for yourself, spouse, or children. Education means any study after passing the Senior Secondary Examination or its equivalent exam. The upper study will be in India or abroad.

ix. Kids Education And Hostel Allowance Must Be Claimed

If you have kids, do claim this exemption. (Annually: Rs.1200/- per child) You can get this deduction for an optimum of two children (Government check on population!). The allowance is very less, and it’s evident that the government has not kept pace with India’s rising cost of education. Something is better than nothing.

If you’ve got children in a hostel, you’ll be able to claim the Children Hostel Allowance (Annually: Rs.3600/- per child).

x. Reimbursements

A person can reduce tax rebates to a great amount by availing reimbursement for expenses done by you within the life of your company telecom expenses, fuel charges, driver expenses, purchase of knowledgeable staff, and accessories necessary in your employment, food coupons, etc.

Telephone Allowance: – Some companies pay for the mobile bills incurred by the employee every month. This mobile is usually postpaid to keep a check. The employee does not pay this amount and hence becomes non-taxable.

xi. Voluntary Provident Fund (VPF)

VPF reduces your income tax rebate and allows you to bring more money home. Even though it does not directly increase your income, it does help you in saving money. VPF may be anoptionalsum that you impart to your provident fund each month. This amount is completed exempted from tax and thus lowers the taxable amount.

3. Look For Other Sources Of Income

You can always look at a different life approach – one of which can be either working overtime or looking at career-changing options. Working overtime has many benefits,s including a big boost in your salary and making you more hardworking.

Turning a hobby into a side job is the best idea can imagine. As it does not bore you, and you also get to earn from your hobby.

4. Work Out A Raise And Always Try For Bonuses

Employers adjust their hiring rates based on market rates. If you have a higher rate in the market, you must ask for a bonus or a raise. If the demands are not met, then it is better to look for a job offering adequate pay for the skill set.

5. Ask For Incentives For Working Overtime

Many workers are currently not paid for their work completed in overtime. The Policy Institute states that “paychecks haven’t kept pace with their productivity partly because many lower-middle-class and even middle-class workers are working overtime but not getting bought it.” If you’re working overtime, see if you’re entitled to overtime pay and make the most of it.

6. Take Advantage of Employer-Incentive Programs

Many companies realize the worth of employee incentives and improve employee health to scale back stress within the workplace. Paying for a gym or such activities of lifestyle can be costly and time-consuming. Still, if your company supports the value, incentive programs’ advantages do not just affect the way of your life but also your wallet.

7. Join A Carpool

Carpooling can be done within the employees or among friends. Carpooling with friends and colleagues can lay aside a substantial amount of cash. Some communities have more formal arrangements like carpools organized through social networks, online forums, and websites.

8. Shop At The Correct Stores

We often don’t look at more than a place for a product because of being in a hurry. Selecting the right store to buy common households or general things can increase the savings by a fold.

9. Choose Cheaper Alternatives

In the name of brands, we often buy a normal thing at a very great price, unnecessary and a total waste of money. Hence one should always look at a cheaper and better alternative to save money. Studies show that almost a few crores are wasted every year by the people on these so-called brands.

10. Exploit Maximum Cashback Options

Cashback offers provide actual cash, which must be exploited to the best. These are in the form of gift cards, coupons, rewards, etc. hence these used to be used as they are not counted as deductions in tax payments.

11. Socialize On A Budget

Regular meal outs and a social get together deduct a huge amount from one’s salary. But there are other routes to save money while also being social. For instance, discount offers, buffet, buy 1 get 1 free deal, etc. can be considered before choosing a place to meet.

12. Avoid Unnecessary Bank Fees

You should try to avoid and dodge the fees applied to the overuse of ATM cards. Hence it is preferred to do cashless transactions than withdrawing from ATM and paying someone. Each bank has separate rules for fees that much be kept under observance.

Thus, this concludes a lot of money can be saved and earned if it is kept in proper check and used properly, keeping all aspects in mind.

FAQs

1. What is In-Hand Salary?

In-Hand Salary = It is the amount that reaches your account after all the deductions.  Monthly Gross Income – Income tax – Employee PF – Other deductions (if any).

2. How can I maximize my take-home pay?

Read the article given above.

3. What are several kinds of allowances?

There are basically3 kinds of exemptions or allowances for the Income-tax Act – taxable allowances, fully exempted allowances, and partially exempted allowances.

4. What is the best salary structure to save tax?

Following are some efficient ways to save tax and increase your pay:-

Employees’ Provident Fund (EPF).

Leave Travel Allowance (LTA).

House Rent Allowance (HRA).

Food coupons.

Car maintenance allowance.

Children education allowance.

Hostel expenditure allowance.

Phone bill reimbursement.

5. Can you take the benefit of both HRA exemption and house loan interest?

Yes, you can benefit under the conditions that you live on rent and your house property. This can happen in many situations, i.e., if you stay on rent in Mumbai for a job and your own house is in another city,i.e., Bangalore.

source http://invested.in/practical-ways-to-increase-your-take-home-salary/

source https://investedindia.wordpress.com/2020/11/25/practical-ways-to-increase-your-take-home-salary/