A Financial Planning For Young Self-Employed People…Combining Benefits Of PPF & FD…Which Are Most Secured Ways of Investment…Maximum Benefit From Minimum Investment.

Why PPF  – PPF offers Best interest as compare to FD & also multiple tax benefits: Deposits in a PPF account qualify for a deduction under section 80C for 1.5 lacs. Furthermore, the entire maturity amount including the interest income  is non-taxable.

PPF YEAR  AGE YEARLY CONTRIBUTION ASSUMING PPF INT RATES (Yearly Decreasing Trend) ASSUMED INVESTED IN APRIL  . So Tax Free Interest Income BALANCE  at end of Year
1 31 1,50,000 8.10% 12,150                   1,62,150
2 32 1,50,000 7.90% 24,660                   3,36,810
3 33 1,50,000 7.70% 37,484                   5,24,294
4 34 1,50,000 7.50% 50,572                   7,24,866
5 35 1,50,000 7.30% 63,865                   9,38,732
6 36 1,50,000 7.10% 77,300                 11,66,031
7 37 1,50,000 6.90% 90,806                 14,06,838
8 38 1,50,000 6.70% 1,04,308                 16,61,146
9 39 1,50,000 6.50% 1,17,724                 19,28,870
10 40 1,50,000 6.30% 1,30,969                 22,09,839
11 41 1,50,000 6.10% 1,43,950                 25,03,789
12 42 1,50,000 5.90% 1,56,574                 28,10,363
13 43 1,50,000 5.70% 1,68,741                 31,29,103
14 44 1,50,000 5.50% 1,80,351                 34,59,454
15 45 1,50,000 5.30% 1,91,301 38,00,755
22,50,000

Then time for fixed deposit OF 38 LACS MATURITY OF PPF ===>>   this 38 lacs must be invested in fixed deposits which earns interest rate at 5% in year 15 … so you might get yearly 38 lacs x 5% = 190000 as interest income  and if interest rates decreased to 4%..You will atleast get 150000 yearly interest.

PPF YEAR  AGE YEARLY CONTRIBUTION FROM Interest income of FD ASSUMING PPF INT RATES ASSUMED INVESTED IN APRIL  . So Tax Free Interest Income  BALANCE  at end of Year
16 46 1,50,000 5.30%                        7,950                   1,57,950
17 47 1,50,000 5.10%                      15,705                   3,23,655
18 48 1,50,000 4.90%                      23,209                   4,96,865
19 49 1,50,000 4.70%                      30,403                   6,77,267
20 50 1,50,000 4.50%                      37,227                   8,64,494
21 51 1,50,000 4.30%                      43,623                 10,58,117
22 52 1,50,000 4.10%                      49,533                 12,57,650
23 53 1,50,000 3.90%                      54,898                 14,62,549
24 54 1,50,000 3.70%                      59,664                 16,72,213
25 55 1,50,000 3.50%                      63,777                 18,85,990
26 56 1,50,000 3.30%                      67,188                 21,03,178
27 57 1,50,000 3.10%                      69,849                 23,23,027
28 58 1,50,000 2.90%                      71,718                 25,44,744
29 59 1,50,000 2.70%                      72,758                 27,67,502
30 60 1,50,000 2.50%                      72,938                 29,90,440

So You Have Invested Only 22.5 Lacs From Year 1 To Year 15 But At End Of 30 Years (I.E 15 Year +15year Of  2 Cycles), You Get   38 Lacs FD As Intact  +  29.90 Lacs PPF Maturity I.E Totalling 67.9 Lacs Which Is Almost 3 Times of 22 .5 Lacs

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Suppose You do this for 2 persons i.e. for own & spouse… Then You both will have 67.9 lacs at end of your retirement Age. Take a print of this & talk to your Financial Planner / CA / Investment Advisers for detailed Explanation on above –    written by CA HARSHIL SHETH   9879831157

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