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
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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