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Monday, November 14, 2011

Personal finance

Sure shot plan
NSC (National Savings Certificate) & PPF (Public Provident Fund) are the popular small savings schemes. Because they provide tax deductions. If the tax benefit from NSC goes it will be dead instrument. PPF investors stand to be the biggest beneficiary of the changes in the small savings schemes. It has been proposed that the max. investment limit in PPF will be increased to 1lakh, that is the exemption limit available under section 80C of the income tax act.
The interest rate on PPF is also likely to go up from 8% at present. This is because long-term money is always costlier tha short term funds. Any tightening of interest rates by the Reserve Bank affects the short end of the G-sec yield curve the most- the long term yield curve remained almost flat since march 2010 when the apex bank began the tightening of the interest rates.
It also means that the rate volatility in PPF will be much less than in small savings instruments.
PPF cn give many tax saving equity options a run for their money in the new tax regime

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