| Please clarify whether the amount invested in an ongoing ELSS is deductible under Section 80C? Will the amount received on sale of these units after three years be added to my taxable income? Will the capital gains made after three years be totally tax free? |
R. Ganguly, Calcutta |
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| You can claim deduction of the investment made in an ELSS under Section 80C. There will be no capital gains tax if you sell the units after the three-year lock-in period. This amount will neither be added to your taxable income nor will you have to pay any tax thereon. |
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| SIP of joy |
| I want to invest in equity mutual funds for one year through the SIP route. What will be the reasonable time to sell the units after three years or five years? |
Sanjib Dutta, Calcutta |
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| SIP is a good way to ward off excess volatility in stock prices and averaging the cost. The time of selling the investment will depend on the market conditions and the rate of return you are aiming at. A better way to manage your return on investments is to set a target rate of return that satisfies your financial goal. Once you achieve this return, you should at least partially book profits, whatever the market condition is at that time. |
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| Be at ease |
| I have invested Rs 80,000 in a fixed deposit plan of a nationalised bank for 8 years at an interest rate of 9.25 per cent. Is TDS applicable to the cumulative interest accrued every year? Should I submit Form 15G with the bank? My annual income is Rs 1,00,000. |
Saibal Sarkar, Calcutta |
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| Your annual income is less than the basic exemption limit of Rs 1,50,000. Your annual interest from the fixed deposit will be Rs 7,661, approximately. Your annual income will not exceed the basic exemption limit even after including the interest. You can submit Form 15G with the bank for non-deduction of tax at source on the interest. |
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| If you have any queries about investing or taxes or a high-cost purchase you are planning, mail to: btgraph@abpmail.com, or write to: Business Telegraph, 6 Prafulla Sarkar Street, Calcutta 700 001. |
