Your Income Plan

Whenever a person is planning his or her investment, the first thing that he or she look at is the safety of the money invested. After safety, the next important thing that a person will look at is the amount of the tax that he or she will have to e pay on the income generated from the investment. Thus, other than safety of the capital sum invested, what one really looks for is higher return or income from one's investments. Tax payable on income depends on two factors :-
i) nature of the income generated from investment e.g whether the income is by way of individual of dividend, interest, capital gains, etc , and
ii) the tax bracket in which one falls into.
In fact one should compare the post tax returns on investment or not. A certain type type of investment may look very good in terms of absolute returns as compared to another investment that may not give similar return in absolute terms, but on comparison of post tax returns, the other investment may look very good in terms of absolute returns as compared to other investment may run over to e better if it gives higher post tax returns.
Before making investment decision, a person must first of all evaluate his or her financial situation as well as present income, plans for the future liquidity needs viz present income , plan for the future , liquidity needs, maturity period, returns on investment, risk appetite, etc An investment decision should be made only after considering all the above factor.
There are various type of investment available in the market that provide tax free income or where the income generated thereon is exempt from tax up to a certain amount. Let us look at some of them bank deposit, post office monthly income account ,government Securities, national saving certificates, public provident fund, equity shares, unit of mutual funds, life insurance policies, pension Funds