But the good news is that you can overcome these obstaclesfinancial planning with strategic and create a wealth-building roadmap. 

In this blog, we’ll explore five smart money moves that every corporate employee should implement in 2025. These actionable steps will not only help you reduce stress but also pave the way to financial freedom.  

1. Prioritize Emergency Funds

An emergency fund acts as a financial safety net during unforeseen circumstances like job loss, medical emergencies, or unexpected expenses.  

Actionable Tip:

Set aside 3-6 months’ worth of essential expenses in a high-yield savings account, Fixed Deposits or liquid mutual funds.

You can automate a portion of your salary into this fund every month to ensure consistency.  

Real-Life Example: 

Rahul, a corporate manager, avoided taking on high-interest debt during a sudden medical emergency because he had saved six months’ worth of expenses in a liquid mutual fund. His financial discipline gave him peace of mind and stability.  This very action also saved him from early withdrawals from his long-term investment thus saving him a lot of money.

2. Take Advantage of Employee Benefits

Many corporate employees underutilize the financial benefits offered by their employers, such as EPF, NPS, and insurance. These perks not only save taxes but also boost long-term wealth creation.  

Actionable Tip:

Maximise your contribution to the Employee Provident Fund (EPF) and take advantage of the National Pension System (NPS) for additional tax deductions under Section 80CCD(1B).  

Review your company-provided health insurance policy and consider adding a personal health insurance plan for additional coverage.  

Real-Life Example:

Anita, a mid-level manager, increased her NPS contributions by 10%. Over the last five years, this small adjustment boosted her retirement corpus significantly while saving her taxes every year.  

3. Start SIPs for Long-Term Goals

Systematic Investment Plans (SIPs) in equity mutual funds are one of the best tools for long-term wealth creation. They harness the power of compounding and help you stay disciplined in your investment journey.  

Actionable Tip:

Identify your financial goals such as buying a house, funding children’s education, or planning for retirement—and start SIPs aligned with each goal.

Begin small and gradually increase your contribution as your income grows.  

Success Story:

A client of Best Invest India started a SIP of ₹5,000 per month five years ago. She increased her contribution on a yearly basis and some additional investment randomly. Today, her investment has grown to ₹12 lakhs, helping her move closer to her dream of early retirement.  

4. Avoid Lifestyle Inflation

As your income rises, it’s tempting to upgrade your lifestyle. However, this can lead to a cycle of overspending and prevent you from building wealth.  

Actionable Tip:

• Automate at least 20-30% of every raise toward savings or investments.  
• Limit discretionary spending and avoid unnecessary debt.  
• Follow the bottom-up/ balloon strategy to reduce existing debt stress.

Real-Life Example:

Consider two employees who receive a raise of ₹10,000 per month. Employee A saves ₹2,000 of the raise and spends the rest, while Employee B saves ₹5,000 in SIPs. After five years, Employee B has accumulated over ₹4 lakhs more than Employee A, just by avoiding lifestyle inflation.  

5. Regularly Review Investments 

Your financial goals, risk appetite, and market conditions can change over time. Regular portfolio reviews ensure your investments remain aligned with your objectives. It helps to weed out the under-performing investments thus saving you money. 

Actionable Tip:

Schedule quarterly or yearly reviews with a Certified Financial Planner. Rebalance your portfolio if necessary and exit underperforming investments.  

Call-to-Action:  

At Best Invest India, we offer personalized portfolio reviews to help you optimize your investments and achieve your financial goals.

Book a free consultation today and take the first step toward financial freedom

Conclusion

Financial freedom doesn’t happen overnight, but small, consistent steps can make a significant impact over time. By prioritizing emergency funds, leveraging employee benefits, starting SIPs, avoiding lifestyle inflation, leveraging tax saving investing and regularly reviewing your investments, you’ll be on your way to a more secure and stress-free financial future.  

Are you ready to take control of your finances in 2025?

Let us guide you with expert advice and tailored financial solutions. Schedule your free consultation now!

In this article, we’ll dive deep into the features, benefits, eligibility criteria, and why this plan might be the right choice for you.

What is LIC Digi Credit Life Insurance For (Plan 878)?

LIC’s Digi Credit Life is a decreasing Term Assurance plan wherein the death benefit will be reduced over the policy term. It is a non-ULIP, non-participating*, term insurance plan.

 It is designed specifically for borrowers who want to cover their outstanding loans in case of unforeseen circumstances. 

The plan ensures that in case of the policyholder’s death, the burden of loan repayment doesn’t fall on their loved ones.

The LIC Digi credit life plan is available online only and can be purchased directly from the website www.licindia.in.

This is a Non-Par Product where policies are not entitled for any share in surplus (profits) during the term of the policy.

LIC Digi Credit Life Benefits

1. Loan Protection– The LIC Digi Credit plan covers the outstanding loan amount, making it a great choice for home loans, personal loans, and other financial liabilities.

2. Term Insurance– It provides pure risk cover which also means, there is no maturity benefit. The sum assured is paid only in the event of death during the policy term.

3. Digital Application Process– As the name suggests, LIC Digi Credit Life is a fully digital plan, ensuring a hassle-free and paperless process from application to policy issuance.

4. Affordable Premiums– The premiums are relatively lower than traditional life insurance plans, making it an affordable option for borrowers.

5. Flexible Tenure- The policy term can be customized according to the loan tenure, allowing flexibility in planning your financial coverage.

6. Single and Joint Life Options- The plan can be taken in single and joint life name, making it suitable for co-borrowers.

7. Peace of Mind- Borrowers can enjoy peace of mind knowing that their financial obligations are covered, securing their family’s future.

Eligibility Criteria for LIC Digi Credit Life (Plan 878)

LIC Digi Credit Life – Maturity, Death Claim

Maturity Benefit

No maturity benefit is payable on successful completion of policy.

Death Claim (For Limited premium payment policy)

In case of unfortunate death of assured, the nominee will get the higher of the below mentioned amounts:

• 105% of “Total Premiums Paid” up to the date of death
• Absolute amount assured to be paid on death

Death Claim (For Single premium policy)

Sum Assured is paid.

Who Should Consider LIC Digi Credit Life (Plan 878)?

1. Loan Borrowers– If you have taken out a significant loan (e.g., a home loan, car loan, or business loan), this plan offers vital protection for your family and loved ones.

2. First-Time Loan Takers– New borrowers can benefit from this plan by ensuring their loan is protected from the outset.

3. Joint Loan Applicants– If you’re applying for a loan with a co-borrower, LIC Digi Credit Life offers joint coverage, securing both individuals.

4.Individuals Seeking Simple Term Insurance- This plan is suitable for those looking for a straightforward term insurance plan specifically linked to their loan.

How to Apply for LIC Digi Credit Life?

• Visit the LIC Website & Navigate to the LIC Digi Credit Life section ( https://esales.licindia.in/CustomerQuote?plan=878)
• Keep ready your documents such as Income/ investment proof, self cancelled Cheque, Address Proof, photograph, online ekyc.
• Fill in your basic details
• Submit your loan details – such as loan amount, tenure, and co-borrower details (if applicable).
• Click on Calculate premium
• Proceed with the paperless application, upload the required documents, and make the payment.
• Once approved, the policy will be issued digitally.

LIC Digi Credit Life (Plan 878)- Review

This plan is a pure decreasing Term Assurance plan wherein the death benefit decreases over the policy term. The Policyholder shall choose the Basic Sum Assured depending on the loan amount.

LIC Digi Credit Life (Plan 878) is a smart choice for borrowers seeking loan protection. Its affordability, ease of application, and coverage make it ideal for individuals with loans. Whether you’re a first-time borrower or someone with multiple financial obligations, this plan ensures that your loved ones are not burdened with loan repayments in your absence.

If you’re looking for financial security with a focus on loan repayment, this policy can serve as a reliable safety net. By opting for LIC Digi Credit Life, you’re not only securing your financial future but also providing peace of mind for your family.

Frequently Asked Questions (FAQs)

Can I apply for LIC Digi Credit Life (Plan 878) if I have an existing loan?

Yes, you can apply for this plan even if you have an existing loan. The plan will cover your remaining loan balance.

Is there any maturity benefit with LIC Digi Credit Life?

No, LIC Digi credit life plan is a pure term insurance plan, meaning there is no maturity benefit. It provides financial protection only in case of the policyholder’s death.

Can I cover multiple loans under a single policy?

No, the plan covers one loan at a time. However, you can purchase multiple policies to cover different loans.

Can I apply for LIC Digi Credit Life (Plan 878) if I have an existing term insurance from LIC/ other company?

Yes, life-proposed (LP) may buy multiple online policy(ies) if the LP needs more life-insurance cover subject to your financial eligibility.

Life-proposed has to disclose their income details & existing life-insurance cover details in corresponding sections while applying for cover under this plan.

Existing insurance coverage, if any, will be added to the current proposed Sum Assured to arrive at your overall eligibility.

Based on the income and overall eligibility, online proposal for risk-cover will be decided by LIC as per its rules.

What is NPS Vatsalya Scheme?

NPS (National Pension System) Vatsalya is a special retirement savings scheme designed to make children ( below age 18) pension ready. Under NPS-Vatsalya parents/guardians can make regular contributions on behalf of their minor children and make them pension ready at age 60.

The minimum contribution of ₹1000 per year and no limit on the maximum contribution.

Eligibility for NPS Vatsalya

All Indian Nationals can invest in NPS Vatsalya Scheme. The eligibility conditions are as given below.

• Subscriber below 18 years of age
• Applicable for NRI & OCI Subscribers also eligible
• NRI & OCI can invest from NRE and NRO A/c. (Applicable only for NRI/OCI Subscribers)

Documents required to Open NPS Vatsalya Scheme

• Date of Birth Proof of Minor
• Guardian Signature
• Scanned Copy of Passport (Applicable only for NRI Subscribers)
• Scanned copy of Foreign Address Proof (Applicable only for OCI Subscribers)
• Scanned copy of Bank Proof (Applicable only for NRI/OCI Subscribers)

 Kindly keep the below information and documents ready

• Mobile-linked Aadhaar Card or DigiLocker of minor and guardian
• Date of Birth proof of minor (e.g., birth certificate, school leaving certificate,matriculation certificate, PAN, passport)
• Bank account details of minor (account number, IFS Code, and bank name; ensure that the bank account is in name of the individual registering for NPS)
  • In the case that the guardian is NRI or OCI, NRE/NRO Bank details of guardian are mandatory
• Scanned copy of cancelled cheque or bank passbook
• Scanned copies of your PAN Card and signature
• Ensure your UPI or Internet Banking is active (for payment purposes)

NPS Vatsalya Registration Online

1. Go to eNPS website. 
2. Find NPS Vatsalya (Minors)
3. click on ‘Register Now’
4. Submit Guardian’s date of birth, PAN number, mobile number, and email address, then click on ‘Begin Registration’.
5. Submit the OTP received on mobile number and email address of the guardian.
6. After OTP verification, acknowledgment number will appear on the screen. select ‘Continue.’
7. Provide minor details as asked
8. Upload documents
9. Click confirm
10. Initiate the initial minimal deposit of Rs.1,000.
11. PRAN will be created (Permanent Retirement Account Number)
12. NPS Vatsalya Scheme is subscribed in name of minor applicant
13. After a day, the subscriber gets a Login ID to his account held by the CRA. Using this login ID, subscriber can view all details and history of his/her account.

PRAN (Permanent Retirement Account Number) which is unique, i.e., an individual can have only one PRAN number

NPS Vatsalya Partial Withdrawal

Before Turning 18

In case a child requires money before the age 18, the money can be withdrawn subject to the following conditions:

• After 3 years of joining NPS
• Up to 25% of contributed amount ( Please note: no interest can be withdrawn)
• Available 3 times till subscriber turns 18

Partial withdrawals can be made for education, treatment of specified illnesses, disability of more than 75%, etc., as defined by PFRDA

Complete Exit from NPS after 18 Years age

After turning major, if the child ( turned major now) want to exit NPS completely ( withdraw entire money and stop contributing), the following conditions has to be met:

If Accumulated Corpus is equal to or greater than 2.5 lakh

In case the accumulated amount is greater than 2.5 lakh then at least 80% of the balance is to be utilized for the purchase of an annuity and the remaining balance in a lump sum can be withdrawn.

If Accumulated Corpus is less than 2.5 lakh

If the accumulated amount is less than 2.5 lakh the subscriber can withdraw entire balance as a lump sum

Unfortunate event with subscriber or Guardian

• Death of the minor: entire accumulated Corpus returned to the guardian.
• Death of the guardian: another guardian is to be registered through fresh KYC. In case of death of both parents, the legally appointed guardian can continue the account with or without making contributions to the account.
• Upon attainment of 18 years of age, the subscriber has an option to continue or exit from the scheme.

Upon attainment of age of 18 years

• Seamless shift to NPS Tier – I (All Citizen)
• fresh KYC of the minor within three months from date of attainting 18 years.
• Upon transitioning, the features, benefits, and exit norms of the NPS-Tier I for All Citizen Model will apply

Investment Choice

NPS Vatsalya provide three investment choice to the subscriber. All three are mentioned below:

• Default Choice: Moderate Life Cycle Fund -LC-50(50% equity)
• Auto Choice: Guardian can choose Lifecycle Fund – Aggressive -LC-75(75% equity), Moderate LC-50 (50% equity) or Conservative-LC-25 (25% equity) as per his/her risk appetite.
• Active Choice: Guardian actively decides allocation of funds across Equity (upto 75%), Corporate Debt (upto 100%), Government Securities (upto 100%) and Alternate Assets (5%).

Pension Fund Selection: The guardian can choose any one of the Pension Fund Manager registered with PFRDA.

Points to Consider Before Investing

Positives ( Pros)

• The child will get an edge over retirement, as he can be pension-ready. Investing in NPS is far better than investing in other pension plans from insurance companies ( since these plans have high inbuilt charges that deeply impact the return).
• It can be a good scheme for affluent investors who have lots of spare money to invest for their bright future.
• But at least it is far better than investing in insurance plans for investment purposes.

Negatives ( Cons)

I have many points to bring to your notice before considering the NPS Child Scheme :

1. Parents’ Obligation/Duty towards Children – A parent must look after their kids, fund their education and help them achieve heights. But Planning for child’s pension looks weird. Leave so much that your children can do anything with it, but do not leave this much that they cannot do anything.
2. Plan your Retirement First – Before planning the pension of a child, it’s better to focus on your retirement first.
3. Plan Your children’s Education First– Please do not consider a NPS Vatsalya a substitute for child’s education funds, since you can withdraw only upto 25% of your deposited money ( without interest).
4. Limited Equity Exposure-Even if you wish to make them pension-ready, there is a limited exposure to equity which will in turn reduce the returns.
5. Compulsory Annuity – Whenever the child takes retirement, there is compulsory purchase of an annuity plan that provides a low interest rate on the pension fund itself. This amount may not be sufficient at that time.
6. Pension received will be taxed– The pension at the age 60, or whenever taken will be taxed as per slab rate.
7. Full Withdrawal – At no point in life you or your child can withdraw money fully and close the scheme. Once entered, it is always entered.( with limited exit & withdrawal rules).
8. No Control– You do not have any control over your investments. You can only choose your fund manager but not where you can invest.

Conclusion

NPS Vatsalya can be a good investment scheme for affluent people who wish to secure their child’s retirement. But practically speaking this children’s retirement scheme is not for middle-class people who struggle to fund their own retirement. NPS child scheme may also hold good for those who buy insurance policies for the benefit of kids’ retirement.

Let’s explore more details about UPS Pension Scheme, outlining its key features, eligibility criteria, benefits, and how government employees can maximise their retirement benefits through this scheme.

What is the new UPS Pension Scheme?

 The New UPS Pension Scheme is a defined Benefit Pension Plan, where the pension amount is calculated based on the employee’s salary and length of service. This ensures that retirees receive a guaranteed pension throughout their retirement.

The salient features of the UPS are:

Assured pension

The employees who have served for 25 years or more will get 50% of the average basic pay drawn over the last 12 months just before superannuation.

Those who served a minimum of 10 years will get proportionate pension money.

Assured Family Pension

The family will get assured 60% pension amount of the employee. For this purpose, the last drawn pension ( just before the demise) of the employee will be considered.

Suppose Mr Bestii was getting a pension of Rs 1 lac at the time of his demise. His family will get Rs 60000 as a Family pension.

Assured Minimum Pension:

The employees who have served for at least 10 years of service, will get an Assured minimum pension of Rs.10,000 per month upon retirement.

Inflation indexation

With time the pension amount will increase as per inflation indexation. The Assured Pension, Assured Family pension and assured minimum pension will be increased based on inflation indexation.

Dearness Relief

Just like serving employees, retirees under the Unified Pension Scheme will receive Dearness Relief based on the All India Consumer Price Index for Industrial Workers (AICPI-IW). 

Lumpsum Payment at Retirement

The Central Govt. of India employees will also get a lump sum payment and Gratuity at the time of Retirement. This lump sum payment will be 1/10th of the employee’s monthly emoluments (including pay and Dearness Allowance) as of the date of retirement, for every completed six months of service.

This lump sum payment will not reduce the quantum of the assured pension.

What Prime Minister Narendra Modi said

“We are proud of the hard work of all government employees who contribute significantly to national progress. The Unified Pension Scheme ensures dignity and financial security for government employees, aligning with our commitment to their well-being and a secure future,” Prime Minister Narendra Modi said in a post on X

Who will Contribute to the UPS Pension Scheme?

Both Employees and the Govt will contribute to the UPS Pension Scheme. The employee will contribute 10% of their salary with the government matching this contribution.

Conclusion

The UPS Pension Scheme is a cornerstone of the Central Government’s commitment to the welfare of its employees. With its unique features, UPS scheme provides a robust safety net for central government employees, ensuring they enjoy a secure and comfortable retirement.

For central government employees, understanding the UPS Pension Scheme is crucial to making informed decisions that maximize their post-retirement income and overall financial well-being.

Mutual Fund Taxation depends on three factors:

1. Type of Mutual Fund
2. Holding period
3. Residential Status

Type of Mutual Funds 

Equity Mutual Funds 

For tax purposes, the fund that invests and maintains 65% of its assets invested in the listed equity shares of domestic companies, is called an Equity Mutual Fund. In the case of Fund of Fund (FOF), the fund invests 90% of its assets in funds that, in turn, invest 90% of its assets in domestic equity (like Equity ETFs or Equity MF).

Debt Mutual Funds 

If the fund invests in 65% portfolio in bonds or Money Market instruments, it is called as a debt mutual fund, including FoF., 

Other Mutual Funds

If any fund does not fall under the above-mentioned two categories, then they are considered as “Other Mutual Funds”. 

Holding Periods of Mutual Funds

The other factor which determines the tax on mutual funds is the holding period.

Equity Mutual Funds 

If you sell equity mutual funds before the competition of 12 months, the gains are called Short Term Capital Gain (STCG).

If you sell an Equity Mutual fund after completion of one year or 12 months, the gains will be termed as Long Term Capital Gain (STCG).

Debt Mutual Funds

The holding period does not matter in Debt mutual funds. The gains are taxable whenever you sell a debt mutual fund. The gains will be added to income and tax as per the income tax slab rate.

Other Mutual Funds

If you sell within two years or 24 months, the gain is considered short-term capital gain (STCG). If you sell after two years or 24 months, then the gain is considered as Long Term Capital Gain (LTCG). 

Equity Mutual Fund -Taxation of Mutual Funds FY 2024-25 / AY 2025-26

Debt Mutual Fund -Taxation of Mutual Funds FY 2024-25 / AY 2025-26

Security Transaction Tax (STT) for FY 2024-25

Security Transaction Charges or STT is levied whenever we buy or sell securities (excluding commodities and currency) through a recognized stock exchange.

These securities includes:

• Equity-oriented mutual funds
• Shares, scrips, stocks,
• Government securities of equity nature
• Bonds, debentures, debenture stock or other marketable securities
• Derivatives
• units or any other instrument issued by any collective investment scheme to the investors in such schemes;
• Security receipt as defined in section 2(zg) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;
• Rights or interest in securities;

On every purchase of sell we pay STT.

What are the latest Security Transaction Tax (STT) FY 2024-25

Although, the rules are not specified. But still, let’s understand it with the available information.

What is the NPS Vatsalya Scheme?

Finance Minister Nirmala Sitharaman has introduced NPS Vatsalya in Budget 2024.  NPS Vatsalya allows parents to contribute on behalf of their children till they turn 18. This NPS scheme for minors promises a healthy future by planning their retirement fund.

Under Vatsalya yojana, Parents can start an NPS account for their children and pay on monthly/ yearly or other modes. 

When the child turns major (18 years), the NPS Vatsalya scheme will transform into a standard NPS account.

From age 18  the child can manage it himself/herself. Parents and guardians, regardless of their citizenship status, can open an NPS Vatsalya account for their underage children.

How does NPS Vatsalya work?

Let’s understand it using the example of Bestii Singh.

Suppose Bestii Singh, opens NPS Vatsalya for his minor child Anuj, aged 1 year. He starts contributing Rs 5000 per month till he turns major.

Anuj can operate NPS Vatsalya himself from 18. But earning usually starts from age 23-25 only ( assumed). Again Mr. Bestii will have to contribute for another 5-6 years.

As soon as Anuj Starts earning, he may contribute to the scheme.

As per current NPS rules, he is eligible to continue contributing to NPS until retirement, or he may make a premature withdrawal and receive a pension with 80% of the money.

He also has the option to withdraw money partially or else contribute NPS till retirement.

Let’s further evaluate this.

Suppose the NPS Vatsalya scheme generates a 10% return yearly. NPS account has been contributed for 59 years ( 5000 monthly contributions). The corpus will be around 17.44 Crore.

As per current NPS rules, Anuj can withdraw 60% lumpsum and from 40% money pension will start.

NPS Vatsalya Scheme – Should you invest?

NPS Vatsalya scheme is a very long-term perspective from an investment point of view. As per my understanding, it is an additional burden on the parents’ shoulders it’s as a parent.

We must support the child for his education and other needs. But Planning a child’s retirement looks daunting.

Even if you are willing to pass good wealth for child’s future, it is best to contribute to other investment schemes such as Index funds, Aggressive mutual funds, and Moderate return mutual funds. It is best if you insure yourself well, so that his future can be taken care of, rather than invest and lock the money for future use.

NPS Vatsalya will be like having low liquidity on your part. It is best to invest under the guidance of a Financial Consultant.

( The post will be updated after Govt. adds more information for NPS Vatsalya)

Read more about NPS

The types of income tax slabs depend on different people’s segments. Let’s understand the new income tax regime and old income tax regime.

• Old Tax System-Income tax for those who want to claim income tax reductions and exemptions 
• New tax System-Income tax for those who do not want to claim income tax reduction and exemptions. 

New Income tax Slab Rate FY 2024-25

There is no change in the income tax slab rate in the Old tax regime. However, a new limit has been added under new tax regime.

Under the New tax regime FY 2023-24 ( last year) , there were limit from 3 to 6 lac, which has now increased to 7 lac.

Earlier, under the new tax regime, there were slab rates of up to 6 lakh. But this year, it has increased to seven lakh slab rates.

What is the Standard deduction?

The standard deduction is available for the salaried and the pensioners (including family pensioners). The standard deduction is increased from Rs. 50,000 to Rs. 75,000 under new tax system.

This increase in the standard deduction will save in taxes for people. It will also enhance the simultaneous shift to the new tax system.

Other changes

Family pension deduction increased from 15K to 25K.

Deduction to employer contribution to NPS increased to 14% of employee salary.

Conclusion

Ideally one should calculate income tax from the old and new tax system. Opt for a system that bring you low taxes.

Let’s understand Capital gain tax with the help of examples.

Budget 2024 – How Much Capital Gain is Tax-Free?

There are different capital gain taxes for different securities.

What is Capital Gain tax India?

Capital gains tax is a tax on the profit booked from selling assets such as stocks, equity mutual funds, bonds, real estate, and other investments. 

 Listed Securities

For listed securities, a holding period of 1 year is termed as Long term holding. Thus if you sell listed securities (such as stocks, equity mutual funds, Equity ETFs, Gold ETFs,Bond ETFs, Listed Bonds, REITs, InVIT, or Sovereign Gold Bonds ( SGB)) after completion of one year, it will be termed as Long Term Capital Gain. and it will be taxed.

Unlisted Securities 

For Unlisted Securities holding period of 2 years is considered as Long term capital gain tax. Below are securities or assets that fall under this category. 

1. Debt Mutual Funds (Units bought before 1st April 2023)
2. Foreign Equity Funds
3. Unlisted Stocks (Indian or Abroad)
4. Real Estate
5. Physical Gold
6. Gold Mutual Fund

Neither Long Term nor Short Term

few securities will be taxed atA Few securities will be taxed as per your tax slab rate. There is no holding period limitation on this. Whenever you sell you will pay capital gain tax as per your income tax slab rate. 

• Debt Mutual Funds (UNits bought after 1st April 2023)
• Market Linked Debentures
• Unlisted Bonds or Debentures

When is the new capital gain tax applicable?

Post-budget capital Gain tax rules will be applicable on the sale of securities from July 23, 2024. For Securities sold before July 23, 2024, the old tax rules are applicable.

https://www.instagram.com/reel/C92T8jAB4c-/?igsh=NG40OHV3ZXNwcXRw

How Capital Gain tax is Calculated?

Equity MF Capital gain Tax

Suppose Bestii Singh purchased Equity Mutual Fund in 2020 for Rs. 150000. Now the value of this fund is 312000.

Capital gain on MF/shares will be 312000-150000 = 162432

Now the taxes on gains upto Rs 1,25,000 are not taxable.

Gains above 1,25,000 is 37432. These gains will be taxed at 12.5%.

So Bestii will pay an LTCG (capital gain tax long term) of Rs. 4679.

Debt MF Capital gain Tax

Now Suppose Bestii Singh purchased Debt Mutual Fund in 2020 for Rs. 150000. Now the value of this fund is 312000.

His LTCG tax is 12.5% with no expemtion of 1.25 lac. Thus his entire gains are taxed at 12.5%.

Debt MF tax will be Rs. 20304

suppose he purchased it 2 years before then his entire capital gains tax short term will be added to his income and taxed as per his income tax slab rate.

How much Capital Gain is Tax Free?

In case of Equity MF/ Shares, If sold after 12 months, the gains are termed as Long Term Capital Gains. Capital Gain upto Rs. 1,25,000 is tax-free. There is an exemption on capital gains tax is 1.25 lac.

What is the capital gain tax on property?

For properties the Long term is calculated as 2 years. If a property is sold after 2 years, LTCG is 12.5%. Whereas if property is sold before completion of two years, the gains are taxed as per income slab rate.

Here’s a simple guide to some of the best short-term investment options available in India.

What are Short-Term Investments?

Short-term investments are financial investments for a very short period, i.e. investing for a few days to few years. The aim is generally high liquidity, low risk, easy to start and easy withdrawal procedure. Above all the procedure should not be time taking.

Best Short-term investments are preferred by investors who want to preserve capital or earn medium returns over a short time horizon. The ultimate need is the flexibility to access funds quickly.

Best Short-Term Investment Options in India

1. Fixed Deposits (FDs)

Fixed Deposits are the most loved investment option for Indians. Fixed Deposits are well known for their fixed return, super easy setup and easy withdrawals.

FD is a safe investment option for tenure ranging from 7 days to 10 years. FDs offer a fixed rate of interest, which is higher than a regular savings account. The returns are guaranteed, making it a risk-free investment.

• Tenure– 7 days to 10 years
• Interest Rate– 3% – 8.5% per annum (varies by bank)
• Risk-Very low

SBI Amrit Vrishti FD – Interest Upto 7.75%

Post Office FD Rates 2024

2. Recurring Deposits (RD)

Another secure option is Recurring Deposits. RDs are perfect for those who want to save a fixed sum monthly. You can choose the tenure ranging from 1 year to 10 years. It’s an excellent way to build a corpus over time with guaranteed returns.

• Tenure- 6 months to 10 years
• Interest Rate- 3% – 8% per annum (varies by bank)
• Risk- Very low

SBI RD Interest Rate 2024- Recurring Deposit

Recurring Deposit Calculator- Features & Benefits

3. Liquid Mutual Funds

Liquid Mutual Funds are debt mutual fund that invests in short-term money market instruments. They offer better returns than savings accounts and provide high liquidity, allowing you to withdraw your money quickly without any exit load ( penalty).

• Tenure- A few days to 3 months or more
• Interest Rate- 3% – 7% per annum (varies by fund)
• Risk- low

4. Short-Term Debt Funds

Short-Term Debt Funds invest in debt securities with a short maturity period of 1 to 3 years. These funds provide better returns than liquid funds and are relatively less volatile as compared to equity funds.

• Tenure- 1 year to 3 months or more
• Interest Rate- 6% – 9% per annum (varies by fund)
• Risk- low to moderate

5. Treasury Bills (T-Bills)

Treasury Bills are government securities issued by RBI. T Bills are issued by GOI for short-term borrowing. They are available in three tenures: 91 days, 182 days, and 364 days. T-Bills are considered very safe as they are backed by the government.

• Tenure- 91 days, 182 days, 364 days
• Interest Rate- 3% – 6% per annum (varies )
• Risk- Very low

Govt. Bonds Online – RBI Retail Direct Scheme

6. Post Office Time Deposits

Post Office Time Deposits are Fixed Deposit with Post Office. They offer fixed returns and are backed by the government of India, ensuring safety and reliability.

• Tenure- 1 Year, 2 Year, 3 year & 5 Year
• Interest Rate- 5.5% – 6.7% per annum (varies by tenure)
• Risk- Very low

Post Office FD Rates 2024

8. Corporate Deposits

Corporate Deposits are fixed deposits provided by companies or financial institutions. They usually have higher interest rates compared to bank FDs but come with a higher risk. It’s essential to choose reputable companies to minimize risk.

• Tenure- 1 Year -5 Year
• Interest Rate- 6% – 10% per annum (varies by tenure)
• Risk- Moderate to high

9. Post Office Mahila Saving Samman Yojana

Post Office Mahila Saving Samman Yojana is available for female investors. The maximum Deposit limit is Rs.2 lac.

• Tenure- 2 years
• Interest Rate- 7.7%per annum
• Risk- Low

Post Office Saving Scheme- Unlocking The Benefits

10. Arbitrage Fund

Arbitrage Funds are a mutual fund category that takes advantage of price differences between different markets. In other words, these funds generate riskless profit.

Above all Arbitrage Funds bear Equity taxation which means a lower tax rate. High-income people can take advantage of these funds and invest for 1-3 years.

• Tenure- 1-5 years
• Interest Rate- 7.7%per annum ( Vary from fund to fund)
• Risk- Low

11. Fixed Maturity Plans

The Fixed maturity plans from mutual fund houses are the close-ended funds. These funds have a fixed investment duration that typically ranges from 2-3 years.

• Tenure- 1-3 years
• Interest Rate- 7-10% per annum
• Risk- Low to moderate

12. National Saving Certificate

National Saving Certificate is a 5-year deposit scheme. Govt of India backs the NSC. Just deposit one time money and enjoy the benefits.

• Tenure- 5 years
• Interest Rate- 7.7%per annum
• Risk- Low

What Is National Saving Certificate- Best One Time Deposit Scheme

13. Equity Savings Mutual Funds

Equity Savings Mutual Funds are combination ( hybrid ) mutual fund and thus have lower risk than equity Mutual Funds. These funds combine Equity and equity-related instruments (min.65%), debt instruments (min.10%) and derivatives.

• Tenure- 3-5 years
• Interest Rate- 6%-9% per annum
• Risk- Low to moderate

14. Conservative Hybrid Fund

These funds are debt-oriented hybrid funds. They are also a type of hybrid mutual fund. These funds invest in equity & equity-related instruments 10% to 25% investment and 75% to 90% in Debt instruments.

• Tenure- 3-5 years
• Interest Rate- 6%-9% per annum
• Risk- Low to moderate

15. Dynamic Asset Allocation or Balanced Advantage Fund

As the name suggests Dynamic Asset Allocation funds are hybrid funds. The fund’s asset allocation is managed at the fund manager’s discretion. Fund Invest in equity/ debt and are managed dynamically.

• Tenure- 3-7 years
• Interest Rate- 6%-10% per annum
• Risk- Low to moderate

16. Multi Asset Allocation Fund

These funds Invest in at least 3 asset classes with a minimum allocation of at least 10% in each asset class. Due to diversification within the fund, they perform better.

• Tenure- 3-7 years
• Interest Rate- 6%-10% per annum
• Risk- Low to moderate

Conclusion

Choosing the best short-term investment plan India depends on your financial goals, risk appetite, and liquidity. Fixed deposits and recurring deposits are ideal for risk-averse investors, while liquid mutual funds and short-term debt funds can offer better returns for those willing to take a slight risk. Treasury bills and post office time deposits provide a safe investment avenue backed by the government.

SBI Amrit Vrishti FD – Details

SBI Amrit Vrishti ( Term Deposit) is available from 15th July 2024 to 31st March 2025. The special deposit scheme investment tenure is 444 days. The annual Interest rate is 7.25%. Senior citizens will get 0.5% extra.

SBI Vrishti Term Deposit – Interest Rate

The Vrishti Deposit Interest rate is 7.25% per annum. Senior Citizens will get 7.75% per annum.
#Staff and Staff Pensioners are eligible for additional interest rate applicable to these categories of customers.

How the interest will be paid?

The interest will be credited at the maturity of term deposit. The interest net of TDS ( TDS will be deducted) will be credited to customer account.

Tax Deduction at Source (TDS)

TDS will be deducted at applicable rate as per the provisions of Income-tax Act

Premature Withdrawal

Premature Withdrawal is possible with a penalty. For Deposits up to Rs.5 lacs, Penalty is 0.5%.

For Retail Term Deposits above Rs.5 lacs (but below Rs. 3 Crores) penalty is 1% (all tenors).

If you opt to withdraw before completion of 7 days, no interest will be paid.

Loan

Customers can take loans on ther term deposits.

Where to buy – SBI Vristhi FD

Customers can purchase Amrit Vristhi Yojana from SBI Bank branch, Net Banking, YONO Channels.