More often than not, investments are based on an investor’s nature and needs.
Some investors like to take risks while some want to play relatively safe, and others want their investments to be secure.
Some investors are looking to make a quick buck, some are looking for long term investing for their children or a pension benefit, and some others are interested in wealth creation over some time.
The five most important entities that should decide an investment and its outcome are
Why does anyone invest money? The answer is to make more money.
Why does anyone need more money?
- Saving for the future
- Tax exemption
- Wealth creation
- Clear off debts
- Retirement plans
- Making some money quickly, for an unforeseen incident or a loss in business or because someone else has made huge profits
Define your purpose clearly to yourself and then move ahead to find the best investment plan that suits you.
Quantify the risk. Naturally quick yields, companies or investments with no reliable history and inexperience will involve more risk.
If you are new to investing, you may be ill-advised to invest a considerable amount of your investment in risky propositions like real estate or stock markets.
Start slowly, understand the environment, and invest wisely.
Degree of Liquidity
Liquidity is the ability of your investment to be converted to cash. Stocks and securities have high liquidity, and investments with long lock-in periods have the least liquidity.
Do not just think about high returns and blindly invest in a plan that promises high returns. Look for stability.
You should understand tax jargon and be familiarized with new and old tax policies, investments exempted from tax, tax on income, returns, and capital gains, etc. There are many other tax-saving alternatives to section 80 C.
If you have to figure out the best investment pan for you, the first step is to understand how the government taxes your investments, incomes, and returns.
The primary requirement for an investor is to understand tax laws and systems in the country. A good investor should also have a fair idea about how his income is taxed and how returns on various investments are taxed. Only then, can he decide what part of his income to invest, in what type of investments to achieve his financial goals.
A new income tax has been proposed in Budget 2020, which may or may not be opted for every year by some of the taxpayers. Salaried citizens and pensioners have the option to stick to the older tax plan or shift to the new plan, each year based on the types of investments they make or on the amount of income they are earning. However, citizens earn incomes from business and those working as consultants, do not have the option to shift between 2 tax plans and have to stick to a single plan.
Comparison of the Earlier Tax plan and New Income Tax slab proposed in Budget 2020
|Previous Tax Plan||Annual Income||New Tax Plan (from FY’20)|
|0%||Less than ₹ 2.5 Lakh||0%|
|5%||₹ 2-5 Lakh – ₹ 5 Lakh||5%|
|20%||₹ 5 Lakh – ₹ 7.5 Lakh||10%|
|₹ 7.5 Lakh – ₹ 10 Lakh||15%|
|30%||₹ 10 Lakh – ₹ 12.5 Lakh||20%|
|₹ 12.5 Lakh – ₹ 15 Lakh||25%|
|Above ₹ 15 Lakh||30%|
*The new tax plan will be applicable from Financial Year 2020-21 (Assessment Year 2021-22)
*In case of senior citizens (aged between 60 & 80 years), no tax is payable up to an annual income of ₹ 3 lakh, instead of ₹ 2.5 lakh for ordinary citizens.
*In case of super senior citizens (aged between 60 and 80 years), no tax is payable up to an annual income of ₹ 5 lakh.
Around 70 exemptions that were claimed under the previous tax plan will not be available under the new plan.
Tax exemptions such as HRA (house rent allowance), interest on home loans, investments under section 80 C (for ₹ 1.5 lakh), investments under section 80 D (NPS), leave travel allowance (LTA), medical insurance premiums, savings bank interest under section 80 TTA (for ₹ 10,000/-), etc. will not be available under the new tax regime.
Citizens earning an annual income of ₹ 5 lakhs or below, can still claim the ₹ 12,500/- tax deduction under section 87 A, which will make the income under ₹ 5 lakh per year, tax-free under both regimes.
Next is asset allocation. Would you invest your entire amount in one or two plans? How would you diversify your investment and maximize returns?
What is Asset allocation?
Instead of investing all your savings in a single plan or policy like insurance, stock market, mutual funds, or real estate – distribute them into 2 or 3 plans, making your returns safer and less volatile.
It is not necessary that when stock markets crumble, real estate also crashes or vice versa.
Physical assets include lands like plots, farms, cultivable lands, constructed properties like apartments, houses, malls, and precious metals such as gold and silver.
Physical assets lose value over some time due to wear and tear, termed as ‘depreciation.’
Assets that do not depreciate due to wear and tear such as stocks, bonds, fixed deposits, mutual funds, life insurance policies, company goodwill, etc. are termed as financial assets.
Financial assets, in turn, can be of 2 types:
- Investments that give fixed returns, e.g., fixed deposits, bonds, etc.
Shares, equity-linked products, and mutual funds that have the potential of giving increased returns, based on other variables
While fixed-income investments are safe, earn interest for the specified period with the advantage of having your principal intact, at the end of the maturity period.
So, the amount you receive from fixed return investments is equal to, or more than the amount you have invested, and your chances of losing on either is almost remote.
Equity-linked products and mutual funds offer higher returns, at attractive rates and tempt you to invest more.
For example, a 5-year fixed deposit will yield a return of around 7.5%, while 5-year mutual funds claim to provide a return of 20% on your investment, which is difficult to resist or overlook.
But, not all is rosy about equity-linked investments. Various happenings in the local and global political and market environments make these investments volatile, and sometimes the yield can be negative. It must be understood that as you seek higher returns, the risk factor also increases proportionately.
But, the most significant advantage with a financial asset is that you can invest even small amounts and monthly savings, while physical assets need you to spend some big capital.
You may buy some stocks in an IPO or a post office certificate or invest in a mutual fund portfolio for as low as ₹ 1000/-, but the same cannot be said about investing in a physical asset.
If you want to buy a plot, a construction, or gold for investment purposes, the capital of a few thousands of rupees maybe not be enough.
There are no maintenance costs for your financial investments. In contrast, physical investments like real estate warrant regular maintenance costs, and the price of securing the safety of assets like gold for a while can turn out to be expensive.
What is an Ideal investment plan?
The plan involves minimum risk and gives maximum returns.
Investment plans can be broadly classified into three types based on the age of the investor.
- Child Investment Plans
General Investment Plans (for adults)
Investment Plans for Senior Citizens
The interest rates, maturity period, taxation benefits, and other expenses will depend on the type of plan one chooses to buy.
Now that you have a fair idea of taxation, assets, and types of investment plans, think of choosing the best investment plan for you.
Government-backed Investment Schemes
The investment schemes run by the government of India are safe, healthy, offer credible interest rates, long term benefits, and importantly, exemption from the tax burden.
Interest rates for National Small Savings schemes
|Type of Scheme||Rate of Interest||How frequently is interest compounded?||Maturity Period|
|Post Office Savings Deposit||4.0 %||Annual||Not Applicable|
|1-year Fixed Deposit||6.9%||Quarterly||1 year|
|2-year Fixed Deposit||6.9%||Quarterly||2 years|
|3-year Fixed Deposit||6.9%||Quarterly||3 years|
|5-year Fixed Deposit||7.7%||Quarterly||5 years|
|5-year Recurring Deposit||7.2%||Quarterly||1-10 years|
|Post office Monthly Income Account||7.6%||Monthly (paid monthly)||5 years|
|Kisan Vikas Patra||7.6%||Annual||9 years 5 months|
|Public Provident Fund Scheme||7.9%||Annual||15 years|
|National Savings Certificate||7.9%||Annual||5/10 years|
|Sukanya Samriddhi Yojana||8.4%||Annual||21 years|
|Senior Citizens Savings Scheme||8.6%||Quarterly (paid quarterly)||5 years|
Apart from the Senior Citizens Savings Scheme (SCSS), interest on all other schemes that is compounded quarterly will be paid annually. For SCSS, the interest will be compounded quarterly and paid every quarter.
For the Post office monthly income account, interest will be compounded monthly and paid out every month.
- Sukanya Samriddhi Yojana is designed to assist in the marriage of the investor’s daughter. Any amount starting from ₹ 1000 and ranging up to ₹ 1.5 lakh per year can be saved in the account on the name of a girl child, aged between 0-10 years.
The investment will mature after 21 years, and premature withdrawals are not allowed. The account can be operated by the account holder (the girl child) after she attains ten years of age.
National Savings Certificate (NSC) is also a popular savings instrument, with assured returns in the range of 8% for 5 years and tax exemption on investments up to ₹ 1.5 lakh under section 80 C.
National Pension Scheme (NPS) was launched in 2004, for all Indian citizens aged 18-60 years. Under this scheme, money can be invested in corporate bonds, government securities, stocks, etc. In addition to tax exemption for ₹ 1.5 lakh on savings schemes under section 80 C, investments made in NPS are eligible for a further deduction of ₹ 50,000/- under section 80 CCD. All these special features have made this scheme a success.
Public Provident Fund (PPF), launched in 1968 is also a credible retirement scheme, which can be opened with a minimum balance of ₹ 100/- and allows tax exemption for investments up to ₹ 1.5 lakh, per year.
- Atal Pension Yojana and Pradhan Mantri Jan Dhan Yojana are small investment schemes, which are mostly aimed at providing retirement benefits to people belonging to economically weaker sections.
Top Debt Mutual funds – Based on 10-year returns
|Debt Mutual Fund||Type||5-Year Returns||10-Year Returns|
|IDFC G Sec Fund - Regular||Gilt||8.58%||9.53%|
|SBI Magnum Gilt Fund||Gilt||8.83%||9.39%|
|Nippon India Gilt Securities Fund||Gilt||9.11%||8.99%|
|IDFC Dynamic Bond Fund||Dynamic Bond||7.90%||8.88%|
|SBI Dynamic Bond Fund||Dynamic Bond||8.29%||8.82%|
|Kotak Dynamic Bond Fund||Dynamic Bond||8.54%||8.74%|
|SBI Magnum Medium Duration Fund||Medium Duration||8.52%||8.53%|
|Aditya Birla Sun Life Floating Rate Fund||Floater||7.80%||8.45%|
|ICICI Prudential Savings Fund||Low Duration||7.75%||8.33%|
|IDFC Low Duration Fund - Regular||Low Duration||7.61%||8.33%|
Equity Mutual funds
One of the most popular investment options for the investors, owing to their flexibility, diversity, and potential to yield good returns allowing calculated risk-taking facility, equity mutual funds are of several types depending on the investing ability, experience, and risk appetite of the investor.
Some of the important ones, about which you should have a fair idea are
|Type of Equity Mutual fund||Level of risk|
|Flexi cap funds||Moderate|
|Sector/ diversified mutual funds||High|
|Thematic mutual funds||High|
|ELSS mutual funds||Low|
Companies are classified based on their market capitalization.
Market capitalization is the market value of the company, calculated by multiplying the total outstanding shares (total shares issued by the company), with the value of each share. E.g., HDFC bank has issued a total of 1 crore shares, and each share costs ₹ 20,000/- the market value of the company is ₹ 20,000 crores.
While large-cap or large capital companies have a market value of ₹ 20,000 crores, companies with a market capitalization between ₹ 5000 – 20,000 crores are called mid-cap companies.
Small-cap companies have a market capitalization of fewer than ₹ 5000 crores.
It is essential to know the market capitalization of a company if you are investing in equity.
Naturally, the larger the value of the company, the lower is the risk.
But the percentage of growth can be low in a large-cap company. Although you are assured of returns, the returns can go up only up to a certain level. But, in the case of small and mid-cap companies, the scope of growth or expansion is high, and if you invest big bucks, the returns can also be high. At the same time, the company may not prosper as expected, and your investment may yield low returns.
Sector or diversified mutual funds are the equity funds invested in a particular sector like healthcare, manufacturing, construction, financial information technology, etc.
All of your investment goes into stocks of different companies in a single sector. Though the returns can be good, the risk factor is high because all of the stocks in a single sector follow the same trend.
Thematic mutual funds are not the same as sector funds, but they are invested in stocks of a similar theme – such as agriculture, FMCG (fast-moving consumer goods), consumption, ESG (environmental, social, and governance), etc.
A thematic fund can be invested in companies from different sectors. An agricultural thematic fund can comprise stocks from fertilizer companies, farming equipment companies, seeds companies, etc., which may fall under various sectors.
Focused Equity Mutual funds are highly specialized, involve a small number of companies in a portfolio, and can be spread across sectors and themes. Also known as ‘best idea funds,’ focused funds invest in a portfolio of companies, focusing on specific requirements of the investor - market cap, multinational presence, performance over the years, asset allocation, etc.
These are usually for experienced investors who are inclined to take risks.
ELSS Mutual funds (Equity-linked savings scheme)
ELSS comes with a lesser lock-in period (3 years) and with tax benefits and a promise of high returns.
Investments in mutual funds up till ₹ 1.5 lakh are exempted from taxation under section 80 C. However, it must be remembered that ₹ 1.5 lakh includes all other savings investments also such as life insurance premiums, EPF, PPF, NSC, etc.
The returns on ELSS are considered as long-term capital gains (as they are invested for a period more than 36 months) and are taxable at a rate of 10% if the capital gains are over ₹ 1 lakh.
Top Equity Mutual funds - Based on 10 year- returns
|Equity Mutual Fund||Type||5-Year Returns||10-Year Returns|
|Axis Long Term Equity Fund||ELSS||2.14%||12.50%|
|SBI Focused Equity Fund – Regular Plan||Focused||4.19%||12.24%|
|Aditya Birla Sun Life India GenNext Fund||Sector/ Thematic||3.05%||11.86%|
|Invesco India Mid Cap Fund||Mid Cap||1.21%||11.41%|
|DSP Midcap Fund||Mid Cap||3.41%||10.72%|
|Kotak Emerging Equity||Mid Cap||2.00 %||9.93%|
|Tata Mid Cap Growth Fund||Mid Cap||- 0.25%||9.75%|
|Mirae Asset Large Cap Fund - Regular||Large Cap||1.71%||9.5%|
|BNP Paribas Long Term Equity Fund||ELSS||0.05%||8.85%|
|Kotak Standard Multicap Fund||Multi-Cap||1.30%||8.59%|
Top Sectors by Market Capitalization – BSE
|Name of the Sector||Market Capitalization (₹, crores)|
|NBFC* (non-banking financial companies)||657244|
|Gas & Petroleum||375402|
*Diversified sector includes infrastructure, engineering, chemicals, construction, heavy machinery, etc. companies
Taxation and duration of Long-term (LTCG) and Short-term capital gains (STCG)
The rate of taxation varies according to the type and length of the investment, a summary of which is given below.
|Type of Asset||Duration to be defined as Long-term||STCG Rate||LTCG Rate|
|Stocks||>1 Year||15%||10% (for capital gains exceeding ₹ 1 lakh)|
|Equity-Oriented Mutual Funds||>1 Year||15%||10% (for capital gains exceeding ₹ 1 lakh)|
|Debt-Oriented Mutual Funds||>3 Years||As per Income Tax Slab||20%*|
|Real Estate||>2 years||20%*|
|Sovereign Gold Bonds||1 Year (if listed); 3 Years (if unlisted)||Exempt|
*Taxed with indexation
Fixed Deposit Investments
Fixed deposits are investments made in a bank or a non-banking financial corporation (NBFC), which earns you interest. But the invested capital is locked-in for a fixed period. Any withdrawals before the maturity period attract a penalty.
The fixed lock-in period can vary from a few weeks to a few years. More extended lock-in periods fetch higher rates of interest.
The interest rates are usually higher than the savings account. The risk involved is minimal. Unless the bank or NBFC defaults, you are assured of your capital plus returns at the end of the maturity period.
Fixed deposits are of 2 types – Cumulative and Non-cumulative fixed deposits.
In a Cumulative Fixed Deposit scheme, you invest a specific amount for a specific period at a pre-determined rate of interest, and collect the amount at the end of the tenure, calculated by applying simple interest.
In the case of a Non-cumulative fixed deposit, the deposited amount is compounded quarterly; that is, the interest rate is applied every three months. The interest in the first three months will be on actual investment, and from thereon, the interest will be applied to the investment plus interest earned every three months (compound interest).
Unlike in a cumulative FD, the interest on your non-cumulative FD can be collected every month, three months, half-yearly or yearly.
Interest rates offered by various Public sector/ Nationalized banks on 5-Year Fixed deposits
|Name of the Bank||Interest Offered p.a||Taxation Status||How much would ₹ 1 lakh become after 5 years?|
|Punjab National Bank||7.20%||Tax Saving||₹ 142875|
|Union Bank of India||6.85%||Tax Saving||₹ 140439|
|Vijaya Bank||6.80%||Taxable||₹ 140094|
|Punjab and Sind Bank||6.80%||Taxable||₹ 140094|
|Bank of Baroda||6.70%||Tax Saving||₹ 139407|
|Oriental Bank of Commerce||6.50%||Taxable||₹ 138042|
|Bank of India||6.50%||Tax Saving||₹ 138042|
|Andhra Bank||6.50%||Taxable||₹ 138042|
|Dena Bank||6.30%||Taxable||₹ 136690|
|Canara Bank||6.25%||Taxable||₹ 136354|
*All Maturity values are calculated on quarterly compounding rates.
Unlike saving schemes, pension schemes, and mutual funds, real estate requires significant capital. Though there a few investors, who allocate the majority of investment into real estate, most of us have or would like to have a one-odd investment into physical assets.
Despite the depreciation, they usually have a long life span, offer flexibility to be converted and used for various purposes, the security of the landholding the property (even if the property is gone), and undoubtedly the highest returns, that are possible.
An apartment which you bought for ₹ 25 lakh this year, can quickly be sold at ₹ 30 lakh the next year. Such returns are not possible with other investments unless you pump in vast amounts of capital.
Apart from the ability to yield high returns when disposed of, the prospect of monthly returns, makes real estate a sought-after option. The only limiting factor here is affordability.
The real estate may not be in quite the boom it used to be a few years ago, but it is evergreen and will be expected to pick-up. The returns may do down a bit in the future, but real estate will remain a fierce competitor in years to come, owing to its remarkable potential in generating wealth.
Real estate may be broadly divided into four sub-classes
Notwithstanding the recent slump statistics, Real estate has been steadily growing in India, recording a growth of 10% between the years 2010-2015 and 11 % from 2015-2020, respectively.
Residex is a residential index developed by the National Housing Bank (NHB), which is similar to the Sensex of the stock market.
The index will take into account 12 factors such as location and environment, construction quality, amenities, current demand of the location, etc.
In short, Residex gives us an idea of the price trends in housing or residential real estate properties.
Higher the Residex, the more the property is in demand.
Comparison of Residex over the last six years – Whole Country (India)
|Year||Period of the Year|
It can be noted that Residex was lowest in Q2 of 2013, and since then, the growth has been more or less steady, reaching an all-time high of 114 for the 3rd quarter that ended September 2019.
REIT – Real Estate Investment Trust
REITs are more like equity-based real estate investments. So, even small investors or investors who do not want to invest big can contemplate investing in commercial real estate. The minimum investment required for a REIT is ₹ 50,000/-.
Though not the same as a real estate mutual fund, in a REIT, funds from various investors are pooled, and rental yields on the property are distributed among the investors as dividends, interest or rental income. Apart from rental yields, capital appreciation gains on the property also get paid as part of the income. Your returns will be based on your investment. Higher the investments, the higher can be the returns.
Interest income is generated through special purpose vehicles or SPVs, money lent to real estate developers, or that is invested in mortgage-based securities. An SPV is a company in which REIT holds stakes of at least 50%. The sole purpose of the SPV would be to be indulged in activities related to the particular REIT.
However, this is very recent in India. IPO for the first REIT, Embassy Office Parks REIT, was issued in March 2019. After 9 months, in the quarter ending December 2019, the company has posted a profit of nearly 7,000 crores
SEBI regulates REITs with a requirement that 90% or more of earnings from a REIT, has to be distributed among the investors, at least twice a year.
However, taxation on REIT investment gains can be a little complicated.
Taxation on Income earned through REIT
|Type of Income from REIT||Tax to the REIT||Tax to the Unitholder|
|Dividends||Not payable||Not payable|
|Interest income from SPV||Not payable||Non-resident 5%; Others 10%|
|Capital gains earned by sponsor on sale of REIT unit||Not payable||
Long term (> 36 months) – 20%
Short term - 30%
|Capital gains earned by Unitholders after selling REIT units||Not payable||
Long term (> 36 months) – Not payable; Short term - 30%
|Capital gains earned by REITs on selling SPV share||At interest rates applicable to capital gains||
|Other income||Marginal rate||
Investing in physical gold
Investing in gold sounds lucrative, and some investors made huge profits over the years. Starting in 1964, the average annual price of gold has not seen a fall.
The price of 10g of gold (24 karats) was ₹ 63 in 1964, which is more than ₹ 42,000 today.
Decade wise trend of the price of gold over the last five decades
|Year||Price of gold (average annual price) in ₹|
As much as it is a high guarantee investment, the costs and risks involved in keeping it secure, making charges, etc. can prove more than a handful, increasing the level of risk.
Sovereign gold bonds
If you do not want the risk of holding and spending resources on safeguarding gold, you have the choice of sovereign gold bonds (SGBs) or paper gold.
These are bonds issued by the RBI on behalf of the government of India. The weight of gold that can be invested in varies from 1 gram to 4 kg for individuals and Hindu Undivided families (HUF) and up to 20 kg for trusts.
An investor pays for a specific weight of gold, e.g., 100 g, and he is issued a bond for the value of 100 g of gold on the day be buys the bond. This gold is protected by the RBI at its own cost, and the investor receives the market value of gold on the day of redemption.
An interest rate of 2.5% is payable annually on the initial investment, which is paid half-yearly.
The bonds mature after eight years, but premature withdrawal is allowed after completion of 5 years. The bonds can also be transferred to other investors or tradable in exchanges.
Returns on Investment – Over the Last Decade
Commercial Real Estate Vs. Residential Real Estate Vs. Sensex Vs. Gold: 2009-2019
|Year||RETURN ON INVESTMENT|
|Residential Real Estate||Gold||Sensex||Commercial Real Estate (CRE)|
It can be observed that the returns on commercial properties have been remarkably consistent and in double digits over the last ten years when compared to residential properties, Sensex, and even gold.
Finally, after you have understood thoroughly the various types of investments on offer, their implications, taxation policies, and returns, compare it with your purpose, and you can easily decide upon the best plan for you.
However, there are a few things one must not forget while choosing an investment plan:
- Check for the history of the scheme and the company offering it
Do not put all your eggs in one basket
Play it reasonably safe
Extreme safety can prove counterproductive
The best investments are those that are neither too safe nor too risky
Hone up your math skills
Do not invest because someone else has made profits or for the sake of investing. Invest only if it suits your purpose
Make a rough calculation, of how much you plan to invest and what could be the returns for different plans
Do not hesitate to make the extra investment on time or resources to find out if your plan could be feasible and offer you the desired outcome
Profitable investments need not always be in mutual funds
Update yourself regularly on financial news and new tax rules
- Seek advice
Ans: Indexation is a method to adjust the prices according to inflation. This will help to lower the taxes you need to pay on capital gains.
For example, you had invested ₹ 1.5 lakh in a debt fund, or a government-backed bond. You decide to sell it after five years, for ₹ 2 lakh.
You made capital gains of ₹ 50,000/-, but using indexation, the amount taxable can be adjusted as per the inflation.
In this case,
Indexed cost of acquisition = original cost of acquisition XCII (cost inflation index) of sale year (2019-20)/CII of purchase year (2014-15) = 150000 x (289/ 240) = 180625.
This means the tax on capital gains does not apply to the ₹ 50,000/- profit you have made. Your capital gains after indexation would be ₹ 19375/-, on which the applicable tax would be levied.
Typically indexation applies to long term capital gains on debt-oriented mutual funds, gold, and real estate investments.
Ans: Cost Inflation Index or CII is the adjusted price of an asset after factoring the inflation rate. The index gives us a rough estimate of the increase in price for a particular asset over a while.
CII is calculated every year, which was 272 for the year 2017-18, 280 for the year 2018-19, and 289 for the financial year 2019-20. CII is commonly used to calculate indexation (indexed cost of acquisition) for calculating tax payable on long term capital gains.
Ans: Index funds are a type of equity mutual funds that track an index such as BSE Sensex or NSE Nifty. While the Sensex tracks 30 companies, Nifty has 50 companies in its index. So index funds also invest in these 30 or 50 companies of a particular index in the same proportions.
While other types of mutual funds are actively managed by a fund manager, index funds are passively managed and have lower service charges and other expenses. These are generally preferred by investors who want no risk (e.g., Senior citizens) or when an investor is doubtful of his fund manager’s strategies.
Ans: Forms 15G and 15H are usually submitted to banks or any other applicable institutions from where you have invested money and earning interest. If the interest earned in a year is above ₹ 40,000/- (₹ 10,000/-, till last financial year), banks will deduct a TDS (tax deduction at source) of 10% on interest payable.
In case your total income before or after including the interest income on fixed deposit does not exceed ₹ 5 lakh for the year (after deducting all tax-exempt investments), then you need to submit 15G.
If you are below 60 years of age, you need to submit form 15 G, and if you are above 60, then you will be submitting form 15H.
Ans: Starting from the financial year 2020-21 (the assessment year 2021-22), citizens earning salaried incomes can switch between old and new tax slabs every year, as per the convenience. If you have more investments to make, you will go for an older tax plan, and if you have fewer investments and choose to pay lesser tax, you will move to the newer tax plan.
But in case you earn your income from a business, or you are registered as a consultant, then you need to stick to any one tax slab. You have to analyse, which slab rate suits you better and then decide to stick to the older regime or to move to the newer slab. Once you have made the shift, you can only change your decision (rollback) once in a lifetime. After that, you will not have any options to switch tax plans, only if you are a businessman or a consultant.