- Cash & Cash Equivalent
- Equity Shares
- Mutual funds
- Land & building,
- Plant & machinery,
- Business and like things.
- Loss of capital,
- Delay in repayment of capital,
- Non payment of interest,
- Variability of returns
Liquidity in marketable assets are provided by the market, while non marketable assets like fixed deposits cannot be liquidated in market but can be offered for premature repayment to bank.
a. Investments can offer tax benefit on initial deposits. For eg PPF, which offers Section 80C benefit for deposits.
b. Investments can offer tax benefit on returns generated. For eg dividends on equity which are taxfree.
c. Investments which, when redeemed are tax exempted. For eg, Maturity proceeds of an insurance policy.
An ideal investment is, which offers tax efficient return commensurate to risk with safety and liquidity.