Thursday, March 22, 2012

Prajna Capital

Prajna Capital


Rajiv Gandhi Equity Savings Scheme - Lock in may be reduced

Posted: 22 Mar 2012 02:45 AM PDT

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

 

THE finance ministry is considering to reduce the lock-in period for Rajiv Gandhi Equity Savings Scheme to one year from the proposed three years to make it more attractive to retail investors.

 

"The investors can put money in top 100 companies listed in BSE and NSE (under the scheme). We are looking at reducing the lock-in period requirement," said an official source.

 

Sources said, however, that investors will not be allowed to shuffle equity portfolio before the end of the year of investment.

 

In order to encourage savings and improve investment in capital markets, finance minister Pranab Mukherjee in his 2012-13 budget had announced Rajiv Gandhi Equity Scheme, under which 50 per cent tax deduction would be allowed to retail investors with annual income less than Rs 10 lakh, for investment up to Rs 50,000, with a lock-in period of three years.

 

Sources said this type of scheme was first introduced in Belgium, followed by France and some eastern European nations.

 

The scheme was highly successful in France and had helped in increasing retail participation in equity market from 7 per cent to 17 per cent, a source said, adding it was also appreciated by IMF chief Christine Lagarde in her recent meeting with Mukherjee.

 

Finance secretary RS Gujral had earlier said that a formal guideline on the scheme, aimed at channelising savings into the stock markets, will be issued within a month.

Besides introducing this scheme, the government has also proposed to make stock market investment more attractive by lowering the securities transaction tax (STT) by 20 per cent from 0.125 per cent to 0.1 per cent on cash delivery transactions.

Strategic move Lock-in may be reduced to one year from the proposed three years to make it more attractive Investors will not be allowed to shuffle equity portfolio before the end of the year of investment This type of scheme was successful in France and had helped in increasing retail participation

 
 
---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

LIC Jeevan Vriddhi

Posted: 22 Mar 2012 02:22 AM PDT

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

 

 

LIC's Jeevan Vriddhi is a single premium policy with a 10-year term that offers guaranteed returns on maturity. The guaranteed additions are determined by the age of the policyholder and the amount of single premium paid. The death benefit in this scheme is equivalent to five times the amount of premium paid

Key Features

The guaranteed maturity benefit ranges from 4.70% to 7.09% CAGR (compounded annual growth rate) for a period of 10 years. The same is determined by the age of the policyholder at the time of investing from 8 years to 50 years.
However, in the case of single premium payments above 1 lakh, there is an increase of about 0.46% CAGR in the guaranteed maturity benefit. For single premium payments between 50,000 and up to 1 lakh, the increase in guaranteed maturity benefit is about 0.20% CAGR for a period of 10 years.

Surrender Value

The minimum guaranteed surrender value is 90% of the amount of the single premium.

Comparative Analysis

Assuming a single premium payment of 1,00,000 for a policy term of 10 years, the comparative analysis of the maturity proceeds that will accrue to various age groups from LIC Jeevan Vriddhi vis-à-vis a similar investment made in a bank fixed deposit (net of term premium to ensure life cover & taxes) is illustrated herewith:
   


Investors who do not currently have a term plan and are looking out for a comprehensive investment cum insurance plan can consider LIC's Jeevan Vriddhi. As compared to the highest returns currently offered by a bank FD (9.25% by SBI for 10 years), Jeevan Vriddhi offers better gains on maturity if one were to adjust the bank FD's returns for premium paid for term plan and income tax at the highest tax slab

 

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

---------------------------------------------

Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

 

Submit filled up application    Collection canter near you

 

 

 

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Download REC Tax Free Bond Application Forms

Submit the filled up form to Collection canter near you

NHAI to again float Rs 10,000 Crore bonds towards the end of 2012 - 2013

Posted: 22 Mar 2012 01:52 AM PDT

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

If you could not get a share of ~10,000-crore bond issue of the National Highways Authority of India (NHAI) this financial year, you will have to wait for the fourth quarter of 2012-13 for a second chance, as the highways authority plans to again hit the bond market around that time.

"The finance minister's announcement allowing us to raise ~10,000 crore through tax-free bonds is beneficial for us, as this will ensure cheap and long-term borrowings. Since we do not need the money immediately this year, we plan to launch our bonds by the fourth quarter of next financial year," J N Singh, member (finance), NHAI told Business Standard.

According to the current financial plan, the highways authority will require ~24,000 crore till the end of 2012-13. Of the total requirement, ~14,000 will come from the government in the form of cess and toll income, while the rest will come from money raised through the earlier bond issue.

NHAI had come out with a bond issue in December last. The issue was oversubscribed in the HNI and QIB category on the first day itself.

Though the highway authority proposed to issue ~5,000-crore bonds, it ended up raising ~10,000 crore with a greenshoe option as it got oversubscribed to the extent of ~25000 crore despite shaky market conditions.

Around 70 per cent of the ~10,000 crore will go in acquiring land for various projects, including expressways. The remaining will go for funding projects. The authority has also allocated funds for arbitration cases, to be soon taken to a committee. Around ~10,000 crore is estimated to be stuck in various disputes with contractors. For the second consecutive year, finance minister Pranab Mukherjee allowed NHAI to raise ~10,000 crore through tax-free fbonds. The Budget also announced to double the kitty of tax-free bonds for the infrastructure sector by increasing it to ~60,000 crore for 2012-13.

This ~60,000-crore bond window includes ~10,000 crore for IRFC, ~10,000 crore for IIFCL, ~5,000 crore for HUDCO, ~5,000 crore for National Housing Bank, ~5,000 crore for SIDBI, ~5,000 crore for ports and ~10,000 crore for the power sector. The Budget also annou-nced an increase in road award target to 8,800 km for next financial year, an increase from 7,300 km this financial year. The allocation of the road transport ministry has been enhanced by 14 per cent to ~25,360 crore in 2012-13.

Apart from tax-free bonds, NHAI raises money through short-term (three years) 54EC bonds. Any capital gains from sale of long-term capital assets, such as real estate or gold, can get tax exemption by investing in the 54-EC infrastructure bonds.

Under Roads Transport Minister C P Joshi, the current financial year has been a good year for NHAI and it awarded a record 7,300 km. For the first time ever, NHAI awarded 21 projects on a premium. The premium income from these 21 projects will come to around ~3,000 crore per year, and will increase by five per cent every year till the concession period ends.

A company offering a premium means it is committing to an annual payment to the government over a period of time, instead of seeking a grant for building a road.

A substantial increase in premium income has brought down NHAI_s borrowing requirement by half. The B K Chaturvedi committee had said the highway authority will need to raise ~191,000 crore by 2030-31, but now the requirement stands reduced by ~1 lakh crore to ~83,000 crore.

NHAI had come out with a bond issue in December that was oversubscribed on the first day.  
 
---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

Choose the insurance you want on need basis

Posted: 22 Mar 2012 12:39 AM PDT

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

 Buying a car? Your dealer will choose your auto insurer. Going on a holiday? The price includes the cost of travel insurance. For several years now, Indians have been sold insurance bundled with other products or services. Even home loan customers are sometimes forced to take a loan protection term cover. But the insurance regulator is not happy with this combo selling. In a discussion paper released this month, the Insurance Regulatory and Development Authority (Irda) has expressed concerns that this bundling forces consumers to buy products they don't want and allows dealers to push policies that earn them better commissions even though they might not suit the buyer.


   The lack of transparency in such products has got Irda worried about these policies. When the insurance cover is clubbed with another good or service, the buyer doesn't get to know how much he has paid for the insurance. Be it the charges of the cover or the features of the policy, it is difficult for a buyer to know if he's getting his money's worth. Car insurance that comes with a new car. "Many dealers offer the first year's insurance for free or for just one rupee. But this is not true and the cost of the insurance is actually built into the car price. So, you don't know if you are paying the correct price," he says.

Does the customer know?

The transparency of charges is not the only thing that has Irda frowning over these bundled covers. The regulator is also concerned that when one cover is bundled with another good or service, people may not understand the policy that they have bought.


   Take the health covers that come bundled with credit cards. Though people think that they are covered for hospitalisation, most such covers are only protection against loss of income due to hospitalisation. So while you would pay almost as much as any proper health cover, you get only a fraction of the protection

Forced selling

Forced selling is another concern raised by the insurance regulator. When a dealer has an upper hand in providing you a particular good or service, he can also force you to buy insurance from a certain company. This is particularly true of tour operators who bundle travel insurance in the total cost of the package. With a bundled cover, there is no opportunity to compare a policy with other options available in the market. So, you do not get a chance to select the best insurance offer. Nobody has the right to force customers to buy certain plans.

Confusing the buyer

The practice of highlighting the insurance cover to sell other products has also come under the scanner. Some mutual funds are offering life insurance if you continue your SIPs in select funds for the agreed tenure. However, Irda is not happy that the fund houses are putting too much stress on the insurance component. Insurance is only a fringe benefit while the core product is the SIP in the mutual fund. By harping too much on life insurance, they will confuse the investor and make it difficult for him to differentiate between the core and the incidental product.


   Bundled policies are also not good for the insurance industry. When there is a distribution nexus between the insurance companies and dealers, the company may agree to accept all damage claims. So while the dealer benefits with car repairs, the insurance company would actually bleed. The industry is already bleeding and I don't see why they would want to continue with such practices. Maybe this is why the regulator is looking to curb these policies.


   However, not all bundled covers are unsuitable, and hence it would not be advisable to completely abolish such plans. "Some bundled covers like term plans with critical illness covers or travel insurance with tickets are quite good. So, Irda must segregate the good from the bad and come up with more stringent regulations. These insurance covers are not bad per se. Irda is only concerned about the way they are distributed.


   Irda needs to ensure two basic things. The first is transparency in these covers. Secondly, it should not be mandatory to purchase these covers. The regulator has asked for comments on the discussion paper till 15 March before it takes a final decision on the matter.

 
 
---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

Advantages of Investing in debt instruments

Posted: 21 Mar 2012 11:58 PM PDT

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

  

Interest rates have reached their peak levels and expectations are the Reserve Bank of India (RBI) will go for some monetary softening, going forward. Investments in debt based instruments seem quite attractive from many perspectives such as capital preservation and risk returns ratio. Capital appreciation is intact even if interest rates go down in the future.


   Investors with a low risk appetite can reduce exposure to equity and rebalance the portfolio by investing in debt based instruments.


   Here are some options in bonds:

Debt funds    

These instruments are good options for investors with a low risk appetite. These funds invest in debt based instruments and government bonds.


   Therefore provide safety of principal with decent returns. These funds come without any lock-in such as bank fixed deposits. They offer quick liquidation and hence come in handy for those wanting to invest with a short to mediumterm perspective without any investment risk.


   Since interest rates are up, debt-based instruments are attractive from many perspectives such as capital preservation, low risk, high returns and the possibility of capital appreciation if the interest rates go down in future.

Liquid funds    

Liquid funds are good for investors who want to park their funds for a short term. These funds invest the corpus mainly in money market instruments, short-term corporate deposits and treasury. Liquid funds can be liquidated on a very short notice. Therefore, they score over other short-term deposits.

 
   Returns from bank fixed deposits are taxable depending on the tax bracket of the investor, which pulls down the actual returns considerably. Dividends from liquid funds are tax-free in the hands of the investor. This increases their effective returns.

Tax-saving bonds    

There are various bonds available in the market that qualifies for income tax rebate. These tax-saving bonds come with a lock-in period of five years or more. The returns from these bonds, including the income tax savings, are attractive for investors in higher income tax brackets.

 

 
 
---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

ICICI Prudential Mutual Fund - ICICI Prudential FMP Series

Posted: 21 Mar 2012 10:14 PM PDT

 

ICICI Prudential MF has announced the preponement of new fund offer (NFO) of ICICI Pru FMP Series 63 1 Year Plan C. Now, the NFO will close on March 24, instead of March 26

 
---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

Dividend Yield Funds

Posted: 21 Mar 2012 09:34 PM PDT

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

 

Around 125 companies rewarded their shareholders with dividends, in some cases interim dividends, since the beginning of this year. Prominent names in the list include public sector units such as Oil India, NMDC, ONGC and some multinational companies like Abbott India, Aventis, and Bosch. Naturally, some people are once again waking up to the charm of dividend paying stocks and dividend yield strategy to build wealth. Regular cash payouts in the form of dividends always had takers in the market, especially those who were looking for regular income as well as capital appreciation over a long period of time.


If you like the idea, you can take a look at stocks with strong dividend paying record or invest in dividend yield mutual fund schemes. Investors should look at dividend yield funds for good returns in the long term as dividend yield strategy aims at buying good underlying businesses paying regular dividends at attractive valuations.


What is Dividend Yield ?

For the uninitiated, dividend yield can be calculated by dividing the dividend per share by the prevailing price of the stock. In a bad market, dividend yield goes up as the stock prices fall, making such an attractive bet. The fund manager tries to cash in on the opportunity to buy under-priced stocks. Fund managers can buy a stock when it is cheap on the dividend yield basis and can sell it as it turns dear if dividend yield falls with rising prices, thus capturing profits for investors. Such a fund will have companies with sound financials and consistent dividend paying record. That means, apart of the regular dividends, you can also be reasonably sure of the capital appreciation over the long-run. Sure, if you have the stock picking skills, you can replicate the same strategy to build your own portfolio. Otherwise, stick to a good mutual fund scheme.


A word caution for those who are going to do it on their own. Don't just pick up any stock that has recently declared dividend and has attractive dividend yield. This is because some companies may announce special dividend to distribute a one-time gain to investors or for achieving a milestone like golden jubilee year or sales of $1 billion. For example, Gujarat Gas recently declared a special dividend of . 12, and Bosch paid a special dividend of . 85 in June 2011. So when you are calculating dividend yield, don't forget to exclude such special dividends. One can choose to invest in stocks quoting at or above, say, an absolute number of 3% or use a relative yardstick such as dividend yield of the Sensex. Also, look into the business growth of the company. Remember, you are buying stocks to create wealth and not just to earn regular income in the form of dividend year after year.

The Funds

There are some dividend yield equity mutual fund schemes you can choose from. UTI Dividend Yield Fund (. 3,451 crore) is the largest scheme in the category, followed by Birla Sunlife Dividend yield Plus Fund (. 1,073 crore) as quarterly average assets under management as on December 31, 2011. Most schemes have managed to outperform the broad market represented by the BSE Sensex in the last five year (See Table). Birla Sunlife Dividend Yield Plus Fund has been the best performing fund in the category with 16.24% returns over last five years, according to Value Research, a mutual fund tracking entity.

 
These funds are more stable compared to the broader market. Risk, measured by standard deviation, in these funds are typically low in the long-term. Most of these schemes have scored better than Sensex over a three-year timeframe, with lower standard deviation. It means fund managers could ensure less risky portfolios here compared to broader markets. Though the picture is great on both returns and risk fronts, there are certain downsides.

Down sides

Not all good companies pay regular dividends. For example, high growth companies may not declare regular dividends to conserve capital. Also, capital intensive businesses prefer to conserve capital which in turn results in low or no dividends. A dividend yield fund cannot invest in such stocks. In a sharp recovery in markets, stock prices of capital intensive businesses may see quick up move resulting into relative underperformance of dividend yield funds in the short term, but over the long term these schemes deliver healthy risk-adjusted returns. A look at the long-term performance proves his point. Though capital-intensive businesses come in demand in economic upturn, they also suffer the most in recessionary times. Whereas, established businesses paying regular dividends always remain on investors' radar.

 
---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

Infra tax free bond issuance doubled

Posted: 21 Mar 2012 08:55 PM PDT

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

 

Reiterating the government's focus on providing an impetus to the infrastructure sector, finance minister Pranab Mukherjee on Friday doubled the amount to be raised through tax-free bonds to ~60,000 crore for 2012-13.

He also widened the ambit of the viability gap funding (VGF) to a host of other sectors. VGF is provided to make public-private partnership projects viable. "I propose to double the amount to be raised through tax-free infrastructure bonds to ~60,000 cr in 2012-13. This includes ~10,000 cr for NHAI (National Highways Authority of India), ~10,000 cr for IRFC (Indian Railway Finance Corporation), ~10,000 cr for IIFCL (India Infrastructure Finance Co Ltd), ~5,000 cr for Hudco, ~5,000 cr for National Housing Bank, ~5,000 crore for SIDBI, ~5,000 cr for ports and ~10,000 cr for the power sector," he said.

Irrigation, terminal markets, common infrastructure in agriculture markets, soil testing laboratories and capital investment in the fertiliser sector will be eligible for VGF under this scheme, he said.

Oil and gas/LNG storage facilities and oil and gas pipelines, fixed network for telecommunication and telecommunication towers will also be made eligible sectors for VGF. Lauding the performance of the ministry of road transport and highways, he said allocation for the ministry will be increased by 14 per cent to ~25,360 crore in 2012-13.

He also proposed covering 8,800 km under the National Highways Development Programme next year. The ministry is set to achieve its target of awarding projects covering 7,300 km during 2011-12. This would be 44 per cent higher than the best-ever length of 5,082 km awarded in 2010-11.

The minister has focused on getting private money to the sector, strengthening the implementation and also provided more avenues of raising funds with measures such as relaxing external commercial borrowings' guidelines. All this will provide an impetus to the sector. Recapitalisation of banks will also make them cash-rich and help in funding the infrastructure projects.

INFRASTRUCTURE

Analysts say the government expects a major part of the ~60,000 cr to come from the private sector

|Tax-free bonds of ~60,000 cr to be allowed for financial infrastructure projects, from ~30,000 cr in 2011-12 |Allocation to road transport and highways ministry enhanced by 14 per cent to ~25,360 crore |Projects covering 8,800 km to be awarded under NHDP, against 7,300 km in 2011-12 |Irrigation, terminal markets, common infrastructure in agriculture markets, soil testing laboratories and capital investment in fertiliser sector, oil and gas/LNG storage facilities and oil and gas pipelines, fixed network for telecommunication and telecommunication towers made eligible for VGF  
 
---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

IDFC infrastructure bonds 2012 third tranche

Posted: 21 Mar 2012 09:54 AM PDT

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

Infrastructure Development Finance Company (IDFC) has announced the public issue of the third tranche of long term infrastructure bonds of face value of Rs 5,000, in the nature of secured, redeemable, non-convertible debentures, having benefits under Section 80CCF of the Income Tax Act, 1961, for an aggregate amount not exceeding Rs 3700 crore.

This is the issue of the third tranche of long term infrastructure bonds having benefits under Section 80CCF of the Income Tax Act, 1961, by the company within the overall aggregate limit of Rs 5000 crore for the financial year 2011-12.

The issue of tranche 3 bonds opened for subscription on March 19, 2012, and will close on March 30, 2012, or earlier, as may be decided by the board of the company. In the event of an early closure or extension of the issue, the company shall ensure that notice of the same is provided to the prospective investors through newspaper advertisements on or before such earlier or extended date of issue closure.

Ratings: The tranche 3 bonds have been rated as (ICRA)AAA by ICRA and Fitch AAA(Ind) by Fitch. While the ICRA rating indicates stable outlook and the highest degree of safety for timely servicing of financial obligations, the Fitch rating indicates a long term stable outlook.

Issue structure: The tranche 3 bonds will be issued in two series - Series 1 tranche 3 bonds and series 2 tranche 3 bonds and will carry an interest rate of 8.43% per annum. The tranche 3 bonds will carry a minimum lock-in period of five years from the deemed date of allotment and can be redeemed after 10 years from the deemed date of allotment. The tranche 3 bonds also have a buy back option at the end of five years. The minimum subscription will be two tranche 3 bonds and in multiples of one tranche 3 bond thereafter. For the purpose of fulfilling the requirement of minimum subscription of two tranche 3 bonds, an applicant may choose to apply for two tranche 3 bonds of the same series or two tranche 3 bonds across different series.

Security: The tranche 3 bonds are fully secured with first floating paripassu charge over certain receivables of the company and first fixed paripassu charge over specified immoveable properties of the company. The security cover is 1.0 times of the outstanding tranche 3 bonds at any point in time.

80CCF benefit: The bonds have been classified as long term infrastructure bonds and are being issued in terms of Section 80CCF of the Income Tax Act, 1961. In accordance with Section 80CCF, an amount, not exceeding Rs 20,000 per annum in the year of investment, paid or deposited as subscription to long term infrastructure bonds during the previous year relevant to the assessment year beginning April 01, 2012, shall be deducted in computing the taxable income of a resident individual or hindu undivided family (HUF). In the event that any applicant applies for tranche 3 bonds exceeding Rs 20,000 per annum in the year of the investment, the aforesaid tax benefit shall be available to such applicant only to the extent of Rs 20,000 per annum in the year of the investment.

The company has raised approximately Rs 1200 crore in the first two tranches of infra bonds. The funds raised through the public issue of tranche 1 bonds, tranche 2 and tranche 3 bonds will be utilized towards infrastructure lending as defined by Reserve Bank of India (RBI) in the Regulations issued by it from time to time, after meeting the expenditures of, and related to the issue.

The lead managers to the bond issue are Karvy Investor Services Limited, HDFC Bank Limited -Investment Banking Division, ICICI Securities Limited, JM Financial Consultants Private Limited and IDFC Capital Limited. The co-lead managers to the issue are Bajaj Capital Limited, RR Investors Capital Services Private Limited and SMC Capitals Limited. The registrar to the issue is Karvy Computershare Private Limited.

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

---------------------------------------------

Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

Submit filled up application    Collection canter near you

 

Income fund – Mutual Fund

Posted: 21 Mar 2012 09:11 AM PDT

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

 

In such a situation, theoretically, dynamic bond funds are best suited. Interest rates and bond prices are inversely related. When the interest rate is rising, bond prices fall and the fund manager should be able to decrease the duration of the bond; short-term bonds face a lower impact. And when the interest rate is falling he should be able to increase the duration of the bond. The fund manager can dynamically move from a fully invested situation to a cash position and various stages in between depending on his reading of the market. Generally, a long-term fund may run a passive exposure to long rates at all points in time. On the other hand, a dynamic fund would take tactical positions and run a combination of long and short end views.

 

But the critics out there are numerous. One argument levied against such funds is that the underlying assumption is that the fund manager will get his call right every single time. "It's like throwing a dart," says one fund manager. It is different when the fund manager goes long or short depending on a certain formula, but here it is a subjective call and he has to get it right every single time. Not a possible task.

 

Another grouse up against dynamic bond funds is that these funds are run pretty much like income funds. Even in a regular income fund, the average maturities can fluctuate widely, just as they do in dynamic funds.

 

How should an investor decide which fund to go for? One parameter is the direction of interest rates. There are way too many variables that go into determining the direction of interest rates - domestic and international. It is difficult for an experienced debt fund manager to make such a call, so one cannot even expect a retail investor to venture into that zone. Cycles are getting shorter. Markets are getting more volatile. If the days of easy predictability of bond prices and interest rates are over, how should an investor decide where to invest?

 

The second is the tenure of the investment. If an investor is looking to park his spare cash for three months, he would be making a big mistake in putting it in a medium-term gilt fund. He should pick a debt fund whose average maturity matches his investment horizon. But if he has money to spare for a year, he can consider a dynamic bond fund. Even today, Fixed Maturity Plans (FMPs) are good bets but there is a reinvestment risk. If the rate cycle turns by the time the FMP matures, the investor could lose out on an opportunity even if he then puts the money in a long-term bond fund. It would be wise to invest a portion of your debt allocation in an actively managed income fund.

 

Income fund - The risks


Interest rate risk


When interest rates rise, bond prices fall. So if the fund manager has his portfolio stacked with lower interest rate paper, the prices of his holdings will fall resulting in a lower net asset value (NAV). On the other hand, if interest rates fall, the prices of his holdings rise and so does his NAV.
The longer a bond's maturity, the greater the interest rate risk. A bond fund with a longer average maturity will see its NAV react more dramatically to changes in interest rates as the prices of the underlying bonds in the portfolio increase or decline.

 

Credit risk


Bonds carry the risk of default, meaning that the issuer is unable to make further interest or principal payments. They are rated by individual credit rating agencies to help describe the credit worthiness of the issuer. Higher the credit rating, lower the risk and lower the returns. Lower the credit rating, higher the risk and higher the return.

 

Liquidity risk


If the credit rating gets downgraded or the current interest rates are much higher than the coupon rate, then the bond would face liquidity issues because finding a buyer would no longer be easy. Liquidity risk describes the danger when one has to sell a bond in the secondary market but is unable to find a buyer.


While at any given point, all these risks exist, there are different phases in the interest rate cycle and in the history of the debt market where one particular type of risk has taken center stage. During the period from 1997 right through 2003, huge money was made on interest rates because during this period rates came down from 14 per cent to 5 per cent (10-year yields). From then on till 2008, money was made by taking credit risks when BBB rated companies were borrowing at 14-15 per cent. In 2008, it was liquidity risk that gained prominence though credit risk too had its place.

 
---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

JM Financial Mutual Fund New Fund FMP Series

Posted: 21 Mar 2012 08:10 AM PDT

 

JM Financial Mutual Fund has announced the launch of JM FMP Series XXII Plan A & Plan B. The NFO will be open for subscription from March 26, 2012 to March 27, 2012 for Plan A and March 28, 2012 to March 29, 2012 for Plan B.

 
 

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

---------------------------------------------

Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

Submit filled up application    Collection canter near you

 

No comments:

Post a Comment