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- Get ready to file returns
- UTI Bond
- Indexation and Capital Gain Bonds
- Investment based on Mutual Fund Statement
- What is AAA rating?
- Star Union Dai-ichi Dhan Suraksha
- HDFC Mutual Fund
- ING Life - New Best Years
- Equity ETFs vs Diversified Equity Mutual Fund
- What is Sensex and how is it calculated?
| Posted: 19 Apr 2012 02:56 AM PDT With the financial year drawing to a close, it is time to turn our attention to filing tax returns for the year gone by. After the fiscal year end, you have four months - upto July 31 to file the returns. Yet, many of us wait till the last minute, owing to the human tendency of procrastination and then hope for an extension of the deadline. However, this year could be different - why not get over and done with your return filing early - perhaps by the end of April itself? Plus, having time on your side means that any inadvertent errors or oversights on account of rushing matters may be avoided. Besides, the tax return preparation process is really simple. First of all, a taxpayer need not file a tax return unless his or her income is above ~1.8 lakh. For ladies this limit is ~1.9 lakh and for senior citizens (60 years and above), the limit is ~2.5 lakh. A new category of taxpayers was also introduced in the last budget -the very senior citizen (VSC). These are resident individuals who are 80 years or above. Their basic exemption limit has been fixed at ~5 lakh. In other words, if your total income is below the above mentioned basic exemptions, there is no legal requirement to go through the entire return filing process. Earlier, even if your income was below this threshold, if you were covered under the ambit of what was called the one by six scheme, the tax return had to be filed. This scheme essentially meant that if you satisfied any one of the various conditions such as owning a telephone connection, a house property, having an electricity bill of over ~50,000 a year and so on, then regardless of the income level, it was obligatory to file a tax return. This is not applicable now and as far as the current year's tax return is concerned, you are required to file only if you have a taxable income above the basic exemption limit. What is taxable income? :It implies the gross amount of income that you earn before claiming any deductions. For example, say a senior citizen, earns an income of ~3 lakh. During the year, he invests ~70,000 in PPF thereby bringing his income down to ~2.3 lakh. Now, even if ~2.3 lakh is below the basic exemption of ~2.4 lakh, he will have to file his tax return since his gross income of ~3 lakh was above the threshold limit. Sources of income :Any income earned can be basically categorised under specific heads which are quite exhaustive: Income from salary Income from house property Income from business and profession Income from capital gains Income from other sources The tax return filing process can thus be reduced to filling in the details of income at the appropriate place in the tax return. Salaried individuals receive the Form 16 from their employer. The form gives full details and breakup of the salary income. It can be used to fill in the requisite details in the tax return form. Income from house property implies the rental income of a landlord. Business or professional income is - the net income left after deducting expenses incurred for running the business, subject to tax. Capital gain (short- or long-term) is earned when you sell mutual fund units, shares or property. The last head is the residuary head which basically includes any interest income earned, such as that on fixed deposits, RBI bonds and so on. An aggregation of all the above incomes should be above the basic exemption limit for you to be liable to pay taxes or to file a tax return. The rate of taxation would depend upon the applicable slab. Of course, interest incomes that are specifically tax exempt (like PPF interest) aren't to be considered in order to arrive at the total taxable income. Return filing process :Basically, it is all about filling in the correct numbers. The earlier two-page form SARAL, was quite the opposite of its meaning. Along with the income figures, you needed to specify the computations leading to the numbers. This had to be provided by way of a separate annexure. As a result the tax return became quite bulky and complicated. Also, each person attached his own version of the annexures leading to inconsistencies in the tax return even in respect of similar income heads. Also, SARAL was a one size fits all kind of a solution. This meant that whether you were an employee or a businessman, a senior citizen or a stock trader, the same form had to be used. In the new regime though one is categorised as a specific type of a taxpayer, based on the nature of income earned, simplifying matters. For most senior citizens, the newly introduced SAHAJ form is required. The forms come with clear instructions for filling it. It is literally as simple as filling in the blanks. The forms are available on the income tax website. It is advisable to go through these forms and familiarise oneself with them only post March 31. Reason: New forms are introduced each year with minor modifications, if any. These new forms do not require taxpayers to provide any additional information by way of annexures or even attach any additional documents. The process of filing the tax return is quite straightforward and totally hassle free. The key is to ensure that you start early and have time on your side. --------------------------------------------- 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)
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These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
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| Posted: 19 Apr 2012 02:04 AM PDT Download Mutual Fund Application Forms
This fund does throw up the occasional pleasant and unpleasant surprise. It found itself amongst the top five twice; once in 2005 and the other instance in 2011. After an impressive 2008, the next year was the worst in its performance history. It lost 5 per cent (category average: -0.32%).
This was mainly due to a terrible first quarter when the average maturity of the fund was high and yields took an upturn. In recent times, the fund is seen to more actively manage its maturity bets. On the other side of the coin, it is penalized when the bets do not turn out as per expectations. But other than the occasional surprise, it is fairly consistent in its performance which does not deviate too far from the category average and has a long term track record to back it up. The fund maintains a high quality portfolio with majority of the investments into debentures and government securities. The expense ratio has seen a rise from 1.40 per cent in September 2008.
--------------------------------------------- Invest Mutual Funds Online
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| Indexation and Capital Gain Bonds Posted: 19 Apr 2012 12:38 AM PDT Download Mutual Fund Application Forms Sachin bought one property for Rs.15 Lac in 2005 and sold for Rs.30 Lakh in 2011.
Numerically his capital gain is: 30 lac – 15 Lac
= Rs.15 Lac.
Its only a numerical capital gain as cost of inflation is not inclusive of it and indexation is broadly related to inclusive of inflation effects in calculation of capital gain. The government comes out with an index number each year to facilitate the calculation of capital gain.
For example we can consider capital gains across Debt mutual funds. These funds have indexation benefits. Suppose investors bought units of debt mutual fund at NAV of 10 in 2008 and sold them in 2011 with an NAV of 15.
Suppose that government inflation index was 400 in 2008 and its 520 in the year 2011.
Now investor have two options to consider while calculating the long term capital gain tax:
A)10% without indexation:
= (10/100) x (15 – 10)
=Rs. 0.5 per unit.
B) 20% with indexation:
Indexed cost of acquisition based on inflation index is
=purchase NAV x (Inflation index at the time of buying of units / index in year of selling of units)
= 10 x (520/400)
= 13.
And now capital gain with indexation benefits is:
=20/100 x (15-13)
=Rs.0.4 per unit.
The investor would pay lower tax between two options. Its not the case that always tax with indexation benefits is lower but it depends upon inflation between two points. but more higher is the period possibility of higher inflation and indexation benefits are there.
Capital Gain Bonds:
Investor can save long term capital gain tax by investing in the capital gain bonds under section 54EC of income tax act 1961.
Key features about above issues are:
1. Bonds are secured and highly rated by CRISIL "AAA " and FITCH AAA.
2. Interest rate is 6% payable annually.
3. Min application amount: Rs.10,000 / 1 Bond.
4. Max. application amount: 500 bonds.
5. Date of allotment: Last day of month in which money is credited.
6. Tenor: 3 Yrs. --------------------------------------------- Invest Mutual Funds Online
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| Investment based on Mutual Fund Statement Posted: 18 Apr 2012 11:27 PM PDT Download Mutual Fund Application Forms
THERE is a possibility of making a wrong decision while investing in mutual funds if the factors considered for the decision are not properly understood. If there are any doubts, then it's better to seek clarifications, rather than make some assumptions on your own. Here is a common mistake that can prove to be costly.
This ensures that the investor is able to reinvest the amounts and, hence, grow the investments over a period of time. A common problem is not understanding the cost of the investment. The fund statement is likely to show the original investment plus the value of the dividend reinvested as the total cost.
When it comes to the dividend reinvestment option, the net asset value (NAV) of the investment will fall after payment of dividend. On the cost side, it is likely that the figure mentioned in the account statement, which includes the dividend already reinvested, is higher than the present value of the investment.
This might seem to suggest that the investment is not doing too well. Technically, the cost aspect mentioned is appropriate because it represents the cost of the existing units that are bought into the fund and will be useful for making tax calculations.
Factual understanding: When it comes to the actual position on the returns front, the investor needs to take a careful look at what the cost figure represents for them. If they really want to see the kind of returns that they have made or earned, then, they should not just look at the cost mentioned in the account statement, but also, look at some of the workings.
The first thing required is information about the initial investment or total investment in the fund over the entire time period.
This becomes the cost against which the present value has to be compared.
The earnings that are generated by the fund is paid out in the form of dividend, so this is something that needs to be taken into consideration and for the investor, the dividend is just a part of the returns figure. There is a need to separate return calculations from tax workings that the investor needs to calculate and this will not tally with the cost that is shown in the account statement. So, in many cases, when the account statement shows a cost greater than the present value, this might actually not be the case. -------------------------------------------- Invest Mutual Funds Online
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| Posted: 18 Apr 2012 10:42 PM PDT Download Mutual Fund Application Forms It is the highest form of rating issued by Standard & Poor's. Moody also uses a similar rating standard but its represented by 'AAA'. Meanwhile Fitch, the third major rating agency, also uses a AAA. --------------------------------------------- Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms
Best Performing Mutual Funds
Mutual Fund Application Forms Download Any Applications Buy Mutual Funds Online Invest Online Infrastructure Bond Application Forms Download Applications  |
| Star Union Dai-ichi Dhan Suraksha Posted: 18 Apr 2012 10:17 PM PDT Tax Saving Mutual Funds Online Current open Infra Bond Application form The months of January, February and March typically see the launch of several financial products, followed by hard-selling by companies and intermediaries. Most salaried tax-payers rush to close their tax-related investment during this period.
--------------------------------------------- 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 )
--------------------------------------------- Application form for Tax Saving Infrastructure Bond and more information Current open Infra Bond Application form
Submit filled up application Collection canter near you Mutual Fund Application Forms Download Any Applications Buy Mutual Funds Online Invest Online Infrastructure Bond Application Forms Download Applications  |
| Posted: 18 Apr 2012 09:38 PM PDT Tax Saving Mutual Funds Online Current open Infra Bond Application form
The HDFC mutual fund that was approved by SEBI in June 2000 offers Equity Funds, Balanced Funds, and Debt Funds schemes. HDFC Mutual Fund has witnessed significant growth in the past few years. It is regulated by HDFC Asset Management Company Limited which is a Joint Venture between India's largest housing finance company HDFC and British investment firm Standard Life Investments Limited. The HDFC Asset Management Company Limited manages the assets of various mutual fund schemes and has assets over Rs. 25000 crores. ------------------------------------------ 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 )
--------------------------------------------- Application form for Tax Saving Infrastructure Bond and more information Current open Infra Bond Application form
Submit filled up application Collection canter near you Mutual Fund Application Forms Download Any Applications Buy Mutual Funds Online Invest Online Infrastructure Bond Application Forms Download Applications  |
| Posted: 18 Apr 2012 07:52 PM PDT Tax Saving Mutual Funds Online Current open Infra Bond Application form
ING Life - New Best Years is a retirement plan that offers flexibility to decide the time, amount and frequency of annual premiums each year. The premiums so contributed after deduction of policy charges are allocated to the investors' Individual Pension Account (IPA). This amount is guaranteed to be returned to the investor at the end of the policy term. The amount is invested in government and other approved securities and investments and returns generated are distributed as bonus interest.
Stay invested. The new guidelines wil mandate policyholders to purchase annuity from the same insurer as against the current provision of choosing the annuity provider at end of the term for pension plans.
--------------------------------------------- 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 )
--------------------------------------------- Application form for Tax Saving Infrastructure Bond and more information Current open Infra Bond Application form
Submit filled up application Collection canter near you Mutual Fund Application Forms Download Any Applications Buy Mutual Funds Online Invest Online Infrastructure Bond Application Forms Download Applications  |
| Equity ETFs vs Diversified Equity Mutual Fund Posted: 18 Apr 2012 10:24 AM PDT Download Mutual Fund Application Forms
The importance of being active couldn't have been explained better. To put it simply, one needs to be active in his or her daily life, if one desires to succeed. An active mind always helps in making sound decisions which otherwise (if you are not active) could lead to chaotic situations (one does not make the right decision).
On the other hand if you remain passive (i.e. not active) in whatever you do, you will surely see yourself at the losing end.
Now, that you are aware of how important it is to be active, make sure that your investments are active in generating long term growth in order to make you wealthy as well as healthy.
While investing in mutual funds too, you investors need to be careful while selecting the right mutual funds according to your ability to bear risks. You need to keep in mind that while there are mutual fund schemes which are actively managed in order to outperform their respective benchmarks and provide a phillip to your returns, there are some passively managed funds too, with an aim to mimic or imitate their benchmarks in terms of returns and composition.
Let us probe further into this.
Actively managed mutual funds
Actively managed mutual funds or diversified equity schemes as we call them are always on a constant look out for opportunities across various market segments in order to generate superior returns with sole intention to beat their selected benchmark indices. The fund managers actively participate in managing these funds in order to provide superior returns; while at the same time intend to minimize the associated risks.
Advantages:
· Superior returns
· Diversification across various sectors and market capitalizations
· Flexibility and liberty to change investment style and strategy to minimize risk or boost funds performance
Disadvantages:
· Medium to high to very high risk profile
· High transaction cost and expenses
Passively managed funds
On the other hand passively managed funds or Index Funds or Index Exchange Traded Funds (ETFs) imitate their respective benchmarks in terms of composition and returns. Their sole objective is to mirror the performance of their respective benchmark indices. Over here the fund managers are not as active as they are in managing diversified equity funds, but let the fund perform in line with the respective index.
Advantages:
· Low transaction cost and expenses
· Market related risks
· No need to actively track the performance
Disadvantages:
· No flexibility to change investment style and strategy to minimize risk or boost funds performance
· Limited investment universe
· Less diversification across market capitalizations
Wait a sec! Why are we here talking about active and passive funds, when our intention was to enlighten you about Diversified Equity Funds and Equity Exchange Traded Funds
Well, Diversified Equity Funds are actively managed funds and Equity ETFs are mostly passively managed funds but some fund managers are trying to make these ETFs actively managed by using re-allocation strategy but holding stocks from the selected Index itself.
As Equity ETFs despite being passively managed are soon catching the eyes of the investors with some recent innovative launches and ease to trade, so here we are going to talk about Equity ETFs and nothing about Index funds which continue to hold their old passive management style.
Now, that you are already aware of the advantages and disadvantages of both active and passive funds, let us first look at some of their performances in order to have a clear idea.
Mutual Fund Report Card
From the table above it is evident that diversified equity funds have given luring returns mainly over 3-Yr and 5-Yr periods. Moreover, the risk adjusted returns too have been enticing for most of the diversified equity funds.
However, over the past 3-Yr and 5-Yr period and also over the past 1-Yr period some equity ETFs basically focusing on banking sector have managed to outperform the diversified equity funds, but a point to note is that this out performance has come with high volatility (as can be made out from their high standard deviation of over 12%). But index based equity ETFs have broadly underperformed the actively managed diversified equity funds and have not able to deliver sufficient risk adjusted returns (as can be seen from their low Sharpe Ratio).
The largest equity ETF (Nifty BeES) seen treading on low path along with its
From the above graph, if one were to invest a sum of 10,000 in Nifty BeES and HDFC Top 200 Fund for a period of say 5 years, the investment would be worth 17,696 and 22,564 in Nifty BeES and HDFC Top 200 fund respectively.
Should one trade in equity ETFs?
Also a point to note here is that equity ETFs are mutual funds and not stocks. There have been many cases where people try to take very short term market calls and get involved in short term trading of equity / index ETFs (as they are easily tradeable).
But before doing this, they do forget that high trading may unnecessarily increase the cost and also lead them to loose out on net returns. Also trading on short term market calls attracts short term capital gains tax leading to low post tax returns from equity mutual funds.
This high trading strategy in equity ETFs is definitely of no use for one who is aiming for wealth creation from equity mutual funds.
To sum it up, a diversified equity fund with a proven track record of atleast 3 years and from a fund house having prudent investment systems and processes in place is able to broadly outperform equity ETFs and that to with lower or similar volatility but better risk adjusted returns.
However, before taking any investment decision, you as an investor need to evaluate your risk appetite, investment goals etc. Though an equity diversified fund is bound to outperform equity ETF due to its diversification across different sectors and market capitalisation and the fund manager's liberty to change his strategy based on his view on the market; You should adopt a prudent and systematic approach towards selecting and investing in the right diversified equity mutual funds (as not all diversified equity funds are well managed and able to provide superior returns).
An investment in equity ETFs can however be considered only if one has no access to unbiased investment advice or is naïve to mutual fund investing and is looking for only market related risk and returns. --------------------------------------------- Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms
Some of the Top performing Mutual Funds are
Mutual Fund Application Forms Download Any Applications Buy Mutual Funds Online Invest Online Infrastructure Bond Application Forms Download Applications  |
| What is Sensex and how is it calculated? Posted: 18 Apr 2012 09:27 AM PDT Download Mutual Fund Application Forms
The Sensex is an extremely popular term not only in financial circles, but also beyond that. The Sensex basically means sensitive index and it is a commonly used term for the Bombay Stock Exchange Sensitive Index. The sensex tracks the movements of the 30 largest stocks and it is the oldest index in India. Now, these 30 stocks are selected based on various parameters and representation and are generally high capitalisation stocks. Today, the sensex is regarded as the barometer of the markets and is used to decribe the trend of the market. How Sensex is calculated? The Sensex is calculated on the movement of the 30 largest stocks on BSE, by a method that is known as the " free float market capitalisation" method, which is the widely expected method across the globe. In a company only few shares available in trading except shares held by founders or government which may not available for trading. The list of stocks that comprise the sensex presently include: Bajaj Auto, bharti Airtel, Bhel, Cipla, Coal India, DLF, Gail India, HDFC, HDFC Bank, Hero Motocorp, Hindalco Inds, Hindustan Unilever, ICICI bank, Infosys, ITC, Jindal Steel, L&T, Mahindra & Mahindra, Maruthi Suzuki, NTPC, ONGC, RIL, SBI, Sterlite Inds, Sun Pharma, Tata Motors, Tata Power, Tata Steel, TCS and Wipro. --------------------------------------------- Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms
Best Performing Mutual Funds
Mutual Fund Application Forms Download Any Applications Buy Mutual Funds Online Invest Online Infrastructure Bond Application Forms Download Applications  |
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