Prajna Capital

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• Start Saving Early for Your Child Future Needs
• Tax Free Income
• Reliance Banking ETF is now R* Shares Banking Exchange Traded Fund

Start Saving Early for Your Child Future Needs Posted: 15 Jan 2013 03:35 AM PST Invest the biggest chunk of your long-term savings in equities with some exposure to debt and gold   Providing a trouble-free and safe life to the child tops almost every parent's wish list. It relates to his or her social, physical and financial safety. When it comes to financial safety, a major challenge for parents is about putting in place a safety net for the child's higher education, when she is in her teens and crossing into the 20s, and then for her wedding. The main problem here is that while the rate of inflation is currently 8-10%, the cost of education is rising at a much faster clip. In government institutions it is at about 15% per annum while in the private institutions the rise is over 20%. And the cost of wedding, by some estimates, is also rising at the rate of about 20% per year. By common logic, if you are saving for your child and getting a return of say about 10%, by the time your child is ready for higher education, the corpus you would build would not be enough. This is because while you are earning at the rate of 10% per annum, the market rate of her education is rising at 15%, around 5 percentage points higher than the returns. As a solution to this problem, financial planners and advisors suggest a twin strategy. For one, you should start saving for your child as early as possible. And the second one is to put in a large sum of the savings into equity mutual funds, or if you are trained well then directly into equities.   Starting early would help you bring in the power of compounding to your advantage. Take this simple example: Suppose you start saving Rs 10,000 per month for your child soon after she is born and get an average return of 15% per annum. At that rate, when she is 20 and ready for higher education, the corpus would be close to Rs 1.5 crore. If you decide to start saving when she is 5 years old, at 20 the corpus would be close to Rs 67 lakh, that is less than half of what it would be if you had started just five years earlier. Let's see how investing a major chunk of the money in equity funds, which is also a proxy for investing in equities, can help build a bigger corpus. Over the long term, say 10-15-20 years, equities are known to give returns that beat inflation while bank fixed deposits (FDs) just about match the rate of inflation or at times even fall short. If you invest in equity funds, you can reasonably expect to get a 15% yearly return while in bank FDs will pay you an average rate of 8%. If you put Rs 10,000 every month in FDs giving you 8% per annum, your total corpus, when your child is 20 years old, would be about Rs 59 lakh. Compared to this, if you manage to get 15% per annum by investing in equity funds, the corpus would be more than 2.5 times what you would get from FDs. When you have 10-15-20 years on your side, equity mutual funds are the best option Settle for monthly SIP in any good equity scheme. In addition, any lump sum that you can afford to invest for your child you should put into the same. Some prefer to invest in gold for their child, but like FDs, the return on gold is also very much linked to the rate of inflation. That is also the reason gold is often taken as a hedge against inflation. So investing in gold, of all probability, will not fetch you as much as you require for your child when your need the money either for her education or wedding,or both. There are other combinations. And if you are not experienced enough about the investment products, it is preferred you take the help from a professional financial advisor or planner. In this page, Vidya Bala's article dwells on the basics of a financial plan for your child while N Rajesh introduces the basics of some of the investment products one could look at.   Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com --------------------------------------------- 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 ) ICICI Prudential Tax Plan Invest Online HDFC TaxSaver Invest Online DSP BlackRock Tax Saver Fund Invest Online Reliance Tax Saver (ELSS) Fund Invest Online Birla Sun Life Tax Relief '96 Invest Online IDFC Tax Advantage (ELSS) Fund Invest Online SBI Magnum Tax Gain Scheme 1993 Invest Online Sundaram Tax Saver Invest Online Edelweiss ELSS Invest Online  Invest in Tax Saving Mutual Funds Download Any Application Forms Buy Mutual Funds Online Invest Online Buy Gold Mutual Funds Invest Now

Tax Free Income Posted: 15 Jan 2013 01:00 AM PST   There is another head that is equally important because the individual can get the benefit of having income and at the same time not having to pay tax on it. This is called tax free income and it consists of flows that are considered as income but there is a special tax effect for such inflows as they will not be considered for the purpose of calculation of the total tax to be paid by the individual. There are several heads of income like dividend or agricultural income or even long term capital gains from equities and equity oriented funds that are tax free in nature. The real benefit of the tax free income is that the amount earned here does not have to be added to the other figures that would be taxable so this goes outside of all the workings for the different heads of income. There is a separate space in the income tax return where the tax free income has to be mentioned and hence this is something that will have to be disclosed by the individual. Another point is that since there is no inclusion of such a figure in the taxable workings there is also no way in which any of the deductions can be set off against such income because for the purpose of taxation this is not entered into the workings at all. Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds ) ICICI Prudential Tax PlanInvest Online HDFC TaxSaver Invest Online DSP BlackRock Tax Saver Fund Invest Online Reliance Tax Saver (ELSS) Fund Invest Online Birla Sun Life Tax Relief '96 Invest Online IDFC Tax Advantage (ELSS) Fund Invest Online SBI Magnum Tax Gain Scheme 1993 Invest Online Sundaram Tax Saver Invest Online Edelweiss ELSS Invest Online ---------------------------------------- Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com --------------------------------------------- Invest Mutual Funds Online Transact Mutual Fund Online Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms Best Performing Mutual Funds Largecap FundsInvest Online DSP BlackRock Top 100 Fund ICICI Prudential Focused Blue Chip Fund Birla Sun Life Front Line Equity Fund Large and Midcap FundsInvest Online ICICI Prudential Dynamic Plan HDFC Top 200 Fund UTI Dividend Yield Fund Mid and SmallCap FundsInvest Online Reliance Equity Opportunities Fund DSP BlackRock Small & Midcap Fund Sundaram Select Midcap IDFC Premier Equity Fund Small and MicroCap FundsInvest Online DSP BlackRock MicroCap Fund Sector FundsInvest Online Reliance Banking Fund Reliance Banking Fund Gold Mutual Funds Invest Online Relaince Gold Savings Fund ICICI Prudential Regular Gold Savings Fund HDFC Gold Fund Invest in Tax Saving Mutual Funds Download Any Application Forms Buy Mutual Funds Online Invest Online Buy Gold Mutual Funds Invest Now

Reliance Banking ETF is now R* Shares Banking Exchange Traded Fund Posted: 14 Jan 2013 09:04 PM PST Buy Gold Mutual Funds Invest Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Call 0 94 8300 8300 (India) Reliance Banking ETF - as R* Shares Banking Exchange Traded Fund Reliance Mutual Fund has announced a change in the names of two ETFs. Reliance Banking ETF has been renamed as R* Shares Banking Exchange Traded Fund and Reliance Gold ETF as R* Shares Gold Exchange Traded Fund.   The change shall come into effect from September 17, 2012 Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com --------------------------------------------- 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.ICICI Prudential Tax PlanInvest Online 2.HDFC TaxSaver Invest Online 3.DSP BlackRock Tax Saver Fund Invest Online 4.Reliance Tax Saver (ELSS) Fund Invest Online 5.Birla Sun Life Tax Relief '96 Invest Online 6.IDFC Tax Advantage (ELSS) Fund Invest Online 7.SBI Magnum Tax Gain Scheme 1993 Invest Online 8.Sundaram Tax Saver Invest Online Best Performing Mutual Funds Largecap Funds Invest Online DSP BlackRock Top 100 Fund ICICI Prudential Focused Blue Chip Fund Birla Sun Life Front Line Equity Fund Large and Midcap Funds Invest Online ICICI Prudential Dynamic Plan HDFC Top 200 Fund UTI Dividend Yield Fund Mid and SmallCap Funds Invest Online Reliance Equity Opportunities Fund DSP BlackRock Small & Midcap Fund Sundaram Select Midcap IDFC Premier Equity Fund Small and MicroCap Funds Invest Online DSP BlackRock MicroCap Fund Sector Funds Invest Online Reliance Banking Fund Reliance Banking Fund Tax Saver MutualFundsInvest Online ICICI Prudential Tax Plan HDFC Taxsaver DSP BlackRock Tax Saver Fund Reliance Tax Saver (ELSS) Fund Gold Mutual Funds Invest Online Relaince Gold Savings Fund ICICI Prudential Regular Gold Savings Fund HDFC Gold Fund Invest in Tax Saving Mutual Funds Download Any Application Forms Buy Mutual Funds Online Invest Online Buy Gold Mutual Funds Invest Now

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