Monday, February 10, 2014

Prajna Capital

Prajna Capital

Best ways to save Income Tax in India for 2014

Posted: 10 Feb 2014 04:15 AM PST

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Employee Provident Fund

The Employee Provident Fund is meant for all employees in the organized sector. The income that you receive is tax free and you can withdraw your money only during retirement. At 8.50% returns per annum, the EPF is a great tool to save tax for salaried people – forced savings has it own advantages and the money that gets automatically deducted from your salary account can form a nice little corpus at retirement.

EPF scores very low on the liquidity front – you just cannot pull out money as and when you wish. A withdrawal is allowed but only for emergency needs like a child’s marriage or building a house. While it compromises on the liquidity, it scores very high on the safety aspect.

Ensure that you do not dip into your retirement savings come what may otherwise you will lose out big time at the time of retirement.

Public Provident Fund

The Public Provident Fund (PPF) as it is commonly called is another alternative of the best ways to save income tax in India in 2013. PPF is meant for risk averse investors and is good for those who cannot save via the EPF. Self employed professionals should take a serious look at the PPF as an ideal retirement saving tool.

For those who do not know, small savings schemes returns have now been linked to the market and hence the PPF is giving returns at 8.8% this year. Like the EPF, the PPF scores very poor on the liquidity front as one can make partial withdrawals from the 6th year onwards. It is a safe investment option.

Bank Fixed Deposits

The 5 year bank fixed deposits are another investment option to save tax in 2013 for risk averse investors. One needs to be aware that the money is locked in for 5 years so you cannot withdraw it before that. The safety aspect is also very high.

With the 5 year bank fixed deposits offering in the range of 8% – 9%, investors can look to park their money in this investment option for 2014.

Insurance Policies

This is the favourite for those who are caught in the investment is insurance rut. Such people are also sitting targets for insurnace companies wanting to close down on sale of insurance products during the first 3 months of the year.

There are different types of life insurance policies in the market, the non market linked ones – endowment, whole life, moneyback plans will offer a meager 6% – 7% returns to you on an average. Your money is safe as it is not exposed to the market volatility – that is something which another category of insurance policies find themselves in – Unit Linked Insurance Plans (ULIPs).

ULIPs give you a plethora of options to invest your money in and partial withdrawals are possible. So you can go for the most risk option and channel your premiums in the stock market or in the debt market or mix and match both. The safety of your money depends on which option you chose.

The income that you receive from insurance policies is tax free. While ULIPs are suitable for those who can understand long term investing and how the stock markets work, the non market linked insurance policies are for risk averse investors who are happy with the low rate of returns. As far as liquidity is concerned, ULIPs have a lock in of 3/5 years post which your money is made available to you but the endowment plans can return money to you only at maturity.

New Pension Scheme (NPS)

Another option among the best ways to save income tax in India in 2014 is the NPS. Again, it gives you an option to invest both in equity and debt so its returns are linked to the market. Unfortunately, there are no withdrawals permitted before retirement so investors might not fancy that a bit.

Equity Linked Saving Schemes (ELSS)

The ELSS are nothing but tax saving mutual funds which have a lock in for 3 years – you can withdraw your money after this mandatory lock in period. Since they invest in the stock market, they will give you decent returns but their safety aspect is therefore low. Hence these are meant for investors who understand the stock market and are willing to ride the volatility for some decent returns.

As of today, the income tax rules exempt the dividends and the capital gains you make on selling them and with a return of approximately 15% in the last 1 year (2012), these make sense to be looked at.

For those who want some exposure to equity, the ELSS is one of the best ways to save income tax in India in 2014.

And finally here is an infographic which talks about other options like the Senior Citizen Saving Scheme (SCSS) and National Savings Certificate (NSC) apart from the ones mentioned above.

 

 

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

 

 

Leave a missed Call on 94 8300 8300

 

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

Invest Any Mutual Fund Online

 

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

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

 

Best Performing Mutual Funds

    1. Largecap Funds             Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds         Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds          Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds   Invest Online

      1. DSP BlackRock MicroCap Fund

2.       Franklin India Smaller Companies

E. Sector Funds          Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds      Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds        Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds         Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF



Invest in Tax Saving Mutual Funds Download Any Application Forms
Buy Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now

Credit History

Posted: 10 Feb 2014 02:23 AM PST

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Leave a missed Call on

94 8300 8300

 

 

 

In India, most working people start thinking about their retirement after they are well into their 30s or 40s. However, to have a financially strong retired life, ideally one needs to think (and also plan) about retirement soon after taking up the first job. That way, time would be on his/her side to build a substantial retirement corpus over the long term through a disciplined investment approach. In other words, time and the power of compounding would give one financial freedom during his/her sunset years.


So what is financial freedom? The word freedom evokes a sense of hope, inspiration, choice and joy all at the same time, and could mean very different things to different people.


Financial freedom is something which can give us the same sense of emotions of liberation for the money side of our life. However, you need to remember that financial freedom is not a gift, but an achievement. We have to put in active efforts to achieve this phase of financial freedom in our lives.


To achieve this goal, Dhawan suggests a few easy-to-achieve steps. These are knowing your exact financial position, crystallizing your goals, building a road map to reach those goals, followed by concrete action according to the road map, then sticking to the plan and, lastly, reviewing the plan periodically but not too frequently. These steps may not give you financial freedom tomorrow but remember that, just like a journey of a thousand miles begins with a single step, your journey towards financial freedom begins when you firm up your mind about achieving the same.


A related article by Vikrant Gugnani details the steps you need to take to have a financially independent life over the long run.

Leaving positive footprints

Here, we give you some idea about another aspect related to your financial dealings that can have substantial bearing on your financial freedom: Your credit history (called credit footprint) and why increasingly it is becoming important in every individual’s life.


As the term suggests, the credit history of an individual is that person’s track record of dealings with various institutions like banks, home loan and other financial services firms and also other companies where an individual may have left some monetary dues — like telecom service providers, etc — knowingly or unknowingly. Put simply, if your credit history is good, you are always in a sweet spot to easily avail of loans from a lender or get a credit card from a card-issuing institution. On the other hand, if your credit history is bad, you may have a tough time getting a loan or a credit card.


individuals need to be very careful about their credit histories. However, the reality is that not many people are careful about the same and, over the long run, this may affect the financial life of an individual.

Taking care of your history

According to Jayaraman, the first step is to take out a consumer report from any of the four registered credit bureaus after presenting appropriate know your client (KYC) documents like a PAN card, driving licence, Aadhaar card, or some other government-approved proof for an individual and his/her address. There are four sections in this report.


The first is the demographic report in which there will be the name, age, address, etc. You should check if these things are correct, or get it corrected in case of any wrong entry. The next section is the credit summary which gives details about loans, credit cards, etc, that you have taken.


The third section is called the credit tradeline where the status of the loans, credit cards, etc, is given. The report will also give you data about how many credit cards you hold and the status of each. It could be that you may have used a credit card many years ago but have not cancelled it, although you think it was cancelled.


As a result, some huge dues may have piled up in that credit card account. In such a situation, you need to correct the tradeline data.


The fourth section is about the number of enquiries the credit bureaus got about your application for loans, credit cards, etc. In other words, it gives the whole summary of the number of times you have gone to banks and other lenders for loans, credit cards, etc.
For a smooth financial life, although the first priority is to have a disciplined and well thought-out long-term investment plan, having a good credit score, which comes from a solid credit history, is also essential, according to financial advisers.

 

 

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

 

 

Leave a missed Call on 94 8300 8300

 

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

Invest Any Mutual Fund Online

 

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

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

 

Best Performing Mutual Funds

    1. Largecap Funds             Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds         Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds          Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds   Invest Online

      1. DSP BlackRock MicroCap Fund

2.       Franklin India Smaller Companies

E. Sector Funds          Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds      Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds        Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds         Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF



Invest in Tax Saving Mutual Funds Download Any Application Forms
Buy Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now

Estate Planning Tool - Will

Posted: 10 Feb 2014 01:22 AM PST

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Invest In Tax Saving Mutual Funds Online

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Leave a missed Call on

94 8300 8300

 

Earlier in this column, we took up succession planning and its importance for an individual and his family. Today, we Will try to understand the tools available for succession planning: a Will and a Trust.


A Will is the most practical first step in estate planning. It is a legal declaration of the intention of a person regarding assets that the individual desires to take effect after his or her death. It is an extremely personal document and showcases an individual’s love, care, opinions and feelings towards loved ones.

 
The importance of drawing up a Will is often highlighted as one of the biggest financial planning steps you Will take. It clearly states how you want your assets to be distributed when you are no longer physically present.


If you don't have a, Will, which means you die intestate, your estate Will be distributed according to the succession laws of the country based on your religion, and your property could be distributed differently than what you would like it to be. A Will made by a Hindu, Buddhist, Sikh or Jain is governed by the provisions of the Indian Succession Act, 1925. However, Muslims can dispose their property according to the Sharia Law.
The laws of succession certainly do not cater to the specific needs of your family. For example, as per The Hindu Succession Act, assets Will be distributed equally among the children but you might have a differently abled child or a widowed daughter and you might want to make sure they are looked after well and might want to provide that extra provision, which can be made available through a well drafted Will. Similarly, a Will shall certainly give you the liberty to bequeath to people who may not be your legal heirs but dear friends, faithful servants or a charity.


Young couples tend to avoid writing a Will as they get caught up in their new roles as newly-weds, first time parents or are less likely to think about becoming ill or incapacitated. Similarly, children from previous marriages can get ignored if you don't provide for them in a Will. Also if you have minor children, a Will also allows you to decide who their guardian Will be.


Anyone can make a Will, so long some basic requirements are met. Every person who is of sound mind and is not a minor can make a Will. Persons who are differently able or visually impaired can make a Will provided they know and comprehend what they do by it. A person who is ordinarily insane may make a Will during an interval in which he is of sound mind. No person can make a Will while he is in such a state of mind, whether arising from intoxication or from any other cause, that he does not know what he is doing.


A Will made on a plain paper is equally valid as a Will on a stamp paper. It can be written in Hindi, English or in any other language. It is not mandatory to register a Will.
There are four main parties to a Will.


Testator: The person making the Will. He has the power and authority of disposing off his/her assets as per his/ her wishes.


Beneficiaries: All those persons, body of persons or an organization who benefit from the bequeaths in the Will.


Witnesses: The person chosen by the testator to countersign the document. It should be noted here that a witness should not be a beneficiary in the Will.


Executor: Someone trusted by the testator who plays the crucial role of executing the Will. On the demise of the testator, the Executor undertakes the responsibility of executing the wishes and desires of the testator as per his Will. He is responsible for obtaining probate from court where required and the final distribution of the estate of the testator.


Making sure your Will has been properly written and is legally binding is often overlooked and assumed, even though it can have adverse effects and can be void. Your intentions might be noble in making a Will, but you end up risking leaving your family with nothing but a legacy eaten away by legal bills or unnecessary bitterness.

 

 

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

 

 

Leave a missed Call on 94 8300 8300

 

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

Invest Any Mutual Fund Online

 

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

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

 

Best Performing Mutual Funds

    1. Largecap Funds             Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds         Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds          Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds   Invest Online

      1. DSP BlackRock MicroCap Fund

2.       Franklin India Smaller Companies

E. Sector Funds          Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds      Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds        Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds         Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF



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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