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- What's the benefit of indexation / Double Indexation?
- Upside / Downside Capture Ratios - Mutual Fund gained more or lost less than benchmark
- Car Insurance in India
| What's the benefit of indexation / Double Indexation? Posted: 08 Feb 2014 05:02 AM PST Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
Before coming to the benefit of double indexation let me explain you the tax structure of debt mutual funds:
Indexation or double indexation helps in considerable reduction of tax outgo, by inflating the cost of investment and thus reducing the actual gains booked. Going back to the above example:
The maturity value (tentative) of the Investment is Rs 1,11,500/-. Thus the absolute gain in this transaction is Rs 11,500/- . To calculate tax on this gain as the holding is for long term so indexation has to be done, and this particular case is of double indexation. The indexed cost as calculated above is Rs 1,19,617/- . So there is no gain but indexed loss of Rs (-8117)/-.
Thus Tax calculation would be as follows :
10% on Rs 11500/- or 20% on Rs (-8117/-) whichever is less, means ZERO.
Imagining the above investments in a bank deposit, you can assume the quantum of tax you would have been subjected to pay. As the bank deposits’ interest is taxed as per tax slabs, so the payout will be huge as compared to Debt Mutual funds.
Since the concept of indexation applies in capital assets and debt mutual funds are very much comparable to bank deposits which are 100% taxable. So by diverting savings from bank deposits and investing in Debt mutual funds one may reduce the considerable tax outgo. Moreover by investing in the end of a financial year i.e in Jan-Mar and withdrawing the funds or getting the maturity proceeds after April next year, one can take the advantage of double indexation also.
These days you will find many Fixed maturity plans coming with double indexation benefit, check out with your adviser to make the most of this opportunity.
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
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| Upside / Downside Capture Ratios - Mutual Fund gained more or lost less than benchmark Posted: 08 Feb 2014 03:11 AM PST Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
Upside / Downside Capture Ratios - Whether a fund has gained more or lost less than any benchmark and by how much
Upside Capture Ratios
Downside Capture Ratios
The DR is calculated by taking the fund’s monthly return for negative return months for the benchmark and dividing it by the benchmark’s return.
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)
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These Application Forms can be used for buying regular mutual funds also
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| Posted: 08 Feb 2014 02:33 AM PST Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
You must have heard the phrase ”The Car You Drive Say’s a Lot About You“. You must be knowing that a car is more than just a medium of transport but a symbol of power and prestige? Oh what a heady feeling it is to feel the rush of the wind in your ears when you zip along the highway in that BMW. Don’t you feel the force of gravity pushing you back in your seat?.What happens when you ride that new Audi or Porsche on the highway .Don’t all the other drivers take their hands off the steering wheel to see you zooming along the highway?.Doesn’t the car become an extension of your body as time passes?. Haven’t you watched a number of movies whose focal point is often cars. In some cases the car is greater than the movie. Don’t you remember the Aston Martin in James Bond Movies, The Audi in the movie ” Transporter ” or the mini cooper used in the movie “Italian Job”. How heartbroken you would feel if your new car where involved in a road crash and severely damaged. Don’t you think it is wise never to forget to take that car insurance package policy?
For further information on the topic you can CONTACT Prajna Capital on 94 8300 8300 by leaving a missed call.
Why Take A Car Insurance Policy?
You must be knowing that the Motor Vehicle Act 1988 states that automobile insurance is compulsory in India. A copy of this insurance needs to be maintained with you at all points of time in your car .Car dealerships maintain relationships with insurance companies giving you the necessary insurance quotes in order to avoid unnecessary hassles.
What Is Third Party Liability?
Let us consider that you are driving your car and it meets with an accident. You would have to pay claims and damages to the opposite party involved in the accident. These claims are settled by the insurance company on payment of the necessary premium. You would be able to pay for the claimant’s car repair charges, medical costs of the occupants of the car damaged and this would definitely help you to prevent financial loss. This premium does not cover damages suffered to your own car and hence the premiums are cheaper than a comprehensive insurance policy.
What Is A Comprehensive Insurance Policy?
You are covered under this policy for third party liability as well as own damage liability. Comprehensive insurance policy covers damages incurred by your car and injury suffered by the occupants in your car along with the damages and injury suffered by people in the other car. This policy also covers you against theft and burglary of your car and on payment of an additional premium you can cover your music, stereo systems, air conditioners and so on.
What Is Meant By Insured Declared Value?
You may be wondering what Is Insured Declared Value (IDV). This basically measures the sum reclaimed by you if your car should meet with an accident. If your newly bought car were to meet with an accident then the IDV value would be higher than an older car used for 3 years as the depreciation of the car is also taken into account. The IDV gives the current market value of the car and serves as a measure when claims are made on the value of the car. The registration cost and the insurance costs are excluded from the IDV value and only the accessories which are factory fitted are included and for coverage of new accessories add on premiums need to be paid.
Chart Showing Insured Declared Value Used To Calculate The Current Value Of Your Car
How Are Premiums Calculated For Car Insurance?
Let us consider you have bought a car from a reputed Indian Manufacturer of price INR 6.85 Lakhs. The Insured Declared Value of the car is INR 6.55 Lakhs. We have charged a depreciation of 5% on the value of the car. The insurance costs of the car do not include any add on accessories, registration and insurance premium costs. Only the factory made accessories are considered. This car is insured for add on’s of INR 30000 worth of electrical accessories and INR 40000 worth of non electrical accessories. This also includes a medical coverage for the car passengers. The total insurance premium will be INR 21000 with a tax charge of INR 2500.This translates to an amount of INR 23500.
Let us consider that you want to purchase a Premium car from a reputed Multi National Company in the used car market. The current ex showroom price of this car is INR 22 Lakhs. You have purchased a 2008 manufactured car which is more than 5 year old and has already run 50000 Kms. The car was purchased for INR 12 Lakhs. The accessories of the car include alloy wheels, power windows, and music system. This car had a comprehensive insurance policy which was transferred to you and lifetime tax has been paid for this car. What value Do You Think The Car Is Insured For? The Insured Declared Value is calculated based on the depreciation of 50% for 5 years and the value translates to INR 11 Lakhs which is half the price of the car .This means that the current market price of the car is 11 Lakhs. The motor insurance premium would be around INR 43000 inclusive of tax.
What Are Voluntary and Compulsory Deductibles
Let us consider that your car has met with an accident .You have entered into an agreement with the insurance company that you will bear part of the loss or damages suffered in an accident. This is called a deductible. These may be of two types namely Compulsory or a Voluntary deductible. If you opt for a compulsory deductible of INR 2500 then you would have to pay that portion and the insurance agency would pay the rest. Let us consider that you want to save on your premium. Then you would take an additional voluntary deductible where you would get a huge deduction on your premium sometimes as high as 25%.However claim damages are very high under such conditions. If you meet with an accident you would have to shell out huge damage costs as you have a voluntary deductible policy as well as the compulsory amount based on your policy. If you want to save on your premium you better have very handy driving skills.
How To Make That Claim For Your Car If You Are Involved In An Accident
· First attend to the injured at the accident scene and call family, friends or your lawyer or anyone you deem fit who can handle the situation.
· Take a note of the vehicle registration number of the other car involved in the accident.
· Be amiable with the other party and share your insurance details with them or if necessary see if you can get covered under their policy. This may be useful if the other party has a very good comprehensive insurance policy.
· Collect details of the witnesses of the accident with their names and contact numbers as you never know when they would come to use especially if you have to testify in court.
· Remember to file an FIR as this is very necessary for any third party liability. Record all details at the accident scene. Take pictures and videos using your mobile camera.
· Be careful of the statements you make to the police or the insurance company as these can be used against you especially if you are not certain of who exactly is at fault in the accident.
· Do not get into an argument and always maintain your composure as anything you say or do may work against you.
· Contact the insurance company within the stipulated time frame and make that claim. Keep all your documents ready as you will need them when you file for that claim.
· The documents might include copy of the insurance policy, FIR Report, Filled up claim form, Driving license copy, Vehicle registration copy, Medical receipts, Copy of the estimate for repairs, Original police verified no trace report in case of theft of your vehicle and RTO transfer papers duly signed in case of theft.
Factors on Which Premiums Depend
· The profile of the driver plays a very important role in determining the premiums of your policy and if the driver is a businessman or a doctor it is assumed that he would travel a lot and he would be charged a higher premium,
· Similarly since Diesel prices are cheaper than petrol a diesel run car is assumed to be used more than petrol run car. In addition the driver’s age, extent of the car usage, age of the car plays a vital role in determining those premiums.
· The safety features installed in the car play a vital role in determining the premiums you pay for that car.
· Voluntary disclosure of your driving records and declarations stating the use of your car can help you save on your premiums.
Finally I would like to end this article on a note that it would be wise to always renew your motor insurance policy on time. It would be prudent to follow all road rules and regulations while driving your car
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 )
------------------ Best Performing Mutual Funds
|
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