Prajna Capital

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• How can Mutual Funds be redeemed?
• Investments need time to grow
• Long Term Capital Gains on Real Estate

How can Mutual Funds be redeemed? Posted: 26 Mar 2014 05:12 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300       Redemption process if Mutual Funds have been purchased through an agent: When you have purchased your Mutual Fund through an agent, you can redeem it through the same agent. The agent will provide you with the Mutual Fund Redemption Form. This needs to be filled in and submitted to the agent, who will then submit it to the Mutual Fund office to process your request. Redemption process if Mutual Funds have been purchased through the AMC directly: When you buy Mutual Funds from the AMC directly, you can sell it through the AMC, either on their websites or by visiting the closest office. Most AMCs offer the facility of transacting online. You can login to your account and redeem the units. However, if you do not have an online account, or if the AMC does not offer this facility, you can collect the redemption form from the AMC’s office and submit it after filling in the details. Redemption process if Mutual Funds have been purchased through online portals: When you purchase Mutual Funds through online portals like FundsIndia and FundSuperMart, the units can be redeemed through a few clicks. You will need to login to your account with these portals and select the scheme to be redeemed. You have to simply select the number of units to be redeemed to process the request. Redemption process if Mutual Funds have been purchased through Demat and Online Trading Account: This method is similar to the previous method. You will need to login to your trading account and access the Mutual Funds section. Select the scheme to be redeemed and the number of units to be redeemed. When you confirm your order, your request will be taken up for processing. Redemption process if Mutual Funds have been purchased through CAMS: CAMS offers the ease of redeeming more than one Mutual Fund in a single place. You can download the Redemption Transaction Slip on the CAMS website, or visit your nearest CAMS office to collect the same. You will have to fill in the particulars by specifying the name of the fund and the folio number. Submit this to the CAMS processing assistant, who will process your request by putting it up to the concerned AMC. However, CAMS does not handle all Mutual Fund requests. So remember to check with CAMS on which mutual funds they handle, before approaching them. Important points to note when you redeem your Mutual Funds: Filling in the application form: For offline methods of redemption discussed above, you will have to fill the Redemption Form. Though this form is very simple to fill, it is critical to fill in all your details correctly (especially the folio number), to avoid problems later. NAV applicability: The NAV at which your units will be sold depends on the time you submit your redemption request. If you submit your request before 3.00 pm, the closing NAV of the same day will be applicable. However, if the request is submitted after 3.00 pm, the next day’s NAV will be considered. Time to receive redemption proceeds: It normally takes a maximum of 2-3 working days to receive the redemption proceeds in your bank account. Bank account: The proceeds of sale of mutual fund units will be credited to your bank account which has been registered with the AMC at the time of purchase. It is important to make sure that this bank account is active. If this bank account is inactive, you will have to follow several procedures to get the proceeds credited to your new bank account, which can be quite exasperating. In very rare cases, electronic transfer is not done and the AMC sends a cheque to the KYC address of the holder, registered with it. For further information contact Prajna Capitalon 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 Largecap Funds Invest Online DSP BlackRock Top 100 Fund ICICI Prudential Focused Blue Chip Fund Franklin India Bluechip ICICI Prudential Top 100 Fund B. Large and Midcap Funds Invest Online ICICI Prudential Dynamic Plan HDFC Top 200 Fund UTI Dividend Yield Fund Birla Sun Life Front Line Equity Fund Franklin India Prima C. Mid and SmallCap Funds Invest Online Reliance Equity Opportunities Fund DSP BlackRock Small & Midcap Fund Sundaram Select Midcap IDFC Premier Equity Fund Birla Sun Life Dividend Yield Plus SBI Emerging Businesses Fund HDFC Mid-Cap Opportunities Fund ICICI Prudential Discovery Fund D. Small and MicroCap FundsInvest Online DSP BlackRock MicroCap Fund 2.Franklin India Smaller Companies E. Sector Funds Invest Online Reliance Banking Fund Reliance Banking Fund ICICI Prudential Banking and Financial Services Fund F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver DSP BlackRock Tax Saver Fund Reliance Tax Saver (ELSS) Fund G. Gold Mutual Funds Invest Online Relaince Gold Savings Fund ICICI Prudential Regular Gold Savings Fund HDFC Gold Fund 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. 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Investments need time to grow Posted: 26 Mar 2014 04:51 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Wealth generation can be defined as the amount saved and the return generated over and above the inflation rate for a long period of time. Here, the three important factors to bear in mind are: 1.       Savings which effectively mean maintaining expenditure lower than income. 2.       Generating real rate of return, that is, return over and above the inflation rate. 3.       Generating real rate of return for a long period of time. So, it is imperative that you curtail expenditure to generate capital for investment and put that capital in the right assets to generate a return much higher than inflation and maintain such a high ‘real’ rate of return for a long period of time. Returns generated by equity funds have proved that this is the best way for wealth generation. Here, we are taking some examples to prove the same. We are assuming an investment of equal amount (Rs 10 lakh) in equity schemes of five large fund houses for 5-, 10- and 15-year periods. Past data show that between January 29, 1999, and January 30, 2014, despite substantial volatility, these five funds generated strong compounded annualized growth rates (CAGRs) of 22.6% over 15 years, 17.6% over 10 years and 21.6% over five years, while the average consumer price inflation (CPI) for the last 15 years was around 6.56% (See Table 1: Making one-time investments). Similarly, for systematic investment plans (SIPs) of Rs 2,000 in each of these funds, the CAGR generated was 20.7% over 15 years, 13% over 10 years and 9.7% over five years (See Table 2: Opting for SIPs). Historic returns give us compelling reasons to invest in equity schemes, although most of us have not generated such massive returns. A clear understanding of equity as an asset class for long-term investment helps in overcoming the fear and greed. The basic factors which you should consider are as follows: Investment allocated for long term only should be invested in equity schemes. The big question here is how long is a long term? This can be above 10 years and ideally above 15 years. Because, longer the investments are held, higher the effect of compounding in multiplying the corpus. Investors should always be ready to accept capital erosion after making the investment. If we consider three-year annualized rolling return for the above five schemes for a period of 10 years, the worst return is the negative CAGR of 18.5% and the best return is a positive CAGR of 85.5%. The average return is at a CAGR of 25.5%. A long-term investment horizon helps in navigating the volatility. Take the help of an asset allocation model. A small portion invested in equity with abnormal return over a long period cannot enhance the overall wealth. So the key to substantial wealth creation also lies in allocating sufficient amount in equity investments. Accept that systematic investment is as volatile as one-time investment in equity. In a declining trend, SIP also generates negative return. So, SIPs need to be for the long haul. Take time to invest and give time for the investment. Even one-time investment should always be spread over a period of one-two years through systematic transfers. For further information contact Prajna Capitalon 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 Largecap Funds Invest Online DSP BlackRock Top 100 Fund ICICI Prudential Focused Blue Chip Fund Franklin India Bluechip ICICI Prudential Top 100 Fund B. Large and Midcap Funds Invest Online ICICI Prudential Dynamic Plan HDFC Top 200 Fund UTI Dividend Yield Fund Birla Sun Life Front Line Equity Fund Franklin India Prima C. Mid and SmallCap Funds Invest Online Reliance Equity Opportunities Fund DSP BlackRock Small & Midcap Fund Sundaram Select Midcap IDFC Premier Equity Fund Birla Sun Life Dividend Yield Plus SBI Emerging Businesses Fund HDFC Mid-Cap Opportunities Fund ICICI Prudential Discovery Fund D. Small and MicroCap FundsInvest Online DSP BlackRock MicroCap Fund 2.Franklin India Smaller Companies E. Sector Funds Invest Online Reliance Banking Fund Reliance Banking Fund ICICI Prudential Banking and Financial Services Fund F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver DSP BlackRock Tax Saver Fund Reliance Tax Saver (ELSS) Fund G. Gold Mutual Funds Invest Online Relaince Gold Savings Fund ICICI Prudential Regular Gold Savings Fund HDFC Gold Fund 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

Long Term Capital Gains on Real Estate Posted: 26 Mar 2014 04:14 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300     What does it mean - When you sell a property at a profit, any time three years after purchasing it, the difference between the sale price and the purchase price will be treated as long term capital gains.  What is the sale value - The sale value will be the amount arrived at based on the valuation as per the state's Stamp Duty and Registration Authority and not the amount mentioned in the sale deed. This is simply to include cases where a part of the sale consideration is in the form of unaccounted cash. How is Long Term Capital Gains taxed - This gain is taxed at the rate of 20% with indexation. By indexation, we mean that the cost inflation index is adjusted to reflect the increase in prices from the date of purchase till the date of sale. The Cost Inflation Index is issued by the Government and represents the increase in the general price level in the economy. Inflation reduces the value of the property over time and so using the cost inflation index inflates the property value to represent the current value. The capital gains is thus reduced as the purchase price is increased, thus reducing the tax burden of the seller. Note that this benefit of indexation is not available for short term capital gains. Indexed Purchase Price = 15,00,000*590/280 = Rs. 31,60,714 Long Term Capital Gains = 35,00,000 - 31,60,714 = Rs. 3,39,286 Tax with indexation = 3,39,286*20% = Rs. 67,857 Any cost incurred after April 1st 1981, on improvement of the property can also be deducted (post indexation). This will bring down tax liability further. How can you reduce/avoid the tax burden - Under Sec 54 of the Income Tax Act, you can claim a tax exemption on the long term capital gains of sale of a house. The gains are exempt from tax if you use the entire profit amount to purchase a new house within two years from the date of sale or construct a house within 3 years. Tax is also exempt if you have purchased a second house within a year before selling the first house. Note that you cannot invest in a commercial property or land for this purpose and the new investment has to necessarily be in a residential property. Another option to avail tax exemption is under Sec 54(EC), by investing the amount of capital gains in bonds of the National Highways Authority of India or Rural Electrification Corporation Limited for a period of three years. However, this must be invested within a period of six months of selling the house. Further, the maximum amount that can be invested in a year under this option is Rs. 50 lakhs. What happens if you sell the new house - When you dispose the new house purchased/constructed, the capital gains which have been exempted will be reversed and will again be taxed as capital gains. However, it will be charged as short term capital gains, which is charged at the normal tax slab rates and not the preferential 20% (with indexation) rate. What happens if you do not invest in a house within the specified time period- If you are unable to invest in another property to claim exemption on long term capital gains, there is another option. You can invest in a separate account in a nationalised bank under the Capital Gains Account Scheme (CGAS) before the last date of filing your return for the particular year. The amount to be invested should be equal to the capital gain if you want to claim exemption on the entire amount.  You must attach the proof of deposit in the account, along with your tax returns to claim exemption. The account can be one of the following two types - either a Savings Bank account or a Term Deposit account. The account carries the relevant interest rate - either the Savings interest rate or the Term Deposit interest rate, as the case may be. The amount deposited should be used only to buy or construct a residential house and failure to do so will result in taxation of the unutilised amount. We recommend you to consult a chartered accountant to understand the actual implications of long term capital gains on the sale of property.     For further information contact Prajna Capitalon 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 Largecap Funds Invest Online DSP BlackRock Top 100 Fund ICICI Prudential Focused Blue Chip Fund Franklin India Bluechip ICICI Prudential Top 100 Fund B. Large and Midcap Funds Invest Online ICICI Prudential Dynamic Plan HDFC Top 200 Fund UTI Dividend Yield Fund Birla Sun Life Front Line Equity Fund Franklin India Prima C. Mid and SmallCap Funds Invest Online Reliance Equity Opportunities Fund DSP BlackRock Small & Midcap Fund Sundaram Select Midcap IDFC Premier Equity Fund Birla Sun Life Dividend Yield Plus SBI Emerging Businesses Fund HDFC Mid-Cap Opportunities Fund ICICI Prudential Discovery Fund D. Small and MicroCap FundsInvest Online DSP BlackRock MicroCap Fund 2.Franklin India Smaller Companies E. Sector Funds Invest Online Reliance Banking Fund Reliance Banking Fund ICICI Prudential Banking and Financial Services Fund F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver DSP BlackRock Tax Saver Fund Reliance Tax Saver (ELSS) Fund G. Gold Mutual Funds Invest Online Relaince Gold Savings Fund ICICI Prudential Regular Gold Savings Fund HDFC Gold Fund 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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