Posted: 22 Mar 2015 02:55 AM PDT

Note that capital gains from any overseas investments would have tax implications here. In his Budget speech, Finance Minister Arun Jaitley made it clear that concealing income in relation to foreign assets will attract a penalty of 10 years' imprisonment. So you have to disclose all investments in stocks, bonds, funds and real estate that you make abroad while filing returns here. Nonfiling of returns or filing of returns with inadequate disclosure of foreign assets will be liable for prosecution with punishment of rigorous imprisonment up to 7 years. Income in relation to any undisclosed foreign asset or undisclosed income from any foreign asset will be taxable at the maximum marginal rate. You also have to mention the date of opening a foreign account while filing returns.

The tax treatment for gains on stocks listed abroad is different from that for domestic equities as STT is not payable on these investments. In India, the gains arising on sale of an asset purchased abroad and held for more than 12 months (shares or units) or 36 months (in any other case), are treated as long-term capital gains and taxed at the rate of 20%. Gains from sale of assets held for a shorter period are treated as short-term capital gains and taxed at the applicable rates. So while gains from Indian stocks are exempt from taxes if sold after a year of purchase, profits from investments in foreign shares are not exempt. However, one can claim indexation benefits. There are other ways to escape the tax net. Tax arising on such capital gains can be avoided by reinvesting the proceeds for purchase of a residential property within one year prior to sale date or two years from the sale date or within three years for an under-construction property. Another option is to invest the proceeds in NHAI or REC bonds within 6 months from such a sale. However, the maximum one can invest here is `50 lakh. The 6% interest one earns is taxable.

Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds

Invest in Tax Saver Mutual Funds Online -

Invest Online

Download Application Forms

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

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You can write to us at

PrajnaCapital [at] Gmail [dot] Com

Leave a missed Call on 94 8300 8300

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Avoid NFOs

Posted: 22 Mar 2015 02:45 AM PDT

Don't get taken in by the flurry of new fund offers. You will be better off sticking to the tried and tested schemes.

For the past one year, to cash in on the bull run in equities, mutual fund houses have gone on a new fund offer (NFO) overdrive. But experts are unanimous in their advice: avoid NFOs. While past performance is not an indicator of how a fund will fare in the future, it does tell the investor how skilful the fund manager is. This crucial information is missing in an NFO. Not only is there no track record to judge an NFO by, many NFOs are similar to funds that already exist. If the new fund is similar to existing funds, you are better off investing in the latter.

Around 67% of the new launches in 2014 were closed-end products. Investing in the NFO of a closed-end fund is doubly risky. In case the fund's performance is lacklustre, a closed-end fund does not allow you to exit. Even though closed-end funds are listed on the stock exchanges, exercising the exit option for retail investors is not easy as the funds, often bought from distributors, are not held in demat form. You could be forced to redeem your investment in a closed-end equity fund when the markets are down.

Moreover, most NFOs are launched during bull runs when valuations are high. The probability of enduring a loss is higher. There is also a notion among investors--which unscrupulous agents promote--that an NFO, which comes at a net asset value (NAV) of `10, is cheap. If the NAV of an existing fund is higher, it only means that the fund has been around for a while and has gained in value. Do not fall prey to the notion that the `10 NAV means the fund is cheap.

Only under special circumstances should you consider investing in a NFO. For instance, if it's an international fund-of-funds, where you have the track record of the parent fund to go by. Or, when an NFO's investment objective is unique, for example, in 2012, the launch of US-focused funds gave Indian investors the opportunity to invest in the US market.

So, unless there is a very good reason to opt for a NFO, it is best to stay away from them.

Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds

Invest in Tax Saver Mutual Funds Online -

Invest Online

Download Application Forms

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

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

Leave your comment with mail ID and we will answer them

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

Leave a missed Call on 94 8300 8300

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

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

Investing in Global Funds

Posted: 22 Mar 2015 12:51 AM PDT

If you are convinced about the benefits of having international exposure, the mutual fund route is the most convenient option.

Under LRS, you can get access to all the exchange traded funds (ETF) listed on foreign bourses. These funds invest passively in an index of stocks, much like the Nifty ETF or Sensex ETF. Prominent players like iShares and Vanguard offer multiple options here, with funds dedicated to US stocks, emerging markets and other global stocks, apart from products investing in REITs, commodities and bonds. Being passively managed products, these charge a much lower expense ratio. The tax implications on sale of such units are the same as for foreign shares.

There are many schemes available locally that help you access mutual funds abroad. Since these do not come under the purview of the LRS, you can invest directly without the ac companying restrictions. These global-oriented schemes vary in structure. There are those that invest abroad directly and those that do so indirectly. The former category consists of funds that do not rely on an offshore fund manager and make investment decisions on their own. Funds that invest abroad indirectly operate either as feeder funds (pool in money from here and transfer it to the parent fund managed offshore) or pure fund of funds (invest the money in a basket of offshore funds).

If you are investing in locally-sold global funds, the tax treatment is on par with non - equity funds or foreign stocks. The equity funds which invest more than 35% of their corpus in foreign equities are not eligible for exemption from long-term capital gains or the lower tax on short-term gains. However, global funds that restrict foreign investments to 35% of the corpus get the same tax treatment as domestic equities.

Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds