Prajna Capital |
- Who Needs to File Tax Returns for 2015
- A SIP in Time Will Keep Financial Worries Away
- Diversify mutual fund portfolio for risk mitigation
| Who Needs to File Tax Returns for 2015 Posted: 21 Aug 2015 04:45 AM PDT NO TAX TO PAY? - YOU STILL NEED TO FILE YOUR RETURN Some taxpayers face a simple dilemma: are they supposed to file their tax returns? Three years ago, the government had introduced a rule that anybody earning up to `5 lakh a year will not have to file returns if all taxes are paid and there is no income from other sources. Though this rule has been removed, a lot of people in that segment still believe they don't have to file their returns.It's time to clear the air about this. As per the law, if your gross taxable is above the basic exemption limit of `2.5 lakh a year, you have to file your return. The gross taxable income is after you have claimed all exemptions, such as HRA, conveyance allowance and LTA. As the table shows, the person with an income of `4 lakh a year is not supposed to file his returns because exemptions reduce his gross taxable income to `2.5 lakh.On the other hand, the person earning `3 lakh a year will have to file returns because he does not get any exemptions. Even though the deductions under Section 80C reduce his tax to nil, he is required to file his return. Similarly, even if all taxes have been duly paid, you still need to file your return. In the table, the person with `7 lakh income does not owe the tax department anything. Yet, the law requires him to file his return.What happens if you are supposed to file your returns but don't? As per the law, the penalty for non-filing of tax return is `5,000.However, experts say it is rare for the taxman to deal with such cases too harshly.Since you have not filed, the department will not have your registered mobile number or e-mail address. But when your income exceeds a certain level after a few years and you file your returns, you might get a flurry of texts and mails from the taxman asking you to file your returns for the previous years.Matters can take a serious turn if you don't respond to such pleas. The department may also issue a notice for not filing. More strict penalties, of up to `2 lakh, have been recently introduced for not responding to notices from the tax department.Incidentally, it is mandatory for residents with foreign assets to file returns, irrespective of their earnings. Individual who qualify as ordinarily resident of India and have foreign asset or income are mandatorily required to file a return in India even if they have zero income here.  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 - 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 OR You can write to us at PrajnaCapital [at] Gmail [dot] Com OR Leave a missed Call on 94 8300 8300 --------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs | ||
| A SIP in Time Will Keep Financial Worries Away Posted: 21 Aug 2015 03:22 AM PDT
Rather than betting on individual stocks, systematic investment plans are less risky and offer better returns One share may seem too small an investment to make a meaningful impact on your portfolio's returns. Yet, disciplined investing can add up to a huge amount in the long run. If you bought one TCS share every month since July 2010, your investment would have earned 22.9% returns till now.The 60 shares of TCS, bought at an average price of Rs 1,642 apiece, would be worth Rs 1.49 lakh today. Plus, you would have received . 6,796 in dividends.` The monthly investment would have been higher at Rs 3,215 if you chose to invest in HDFC Bank instead. But the returns would have been just as spectacular. If you bought one share of HDFC Bank every month (increased to 5 shares a month after the stock split in July 2011), you would be holding 300 shares worth . 3.27 lakh. Factor in the Rs 5,748 received as dividend and your total returns are 25.6%. Impressed by the returns these stocks have delivered? Here's the spoiler. If the average monthly investment in these blue-chip shares was put in corresponding sector funds, the returns would have been higher. A systematic investment plan (SIP) of Rs 1,643 started in the ICICI Pru Technology Fund in July 2010 would be worth Rs 1.7 lakh today. Even after factoring in the dividends, the tech fund has given almost Rs 15,750 more than the SIP in TCS. Similarly Rs 3,215 invested every month in the ICICI Pru Banking and Financial Services Fund would have grown to Rs 3.57 lakh today , an additional gain of nearly ` . 25,000 over the SIP in HDFC Bank. The gap is even wider between gains from L&T and the Franklin Build India infra fund. Five years ago, Infosys was among the most highly-rated stocks and almost all analysts had it on their radar. If you had started buying one share of the software giant in July 2010, you would today be holding 228 shares worth ` . 2.23 lakh, a return of a paltry 11.4%. The same amount put every month in the ICICI Pru Technology Fund would have . 3.07 lakh, a return of 23%.grown to ` Even the worst performing tech fund, DSP BlackRock Technology.com has generated higher returns than an SIP in Infosys. The lesson for small investors is simple. Take the MF route instead of trying to find the next Infosys among individual stocks. Just as you are diversifying your investments across a basket of stocks, diversify across time as well by using the SIP mode. That's the best way to create wealth without losing sleep. Of course, you can also go wrong when in vesting in funds. If you had invested in the worst performing banking scheme, Sundaram Financial Services Opportunities Fund, you would have earned almost ` . 45,000 less than what investments in HDFC Bank delivered. In the Kotak PSU Bank ETF, you would have earned only ` . 13,990 in five years. At 2.75%, the SIP returns are less than what your savings bank offers. So, choose your fund carefully.  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 - 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 OR You can write to us at PrajnaCapital [at] Gmail [dot] Com OR Leave a missed Call on 94 8300 8300 --------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs | ||
| Diversify mutual fund portfolio for risk mitigation Posted: 21 Aug 2015 02:53 AM PDT Through Portfolio diversification investors can minimize or eliminate company-specific risks as well as market risks and also minimize effects volatility on individual asset classes A successful investor is able to balance his portfolio risks well. One of the ways to balance the risks is to diversify the portfolio within one single asset class. For example, an investor invests through equity mutual funds and is invested in large cap, mid cap, small cap and balanced funds. Another way to mitigate risks is to diversify among asset classes. In the second case, the logic is that if there are more than one asset in a portfolio, then the risks associated with each of those assets have to be balanced. Again here the logic is that since each asset class gives superior returns during a particular phase and rarely all the asset classes give similar returns at the same time, so it is prudent to diversify among asset classes as well so that the total portfolio risk is distributed by allocating funds to each asset class in some ratio. This method of distributing funds among various asset classes, to mitiage risks, is called asset allocation process. In India an average investor will allocate his funds into maximum of five assets. EQUITY: Through the mutual fund route, direct stock investment FIXED INCOME: Through the debt mutual fund route, bonds, post office schemes, PPF etc. GOLD: Physical purchase, through gold exchange traded funds CASH OR CASH EQUIVALENT: Savings bank, liquid funds, fixed deposits Real estate Other than these, some investors may also invest in commodities (other than gold), foreign exchange etc. With 5-7 asset classes available for investing, financial planners and advisors say that an investor can face several questions about how to allocate his assets among these options. One of the most common dilemmas is what should be the ideal percentage of his total portfolio he should invest in stocks, how much in bonds and how much he should keep in cash. The next question is if the time is right to invest in real estate, like buying a residential or commercial property. Investors are also faced with the question if the time is right to buy gold. The last question is more relevant now when the gold prices are down about 30% from the peak seen two years ago. This is where the process of risk profiling of an investor comes into play. This process uses some scientific tools, some objective and subjective questions are thrown at the investor to decide how much risk the investor can take without stretching himself financially as well as psychologically. For example if a person is able to withstand higher risks, according to financial planners and advisors, he should be invested more through equity mutual funds, while an investor having low risk taking ability should have more of his investments in debt funds and cash. Asset allocation methods also take into consideration the time left for an investor to reach his gosls for which he is investing, the liquidity factor in his overall portfolio etc. Ac cording to financial planners, while real estate has a low level of liquidity, money in savings bank, bank FDs and liquid funds are on the other side of the liquidity spectrum with very high liquidity. According to financial planners and advisors, prop er asset allocation for an in vestor will help him to achieve personal goals. At the same time, it is also very important to measure the risk taking ability of the in vestor. Since investors at an early stage of their lives can usually take higher risks, they should get a financial plan early in their life and have the right asset alloca tion, preferably with higher exposure to equities so that they get long years to create some serious wealth. There is every possibility this can help them have a stress-free life during their sun set years. An important aspect about asset allocation is that since risk profile of every individual differs, because of various factors, so naturally there can not be a single solution for asset allocation for all investors.Asset allocation process is very much a personalized process, and it's also a dynamic process. In case an investor is not experienced enough to carry out the process for himself, he could seek professional help from financial planners and advisors, who, for a fee can do the same in a much efficient manner 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 - 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 OR You can write to us at PrajnaCapital [at] Gmail [dot] Com OR Leave a missed Call on 94 8300 8300 --------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs |
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