Prajna Capital

Reliance Fixed Horizon Funds Dividend
ICICI Prudential Long Term Fund Online
What is Cost Inflation Index?

Reliance Fixed Horizon Funds Dividend

Posted: 22 Sep 2016 07:32 AM PDT

Invest Reliance Fixed Horizon Funds Online

Reliance Mutual Fund has announced dividend under the dividend option of the following schemes:

Schemes
Reliance FHF XXIV Series 17-D
Reliance FHF XXIV Series 17 Direct-D
Reliance FHF XXIV Series 18-D

The quantum of dividend will be the entire distributable surplus as on the record date.

The record date has been fixed as September 27, 2016.

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Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds

Top 10 Tax Saver Mutual Funds to invest in India for 2016

Best 10 ELSS Mutual Funds in India for 2016

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. Religare Tax Plan

4. DSP BlackRock Tax Saver Fund

5. Franklin India TaxShield

6. ICICI Prudential Long Term Equity Fund

7. IDFC Tax Advantage (ELSS) Fund

8. Birla Sun Life Tax Relief 96

9. Reliance Tax Saver (ELSS) Fund

10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 Tax Saver Mutual Funds Online

Invest Online

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

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Leave a missed Call on 94 8300 8300

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ICICI Prudential Long Term Fund Online

Posted: 22 Sep 2016 04:39 AM PDT

Invest ICICI Prudential Long Term Fund Online

The scheme seeks to generate income through investments in a range of debt instruments and money market instruments and the plan aims to maintain the optimum balance of yield , safety and liquidity.

Though labelled as a 'long-term' debt fund, ICICI Pru Long Term Fund has floated to the top of the dynamic-fund category mainly through well-timed tactical calls on interest-rate moves in the economy in the last three years. After functioning mainly as a short-term fund until early 2014, longer-duration calls since mid-2014 have helped this fund notch up a three-year CAGR of well over 10 per cent and end up at the top of its category. Investing mainly in AAA corporate bonds or G-secs, the fund takes negligible exposure to credit risk. However, it is an aggressive fund when it comes to duration calls. From an average maturity of less than a year until 2014, the fund extended its maturity to as much as 19-20 years by 2015-16 to make the most of falling rates. The fund's asset size has also expanded in this period. The fund uses a quantitative model.

The fund's three- and five-year returns show large margins of outperformance vis-a-vis the benchmark and the category. Three-year returns are a good 3 percentage points above peers while five-year returns ace the category by 1.50 percentage points. But with the high duration working against the fund in the past year, relative performance has suffered. While the high portfolio maturity has worked against the fund in the last one year or so, it is likely to pay off as market interest rates follow policy rates southwards. Compared to other dynamic funds, the fund almost wholly avoids lower-rated corporate bonds, with just a 1 per cent long-term corporate exposure by March 2016. The returns are thus quite reliant on a falling-rate cycle playing out.

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Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds
Top 10 Tax Saver Mutual Funds to invest in India for 2016
Best 10 ELSS Mutual Funds in india for 2016

1. BNP Paribas Long Term Equity Fund
2. Axis Tax Saver Fund
3. Franklin India TaxShield
4. ICICI Prudential Long Term Equity Fund
5. IDFC Tax Advantage (ELSS) Fund
6. Birla Sun Life Tax Relief 96
7. DSP BlackRock Tax Saver Fund
8. Reliance Tax Saver (ELSS) Fund
9. Religare Tax Plan
10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 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
OR
You can write to us at
PrajnaCapital [at] Gmail [dot] Com
OR
Leave a missed Call on 94 8300 8300

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What is Cost Inflation Index?

Posted: 22 Sep 2016 03:02 AM PDT

When arhar dal hits a triple digit price tag, you literally eat the realisation that you have been hit by inflation. It is not just what we eat that responds to inflation, asset prices also rise. Some of the increase is because the asset has grown in real value, and some is simply due to inflation. We can see the face of this price rise by looking at the cost inflation index (CII).

What is cost inflation index?
The Central Board of Direct Taxes maintains the CII, and the figure is updated annually. The base year is taken as 1980-81. Each year after this, the value is adjusted in proportion with the inflation recorded for that financial year (FY). Until last year, ie. 2015-16, CII was 1,081 and for FY17 it has been notified as 1,125, reflecting an inflationary increase of 4.07% over the previous year. Similarly, a specific CII has been notified for each FY from 1980-81 onwards.

Impact on capital gains tax
The importance of this inflation index is seen in calculating capital gains on assets and the tax applicable thereon. When you buy and sell financial or physical assets, any gains earned are subject to capital gains tax. If you have held an asset for more than 36 months before selling, you are liable to pay long-term capital gains tax on the profit made.

Considering the impact of inflation on the long-term value of assets, the income tax authority allows you to adjust or index your cost of purchase according to CII.

For physical assets like property, provision of calculating capital gains tax without indexation is not available. Till July 2014, for financial assets like mutual funds (non-equity mutual funds), there was an option of paying tax at a rate of 10% without indexation. But this is no longer available for units sold after 10 July 2014. A long-term capital gains tax of 20% is applied to assets sold after 36 months after indexing or adjusting the purchase price according to the CII. In years of high inflation, it is possible that the indexed cost is higher than the sale value. Let's say you index the cost based on the CII value in 2010 and 2015. The value of purchase would be 1024/632 * 10,00,000 or R16,20,253. This works out to be more than what you got while selling the flat. On indexation, there is no capital gains and no tax to be paid.

In years of high inflation, it is possible for such a scenario to take place. While, inflation has come down in the last year, between FY10 and FY15 the inflation index remained high. In years of relatively lower inflation-as seen in the last financial year-it is possible that the indexed capital gains for a similar purchase and sale value will be more than that for years when inflation is high. Hence, tax based on indexation could be higher. This happens because the value of the rupee itself declines faster in years of high inflation and vice versa.