ELSS Funds

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ELSS is a good option for an investor to take exposure to equities as it comes with an added benefit of tax savings on investments up to a specified limit. Although it comes with a lock-in of three years, this should not be seen as an irritant as equity is a long-term asset class and delivers superior return over cycles. To benefit from the compounding effect, one has be patient and remain invested during market ups and downs. Three-year lock in encourages the investor to have a minimum three-year view while investing in ELSS funds which is in the interests of the investors considering the characteristics of the asset class I just explained.

Indian equity markets have delive-red very strong returns in the last 12 months with the benchmark Sensex delivering about 26% returns and BSE Midcap Index about 37% returns. Even though the medium- to long-term outlook for markets continues to remain positive, it would be prudent for investors to moderate their return expectations and not extrapolate last one year's returns. Over a longer period of time, return expectation from equity as an asset class should be in line with the nominal GDP growth.

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Redeeming Infrastructure Bonds before maturity

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Depending on the nature and scheme of the infrastructure bond, it can be traded on the stock exchange or can be bought back. If the bond is traded on the stock exchange, gains arising from the same would  be subject to capital gain tax. Further, interest on the infrastructure bond is taxable/tax free depending on the nature of the bond.

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Mirae Asset India Opportunities Fund

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Increasing volatility in markets should be a signal for investors to look for consistent performers in mutual funds. Among diversified equity funds, in the past eight years, Mirae Asset India Opportunities has been one of the consistent performers.

The scheme's fund manager Neelesh Surana has been consistent with the fund house's philosophy of selecting high growth businesses at reasonable prices. The focus has been on the companies which have generated high return on capital employed (RoCE) and are expected to enhance it further. These two key factors have played a critical role in the scheme's out performance as opposed to its benchmark S&P BSE 200 and its peers.

The scheme invests 70-80% of its portfolio in large-sized companies and the remaining part is invested in mid-sized companies. With the help of these factors, in the past seven, five and three years, the scheme has given 18%, 17.8% and 27.6% returns, respectively, while its benchmark S&P BSE 200 in the same period has returned 9.6%, 11.4%, and 18.1%, respectively. In the same 9.6%, 11.4%, and 18.1%, respectively. In the period, the scheme's category has given 13.3%, 14.6% and 24.5% returns, respectively.

At present, the scheme is invested in large-sized companies which are fundamentally sound but have been beaten down in the recent volatility.These companies are Tata Motors, Lupin, Housing Development Finance Corporation, Larsen & Toubro, Crompton Greaves and State Bank Of India.

Also going by the recent encouraging railway freight traffic data, the scheme's fund manager has bought into Container Corporation of India.

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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 2018

Best 10 ELSS Mutual Funds in india for 2018

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

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Investment towards health and life cover

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Life and health insurance typically are not supposed to be considered as investments. However, both are very important and must be considered as one of the priority money move to be made before turning 30. If you are earning and have a family dependent on you, you must assess and buy the right life insurance term cover for yourself. Further, with costs of health care and medical on the rise, any untoward illness without sufficient cover will have you dip into capital which is unnecessary. Hence, there cannot be any compromise on health insurance. Thankfully, there are various health covers available in the market today. You should opt for the right cover for yourself, depending on your needs and post considering all the options.

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ICICI Prudential Value Discovery Fund

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Peak valuations in markets warrant attention to stocks which have growth potential and are attractive on relative valuation. Among the large-cap schemes which not only look at companies from growth potential but also on ratios such as price-to-book value and relative market capitalisation is ICICI Prudential Value Discovery Fund.

The scheme has consistently followed this style of investing and has rewarded investors by recording commendable performance especially in the long-term. In the past five-year and ten-year periods, the scheme has delivered 20.9% and 15.3% returns while its benchmark BSE 500 has delivered 14% and 6.4% returns, respectively, in the same periods.

One of the key features that has been the hallmark of the scheme is it is not tied down to size of a company. The scheme's fund manager Mrinal Singh is in constant search of attractive valuations. Since the past one year, large-sized companies have been far more attractive than their mid-sized counterparts, the scheme has enhanced exposure to large-sized companies.This ensures margin of safety and also to a large extent, predictability of earnings in comparison with mid-sized companies.

In the past six months, the fund manager has invested in companies which may look contrarian (IT, Pharma) to the street's consensus but have the promise of stable earnings, established market share, strong brand value and encouraging past financials. A few of the prominent companies which reflect this line of thought are Sun Pharmaceutical Industries, Indian Oil Corporation, Bharat Forge, and Infosys.

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Best ELSS Funds for Growth

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SIPs are when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich

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Know about PF Withdrawal

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PF Withdrawal

1) To encourage long-term savings, the government has formulated tax laws accordingly. If the withdrawal from a recognised PF happens after five years of continuous employment, it attracts no tax liability. In case of employment with different employers, if the PF balance maintained with the old employer is transferred to the PF account of the new employer, it is considered a continuous employment.

2) If an employee has been terminated because of certain reasons beyond his or her control (such as ill health and discontinuation of business of employer), the withdrawal does not attract any tax, irrespective of the number of years of employment.

3) In case of a withdrawal before five years, the amount becomes taxable in the same financial year. Thus, the amount has to be shown in your tax return for the next assessment year. The employer's contribution to PF and interest earned on it is added to one's income and taxed accordingly.

4) In addition, if you have claimed benefits under Section 80C on your own PF contribution, it will be taxed as salary. The interest earned on your own contribution will be taxed as 'income from other sources' and taxed according to the respective tax slabs.

5) TDS (tax deducted at source) - If the withdrawal is after a period of five years of continuous employment, it attracts no TDS or any tax. What happens if the period of service is less than five years? If PAN has not been submitted to the EPFO authorities, TDS is deducted at 30 per cent. If PAN has been submitted along with Form 15G/15H, no TDS is deducted. If form 15G/15H is not submitted and PAN is submitted, TDS @ 10% is deducted. Form 15H or 15G is meant to prevent TDS for those whose income falls below the taxable limit.

6)  Many people continue to maintain their EPF accounts even after they cease to be in jobs. They are no longer in jobs but EPF (employee provident fund) accounts continue to earn interest.  Income tax laws say that the interest accumulated in your EPF account after you quit the job is taxable. This was upheld in a ruling by Bangalore Income Tax Tribunal. "The ruling states that interest on EPF accumulated shall be taxable after the period when a person leaves employment and doesn't withdraw or get his/her EPF balance transferred with the new employer.

7) The Employees' Provident Fund Organisation has come out with a single-page form for provident fund related claims - from provident/pension fund withdrawal to the advance facility.

8) In addition, an Employees' Provident Fund Organisation or EPFO subscribers can submit the new one-page form directly to the retirement fund body without the employer's attestation if their accounts are seeded with Aadhaar and bank account details.

9) For subscribers who are yet to seed Aadhaar and bank details, a new composite claim form has been introduced which has to be submitted with attestation of employers for any claims.

10) Also, no other document would be required to be submitted by the subscriber for taking advances from the provident fund corpus. A provident fund subscriber can go for partial withdrawal/advance from his or her corpus for specific purposes like purchase of flat, construction, marriage/education of children etc. 

SIPs are when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich

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Tata Ethical Fund

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HOW HAS Tata Ethical Fund PERFORMED? 
With a 10-year return of 7.62%, the fund has underperformed the category average (8.63%), while faring marginally better than the benchmark (7.11%). 

Category: Equity 
Type: Multi Cap 
Benchmark: Nifty-500 Shariah 

FUND MANAGER 
Pradeep Gokhale 
Tenure: 5 years and 10 months 
Education: B.com (H), CA and CFA 

Being a Shariah-law compliant fund, this scheme stays away from the banking and finance sector and avoids some of the 'sin' sectors like alcohol, armaments, and even hospitality, among others. It doesn't have any market-cap bias, but currently its tilted towards large-caps. 

It has raised exposure to the midcap segment in recent months, resulting in lower portfolio market cap relative to peers. The fund prefers companies with high capital efficiency, low leverage and high cash generation ability. 

The portfolio is reasonably diversified, with the fund manager taking aggressive positions in the top picks. The fund's performance has been inconsistent over the years. This fund is purely for investors looking for the 'ethical' investing approach and not keen on investing in funds skewed towards banking and finance firms. 

SIPs are when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich

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Tax Saving options other than Section 80C to save money

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While you may have made investments to claim deduction under Section 80C of the Income Tax Act, there are various payments, investments which are available as deduction against an individual's taxable income.

It is your duty to pay tax to the government, but overpaying taxes is not wise. While you may have, for instance, made investments to claim deduction under Section 80C of the Income Tax Act, there are various payments / investments which are available as deduction against an individual's taxable income. A few are mentioned below:

1. Deduction towards rent paid for accommodation provided is available, subject to conditions.

For salaried individuals, an exemption for the rent paid is allowed being the least of the following:

# actual HRA received,

# actual rent paid as reduced by 10% of basic pay, or

# 40% / 50% of the basic pay (depending on the location of accommodation)

For non-salaried individuals, a deduction is allowed being the least of following (subject to conditions)

# Rs 60,000,

# actual rent paid as reduced by 10% of total income, or 25% of total income.

2. Payment towards medical insurance premium up to Rs 25,000 for self, spouse and dependent children and up to Rs 25,000 for parents is allowed as a deduction. In case of senior citizens, the limit is extended to Rs 30,000.

3. In case an individual is a salaried employee, reimbursement towards medical expenses of up to Rs 15,000 is available for exemption.

4. Deduction is allowed for interest paid on education loan taken for higher education subject to conditions. The deduction is allowed for eight years or till the loan is repaid, whichever is earlier.

5. Interest payments on loan taken for purchase of property are allowed up to Rs 200,000 for self-occupied property, while there is no limit for deduction in case of let-out properties. However, in case of let-out properties, loss of only up to Rs 200,000 is available for set-off in the same year and the balance needs to be carried forward for set-off against income from house property (up to the next 8 years).

6. Donations to a notified organization / fund are available as deduction up to 50%-100% of the donations made depending on the type of organization / fund.

Certain investments which can also be considered as deductions are listed below:

7. Where an individual has earned long-term capital gains, and the gains are invested in REC / NHAI / other notified bonds (up to Rs 50 lakh) within a duration of six months of the sale, such gains can be exempt.

8. Where an individual earns the long-term capital gains on transfer of residential house property and reinvests the same to purchase / construct another residential house property, an exemption of such gains is available subject to conditions.

9. Similarly, where sale proceeds of long-term capital assets (other than house property) are reinvested to purchase / construct a house property, an exemption is available subject to specified conditions.

10. Where an individual makes a contribution towards National Pension Scheme, an additional benefit of Rs 50,000 is available.

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How to withdraw PF and EPS money

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After resigning from a job many individuals do not get their provident fund (PF) transferred from the previous employer to the new employer.

People do this mainly because the funds are safe with the Employees' Provident Fund Organisation (EPFO) and it keeps earning tax-free returns.

Things, however, will not be the same from now on. In November 2017, the Bengaluru bench of the Income-Tax Appellate Tribunal (ITAT) ruled out tax-exemption on the interest earned after an employee has quit. So, to avoid getting taxed, you will have to either transfer the PF balance to the new employer or withdraw the amount at the earliest after the exit.

After an exit from a job, even though no fresh contributions are made, such PF accounts remain 'operative' with the balance earning interest every year. The PF balance as on the date of exit from an organisation continues to be tax-exempt but interest earned on the balance thereafter will be taxable in the year of withdrawal, i.e., it's only the amount of interest earned during the out-of-job period which comes into the tax net. So, to avoid tax, one should get the PF balance transferred to the new employer.

If such a case pertains to you, you have two options: continue earning taxable interest or withdraw the PF balance. Let's see how you can withdraw the PF balance.

When can an employee withdraw PF balance?
According to the EPF Act, to claim final PF settlement, one has to retire from service after attaining 58 years of age. The total PF balance includes the employee's contribution and that of the employer, along with the accrued interest. In addition, he will be eligible to get the Employees' Pension Scheme (EPS) amount as well depending on the years of service.

But what if someone decides to quit his job before reaching 58? Under the existing rule, employees who resign from a job before they turn 58 years of age can withdraw the full PF balance (and the EPS amount depending on the years of service), if he is out of employment for 60 straight days (two months) or more after leaving a job and then withdraw.

Along with the PF, one is also allowed to withdraw the EPS amount if the service period has been less than 10 years and not later on. Once this milestone is crossed, the employee compulsorily gets pension benefits after retirement.

To withdraw the PF balance and the EPS amount, the EPFO has launched a 'composite form' to take care of withdrawals, transfer, advances, and other related payments.

Before you start the withdrawal process make sure all your previous PF accounts are merged into one. The total service in the present establishment as well as previous organisations will be taken into account and therefore, it is advisable to merge your accounts.

To merge all previous PF accounts, you may click here.

The withdrawal process
The withdrawal process becomes simpler and less time-consuming if you have your Aadhaar number with you. Here is how you can initiate the withdrawal for both, with and without Aadhaar.

Withdrawing without using Aadhaar card number: If you don't have an Aadhaar, but have the PF number, use this form – Composite Claim Form (Non-Aadhaar).

You will have to furnish Permanent Account Number (PAN) if the total service period is less than five years and also attach two copies of Form 15G/15H, if applicable. In case the Universal Account Number (UAN) is not available, you can mention only the PF account number.

Withdrawing using Aadhaar card number: You can submit a Composite Claim Form (Aadhaar) directly to the concerned EPFO office without attestation of claim form by the employers. The payment of the PF balance will be sent to your bank account, so attach a cancelled cheque along with the form.

Before proceeding ensure these things: You have submitted complete details in Form11 (New) to your employer, Aadhaar card number and bank account details are available on the

are available on the UAN portal, and the UAN has been activated.

The withdrawal process will entail these conditions. See which one caters to you and choose the form accordingly.

1. Withdrawing PF balance plus EPS amount (for below 10 years of service)
2 . Withdrawing PF balance plus EPS amount (over 10 years of service)
3. Withdrawing PF balance only and reduced pension (age 50-58; over 10 years of service)
4. Withdrawing PF balance only and full pension (After 58)

1. Withdrawing PF balance plus EPS amount (for below ten years of service)
If service period has been less than 10 years, both PF balance and the EPS amount will be paid. To get EPS amount, in the Composite Claim Form (Aadhaar or Non-Aadhaar), along with choosing 'Final PF balance', also choose the 'pension withdrawal' option.

If you plan on re-joining the workforce, you may opt to get the 'scheme certificate' by furnishing
Form 10C.

2. Withdrawing PF balance plus EPS amount (over ten years of service)
If you have already completed 10 years of service, the EPS amount cannot be withdrawn and only the scheme certificate is to be issued by filling Form 10C along with the Composite Claim Form (Aadhaar or Non-Aadhaar). Pension is to be paid from age 58 while a reduced pension can be paid from age 50. One may opt for early pension (reduced proportionately) after 50 years, provided one has completed 10 years of service.

3. Withdrawing PF balance and reduced pension (age 50-58) (over ten years of service)
You can only get pension after turning 50 years of age and have rendered at least 10 years of service. If your service period has been more than 10 years and you are between the age of 50 and 58, you may opt for reduced pension. For this,
Form 10D
has to be submitted along with the Composite Claim Form (Aadhaar or Non-Aadhaar).

4. Withdrawing PF balance and full pension (After 58)
After 58, you have to submit the same
Form 10D
to claim the full pension.

What you should do
It is advisable to transfer your PF balance when you change jobs as it is a form of forced savings. For those who are still in service and have not started their own business, it is better to transfer the PF balance to the new employer. The transfer process has been made automatic, 

to know about it. And if you have quit to start your own business, the entire balance in your EPF account can be transferred to the National Pension Scheme.

SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich

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NPS Returns

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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

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Tax Benefits Available for Senior Citizens

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Articles Discusses Income Tax Benefits Available to Senior Citizens in India. A person becomes senior citizen under Income Tax Act in any year after attaining the age of 60 even for one day. Once he attains 60 years, his status as senior citizen in that financial year, gives him some relief. There are not many income tax exemptions available for senior citizens. These are listed below:

1. Higher Exemption Limit for Senior Citizens

From F.Y. 2011-12  Qualifying age for Senior Citizens has been reduced from 65 years to 60 years and from A.Y. 2015-16 exemption limit for Senior Citizens has been enhanced from Rs. 2,50,000 to Rs. 3,00,000.  A new category of Very Senior Citizens, 80 years and above, has been created who will be eligible for a higher exemption limit of Rs. 5,00,000. Senior citizen above the age of 80 years are entitled to higher exemption Limit of Rs. 5,00,000 from A.Y. 2012-13.

Senior citizens and a very senior citizen are granted a higher exemption limit as compared to normal tax payers. Exemption limit is the quantum of income up to which a person is not liable to pay tax. The exemption limit granted to senior citizen and very senior citizen for the financial year 2017-18 is as follows :

Senior citizen

Very senior citizen

A senior citizen is granted a higher exemption limit compared to non-senior citizens. The exemption limit for the financial year 2016-17 available to a resident senior citizen is Rs. 3,00,000. The exemption limit for non-senior citizen is Rs. 2,50,000. Thus, it can be observed that an additional benefit of Rs. 50,000 in the form of higher exemption limit is available to a resident senior citizen as compared to normal tax payers.

A very senior citizen is granted a higher exemption limit compared to others. The exemption limit for the financial year 2016-17 available to a resident very senior citizen is Rs. 5,00,000. The exemption limit for non-senior citizen is Rs. 2,50,000. Thus, it can be observed that an additional benefit of Rs. 2,50,000 in the form of higher exemption limit is available to a resident very senior citizen as compared to normal tax payers.

2. Reverse mortgage for senior citizens

Reverse mortgage' – a concept introduced by Finance 2007 -provides that a senior citizen will be able to avail of monthly income streams by mortgaging a house owned by him.  For more details read the following article :- Reverse mortgage created under a scheme made and notified by the Central Government shall not be regarded as a transfer U/s. 2(47)

3. Tax benefits on medical insurance hiked for Senior Citizens

A senior citizen can avail of higher of higher deduction of Rs 20,000 u/s Section 80D and the same limit is been further increased to Rs. 30,000/- from A.Y. 2016-17.

4.  Tax benefit in respect of Expense on medical expenditure in respect of a very senior citizen

With effect from A.Y. 2016-17 Any payment made on account of medical expenditure in respect of a very senior citizen, if no payment has been made to keep in force an insurance on the health of such person, as does not exceed thirty thousand rupees shall be allowed as deduction under section 80D. Section 80D- Hike in Deduction Limit for Mediclaim

5. Higher Deduction u/s 80DDB for Senior Citizens and Super Senior Citizens

Section 80DDB provides deduction to an assessee in case of expense on medical treatment of specified ailments. Generally this deduction is available upto Rs 40,000 . However , if the patient is a senior citizen, then deduction of Rs 60,000 is allowable.

From A.Y. 2016-17 higher limit of deduction of upto eighty thousand rupees is allowable, for the expenditure incurred in respect of the medical treatment of a "very senior citizen". A "very senior citizen" is proposed to be defined as an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year.   Section 80DDB– Limit raised & waived condition of certificate

6. No Routine Income Tax Scrutiny of Senior Citizens for FY 2011-12 -Appreciating the concern of these taxpayers and with a view to mitigate their hardships, Central Board of Direct Taxes has reviewed its scrutiny selection procedure. In order to redress the grievance, it has been decided that during the financial year 2011-12, cases of senior citizens and small taxpayers, filing income-tax returns in ITR-1 and ITR-2 will be subjected to scrutiny only where the Income Tax department is in possession of credible information. Senior citizens for this purpose would be individual taxpayers who are 60 years of age or more.

7. Senior Citizens not having Business Income Exempt From Advance tax payment :- As per section 208 From Financial year 2012-13  resident senior citizen, not having any income chargeable under the head "Profits and gains of business or profession", shall not be liable to pay advance tax and such senior citizen shall be allowed to discharge his tax liability (other than TDS) by payment of self assessment tax.

8.  Senior citizens receive a higher interest (up to 50 bps) on a 5-year fixed deposit, which is eligible for deduction from the total income under Section 80C.

9.  Senior citizens can claim exemption on the tax deducted at source (TDS) on interest income earned on deposits. It can be done by submitting Form 15H under Section 197 of the IT Act.

10. Exemption from e-filing of income tax return to very senior citizen

​​From the assessment year 2017-18 onwards any taxpayer filing return of income in Form ITR 1/4 and having a refund claim in the return or having total income of more than Rs. 5,00,000 is required to furnish the return of income electronically with or without digital signature or by using electronic verification code. However, Income-tax Law grants relaxation from e-filing in above case to very senior citizen.

In other words, a very senior citizen filing his return of income in Form ITR 1/4 and having total income of more than Rs. 5,00,000 or having a refund claim can file his return of income in paper mode, i.e., for him e filing of ITR 1/4 (as the case may be) is not mandatory. However, he may go for e-filing if he wishes.​

Some Frequently Asked Question on Attaining the Age of Senior Citizen or Super Senior Citizen in a Particular Assessment Year with Practical Examples-

• At what age a person will qualify as a senior citizen and very senior citizen under the Income-tax Law?

  Before understanding the age criteria, it is very important to know that the tax benefits offered under the Income-tax Law to a senior citizen/very senior citizen are available only to resident senior citizen and resident very senior citizens. In other words, these benefits are not available to a non-residenteven though he may be of higher age. The age and other criteria to qualify as a senior citizen and very senior citizen under the Income-tax Laware as follows :

  Criteria for senior citizen	Criteria for very senior citizen
  Must be of the age of 60 years or above but less than 80 year at any time during the respective year.	Must be of the age of 80 years or above at any time during the respective year.
  Must be resident	Must be resident
  Illustration	Illustration
  (1) Mr. Kumar (resident in India) attained the age of 60 years during the financial year 2017-18. Will he qualify as senior citizen under the Income-tax Law for the financial year 2017-18? ** Yes, since Mr. Kumar is a resident and he attained the age of 60 years during the year 2017-18, he will be treated as senior citizen under the Income-tax Law for the financial year 2017-18. (2) Mr. Kamal (non-resident) attained the age of 60 years during the financial year 2017-18. Will he qualify as senior citizen under the Income-tax Law for the financial year 2017-18? ** Mr. Kamal is a non-resident, the benefits of senior citizen under the Income-tax Law are available to a resident only, and hence, Mr. Kamal will not be treated as senior citizen under the Income-tax Law for the financial year 2017-18.	(1) Mr. Raja (resident in India) attained the age of 80 years during the financial year 2017-18. Will he qualify as very senior citizen under the Income-tax Law for the financial year 2017-18? ** Yes, since Mr. Raja is a resident and he attained the age of 80 years during the year 2017-18, he will be treated as a very senior citizen under the Income-tax Law for the financial year 2017-18. (2) Mr.Rajat (non-resident in India) attained the age of 80 years during the financial year 2017-18. Will he qualify as very senior citizen under the Income-tax Law for the financial year 2017-18? ** Mr.Rajat is a non-resident, the benefits of very senior citizen under the Income-tax Law are available to a resident only and, hence, Mr.Rajat will not be treated as very senior citizen under the Income-tax Law for the financial year2017-18.

  
  

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Investment towards Tax Saving

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Best Investment for tax saving - ELSS Funds

Considering that you are working and earning, it is important for you to assess your tax liability and take advantage of tax deductions available under Section 80C of the Income Tax Act. "By proper tax planning, you can not only reduce your tax liability but also save some more to invest towards your other goals. One of the best tax-saving instruments is Equity-Linked Savings Schemes (ELSS). It is a type of open-ended equity mutual fund wherein an investor can avail a deduction u/s 80C up to Rs 1.50 lakh for a financial year

SIPs are when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich

For further information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

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NPS does not allow withdrawals till Retirement at 60

Best SIP Funds Online 

Investors may want to use the money to meet other financial goals as well.

The rigid rules for withdrawals reduce the attractiveness of the NPS. During the productive years of a person, there are multiple occasions where she might need money. At this stage, inaccessibility to one's own funds curbs a person's financial freedom.

Of course, NPS does give an investor the option to exit before 60. But 80% of the accumulated corpus will have to be put in an annuity and only 20% will be available. The investor can also choose to make partial withdrawals of up to 25% of the contributed amount. But there are restrictions here as well. Partial withdrawals can be made only thrice and only for specified reasons. There should also be a gap of at least five years between two partial withdrawals.

This is very restrictive. A person will not be able to withdraw money for her daughter's marriage if she had made a withdrawal less than five years ago for her education. The withdrawal rules should be aligned with real-life situations to make them more meaningful.  

SIPs are when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich

For further information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Best SIP Funds Online 

Investment scenarios need customised responses

Practice a structured risk-reward balance in your investment thinking. Weigh the choices between overvalued mid-caps and undervalued cyclicals in recovery mode

Investment scenarios are always unique and we can't respond the same way to every scenario. Each scenario is a function of the broader equity market and calls for a customised response. An investor must align her response keeping in mind the risk-reward balance in each scenario. One's investment strategy must not be fashioned solely on the judgement of either the reward or the risk. Year 2014 was a very different scenario from the present. Then, investors were viewing the markets as a hope trade. Rewards were the sole driver after the historic election verdict. A new government raised expectations of change. We were betting on an aggressive approach to liberalisation. Speedy resolution was expected of issues faced by several industries, most of which were core industries. These issues were weighing heavily on the banking sector. We were betting on the resolution of the pain in banking. We were also betting on the speedy resolution of challenges to growth. We were happy to sidestep the risks that a top-down trade faced then. Large institutional monies chased headline growth. Money poured into the indices. Foreign institutional investors (FIIs) added top-up fuel to the indices exactly when fundamentals were not supporting them. Fund houses sold large-cap and diversified schemes heavily. There was a scurry to put money into equity as people scampered to get in. Predictably, that bet proved short-lived. 

By early 2016, the index-hugging funds were struggling. Performance was eluding them; the top-down approach wasn't working. 

So, were investors wrong in their strategy? I think, investors could not rightly evaluate the magnitude of the problems faced by the economy. And, near-term returns were becoming a huge challenge. We had not adequately evaluated the risks attached to a top-down trade. When rewards are the sole driver of investment decisions, risks always come back to play spoiler. 

Professional investors and the savvier high net-worth individuals (HNIs) handled the scenario much better—they got their risk call right. They avoided a top-down direction and approached the markets bottom-up. The risks were in favour of that. So, they followed a stock-specific approach and bypassed the top-down opportunities. They rode the earnings momentum that was already built up in companies that did not suffer headwinds.

Much later, when it became evident that it would take significantly longer for the-top down approach to deliver, fund houses and retail investors started aggressively focusing on the themes that had worked well for the HNIs and professional investors. This created a rush of flows, which soon turned into a flood in mid-cap and small-cap themes. The flows simply refused to ebb. This became the reward hour for HNIs and professional investors. Now they are going to town advocating their bottom-up approach's invincibility. The fund industry is also participating in this parade as it helps them gather assets. Anything that's good for asset gathering will never be stopped in its tracks. So money keeps pouring into the wrong tank.

Importantly, the top-down approach has almost fallen out of favour among retail investors. The professional investors and HNIs are now making exactly the same mistake that large institutions and funds had made earlier. They are sidestepping the risks posed by valuations. They are focussing mostly on the residual rewards that this extended trade has to offer. They see little risk in going down the quality ladder to find newer ideas. Clearly, reward is sidestepping risks now.

What we see now is an expedient approach to risk. The current investment premise is that the top-down approach will take too long to deliver, and growth is expected to remain elusive. This assessment seems to have become almost routine and habitual among both institutional and retail investors. For a moment, think what will happen if this expedient and habitual assessment is proved wrong.

The money that is overflowing in the wrong tanks will want to move quickly into the top-down investing tank. This could potentially cause a valuation breach in mid-caps and small-caps. And that could be just as painful as the hope trades from the past. A more pragmatic approach will be to bet now on a broader economic recovery. One must wait and watch. A better, structured risk-reward balance needs to be practised in our investment thinking. The choice needs to be weighed carefully between cruising overvalued mid-caps and undervalued cyclicals that are in recovery mode.

Investors must evaluate what makes more sense to them. We need to carefully recalibrate our portfolios. Risk-reward alignments must match the playing conditions. Even a master batsman who has just scored a double century takes a fresh guard before he bats on—a cricketing lesson that applies to investing as well.

SIPs are when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich

For further information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com