Fresher

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

HDFC TaxSaver
ICICI Prudential Tax Plan
DSP BlackRock Tax Saver Fund
Birla Sun Life Tax Relief '96
Reliance Tax Saver (ELSS) Fund
IDFC Tax Advantage (ELSS) Fund
SBI Magnum Tax Gain Scheme 1993
Sundaram Tax Saver

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Application form for Tax Saving Infrastructure Bond and more information

Submit filled up application Collection canter near you

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Submit the filled up form to Collection canter near you

Market linked debt schemes yield higher

Debt schemes and government - backed instruments have always been the choice of the risk-averse and investors in their retirement years who seek a stable income. Bank recurring deposits and fixed deposits that earn a fixed income are popular along with the post office savings deposit, term deposit and monthly income scheme (MIS). These are simple investment schemes that guarantee a fixed inflow and come with near zero risk.

However, things are a tad different now. While the interest rates on post office savings schemes remain fixed throughout the term of the scheme, the Public Provident Fund (PPF) needs to be understood by the investor. It is a 15-year scheme where the interest rates will not remain fixed for the entire period. The annual interest accruals in a PPF account will depend on the rate for that particular year. How are the rates arrived at?

The rate will be linked to the government security market (G-sec). The advantage is that since the rates are inter-twined with the market rates, your investment will fetch you higher returns in a high interest regime.

You will not be anchored to a past low number. However, most debt instruments take a beating in times of high inflation. Inflation-adjusted returns sometimes go into negative territory.

An investor can get the real rate of return only after factoring in inflation and the tax component that chew into earnings. With a soaring inflation over the past few months, the returns on most debt schemes after adjusting for inflation have gone negative. When rates are linked to the markets, the investor stands to benefit in times of higher rates.

On the flip side, variable interest rates remove the predictability component from these small schemes preferred by risk-averse investors. This makes financial planning more of a challenge for small investors. Senior citizens who anticipate a regular income and do not have adequate resources for strategising investments may find it tougher. Returns during the periods of low interest rates could affect cash inflows.

Going back to the PPF, with effect from December 1, 2011, the government increased the interest rate to 8.6 percent from eight percent. Further, the ceiling on annual contributions to the fund has been raised to Rs 1 lakh from Rs 70,000. Variable interest rates will make the corpus at the end of a 15-year period difficult to predict.

Lack of predictability will remove some of the sheen out of these products. Instruments like the PPF were an essential part of a retirement corpus or long-term goals such as children's marriage and education expenses. With the element of uncertainty creeping into it, financial planning needs to be done with a bit more prudence.

Yet, the PPF will still remain the old faithful for small investors.

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

HDFC TaxSaver
ICICI Prudential Tax Plan
DSP BlackRock Tax Saver Fund
Birla Sun Life Tax Relief '96
Reliance Tax Saver (ELSS) Fund
IDFC Tax Advantage (ELSS) Fund
SBI Magnum Tax Gain Scheme 1993
Sundaram Tax Saver

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

Application form for Tax Saving Infrastructure Bond and more information

Submit filled up application Collection canter near you

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Submit the filled up form to Collection canter near you

Maternity Cover

Independent insurance cover for maternity was unheard of until a few years ago. Insurance is about covering unforeseen eventualities and maternity really does not count as one, was insurers' common refrain.

At best, it was included in the group health policies bought by organisations for their employees and their families. In the last couple of years, however, some companies have started selling individual and family floater policies that reimburse maternity expenses as well.

But before you buy such an independent health policy, you need to understand their terms of coverage and other intricacies. Here's what you need to know about maternity benefits provided under group health packages as well as individual covers:

Sub-Limits

Health insurance plans that include maternity coverage come with an inbuilt sub-limit. That is, while your total health cover may amount to say . 3 lakh, maternity expenses will be eligible for a much lower sum. Typically, it ranges from . 15,000-25,000 for normal deliveries whereas caesarean ones will be covered to the extent of . 25,000-50,000.
If you opt for certain high-value policies with a sum assured of over . 10 lakh, the maternity part could even touch . 1 lakh. Under group covers, the pregnancy-specific sum insured could be slightly higher. "Fifty-three per cent of the (surveyed) employers in 2011 have the same sublimit for normal and caesarean delivers.

In 2011, the average sub-limit for normal deliveries has been in the . 35,000–40,000 range and that of caesarean delivery is higher, in the . 45,000–50,000 range," states a Vantage Insurance Brokers survey, while pointing out that employers are increasingly looking at different sub-limits for normal and caesarean deliveries. Some employers, though, continue to have similar sub-limits for both procedures. Pre- and postnatal expenses are also covered under group as well as individual plans, though the sub-limits, if imposed, may vary.
If individual policies fix a sub-limit of up to . 2,500, it can go up to . 5,000 in case of group covers. New-borns are covered to the extent of . 3,500, depending on the policies. Some companies have eliminated the sub-limits for pre- and post-natal as well as new born baby covers; they are included under the sum insured earmarked for maternity expenses are a whole.

Exclusions

As mentioned earlier, some policies — group as well as individual — do include pre- and post-natal expenses in the scope of coverage. But in case of several others, this features as a key exclusion. Pre- and post-natal expenses would mean costs pertaining to ultrasound, regular checkups, doctor's consultation fee, medicines and so on. These are similar to pre- and post-hospitalisation
expenses that are admissible under a standard health insurance policy. Likewise, not all policies cover expenses related to new-born babies. You should take into account all these nuances at the time of making a comparison before buying an independent health plan.

Waiting Period

This, perhaps, is the biggest hurdle for someone looking to buy an individual cover with maternity benefits in mind. The waiting period — when the expenses are not payable by the insurer — can stretch to six years. Even the lower limit for the waiting period is nearly three years. "In case of group health covers, the waiting period could be up to nine months," informs Sanjay Datta, head – underwriting & claims, ICICI Lombard General Insurance.

MERIT OF INDIVIDUAL POLICIES

So, if an individual is covered under group health packages, which do not impose such stringent restrictions, s/he may not find value in individual maternity covers. The argument could be that since the premium amount paid over three or six years is equivalent to the maternity coverage, they would be better off investing the money elsewhere.

However, they need to remember that apart from maternity coverage, the policy entitles them to general health cover too. This would not be the case if they simply save the money instead. If planned well, such covers may turn out to be useful. The key factor, of course, will be your employers' package. If it encompasses maternity benefits, you may not need to buy an individual policy, assuming that you do not face the threat of a job loss. Besides, the claim settlement procedure is usually simpler and more efficient when it comes to group covers.

Employed professionals may not require such plans as they are already covered. Such policies may be more relevant from the point of view of self-employed professionals and businesspersons, who do not have the security of a group cover. Also, remember, such covers are not meant for all age groups, as they do not suit everyone's requirements.

For instance, a senior citizen will not need such policies. These covers are targeted at those who are likely to plan a family in the future.

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

HDFC TaxSaver
ICICI Prudential Tax Plan
DSP BlackRock Tax Saver Fund
Birla Sun Life Tax Relief '96
Reliance Tax Saver (ELSS) Fund
IDFC Tax Advantage (ELSS) Fund
SBI Magnum Tax Gain Scheme 1993
Sundaram Tax Saver

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

Application form for Tax Saving Infrastructure Bond and more information

Submit filled up application Collection canter near you

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Submit the filled up form to Collection canter near you

Define your financial goals before Investing

HAVE you seen children playing this game called donkey's tail? On a board or chart paper, a donkey is drawn without a tail.

Each child is blindfolded and then given one chance to mark the tail of the donkey.
The child who draws the tail closest to the donkey wins the prize.

Well, going on an investment path without any goals is like playing donkey's tail.
You don't know where you are heading. If the place you actually reach is where you want to be, consider you self lucky! Should I buy the new iPAD2? Should I start this SIP (systematic investment plan) my friend was talking about? Can I afford to go for a weekend getaway now? Should I make a prepayment on my home loan or invest in the equities instead since the markets are bearish? Is my insurance adequate? These are all questions in your mind to which clear answers can only come if you have goals.

You need to look at your life and take stock. What are my goals short-term, medium-term and long-term? Depending on the type of person you are and the stage of life you are at present in, you will have a set of goals, different from what you may have a few years later and in all likelihood different from your friend's. Typically, gadgets and holidays when you are single, a four-wheeler when newly married, schools and a house when you have kids, their college and your retirement as you reach your 50s. Whatever the case, you need to identify your goals, qualify them in financial terms and prioritise them.

This will give you a clear picture of where you are heading. Is the income you are earning enough? Do you need to earn more, do something different, or change your investment pattern? Do you need to change your goals as they may be unrealistic given the present set of circumstances, or can you afford to continue as you are?

Take for example, your wish for an iPAD2. Now, if you have defined a goal for saving Rs 1,00,000 this year, so that, you and your family can go for a holiday to Sri Lanka in the summer and you have managed Rs 75,000 so far. Then you can make an informed choice. Evaluate what is more important and then decide, rather than being blindly led by wants.

Pursuing this example further; you can define a goal of an iPAD2 and then see how you can put aside some money each month towards this goal, perhaps by skipping eating out and movies for some time.

This way you can end up with showing off the pictures of your vacation in Sri Lanka on your iPAD2.

Defining goals, whether financial or otherwise, gives your life a direction, a target for your finances and control to you. The sense of accomplishment you get when your goals are accomplished one after the other is akin to none.

Even when unfortunate things happen, for instance an accident, and suddenly life is out of control, then `all iz still well', since you know exactly what are the things that will get affected by this turn of events and how to manage them, rather than being completely lost without idea of how this accident will set you back.

Goals are the compass to your life and something you should take very seriously, and involve your family/spouse in this process of setting them down. It is also important to update and review your goals periodically and regularly.

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

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

HDFC TaxSaver
ICICI Prudential Tax Plan
DSP BlackRock Tax Saver Fund
Birla Sun Life Tax Relief '96
Reliance Tax Saver (ELSS) Fund
IDFC Tax Advantage (ELSS) Fund
SBI Magnum Tax Gain Scheme 1993
Sundaram Tax Saver

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

Application form for Tax Saving Infrastructure Bond and more information

Submit filled up application Collection canter near you

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Submit the filled up form to Collection canter near you

Edelweiss ELSS Benchmark change

Edelweiss Mutual Fund has announced a change in the stated benchmark of Edelweiss Equity Linked Savings scheme ( ELSS ), with effect from March 1, 2012.

The revised benchmark will be S&P CNX 500 index instead of S&P CNX Nifty.

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

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

HDFC TaxSaver
ICICI Prudential Tax Plan
DSP BlackRock Tax Saver Fund
Birla Sun Life Tax Relief '96
Reliance Tax Saver (ELSS) Fund
IDFC Tax Advantage (ELSS) Fund
SBI Magnum Tax Gain Scheme 1993
Sundaram Tax Saver

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

Application form for Tax Saving Infrastructure Bond and more information

Submit filled up application Collection canter near you

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Submit the filled up form to Collection canter near you

Friday, March 2, 2012

Tax Saving MFs – Section 80C

Investors are shunning equity-linked savings schemes (ELSS), or tax-saving mutual fund schemes, this tax planning season, say investment advisors. According to them, investors have invested a measly . 200 crore in the first four months of the tax saving season, which starts from October to March. A lackluster stock market, attractive returns from alternative investments in debt and the 'confusion' about the status of ELSS after the implementation of Direct Taxes Code (DTC) have contributed to investor apathy towards these schemes, which served as the introduction to stock market for many retail investors. Though investors' decision may look solid from the short-term perspective, they may be letting go of a chance to create wealth in the long-term by eschewing tax planning MFs, say investment experts.

Those who have been investing in these schemes regularly through SIPs (systematic investment plans), as part of their financial plans, have been continuing with their investment. But those who invest lump sum in these schemes at the last minute as part of their tax planning strategy are not enthusiastic about them anymore. However, more than the subdued market and better debt options, it is the confusion about the DTC which is really bothering the investors. According to experts, investors are in a quandary as they don't know for sure whether DTC would be implemented next year or whether ELSS would find a place in the final list of investments that qualify for tax deduction under Section 80C of the Income Tax Act. As per the original proposal, ELSS won't qualify for tax deduction after the introduction of DTC. However, there are unconfirmed reports that the MF industry is lobbying for the continuation of the benefit to ELSS.

It is a huge problem. Since most people are not sure whether ELSS would continue to exist next year, they are hesitant to make fresh investments in them. Also, since the stock market hasn't given any meaningful returns in the short term, it is difficult to convince them otherwise," says a mutual fund advisor. According to investment consultants, the rebound in the stock market in the recent past hasn't boosted investor sentiment. The smiles are back on many faces in the market, but the market has improved very fast. There is still some confusion about the future course of the market. Though investors have nothing per se against ELSS, they don't have the confidence to invest in stocks. Also, you can get assured returns of 8%-plus in alternative investments available under Section 80C. Investors, especially conservative ones looking for assured returns plus safety of capital, can invest in public provident fund (PPF) or five-year bank fixed deposits to claim tax benefit under the same section that also covers ELSS.

Sadly this is the best introduction possible to the stock market for retail investors, especially the first-timers. The tax benefit plus the three-year lock-in period act as a perfect way to weather the volatility in stock market. Unlike other funds, you won't be tempted to book profit after a short period and get out of the market if it goes down. In that sense, it prepares investors for a long-term in the market.

Unfortunately retail investors in India don't realise that when the market is down it is the right to invest in stocks. Sadly, investors end up doing exactly the opposite. When the market is very high, people start investing more and more in equities and they run away when the market starts going down. That is why they end up losing money in the market. I would still recommend ELSS to investors who are ready to take the risk and time to wait for the returns. The returns generated by these schemes in the long term underscore the point (See table). For example, the best performer returned around 13% in the last five years. As you would agree, that is something your debt investments can't offer you in the long term.

To begin with, ask yourself whether you can stomach the uncertainty and volatility in the stock market. Two, can you handle a depressed stock market even after the mandatory lock-in period? According to investment experts, this is crucial because investors should get into the stock market only if they have time in hand. "If you are used to the stock market, go ahead and invest. However, if you are a first-timer, be sure whether you can handle the volatility. As for first timers, I will ask them to invest the money in two or three tranches in the next one month when the market is a bit down. It may prove beneficial as the market has already gained much this year

A Case for ELSS Investment

Don't shun your ELSS just because of depressed stock market or better returns in PPF and five-year FDs

If you have earmarked money for the stock market, you can still go ahead with your investments

Don't let the confusion on implementation of DTC and the status of ELSS in the new regime bother you

Always remember that equity is risky and you should have at least five to seven years time frame

If you are investing for the first time in equities, be cautious as the market is going though a rough period

Equities can still earn you superior returns in the long-term; the best ELSS has returned over 13% in the last five years

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

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

HDFC TaxSaver
ICICI Prudential Tax Plan
DSP BlackRock Tax Saver Fund
Birla Sun Life Tax Relief '96
Reliance Tax Saver (ELSS) Fund
IDFC Tax Advantage (ELSS) Fund
SBI Magnum Tax Gain Scheme 1993
Sundaram Tax Saver

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

Application form for Tax Saving Infrastructure Bond and more information

Submit filled up application Collection canter near you

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Submit the filled up form to Collection canter near you

IDFC Premier Equity Fund - Re-opens for New Subscription

IDFC Mutual Fund has announced the re-opening of IDFC Premier Equity Fund for new subscriptions, with effect from March 1, 2012. Units will be available at the applicable NAV.

Last time, it was opened on March 31, 2011

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

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

HDFC TaxSaver
ICICI Prudential Tax Plan
DSP BlackRock Tax Saver Fund
Birla Sun Life Tax Relief '96
Reliance Tax Saver (ELSS) Fund
IDFC Tax Advantage (ELSS) Fund
SBI Magnum Tax Gain Scheme 1993
Sundaram Tax Saver

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

Application form for Tax Saving Infrastructure Bond and more information

Submit filled up application Collection canter near you

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below