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Wednesday, December 7, 2016

Understanding Equity Mutual Funds

 

Equity Mutual Funds Online

You give money to a fund, which it invests in stocks. The gains or losses, whatever they may be, accrue to you. Equity funds are that simple

 

Expenses: Clearly, a mutual fund is a business and not a charity. It must be taking some money from you in order to meet its expenses as well as to make some profits and indeed it does. Equity funds are allowed, by law, to charge up to 2.25 per cent per annum of the money it manages as it's expenses. Since the amount of money it manages goes up and down every day, the fund deducts a small amount from your money every day such that, on an average, the annual deduction comes to the above percentage. There are some complexities to this percentage--smaller funds are allowed sightly more. Also, in order to encourage financial inclusion, funds are allowed to charge a slightly higher amount if they get more investments from smaller towns and rural areas.

 

Mutuality: The word 'mutual' in the name means exactly what it implies. A mutual fund is composed of the money that a large number of people have invested in it. The way law, rules and regulations are formulated, all investors are exactly equal financially. and are treated the same way.

 

NAV and Units: In terms of relevance to an investor, the NAV (Net Asset Value) of a fund and the number of units that he owns are two of the least useful, most misunderstood and most over-valued numbers. A mutual fund is made up of all the money that its various investors have invested, combined. Here's an example: A fund is launched and a 1000 investors each invest R10,000 in it. In all, the fund has R1 crore of assets under its management. Just for convenience, a fund is divided into 'units' of a certain value, which is set to a round number initially. Typically, this is R10. In the above fund, each investor is said to own a 1000 units and in all, the fund has issued 100,000 units.

 

Now we come to NAV. NAV stands for Net Asset Value. It basically means the current value (on any given day) of each unit of the funds. In the current example, the fund manager invests the R1 crore of assets in various stocks. In the beginning, the NAV is R10 and each unit is worth R10.

 

Let's say that after an year, the investments have done well and theR1 crore grows to R1.1 crore. Now, the NAV of each unit is R11 (1.1 crore divided by 100,000). Each investor owns 1000 units so the value of his investments has grown to R11,000. It is important to understand that the only relevant thing here is that the total assets have grown by 10 per cent and therefore the investors have had a gain of 10 per cent. If the fund had initially had a face value of R100, then the NAV would have grown to R110 or if the face value had been R1 then the NAV would have grown to R1.10. From the investors' point of view, only the percentage change in the NAV is important, not the actual number.

 

Whenever an investor has to invest or redeem his money, he either buys fresh units or sells them at the NAV at the point. Under some circumstances, there might be a small extra charge at the time of redeeming. Also, some funds allow entry and exit at any time while others allow entry only when the fund is launched and exit only after a pre-determined period when the fund is terminated.

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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

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How to undo a Lapsed Insurance Policy

 

For insurance policies to be in force, it is vital to make the regular premium payments well before the due date of the policy. Non-payment of regular premiums could result in a lapsed policy that would yield no stipulated policy benefit. So in case death was to occur at such times, your family or loved ones would not receive any compensation/death benefit. Thus it is very important to ensure your policy stays in force and your family receives the financial protection the policy entitles them to.


When Does an Insurance Policy Lapse

The single most important reason when a policy could lapse is non -payment of premiums before the due date. In most cases, insurance companies do send policy holders a reminder well in advance so that premiums could be paid at least before the end of the grace period.


Unit Linked Insurance Plans that have acquired a paid up value however do not lapse even if the regular premiums have not been paid. ULIPs which have completed 3 policy years acquire a paid up value and continues to stay in force as long as the fund value is sufficient to meet the policy expenses.


Your Policy's Grace Period

All insurance policies offer a specific time period to make premium payments- known as the grace period. A grace period is the additional period of time given after the premium due date, to pay up premiums. Your policy continues to stay in force during the grace period and all benefits would be extended. So even though you may have missed your due date, if you are well within your grace period the policy does not lapse. If death were to occur during the grace period, the sum assured would be payable to your family. Insurance grace periods vary from 15 days to two months depending on insurer to insurer and policy to policy. Post this grace period, all benefits would cease to exist.


Steps to Revive a Lapsed Policy


A lapsed policy could be revived in up to 5 years from your last unpaid premium's due date, and before the policy matures. Here's what is to be done. The penalty and procedure depends on the time since the policy has lapsed.



  • You would have to contact your insurer to complete the policy revival documentation.
  • All overdue premiums from the time of last paid premium are to be paid.
  • Additional penalties (along with accumulated interest) to the tune of 12 to 18% would be levied. Do remember the sooner the policy is revived, the lesser are the penal interest charges.
  • Medical tests may be called for if the policy is revived post 6 months from the last premium paid date.

 

Preventing a Policy Lapse

A policy lapse not only leaves you and your family without a life cover protection, but a revival also brings with it additional costs. It is wise to avoid such lapses and ensure the policy stays in force to meet unforeseen emergencies. Here is what you could do to ensure your policy does not lapse and you aren't left high and dry.


  • Opt for bank mandates: If you are in a job that involves travelling or, are simply unable to keep track of premium due dates, opt for ECS payments. You could mandate your bank to make payments on your behalf by automatically debiting the amount from your account. You could alternatively opt for credit card auto-pay where the premiums would be charged to your credit card.


  • Reminders through mailers: Almost all insurance companies these days provide the option of sending payment reminders through emails, SMS or regular post. You could opt for these reminders. Do ensure your contact information is update with the company.


  • Financial crunch: If you are facing a temporary financial crunch, try evaluating your insurance need again. You could opt to review your sum assured. It is better to have some insurance than not be insured at all.


  • Making use of the grace period. Be aware of what the grace period of your life insurance policy is. If you have missed making your premium payment due to any personal commitment, do try making the payment before the grace period is over.





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Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds

Top 4 Tax Saver Mutual Funds for 2017

Best 4 ELSS Mutual Funds to invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Invesco India Tax Plan

3. Tata India Tax Savings Fund

4. BNP Paribas Long Term Equity Fund



Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms


For further information contact Prajna Capital on 94 8300 8300

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

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Tax Saving mistakes to avoid in 2017

 

It goes without saying that saving money is as important as earning money. One way to save money is by taking advantage of tax-saving deductions to minimize your tax outgo as much as you can. But that's easier said than done. Saving taxes is tough and we tend to make it tougher by committing common mistakes.

Here are five common tax-saving mistakes that we can easily avoid.


Rushing to save taxes in the last quarter

Typically, most taxpayers think of their tax-saving investments only in the last quarter of the financial year. This is a folly because rushed investment decisions can lead to investments in the wrong products. Tax-saving investments made at the last moment won't allow you to benefit from them entirely.


What to do: Start investing in tax-saving avenues at the beginning of a financial year. Plan your investments out in different options like ELSS funds, PPF, fixed deposits, etc to get the long-term wealth creation benefits of a diversified portfolio. The more time and thought you give to your tax-saving investments, the more you will be able to benefit from them.


Not fulfilling the 80C limit

An individual or HUF can save taxes up to Rs 1.5 lakh under Section 80C of the Income Tax Act. Unfortunately, not everyone is able to meet this limit. Often, taxpayers end up paying more taxes than they need to because they're unable to take advantage of the Section 80 deductions.


What to do: Even though you may not need to invest the entire Rs 1.5 lakh to save taxes, you should make sure you invest as much as you can. Plan your tax-saving investments in such a way that you're able to take the benefit of the deductions made available.


Ignoring basic expenses that are exempt

A lot of tax payers are not aware that they can avail tax deductions on a number of expenses like children's tuition fees, life insurance premium, medical insurance, etc.They make these expenses but don't claim deductions on them and end up paying more taxes than they should.

What to do: Learn about all the expenses that are eligible for tax deductions under Section 80. This is money that you have already spent, it is almost a crime on yourself to pay that amount of taxes as well. Get a CA to help you out if need be, but make sure you claim the deductions you can.


Not investing in ELSS

The equity-related risks that ELSS funds come with often turn investors away from them. Taxpayers are not prepared to take market-related risks and opt to invest in fixed income investments like PPF and FDs. But this is a mistake because only equity can generate inflation-beating returns.


What to do: Allocate a part of your tax-saving portfolio to ELSS funds. You may not want to have higher exposure to ELSS funds, but a certain portion in it is essential to make sure your tax-saving portfolio earns high returns over the long-term.


Not setting investment goals

More often than not, tax saving investments are something that you do and forget about. In many cases, they are done at the last minute when the financial year is drawing to a close and then not given a thought for another year. This doesn't allow you to get the benefit of wealth creation out of them.


What to do: Plan your tax-saving portfolio and align them with your long-term goals like a child's education or wedding or your own retirement. Doing this will allow you to get the dual benefit of these investments–saving taxes and meeting long-term objectives.


These are the five common tax-saving mistakes that are repeated too often by taxpayers. Make sure you avoid them this year to give yourself the best possible chance of making optimum use of the income tax deductions available to you.







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Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds

Top 4 Tax Saver Mutual Funds for 2017

Best 4 ELSS Mutual Funds to invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Invesco India Tax Plan

3. Tata India Tax Savings Fund

4. BNP Paribas Long Term Equity Fund



Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms


For further information contact Prajna Capital on 94 8300 8300

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

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OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Call us on 94 8300 8300

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Tata Regular Savings Equity Fund Dividend

 


Invest Tata Regular Savings Equity Fund Online

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Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds

Top 4 Tax Saver Mutual Funds for 2017

Best 4 ELSS Mutual Funds to invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Invesco India Tax Plan

3. Tata India Tax Savings Fund

4. BNP Paribas Long Term Equity Fund



Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms


For further information contact Prajna Capital on 94 8300 8300

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

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Call us on 94 8300 8300

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Tuesday, December 6, 2016

HDFC Taxsaver Fund Online

Invest HDFC Taxsaver Fund Online


HDFC TaxSaver logo


 The scheme seeks capital appreciation with at least 80 per cent exposure to equities, FCDs, preference shares and bonds of companies.
 

Once a hot favourite in the tax planning category, HDFC Tax Saver has delivered a patchy show in the last four years, starting from 2012. While it has managed to stay ahead of benchmarks, sluggish returns vis-à-vis its peers have seen its ratings slip from 4 stars in early 2013 to 1 star now. While the fund's 7 and 10 year return are quite healthy, both 5 and 3 year returns are below the category averages by 3-4 percentage points. The asset size has dipped from over R5,200 crore in February 2015 to R4,424 crore by January 2016. Like other HDFC funds, this fund follows a blend of value and growth investing. But its tilt towards low PE stocks in an expensive market has become more pronounced in the last couple of years. A heavily mid-cap tilted fund until 2012, it has taken to an overweight position in large-cap stocks in the last couple of years. This tilt is likely to have reduced portfolio risks, but may have reduced the fund's overall returns too, in a period where mid-cap stocks sharply outperformed large-caps.

Though the fund did participate in the bull run of 2014, its sharply lower returns in the last one year have dragged the overall performance. Like other HDFC funds, the slowdown appears to be attributable to the fund's heavy bets on pro-cyclical sectors of the economy, which haven't paid off amid a delayed recovery. As of February 2016, the fund had overweight positions in financials, engineering, construction and was under-weight in FMCG, healthcare and automobiles. While this contrary take on the economy has cost the fund in terms of returns, it has contributed to reasonable portfolio PE of 15, a sizeable discount to the market.

The fund's big bet on the economy can pay off strongly if the much delayed economic recovery gathers steam. But its recent returns have been the casualty of the fund sticking to its guns on this bet.

-----------------------------------------------
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 Saving 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

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

Insurance Bill - 5 benefits

 

The government recently passed an ordinance to increase the foreign direct investment limit in the insurance sector to 49% from 26%. It also announced some more changes to insurance laws. These had been long pending. It is expected to bring major reforms in the insurance industry. Not only does it help increase foreign participation in the sector, it could also bring more credibility to the sector. Involvement of foreign partners could also bring about technological advancements. This could help address incompetency in the sector. There are a lot of other benefits too that you can avail as an insurance policy holder from this Insurance Act. Benefits include simpler and more reliable products, easy claim settlement, flexibility of premium payment and lesser dependency on agents.

Here are five benefits of the new Insurance rules:

1. More agency channels and easy claim processing: The aim is to make your claim-processing simpler and hassle free. As of now, you can only get insurance policies and handle insurance-related claims through established agents. With this amendment, there will be multiple government-established channels through which you can handle your insurance claims. This also increases the number of medium of sales. Also, online insurance processing is not a preferred option, especially in the rural areas. The new rules propose to make use of technology to make sure that online insurance processing becomes easier and available to its vast audience.  


2. Agent dependency and remuneration capped: This change in the Insurance Bill makes sure that you are not fooled by your insurance agents, who try to sell wrong products to you. Suppose there are two policies in the market, policy A and B. Insurance companies can provide extra commission to the agent for selling product B when compared to product A. In this case, the agent would like to sell product B to you because of the extra commission that he can avail, even if the product does not suit your needs. Now, with the new rules, such mis-selling of products can be stopped as such the agent's remunerations are limited. Also, you will be able to get all the details related to the products in the market easily, since online marketing will be made available. This will help you to make wiser decisions.


3. Claim rejection: The old rules stated that insurance companies have a period of two years after a policy is bought to reject fraudulent claims or on the basis of mis-statement. After this two year period, the company could still reject your claim if it found that you hid some important information. The new rules extend this period to three years. Moreover, after this three year period, the company cannot reject any claims for any reason. This rule puts the onus on the insurance company to conduct all the background check at the time you buy the policy, and not when you claim for some amount. So, at the time of the claim, the insurance company cannot back out saying you held some information back or mis-statement or some other reason, especially if you claim after three years of buying the policy.


4. Financial penalties: Since the world is moving towards financial penalties, so is the amendment in this Insurance Act. The new rule holds the insurer responsible for committing fraud. So, the person committing the fraud could be liable for a penalty as huge as Rs 1 crore. This is expected to help reduce insurance fraud by customers.


5. Policy transfer: The new Insurance Bill gives you the right to partly or fully transfer your policy to a third party. You can now transfer your policy by fully explaining and obliging the terms and conditions of the transfer that are clearly. This amendment is in line with the global practice. The person to whom you transfer the policy will have all right over the policy and can obtain a loan under the policy or surrender it.







------------------------------------------
Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds

Top 4 Tax Saver Mutual Funds for 2017

Best 4 ELSS Mutual Funds to invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Invesco India Tax Plan

3. Tata India Tax Savings Fund

4. BNP Paribas Long Term Equity Fund



Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms


For further information contact Prajna Capital on 94 8300 8300

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

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Call us on 94 8300 8300

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

 

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