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Thursday, March 5, 2015

Common Account Number for Mutual Funds

The Mutual Fund Utility (MFU) provides a common platform for investors to transact across different mutual funds using a common account number (CAN). The investor is allotted a CAN as a single reference for all investments. The investor gets the benefit of a single view of all MF investments, single payment for multiple transactions, centralized complaint redressal and single point communication in case of changes in details.
 

Form

In order to get a CAN allotted, an investor needs to submit a duly filled CAN Registration Form at any of the nearest points of service (POS) of MF Utilities India Pvt Ltd (MFUI) or a distributor signed-up with the MFUI or a participating AMC branch. CAN forms can also be downloaded from the MFU website.

Documents

Needed with the application form: PAN proof Proof of KYC, date of birth Proof of bank account for bank mandates registered under the CAN Proof of depository account Proof of guardian relationship (in case of minor applicants)

Existing investments

The existing investments of investors are not migrated by MFU. However, upon creation of a CAN, MFU will map the existing folios of the investors across mutual funds to the CAN, based on the PAN, holding pattern and other parameters.

Modes of holding

In case of joint holdings, a separate CAN is created for different combinations of investor holdings. CAN is provided for a combination comprising different number of investors 1, 2 or 3, order of holding, mode of holding (single, joint, anyone or survivor)and tax status.

POA holder cannot request for a CAN registration on behalf of the applicants.

KYC compliance is compulsory for CAN creation.


Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds

Invest in Tax Saver Mutual Funds Online -

Invest Online

Download Application Forms

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

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Capital Gains Tax

 

FY 2014-2015 has seen a good rally in the stock market and investors have made good money in shares. This also means that there may a need to pay some capital gain tax. Depending on the time frame of your investment, you may have to pay some capital gain tax.

As the end of the financial year approaches it is important for every individual to have a clear idea of the kind of capital gains and losses that they have earned over the financial year in the stock market. This will enable them to know the tax implication that will follow as they might have to pay quite some bit of tax this year around since there has been quite a rally in the equity markets. This is the reason why the individual has to take a careful look at the entire situation and then separate all the details in an effective manner. Here is how they can go about the entire process

Shares sold

The first thing to do is to check the list of the shares that the individual has sold during the year. This is significant because this represents the starting point of the entire exercise for the individual because a capital gains or loss arises only when the shares are sold and not when they are held. The process of sale puts other things into motion and this is something that will have to be watched. It also becomes easier for the individual to ensure that they are able to record the right details in their accounting because all that they have to do is to ensure that they look at the shares sold and then the tax impact for this would have to be considered.

Time period

The key part of the entire exercise is to see the time period for which the shares that have been sold have been held by the individual. This will determine the nature of the capital gain or loss because the tax impact will differ depending upon the time period for which the investment was actually held. This is important as the holding period of less than a year will make the investment a short term capital asset for the shares while a holding period of more than this will make the asset a long term capital asset.

Short Term Gains

 

One area that will need special attention from the investor is that of the short term capital gains that have been earned by them. This is because there can be a tax element that can arise on these gains. There is a short term capital gains tax of 15 per cent that the individual has to pay when they make gains from the sale of shares and hence this can give rise to an additional tax liability. There has to be a look at all the transactions of the individual and then one has to find out whether there is some net capital gains that have been earned. This is because if there is some short term capital loss then this would have to be set off against the gains that have been earned and the net figure would be the taxable one.


Long Term Loss

There is no tax on long term capital gains on shares but with this another point also needs to be known which is that if there is a long term capital loss then there is no use of this figure. The investor would have to ignore the long term capital loss because there is no gain which is taxable against which this can be set off. One has to remember that the long term capital loss cannot be set off against short term capital gains so there will be no reduction of the liability on that front. This should form the basis of the entire calculation that they will undertake and hence one has to keep this in mind.


 
Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds

Invest in Tax Saver Mutual Funds Online -

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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Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

How to choose a Mutual Fund Scheme

 

As an investor you should look into the following important parameters while choosing to invest in a debt fund:

Average maturity of the fund:

These gives the average maturity of all the securities held in the portfolio of a debt fund. For example, if a debt paper in the portfolio has a maturity of one year, another two years and another three years, provided an equal sum is invested in each of the three papers, the average maturity is two years.

Duration:

This is the measure of the price sensitivity of the fund portfolio to a change in interest rates. Funds with a longer duration would be more sensitive to a change in interest rates. For example, if the modified duration of the fund is seven years and the interest rates are expected to go down (or up) by 1%, the net asset value (NAV) of the fund is likely to go up (or down) by 7%.

Yield:

The yield is a measure of the interest income generated by the bonds in the fund's portfolio. For example, bonds having face value of Rs 100 and coupon of 6% per annum is currently trading in market at Rs 110, then the yield that would be earned if the bond is held till maturity is 5%.

In a stable interest rate scenario, this can be considered as an approximate measure of the returns that the fund can generate. While in a falling interest rate scenario, this is not likely the true measure to know the fund returns, because it does not take in consideration the trading gains that the fund may generate.

Credit Rating:

It indicates the credit worthiness of the borrower. Rating houses like Crisil, Icra and others give rating to the securities issued by the issuers like companies and banks and are held by debt funds in their portfolios. Credit profiles of the debt fund portfolio point toward the level of credit risk that the debt fund has assumed. Higher the ratings, lower is the risk in the portfolio.

Taxation:

Long-term capital gains in debt mutual fund schemes will be derived only if the investments are held for more than 36 months. The long-term capital gains tax is 20% with indexation benefit. Short-term capital gains from debt funds are at tax slab rates of the individual investor.

Debt fund plays an important role in the portfolio at different age groups. At young age, one has to invest into equity but also needs to have debt exposure which gives a cushion from the equity volatility and liquidity requirements.

As you approach towards your goals, use Systematic Transfer Plan (STP) from equity funds to debt funds. This will help to reduce the instability in the corpus you need to source your family goals.

 
 
Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds

Invest in Tax Saver Mutual Funds Online -

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

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

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Health Insurance for New Born Babies

 

There is a trend among new parents to bank cord blood stem cells to protect the child and family from future diseases. However, many forget to get the new born under a health insurance plan to cover medical expenses of the child. Though health insurance providers may not issue an individual policy to a new born, it is a good idea to add the child to an existing group health cover of the parents or the family floater policy.

Age

Most health insurers allow addition of a child to the parent's insurance cover once the child has completed 90 days. A few insurers also offer the facility of health cover from day one of birth under maternity benefit offered under group health policies. Such policies may cover initial vaccination or post-natal care.

Conditions

In case of cover from day 1, the insurance provider must be informed within a week of birth. The provider may prescribe the maximum cover applicable for children under the policy. If the provider offers cover after the baby is over 90 days, the addition can be made at the time of the annual policy renewal.

Documents

At the time of annual policy renewal, an application to add the child along with a copy of the child's birth certificate, maternity discharge card and copies of documents related to medical history, if any, are required to be submitted to the insurance provider.

Premium

Once the documents are submitted, the health insurance provider will recalculate the premium after adding the child's cover and convey the revised premium amount. On payment of the revised premium, the policy will be issued covering the child as well.

Family floater policies usually cover children till they are 21 years old.

Insurance firms may allow individual cover for a child over 5 years.

A photo may have to be submitted to the TPA for issue of cashless card.


Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds

Invest in Tax Saver Mutual Funds Online -

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

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

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

What is Disinvestment?





1 Disinvestment is when the government sells the equity shares it holds in public sector units (PSUs) to individuals or institutions.

2 Disinvestment transfers the ownership of shares from government to another entity, at market prices and creates gains for the government depending on the price.

3 It is done when the PSU is not profitable or the government does not want to continue in any business since the private sector has penetrated that business.

4 When funds raised from disinvestment are used to meet routine revenue expenditure, it is undesirable as an asset is sold without creating another asset.

5 Disinvestment has become a significant source of revenue for the government, `40,000 crore is the estimated amount to be raised in financial year 2014-15.


 
Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds

Invest in Tax Saver Mutual Funds Online -

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

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

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Wednesday, March 4, 2015

Sukanya Samriddhi not a good option for Tax Saving

It is just an addition to Section 80C. Go for it only if you are looking for stable returns

The Budget 2015- 16 has brought some good news for families with girl children, for, returns from the Sukanya Samriddhi scheme will be fully exempt from income tax. This makes it the only other instrument under Section 80C, other than Public Provident Fund ( PPF) to be exempt, exempt, exempt (EEE). This means any money deposited in this scheme will be exempt from tax at the time of investment, accrual of interest and payout of returns.
 

Another point to consider is that for the year 2014- 15 the interest has been fixed at 9.1 per cent, which is higher than the 8.7 offered by PPF. In comparison, most commercial banks offer between eight and nine per cent for one- year deposits and the interest and returns of bank fixed deposits are taxable.

In case of PPF, partial withdrawal is allowed from seventh onwards or you can take a loan against it. In case of Sukanya Samridhi, partial withdrawal is allowed only at the end of the preceding financial year of the child attaining 18 years. So, should you rush to the nearby post office to open a Sukanya Samriddhi Scheme for your daughter? Not yet

The scheme does not make sense form tax saving point of view or for using the limit under Section 80C. It is useful only for those who want an extremely safe instrument to save for their daughters.

For those in the 30 per cent tax bracket, instruments like Employees Provident Fund ( in the case of salaried employees), PPF, life insurance premiums or home loan principal repayment will suffice to meet the 1.5 lakh limit under Section 80C. So, other deductions, which are mandatory will take precedence over this optional investment.

In addition to the instruments mentioned above, Section 80C also includes investment in National Savings Certificates, Equity Linked Savings Schemes and pension funds offered by mutual funds, five year bank FDs and expenses incurred on children's tuition fees.

One expectation from the Budget was that the list of exemptions under Section 80C might be trimmed and some instruments might be allowed under another head. But that did not happen and it continues to be cluttered with so many options.

Sukanya Samridhi has become a category similar to PPF. It allows tax deduction and tax free returns.

But while superior to PPF in terms of returns, it is inferior to PPF in flexibility. So, one should look at it only if there is a need for it.

To get post- tax returns of 9.1 per cent from a bank FD, for instance, the pre- tax returns would have to be 13 per cent. So, if you are looking for stable returns, it is a good option. Otherwise you can look at PPF for retirement corpus and long- term equity products for children's education.

Another factor to remember is that since interest rates are likely to go down, returns from instruments like PPF and Sukanya Samriddhi will also go down. So, parents who want to save for their children can look at other options even in debt, such as income funds.

Many a times investors end up investing too much in conservative instruments like PPF and such deposit schemes. That is why it is important to keep a balance between such instruments and trading instruments like income funds. Otherwise, in the long run, the returns could be much lower


 
Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds

Invest in Tax Saver Mutual Funds Online -

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

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

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now
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