Skip to main content

Take advantage of infra bonds before time runs out

 

THE last few months of a financial year always requires some financial action. This usually means that individuals need to ensure that they have completed their tax saving investments.

This time one should give special attention to the area of infrastructure bonds, as this is a new investment option that has been introduced this year.

Given here are a few reasons why the area of infrastructure bonds needs special attention.
Additional benefits: One of the reasons why an investor needs to look at the benefit of infrastructure bonds is that this is an additional benefit that has been introduced from this financial year.

Under the new rules, an extra deduction of Rs 20,000 from the taxable income can be availed for investments into infrastructure bonds, and hence, this area should be focused upon by investors.

There is time till the end of March for the limit to be completed, but this can be done only when there is an issue for such infrastructure bonds present in the market.

With the last three months left individuals should not leave it till the last moment, but should ensure that they complete the requirement when the opportunity is present.
Higher rate: The recent spike in the interest rates in the economy has meant good tidings for individuals because this will also result in a small hike in the rates that are being witnessed for the infrastructure bonds.

This is a good thing because these bonds have a lock-in for a period of five years and even a small rate rise will translate to a higher amount that will be earned over the entire du ration of the loan. While this represents a higher income for individuals, the income from this route is taxed. So there will be a consequent impact that will be witnessed on the tax aspect from the higher income generated.
Debt option: The other factor that has to be taken into consideration is that this is a debt option that is available for the investor.

The presence of a debt option means a lower risk and it is also a sign that there will be a higher confidence of the investor in such bonds as their operation are also easier to understand.

While looking at this aspect, one should understand that the term of the bonds will be of 10 years, but after a lock-in period of five years there will be a buyback option that will be given to them.

Since this is a debt option there is also no need taxable income can be availed for i for the individual to focus too much on the time of investment.
Liquidity aspect: There r investments in infrastructure has to be special emphasis on the entire liquidity as pect of the investment for the investor because this will be low on account of the lock-in.

The investor also has to choose between the various sub options in terms of the nature of the income that they want.

There can be an annual option of the income that can be taken as a payout or there can be a cumulative option and hence that will mean that they should make a choice about the option that is suitable to their liquidity position.

Further, they must also intimate the institution at the time of the subscription whether they will take the buyback option.

All this work is essential at this stage because of the fact that there are longterm consequences of the entire decision and the option cannot be changed once the bonds have been allotted.

 

Popular posts from this blog

How much to invest in gold ?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India) Let your motivation dictate the share of the yellow metal in your portfolio Enough has been said and written about gold as an investment option. The latest argument is that the craze for gold among Indian households is endangering our country's balance of payments. The policymakers are busy trying to find ways of discouraging investment in gold, but if households keep the common good in mind, they would be paying the market price for gas cylinders as they do for, say, their mobile phone bills. After all, private decisions are driven by private motives. So, how should a household look at gold from its own perspective? Gold is primarily acquired for its merit as a store of value. Even if the worst crisis hits a family, the gold that it holds could be put to use anywhere in th...

Reliance Health Total

  Reliance Life Insurance has launched Reliance Health Total, a non-linked, non-participating and non-variable health insurance plan . It provides a fixed benefit cover for hospitalisation, critical illnesses and surgeries. The customer can also make a claim for over-the-counter health-related expenses. This is a regular-pay, five-year plan that can be renewed till the age of 99. The plan comes with two options: customers can choose a higher medical reimbursement benefit or a higher sum insured. 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 - I...

Right Size your SIPs in terms of tenure and amount

Buy Gold Mutual Funds Invest Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Call 0 94 8300 8300 (India)    Systematic investment plans ( SIPs ) are here to stay. Going by the growing number of SIPs, it does look like investors have taken to them in a big way. Today as much as . 1,000 crore flow into SIPs every month. A SIP, as the name denotes, is a method to invest a fixed amount in a mutual fund at regular intervals --generally monthly or quarterly. It is easy to do and the minimum amount with most mutual funds is a mere . 1,000 per month. You can write post-dated cheques for your investment, or give an auto-debit facility from your bank account. In fact, most investors today prefer setting up an auto debit for their SIPs, since writing cheques is cumbersome. Also, you can choose any tenure that you want for your SIP — six months, one year, five years, 10 years or even opt for a perpetual SIP which will continue forever till you stop it....

SBI Small Cap Fund

SBI Small Cap Fund scheme seeks to provide investors with opportunities for long-term growth in capital along with the liquidity of an open-ended scheme by investing predominantly in a well diversified basket of equity stocks of small cap companies. SBI Small Cap Fund has widened its margin of outperformance relative to its category and benchmark in the last one year, earning itself a five-star rating. The fund shows a hefty 18 percentage-point outperformance relative to its peers in the last one year, 5 percentage points over three years and 4 percentage points over five years. Needless to say, it has also outpaced its benchmark to deliver convincing five-year annualised returns of 37 per cent. A believer in the credo that a small market cap does not reflect business quality, the fund looks for five attributes in the stocks it buys: competitive advantage, return on capital, growth, management and valuation. SBI Small Cap Fund is among the few in this space to remain at quite a man...

Good Loan

Why Is It A Good Loan?: Loans against gold are cheaper and better than personal loans as the former are available at lower interest rates. In contrast, the interest rates on personal loans are not standardised and can vary from bank to bank. Also, a personal loan depends on a host of factors including, the borrower's salary, profession and the purpose for which the loan is being taken.      For instance, the interest rate on a personal loan of 5 lakh falls in a wide range of 15-30%. But loans against gold are available for as low as 11%. Secured borrowing such as a loan against gold, investments or property is cheaper because it is backed by some assets, which command a good value at any point of time. If the borrower defaults on the loan, the banks can liquidate the assets to settle the loan account.    Being a secured loan, the risk of default and credit losses is significantly lower in this loan compared to other forms of loan for personal use. Given the lower risk, gold loa...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now