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...

Save Tax With Mutual Funds

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300       Mutual funds are ideal as long term investment avenues for retail investors. To encourage investments in this avenue, the Government of India offers investors a spate of tax benefits thus ensuring maximum benefit from mutual funds held beyond a year. Sample some of the key benefits and refer to the table for a detailed list of tax rates for different types of schemes ·        Avail deductions under Sec 80C of the Income Tax Act by investing up to a maximum of Rs. 1 lakh in designated Equity Linked Savings Schemes (ELSS). Such investments have a compulsory lock in period of 3 years. ·        First time retail investors in equity with a gross total income of up to Rs. 12 lakh can invest up to Rs. 50,000 in specific MF schemes un...

How to manage Volatility in Debt Mutual Funds

Best Debt Funds Online   The debt mutual fund space is creating a lot of confusion among investors, especially the new ones. After a series of cuts in bank deposit rates and small savings, many new investors have started investing in debt mutual fund schemes. However, the complexity of the space is challenging most investors. Top mutual fund managers believe that these investors would fare well if they stick to an asset allocation plan in debt. The best strategy to avoid volatility in the debt space at this point is having an asset allocation Many investors are familiar with the concept of asset allocation. However, most of them do not associate it with debt investments. So, is there a formula? There should be three baskets in which you put your debt investments : short/ultra-short term funds, credit opportunities funds and bond funds . But, at this time, when the interest rates are not headed anywhere, it is good to stay away from long-term bond funds ...

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...

Mirae Asset Ultra Short Term Bond Fund and Mirae Asset Tax Saver Fund

Mirae Asset Mutual Fund   has renamed   Mirae Asset Ultra Short Term Bond Fund , an open ended debt scheme, to   Mirae Asset Tax Saver Fund   with effect from October 18, 2016. Also, Mr. Sumit Agrawal, the co-fund manager of Mirae Asset India Opportunities Fund (MAIOF) and Mirae Asset Great Consumer Fund (MAGCF) ceases to be the fund manager with effect from October 1, 2016. Consequently, MAIOF shall now be solely managed by Mr . Neelesh Surana while MAGCF shall continue to be co-managed by Mr. Neelesh Surana and Ms. Bharti Sawant. ------------------------------ ----------------- 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. Religare Tax Plan 4. DSP BlackRock Tax Saver Fund 5. Franklin India TaxShield 6. ICICI Prudential Long Term Equity Fund 7. ID...
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