Skip to main content

Grow your wealth with Stocks

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

 

 





Joining the workforce opens a whole new world for an individual. A new place, people, culture, setup, income, ever-increasing expenses, etc -all become part of the change. Usually in the initial years, there are more expenses than income as one starts fulfilling his/her aspirations. If you are living with your parents and have very few dependencies, then there are more savings to start with. But for most people, savings start accruing only after two-three years into the job.

 

Usually in the first year of work life, it is also the first time for filing income tax returns. In such cases, understanding the tax structure and tax deductions becomes essential. More often than not, during the last quarter of the financial year (Jan-Mar) your office would require details of all investments and expenses for calculating taxes for an individual. There would be a mad rush to make last minute investments to avail of the maximum tax benefits (typically advised/guided by friends, colleagues or seniors).

 

Rather than making investments at the last hour, it would be beneficial to start early and invest through SIPs in case of mutual funds or plan investments well in advance. Know your I-T deductions The deductions covered under section 10 of the Income Tax Act include HRA, LTA, medical, transport and leave encashment deductions. All of the deductions under this section would be based on actual expenses incurred. The deductions under section 80C (Rs 1 lakh) give ample options for investment under different instruments like life insurance, PPF, NSC, ULIP, ELSS, tax-saving FDs, infrastructure bonds, etc.

 

What is important before choosing any or some of the options is to evaluate the net returns (post fees and taxes), investment limits of each instrument and know the lock-in periods for each of the available options. For example, ELSS investments have a lock-in period of three years while PPF 15 years, although some withdrawals are allowed after the sixth year. Also, in case of recurring payments like life insurance premiums, recurring FDs, etc, one should be sure of being able to make those payments every year depending on the tenor of the instrument.


Other options such as NSC, infrastructure bonds, post office deposits, etc, are safer investment options with varied or no lock-in periods.

 

There are several other deductions under section 80CCC (Pension scheme), 80CCG (RGESS), 80D (mediclaim insurance premium), 80E (education loan interest repayment), 80DD, 80EE (interest on housing loan) and 80U that one can avail of depending on each individual and the actual expenses incurred.


Have an allocation plan Of all the options available, you should start with a certain asset allocation plan which is diversified (that is, don't make all your investments in one instrument only , but in at least two-three instruments). Life insurance is a must for every individual and the earlier one starts, the lesser is the premium and the higher is the compounding effect one will benefit from. PPF investments have a Rs 1 lakh-per-year limit.

Being young and just into your first job, from an asset allocation perspective it is good to allocate funds to equities.


ELSS and ULIPs may help achieve that objective if you are not sure about direct equity investments.


Track your investments In the initial years of work, the savings may be small or even negligible for most. But as one starts saving more and spending less, there is dire need for financial planning. These savings would be over and above the requirements under tax structure. Financial planning means accounting or keeping in check the expenses and investing the savings for planned future needs. What most of us forget is to manage the savings from the onset.

 

The ease of investing in various instruments and tracking the investments on a regular basis is as important as investing. Also, rather than keeping money in a savings bank account, it is advisable to park funds in liquid mutual funds.


With online/mobile access, the process of investing has never been more simplified. Also, information about each investment alternative can be easily gathered and evaluated before choosing the right opportunity .

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

Leave a missed Call on 94 8300 8300

Leave your comment with mail ID and we will answer them

OR

You can write back to us at

PrajnaCapital [at] Gmail [dot] Com

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

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

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

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds Invest Online

      1. DSP BlackRock MicroCap Fund
      2. Franklin India Smaller Companies

E. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

Popular posts from this blog

Atal Pension Yojana contribution Tax Benefit for spouse

Contributions to Atal Pension Yojana (APY) are eligible for the same tax benefits as the NPS. This means that the contributions can be claimed under Section 80CCD (1B). The current limit for Section 80CCD (1B) is   Rs   50,000, over and above the   Rs   1.5 lakh limit under Section 80C. Section 80 CCD (1) is a different one, meant to cover employers' contribution towards NPS . You cannot get tax benefit by investing in the name of your spouse under Section 80 CCD . ------------------------------ ----------------- 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. IDFC Tax Advantage (ELSS) Fund 8. Birla Sun Life Tax Relief 96 9. ...
Read more

L&T Income Opportunities Fund dividend

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 L&T Income Opportunities Fund declares L&T Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( R /unit) L&T Gilt Investment-DQ 0.3 L&T Gilt Investment Direct-DQ 0.3 L&T Income Opportunities Ret-DQ 0.31 L&T MIP-Wealth Builder-DQ 0.3 L&T MIP-Wealth Builder Direct-DQ 0.3 L&T MIP-DQ 0.3 L&T MIP Direct-DQ 0.3 L&T Short Term Opp-DQ 0.26 L&T Short Term Opp Di...
Read more

Avoid NFOs

  Don't get taken in by the flurry of new fund offers. You will be better off sticking to the tried and tested schemes.   For the past one year, to cash in on the bull run in equities, mutual fund houses have gone on a new fund offer (NFO) overdrive. But experts are unanimous in their advice: avoid NFOs . While past performance is not an indicator of how a fund will fare in the future, it does tell the investor how skilful the fund manager is. This crucial information is missing in an NFO. Not only is there no track record to judge an NFO by, many NFOs are similar to funds that already exist. If the new fund is similar to existing funds, you are better off investing in the latter. Around 67% of the new launches in 2014 were closed-end products. Investing in the NFO of a closed-end fund is doubly risky. In case the fund's performance is lacklustre, a closed-end fund does not allow you to exit. Even though closed-end funds are listed on the stock...
Read more

Common errors that couples make while investing

Most couples plan their strategies together but make mistakes while investing. Here’s how they can avoid the common errors Make no mistake. Ignorance is no longer bliss. In fact, many couples goof-up while investing together because they are not financially transparent to each other and don’t share a common goal. KEEPING SECRETS You may find questions from your spouse as an intrusion into your privacy, but financial planners believe that sharing financial details with each other is the first step that a couple takes towards their family financial goals. If you plan to invest together, then it’s important that you should be transparent to each other on the financial front. The whole idea is that you should be able to determine how much you will set aside for investments after making all the deductions for personal and household expenses. IMBALANCED APPROACH As a couple, you may have huge assets and hold stocks, but it’s important that you should direct a part of the investments for emer...
Read more

Debt Mutual Fund Dividends are Taxable

DDT is deducted when a non-equity fund declares dividends. Equity and balanced fund dividends are tax-free The AMC is correct to deduct the dividend distribution tax (DDT) as it is mandated by tax laws. DDT in mutual funds is deducted every time a non-equity fund declares dividends. Equity fund and balanced fund dividends are tax-free . It is possible that you have invested in a non-equity fund for the first time or have received the dividend under a non-equity fund for the first time. That is why this is the first occasion when you have come across DDT.   The rate at which non-equity schemes deduct DDT has also gone up after the July 2014 budget. This is due to a change in calculation methodology. Earlier, if the fund has to declare a dividend of R 100, it used to make a provision for R 128.3, paying R 28.3 to the taxman and distributing the balance to the investor. This allowed the investor to bear less tax since the effective tax rate was 22.07 per ce...
Read more
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