Haryana Urban Development Authority (HUDA) has come out with freehold residential plot scheme in Sector 14 (Part II) and Sector 33(part I) of Hissar.

Important Dates:

• Booking Commences: May 9, 2013
• Booking Closes: July 8, 2013

Plot Details and Earnest Money Required:

There are 888 plots in Sector 14 and 1990 plots in Sector 33 with size varying from 1 karnal to 4 marla. The earnest money varies from 1.17 lakhs to 7.18 Lakhs. The figure below shows the details:

HUDA Residential Plots Scheme in Hissar – Earnest Money

Payment Plan:

• At the time of Application – 10%
• Within one month of allotment – 15%
• Six equal yearly installments – 12.5% every year

Reservations:

There are reservations for various categories like SC/ST, Backward classes, handicapped, War Widows, etc

How to Apply?

• The application form can be downloaded from HUDA website, filled up and submitted to the designated centers.
• You can also apply online on HUDA Website.
• The application form with brochure can also be obtained from designated bank branches for Rs 100

Why You should Apply?

1. The plots are priced substantially lower to the market rates. The existing rates for Sector 14 is more than Rs. 35,000 per sq. yard depending on size, location, etc.
2. The plots are from Authority, so you need not worry much about the authenticity of the plots.

Important Points:

You can fill one application per sector. So for two sectors you can fill up two application forms.

Authorized Banks:

You can buy/ submit the form in the following banks. Some of these might also finance the earnest money for the scheme.

HUDA Residential Plots Scheme in Hissar – Authorized banks List

Download Brochure and Application Form:

HUDA Residential Plots Scheme in Hissar – Advertisement:

You can get all the details like authorized banks list etc in the advertisement below:

HUDA Residential Plots Scheme in Hissar – Advertisement (Click to enlarge)

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In recent few days there have been a deluge of Capital Protection Funds from Mutual Fund houses. I have often been asked should I invest in these Capital Protection Funds?

What is Capital Protection Fund?

We hate to loose our hard earned money. Taking advantage of this emotion, Mutual Funds launch Capital Protection Fund when the stock market is volatile. These funds promises investors to give a minimum guaranteed return which is the capital invested or may be a nominal appreciation of 10% on the same at the end of investment tenure.

But do you know you its easy to create your own Capital Protection Fund!

This can be done in two ways.

1. Invest the entire amount in Debt Instruments like Fixed Deposits etc and invest the interest so earned in equities.
2. Invest partly in fixed deposit and partly in equities.

Both the concepts are explained below with examples.

First the Assumptions:

• Amount to be invested: Rs 5 lakhs
• Investment Tenure: 5 Years
• My aim is capital protection so the minimum I expect is Rs 5 Lakh after 5 years. Anything above this is bonus

First solution:

1. Invest entire 5 Lakh in a Monthly Income Plan or Fixed Deposit paying out monthly interest.
2. For example I invest entire 5 lakh in 5 years Post Office Monthly Income Account Scheme. This gives annual interest of 8.2%. So monthly I would get Rs. 3,416.67.
3. I invest this interest payout in any good diversified equity scheme as Systematic Investment Plan (SIP).
4. At the end of 5 years I have 5 lakhs still in my Post office account. All the investment I made in the equity fund is my additional income.
5. So in worst case I would be able to preserve my capital i.e. Rs. 5 Lakh as promised by most Capital Guarantee Funds.
6. While on an average case scenario, taking 12% annualized returns on equities I would make 2.77 Lakhs. So I would have around 7.77 Lakhs at the end of 5 years tenure.
7. This means an annualized compounded return of 9.2%

Second solution:

1. Open a fixed deposit account with SBI offering 9.25% interest and invest Rs. 3.2 Lakhs. At the end of 5 years this FD would give me Rs. 5 Lakh. So investing Rs. 3.2 Lakh has preserved my capital.
2. The rest of Rs. 1.8 Lakh can be invested in diversified equity mutual fund.
3. At the end of 5 years, in the worst case scenario if I lose all my money in equity investment I would be left with 5 lakh.
4. While in the average case scenario taking 12% annualized returns on equities I would make Rs 2.7 Lakhs. So a total of Rs. 7.77 lakh
5. This means an annualized compounded return of 9.2%

Both the above solutions are good and both the methods work equally well for capital protection. Now go ahead and create your own Capital Protection Fund!

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Our fancy for higher returns never ends! And for this we devise different techniques and strategies – one of them is “Timing the Stock Market” – in which you buy when markets hit the bottom & sell when its at the top.

A very popular and simple concept but the only problem is no one has got it right every time!

And to get rid of this “Market timing Psyche” Advisors came up with the concept of SIP or Systematic Investment Plan which is supposed to help investors get out of lure of timing the markets and invest regularly. But then there are people who still want to “time their SIP in Mutual Funds”.

I have often come across questions like these:

• Is it good time to start SIP in equity Funds?
• Is it possible to time my SIP so that I get the best returns?
• Which is the Best day for SIP?
• Which day of month should I choose for my SIP and Why?

Well all these questions because somewhere Investors feel that they can outsmart markets to get some extra returns. And true little more doesn’t hurt if we get it just by just altering date of our SIP. In this post I would analyze how the returns have been if you done SIP on a particular date historically.

Best Day for SIP in Mutual Funds – My analysis:

I did this analysis a few years back and hence the data is bit dated, but the concept still holds true!

For my analysis I choose the closing point of NIFTY for the period of 1st January 2000 – 31^st December 2009 (ten year period). Here I assumed that I could buy 1 unit of NIFTY by paying amount equal to its value, for e.g. As on 31^st December 2009 the value of NIFTY was 5201.05, so I assumed that I could buy 1 unit of NIFTY by paying Rs. 5201.05.

The second thing is I calculated how much units of NIFTY I can buy monthly with a SIP of Rs 10,000 every month.

All my calculations are based the way real SIP happens, i.e. if the market is closed on the SIP date then that investment is done on next business day. For e.g. If you do SIP on 1st of every month & market is closed on 1st your SIP would happen on next day when markets open which may be 2nd, 3rd, 4th or 5th.

Best day for SIP in my analysis means the day when you could buy the maximum number of units while worst day is just the opposite.

Calculation Sheet for every Year:

The table below shows the total NIFTY units I could buy in respective years if I did a SIP on the respective date. At the end of table I have mentioned the day which was best & worst for SIP. The last row has the percentage gain you would have made had you invested on best day over worst day.

Best Days for SIP: 23, 27

Worst Days for SIP: 27, 28

Its amazing to see 27^th occur as best day twice and also worst day twice in the period of 10 years. This proves to an extent that timing the Market by choosing SIP dates is a futile exercise.

Calculation Sheet for every 3 Years

Now usually we don’t do SIP for 1 year, we should do SIP for a minimum of 3 years. So I did the same thing as above for the 3 year period. Here you can see the percentage gain you would have made had you invested on best day over worst day reduces.

Best Days for SIP: 1, 23, 24

Worst Days for SIP: 9

Calculation Sheet for every 5 Years and 10 Year

Well some people do it for 5 years, so I do the same thing for a period of 5 year. The last column shows the same thing for the entire analysis period of 10 Years.

Best Days for SIP: 1, 23, 20

Worst Days for SIP: 9

So finally the question - what are best days for SIP?

Based on overall analysis, if I look at 3 year running SIP, 1st, 23rd & 24th seems to be the best days while 9th seems to be worst.

The days are almost similar for 5 year period too.

But your gains had you chosen the best day over worst varies from 0.9% to 2.8% in 3 year period & 1% – 2.3% for 5 year period. And these gains are overall gains which if seen on annualized basis is not even 1%.

So if you are looking for SIP in a Mutual Fund for a long period of time say 5 years the selection of day hardly matters. Do it on the days most convenient to you. For e.g. for a Salaried person his SIP day may be close to day he gets his salary.

Also most investors don’t have just one SIP running. You may have 3-5 different Mutual Funds where you invest the SIP way. So it makes sense to spread out the investment for the entire month rather than concentrating them on a single day until you have some special convenience or requirement for doing so.

To conclude:

As we have seen a single day can be best for SIP in one year while it could turn to be worst the very next year. The other thing is 9^th appears to be worst if we see cummulative return in 3 years, 5 years & 10 years basis but for individual year analysis it is worst just once in year 2000. All the above proves that the “BEST SIP Date” is just a random event and there’s nothing called “Best or Worst Day for Investment or SIP“.

I would advise investors to get out of the Market Timing mentality and start investing in Mutual Funds by using SIP (Systematic Investment Plan) for serious long term wealth creation.

Readers let me know what your SIP dates are and did you decide them because you wanted to time the market via SIP or just for your convenience?

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Do you know how did your investment portfolio performed in last one year or last quarter or last month?

I asked this question to some of my friends and NONE of them knew the right answer. Some smart souls took wild guesses and linked their returns to the instrument they invest in. So someone primarily investing in bank fixed deposits said he got a return of almost 9% as the bank was paying him that interest.

Though calculating return on portfolio seems simple but unfortunately it’s not. You can easily calculate your returns if you have lump sum investment. For e.g. you invested Rs 1 Lakh in SBI fixed deposit and end of year you got Rs 1.09 Lakhs in your account, so your annual return comes out to be 9%.

Also Read: How to make Capital Protection Fund Yourself?

But our investment pattern is not so simple. Many of us have SIPs (Systematic Investment Plans) in Mutual Funds or have Recurring deposits (RD) with banks. There are times we withdraw money from these investments. Thus, we constantly keep on investing and withdrawing money from our portfolio. On a conservative basis, if you have 5 monthly SIPs, 2 RDs and one lump sum investments/ withdrawals every month in a year, you are making close to 100 transactions a year. This makes the return calculation very complex.

If you are familiar with excel sheet you still can list down these 100 transactions with date and run IRR function. But then most of us are too lazy or too naïve to do this. And thus the return on your portfolio is always guessing game!

We have a simple solution to your complex problem!

We have made an excel sheet template in which you just need to enter the starting and ending portfolio balance along with deposits/ withdrawals made in the month. This would give you the monthly return. As you go on entering these values for every month, you would get the quarterly and annual returns.

Portfolio Return Calculator

Why you should calculate portfolio Returns?

1. Most people investing in stock market believe that they are generating returns which are superior to markets or fund managers. You cannot compare this until you have your portfolio returns with you.
2. The return calculation would help you make better judgment while choosing next investment.
3. The return would tell you if you are at the right investment path.

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Yamuna Expressway Industrial Development Authority (YEIDA) has launched four storeyed flat schemes in Sector 18 of Yamuna Expressway (BHS-01/2013).

YEIDA Flat Scheme – Flat Details and Registration Money:

There are total of 4,425 flats in the scheme. All the flats are 1BHK of 29.76 square meters.

The cost for ground floor is Rs 7.75 Lakhs while the First, Second and Third Floor costs Rs 7.22 Lakhs.

YEIDA Flat Scheme – Who can Apply?

1. Anyone who is resident of India and is over 18 years of age.
2. Husband/ wife and dependent children can apply for only one flat
3. Husband/ wife and dependent children have not been even allotted plots or flats under any scheme by YEIDA

YEIDA Flat Scheme – Reservations:

22.5% of flats are reserved among the following categories:

1. Farmers whose land was acquired by YEIDA – 17.5%
2. Allottees of YEIDA Industrial Units which are functioning – 5%

There is also horizontal reservation of 3% for handicapped Persons

YEIDA Flat Scheme – How to Apply?

• Application form can be obtained for Rs 550 from the bank branches listed below from April 2, 2013
• The application duly signed, completed in all respect along with registration money should be submitted by May 2, 2013 in those bank branches.
• Application and detailed brochure can also be downloaded from YEIDA Website. These applications need to attach Rs 550 bank draft in favour of Yamuna Expressway Industrial Development Authority.

Cost of Application Form: Rs 550

Registration Amount: Rs 75,000

Form Available From: April 2, 2013

Last Date of Submitting Form: May 2, 2013

Draw Date: August 5, 2013

YEIDA Flat Scheme – List of Banks:

Below is the list of banks where the YEIDA Sector – Sector 18 Flat Schemes application form would be available and can be submitted. These banks might also finance the earnest money (registration money) for applying to the scheme.

YEIDA Flat Scheme – List of Banks

Cost & List of Banks financing YEIDA Flat Scheme:

YEIDA Flat Scheme: Why you should apply?

1. The scheme is from Yamuna Expressway Industrial Development Authority (YEIDA), so you can be positive that the land and flat would be free of litigation and built as per Government building laws. No problems of completion certificates or adverse surprises after you move in.
2. There are around 3,400 flats for general public (unreserved). So you might have a better chance of allotment than other authorities’ schemes.

YEIDA Flat Scheme: Why you should not apply?

1. Since all flats are 1BHK and cheaper than market rate, you might not be happy with the gentry, if you plan to settle there.
2. As of today the Yamuna Expressway area is not populated and so you might find it difficult to live there.
3. Greater Noida Authority too has similar scheme for 1BHK 4 storied flats (BHS-16/2013) open now. That seems to be better scheme than YEIDA Scheme.

YEIDA Flat Scheme: Application Form:

You can download the detailed floor plan, brochure and application form from YEIDA Website here.

Here is the advertisement of the YEIDA Flat Scheme:

Yamuna Expressway Authority Flat Scheme – BHS-01/2013

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SRS Limited, the NCR based company is offering Fixed Deposit Scheme for 1 to 3 years tenure offering 12% – 12.5% Annual Interest.

Scheme Highlights:

• Minimum Amount of deposit to be accepted is Rs.20,000/- and in multiple of Rs. 1,000/- thereafter.
• For Scheme A (Non Cumulative), interest will be compounded monthly and payable quarterly.
• For Scheme B (Cumulative), interest will be compounded monthly & paid on maturity.
• Post dated cheques for the Maturity Amount and periodic interests would be sent along with the FD receipt
• Nomination Facility is available
• Pre-mature withdrawal of deposits is as per Rules applicable.

Interest Rates:

The interest rates varies from 12% to 12.5% depending on tenure and would be compounded monthly.

SRS Limited Fixed Deposit Scheme

About SRS Limited:

SRS Limited is a diversified company listed on NSE and BSE with a business portfolio comprising cinema exhibition, food and beverages, retail and manufacturing, and retailing of jewelry. It has four segments: cinema exhibition, food and beverages, retail and cash and carry, and jewelry.

SRS Cinemas is a cinema exhibition brand, under which the Company operates a chain of cinemas spread across five cities. Its food and beverages segment operates a chain of food courts, fine dining restaurants and banquets across several cities. The food courts are operated under the SRS 7dayz brand name.

It operates a chain of retail stores under the brand name SRS Value Bazaar that offer fast moving consumer goods. On January 26, 2012, it opened SRS Cinemas at Omaxe Mall, Ludhiana, with three screens having a seating capacity of 1013 seats.

Why Should You Invest?

The company is offering attractive interest rate of 12.5% on certain tenures. Banks right now are offering in the range of 8.5% to 9.5%. Check best fixed deposit rates by banks here.

Why you should not invest?

The risk for company deposits are higher than Banks Fixed Deposits, so you should understand the risk before investing.

SRS Limited Fixed Deposit Scheme – Application Form

Download Application Form

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IDFC Mutual Fund has come with a New Fund Offer (NFO) – IDFC Equity Opportunity Series 1. This is a closed ended fund which would mature in 3 Years (on April 14, 2016).

IDFC Equity Opportunity Series 1 – Features:

• A 3 year close-ended equity fund. The fund would be redeemed on April 14, 2016
• One time investment (No SIP/ STPs)
• Minimum amount of Rs 5,000 with a dividend pay-out option
• NFO is open for just 2 days – 9th and 10th April, 2013

IDFC Equity Opportunity Series 1 Theme:

The IDFC Equity Opportunity Series 1 aims to generate capital gains by investing in small companies, which are beyond the top 200-250 companies listed by market capitalization.

IDFC Mutual Fund is of the opinion that the market has bottomed out (as it was in 2003) and hence it’s a good opportunity to invest in small and mid cap companies, which would bounce back faster as the overall market sentiment improves.

Fund Manager:

The fund would be managed by Kenneth Andrade who is head of Investments at IDFC Mutual Funds. He also manages IDFC Premier Equity Fund, which is one of the best performers in mid-cap space. But there are some other funds too like IDFC Infrastructure Fund, IDFC Equity which is managed by him and are average performers.

Risk and Returns:

The IDFC Equity Opportunity Series 1 is a high risk, high return theme. If the timing gets right as the fund manager thinks, you would be laughing all the way to the bank after three years. But as happens with most small cap funds, there is also possibility of making big losses. Remember that since it is an equity fund, there is no concept of a fixed return even after a lock-in of three years.

How to Invest?

In case you are an existing investor in IDFC Mutual Fund, you can invest online through IDFC Website. The advantage is your investment would be considered as “Direct” Investment and so would gain slightly.

You can also invest online through demat account or other websites offering Mutual fund investments. In this case the investment would not be “Direct”.

One more way is to download the form from IDFC MF website and submit it to their office or their registrar’s office physically.

Also Read: How to Invest Direct in Mutual Funds?

Why You Should Invest?

1. The NFO is suited for you, if you have high risk tolerance.
2. The fund manager has shown outstanding performance in IDFC Premier Equity Fund, which has similar theme to the present NFO.

Why You Should not Invest?

1. As stated above IDFC Equity Opportunity Series 1 is a high risk, high return fund scheme. So don’t go for it if you are not a high risk taker.
2. The other point to keep in mind is its closed ended nature, which means you would not be able to exit the scheme mid-way through fund house. The scheme would be listed on Stock exchanges and you can sell there to exit. But the liquidity for closed ended schemes is low and you might have to sell the fund below NAV.

Conclusion:

Invest only if you have money which you can put in high risk, high return investment for 3 years. If not you would do good to stick with your SIP in any well rated mid/small cap scheme.

IDFC Equity Opportunity Series 1 NFO

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After NHAI, REC (Rural Electrification Corporation Ltd) too has  come up with its fresh issue of Capital Gains Bonds (Series IX) of Rs 1,000 crores.

REC Capital Gains Bonds – Significant Points:

• Offer Period: April 1, 2013 – March 31, 2014. So you can invest in these bonds for the entire financial year of 2013-14
• Annual Interest Rates: 6% per annum
• Deemed Date of Allotment: Last day of the month during which the application amount has been cleared and credited to REC’s collection account
• Maturity: 3 Years from date of allotment
• Price of each bond: Rs 10,000
• Minimum Investment: 1 Bond (Rs 10,000)
• Maximum Investment: 500 Bonds (Rs 50 Lakhs)
• Credit Rating: ‘CRISIL AAA Stable’ by CRISIL/“CARE AAA” by CARE /‘AAA (ind)’ by Fitch Ratings
• Loan against Bonds: The Bonds are non-transferable, non-negotiable and cannot be Offered as a security for any loan or advance
• Trustee: IDBI Trusteeship Services Ltd., Mumbai

REC Capital Gains Bonds - Who can invest?

Any individual, Hindu Undivided Family (HUF), or non-resident Indians (NRIs) can invest in these REC capital gains bonds. The amount invested should be the long term capital gains made by selling residential property held for more than three years or more.

REC Capital Gains Bonds - How much Capital Gains can you Save?

The long term capital gains on sale of residential property (held for more than 3 years) are taxed at 20% with indexation. You would need to invest the long term capital gains made within 6 months of date of sale of the property.

We explain this by an example:

You bought a house in April 2007 for Rs 50 Lakhs and sold it on April 2011 for Rs 1 Crore. This is how the capital gains would be calculated.

The property has been held for more than 3 years and so it qualifies for Long term capital gains.

Next you have to look at Cost of Inflation Index (CII) published by Income Tax Department every Financial Year.

• The CII for FY 2007-08 when the house was bought is 551
• While the CII for FY 2011-12 when the house was sold is 785
• So the CII adjusted purchase cost would be Rs 50,00,000 * (785/551) = Rs 71,23,412
• Long Term Capital Gains = Rs 28,76,588 (1,00,00,000 – 71,23,412)
• Tax Liability = 20% of Rs 28,76,588 = Rs 5,75,318

So out of Rs 1 crore that you get out of sale, you would need to invest the entire long term capital gains of Rs 28,76,588 in Capital gains Bond by October 2011 (i.e. within six months of date of sale) to save tax of Rs 5,75,318.

In case you invest only part of the capital gains, the remaining amount would be taxed at 20%.

Is Capital Gains Bond Interest taxable?

There is a misconception that the interest earned on capital gains bond is tax free as there is no TDS (Tax Deduction at source) deduction by REC. But unfortunately the truth is the interest earned from capital gains bond is added to your income and taxed at marginal rate of your income tax.

REC Capital Gains Bonds - How to buy?

The application form for REC Capital gains bond can be obtained/ submitted at select branches of  HDFC Bank, Canara Bank, IDBI Bank, Indusind Bank, ICICI Bank and Axis Bank

REC Capital Gains Bonds - Should you invest?

If you want to save your long term capital gains tax on sale of residential property u/s 54EC, there are two options:

1. Reinvest in another residential property within stipulated time frame as per Income tax laws or
2. Invest in capital tax gains bonds of REC (Rural Electrification Corporation Ltd) or NHAI (National Highways Authority of India)

As far as the investment in capital gains bonds like REC/NHAI is concerned, the interest offered is just 6% and that too taxable. So at times it might make sense to pay long term capital gain tax and invest the rest of amount in higher return investments.

REC or NHAI Capital Gains Bonds?

I have written about NHAI capital gains bond here. If you compare both the Capital Gains bond from REC and NHAI, they are same in terms of Risk and Return. The decision on which bond to invest should mainly depend on which bond is easier for you to invest or what you want to support – Building Highways or providing electricity to rural areas .

REC Capital Gains Bonds – Application Form

You can get more details and detailed prospectus and application form from here.

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In case you are looking to save your long term capital gains, National Highways Authority of India (NHAI) has come up with its fresh issue of Capital Gains Bonds (Series XIV) of Rs 4,000 crores.

NHAI Capital Gains Bonds – Significant Points:

• Offer Period: April 1, 2013 – March 31, 2014. So you can invest in these bonds for the entire financial year of 2013-14
• Annual Interest Rates: 6% per annum
• Deemed Date of Allotment: Last day of the month during which the application amount has been cleared and credited to NHAI’s collection account
• Maturity: 3 Years from date of allotment
• Price of each bond: Rs 10,000
• Minimum Investment: 1 Bond (Rs 10,000)
• Maximum Investment: 500 Bonds (Rs 50 Lakhs)
• Credit Rating: “AAA/Stable” by CRISIL and “IND AAA/Assigned” by India Ratings & Research
• Loan against Bonds: The Bonds are non-transferable, non-negotiable and cannot be Offered as a security for any loan or advance
• Trustee: Syndicate Bank, 6, Bhagwan Das Road, New Delhi-110001
• Contact person: Sh. S.K.Chauhan, Manager (F&A); Email: skchauhan@nhai.org; Phone: 011- 25074100-200 Extn 2479, Fax: 25093517

NHAI Capital Gains Bonds - Who can invest?

Any individual, Hindu Undivided Family (HUF), or non-resident Indians (NRIs) can invest in these NHAI capital gains bonds. The amount invested should be the long term capital gains made by selling residential property held for more than three years or more.

NHAI Capital Gains Bonds - How much Capital Gains can you Save?

The long term capital gains on sale of residential property (held for more than 3 years) are taxed at 20% with indexation. You would need to invest the long term capital gains made within 6 months of date of sale of the property.

We explain this by an example:

You bought a house in April 2007 for Rs 50 Lakhs and sold it on April 2011 for Rs 1 Crore. This is how the capital gains would be calculated.

The property has been held for more than 3 years and so it qualifies for Long term capital gains.

Next you have to look at Cost of Inflation Index (CII) published by Income Tax Department every Financial Year.

• The CII for FY 2007-08 when the house was bought is 551
• While the CII for FY 2011-12 when the house was sold is 785
• So the CII adjusted purchase cost would be Rs 50,00,000 * (785/551) = Rs 71,23,412
• Long Term Capital Gains = Rs 28,76,588 (1,00,00,000 – 71,23,412)
• Tax Liability = 20% of Rs 28,76,588 = Rs 5,75,318

So out of Rs 1 crore that you get out of sale, you would need to invest the entire long term capital gains of Rs 28,76,588 in Capital gains Bond by October 2011 (i.e. within six months of date of sale) to save tax of Rs 5,75,318.

In case you invest only part of the capital gains, the remaining amount would be taxed at 20%.

NHAI Capital Gains Bonds – Series XIV

Is Capital Gains Bond Interest taxable?

There is a misconception that the interest earned on capital gains bond is tax free as there is no TDS (Tax Deduction at source) deduction by NHAI. But unfortunately the truth is the interest earned from capital gains bond is added to your income and taxed at marginal rate of your income tax.

NHAI Capital Gains Bonds - How to buy?

The application form for NHAI Capital gains bond can be obtained/ submitted at all branches of IDBI Bank and Union Bank, and select branches of few more banks like Canara Bank, Axis Bank, ICICI Bank, Yes Bank and HDFC Bank

NHAI Capital Gains Bonds - Should you invest?

If you want to save your long term capital gains tax on sale of residential property u/s 54EC, there are two options:

1. Reinvest in another residential property within stipulated timeframe as per Income tax laws or
2. Invest in capital tax gains bonds of RECL (Rural Electrification Corporation Ltd) or NHAI (National Highways Authority of India)

As far as the investment in capital gains bonds like NHAI is concerned, the interest offered is just 6% and that too taxable. So at times it might make sense to pay long term capital gain tax and invest the rest of amount in higher return investments.

NHAI Capital Gains Bonds – Application Form

You can get more details and detailed prospectus and application form from here.

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Greater Noida Industrial Development Authority (GNIDA) has launched four storeyed flat schemes in Sector MU-II and Sector 10 of Greater Noida (BHS-16/2013).

GNIDA Sector – MU-II & 10 Flat Scheme – Flat Details and Registration Money:

There are total of 7,215 flats in the scheme, with 5,265 flats in Sector MU-II and 1,950 in Sector 10 of Greater Noida. All the flats are 1BHK of 29.76 square meters.

The cost for ground floor is Rs 8.63 Lakhs while the First, Second and Third Floor costs Rs 7.52 Lakhs.

GNIDA Sector – MU-II & 10 Flat Scheme – Who can Apply?

1. Anyone who is resident of India and is over 18 years of age.
2. Husband/ wife and dependent children can apply for only one flat
3. Husband/ wife and dependent children have not been even allotted plots or flats under any scheme by GNIDA

GNIDA Sector – MU-II & 10 Flat Schemes – Reservations:

50% of flats are reserved among the following categories:

1. Allottees of GNIDA Industrial Units which are functioning – 17.5%
2. Farmers whose land was acquired by GNIDA – 17.5%
3. Allottees of GNIDA Commercial & Shop Units – 10%
4. GNIDA Employees – 5%

There is also horizontal reservation of 3% for handicapped Persons

GNIDA Sector – MU-II & 10 Flat Scheme – How to Apply?

• Application form can be obtained for Rs 550 from the bank branches listed below from April 3, 2013
• The application duly signed, completed in all respect along with registration money should be submitted by May 2, 2013 in those bank branches.
• Application and detailed brochure can also be downloaded from GNIDA Website. These applications need to attach Rs 550 bank draft in favour of Greater Noida Industrial Development Authority payable at Greater Noida.

Cost of Application Form: Rs 550

Registration Amount: Rs 80,000

Form Available From: April 3, 2013

Last Date of Submitting Form: May 2, 2013

Draw Date: September 2, 2013

GNIDA Sector – MU-II & 10 Flat Scheme – List of Banks:

Below is the list of banks where the GNIDA Sector – MU-II & 10 Flat Schemes application form would be available and can be submitted. These banks might also finance the earnest money (registration money) for applying to the scheme.

GNIDA Sector – MU-II & 10 Flat Scheme – List of Banks (Click to Enlarge)

Cost & List of Banks financing GNIDA Sector – MU-II & 10 Flat Scheme:

GNIDA Sector – MU-II & 10 Flat Scheme: Why you should apply?

1. The scheme is from Greater Noida Industrial Development Authority (GNIDA), so you can be positive that the land and flat would be free of litigation and built as per Government building laws. No problems of completion certificates or adverse surprises after you move in.
2. The cost of the flats seems reasonable. The super built up area is 29.76 sq. mt. (= 320.33 sq. ft) and costs between 7.52 lakhs to 8.63 lakhs. This comes out to be Rs. 2,348 to Rs 2,694 per sq. ft. all inclusive cost. It would be difficult to get these kinds of flats at this cost at this location.
3. There are around 3,500 flats for general public (unreserved). So you might have a better chance of allotment than other authorities’ schemes.
4. Greater Noida is upcoming real estate location in NCR. There would be good population moving in Greater Noida (West) or Noida Extension in coming years. This would in turn impact the prices of other sectors of Greater Noida too.
5. Greater Noida is well planned city and GNIDA is the best authority as far as planning of city is concerned .

GNIDA Sector – MU-II & 10 Flat Scheme: Why you should not apply?

1. Since all flats are 1BHK and cheaper than market rate, you might not be happy with the gentry, if you plan to settle there.
2. As of today the Greater Noida area is not populated and so you might find it difficult to live there.

GNIDA Sector – MU-II & 10 Flat Scheme: Application Form:

You can download the detailed floor plan, brochure and application form from GNIDA Website here.

Here is the advertisement of the GNIDA Sector – MU-II & 10 Flat Scheme:

GNIDA Sector – MU-II & 10 Flat Scheme

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Invest Direct in Mutual Funds

I have always stated that mutual funds (MF) are one of the best wealth creation products for the masses. These are one of the lowest cost products, well regulated and give you the benefit of diversification.

The good news for investors is from January 1, 2013 on-wards mutual funds on directive of SEBI have launched ‘Direct’ version of all existing mutual fund schemes.

What are ‘Direct’ Mutual Fund Plans?

Direct mutual fund schemes as the name suggest are for investors who invest directly with the mutual fund AMC.

Why you should prefer Direct Plan?

The direct plans have the same portfolio as their regular counterparts but the difference is in their expense ratio. In case of direct plans there is no brokerage or trail commission to be paid to intermediary [as the investment is done directly by investors] and this comes as saving for the investors in the MF scheme.

It has been just 3 months since launch of direct plans, so annual difference in returns between direct and regular plans is yet not clear. But estimates suggest direct plans could be could be cheaper by 0.25% to 0.75%. This means you can hope to get 0.25% to 0.75% more returns than the corresponding regular MF schemes.

It might not look very high savings but in long run this is good money. For example you would make additional Rs 1,250 to Rs 4,000 on Rs 1 Lakh invested for 5 years.

How to invest directly in Mutual Funds?

You can invest in direct plans of Mutual Funds both physically and online.

For Online you can invest through the respective Mutual Fund Websites. Most of Mutual Fund AMCs are offering online investment facility. You need either Debit card (which is activated for online transactions) or bank account which is activated for online transactions.

In case you are not comfortable with online investment option, you can download the application form from the respective MF website, fill it and submit it to either their Registrars address (Karvy/CAMS) or respective Mutual Fund Offices. In case the office is not near, you can also courier/post the filled up application form and cheque to the respective addresses.

In most Mutual Funds, you would need to do the first investment in physical form and would need to submit your KYC (Know Your Customer) document, a cancelled cheque and nomination form. Once you get the folio number, the subsequent investments can be easily done online.

The good thing is many large fund houses have started offering SIP, SWP facility online.

What is not Direct investing?

Here are some common channels of investing in Mutual Funds which are not considered as ‘Direct’ investment

Demat Account – Though you get the advantage of all investment through a single portal and consolidated portfolio view but investment through Demat account is not considered as direct investment.

Brokers/ Distributors/ Financial Planners – if you invest through your broker/ distributor or planner, the investment would not be considered direct.

Banks – Many people have the miss-conception that banks with similar names to Mutual fund AMCs are same entities. For example if you invest in HDFC Mutual Fund through HDFC Bank, it is not a direct investment. Here HDFC Bank is acting as broker to HDFC Mutual Fund and would get its commission.

Websites – I know of three websites which offer online investment in mutual funds. These are

• fundsindia.com
• fundsupermart.co.in
• scripbox.com

The investment through them is not direct as they are brokers to the mutual funds.

Useful Tips:

1. As you can see above there is savings to be made but this comes at the cost of convenience. You would be ready to do the paperwork related to KYC, change of address, nomination, etc yourself. Though these are not very tedious and can be done yourself, but in case you are not comfortable with this then you should take services of an intermediary.
2. The selection of funds is the most important aspect of investing. So if you require help of any intermediary for deciding on which fund to invest, you are strongly recommended to avail their services.
3. All the SIPs that you had done directly earlier are invested automatically in Direct Plan of the respective scheme from January 1, 2o13.
4. You can switch from regular plan to direct plan of the same scheme but this would be treated as exit from the earlier scheme and investment in a new scheme. This might lead to exit load and capital gains depending on your investment tenure.
5. You don’t need a demat account to invest in Mutual Fund Scheme.

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SREI Infrastructure Finance Ltd one of the leading infrastructure companies in India has come out with Secured Redeemable Non Convertible Debentures (NCDs) of Rs 75 crore with over-subscription of additional Rs 75 crore.

SREI Infrastructure Finance Ltd NCD – Significant Points:

• Offer Period: April 4 – April 25, 2013
• Annual Interest Rates for Retail Investors:

• 10.35% (Quarterly) or 10.75% (Annually) for 3 Years
• 11.00% for 5 Years
• The money doubles in 6 Years 6 Months (11.24% annual interest)
• Price of each bond: Rs 1,000
• Minimum Investment: 10 Bonds (Rs 10,000)
• Max Investment Limit for Retail Investor: Rs 10 Lakhs
• Credit Rating: ‘CARE AA-’ by CARE and ‘BWR AA’ by Brickwork
• Allotment: First Come First Serve
• Listing: Bonds would be listed on BSE and will entail capital gains tax on exit through secondary market
• Loan against NCDs: The Company, at its sole discretion, subject to applicable statutory and/or regulatory requirements, may consider granting of a loan facility to the holders of NCDs against the security of such NCDs

Also Read: Everything you wanted to know about NCDs – Types – Taxation – Options – Capital Gains?

SREI Infrastructure Finance Ltd NCD – April 2013 Review

SREI Infrastructure Finance Ltd NCD - Investment Options:

The SREI Infrastructure Finance Ltd NCD has following six series options for investments:

SREI Infrastructure Finance Ltd NCD – Investment Options

SREI Infrastructure Finance Ltd NCD - Who can Apply?

The investors have been divided into 3 categories of investors as in the table below:

SREI Infrastructure Finance Ltd NCD – Category of Investors

Why you should invest?

1. The interest offered is 1 – 2% higher than the bank fixed deposit
2. The interest rates are on a downward trend, so further decrease in interest rates would give capital appreciation on these bonds
3. This NCD is secured and has good credit rating, which means relatively lower risk

Also Read: 50 Best Bank Fixed Deposit Schemes

Why you should not invest?

1. Though this NCD can be sold anytime on BSE, but the liquidity is usually low. So you might not get right price if you want to sell urgently
2. The interest on NCD is fully taxable according to the tax slab you fall in

Useful Tips:

1. No TDS (Tax deduction at source) is deducted when the NCDs are held in demat account.

About SREI Infrastructure Finance Ltd:

Srei Infrastructure Finance Limited (SIFL) incorporated in 1985 and having it’s headquarter at Kolkata is primarily engaged in financing of infrastructure projects and equipments. Apart from Infrastructure Financing, SIFL is also engaged in infrastructure project development and provides advisory services.

SREI Infrastructure Finance Ltd NCD - Application Form:

You can download the application form for SREI Infrastructure Finance Ltd NCD – April 2013 from here.

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IPL 2013, the biggest cricket event in India starts today. It’s a 54 day event.

To make sure you don’t miss it, here is the schedule for Pepsi IPL 2013

Pepsi IPL 2013 Schedule

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Greater Noida Industrial Development Authority (GNIDA) has launched Industrial Plots Scheme in Greater Noida. The allotment of the plots would be done through lucky draw.

How to Apply?

The application form along with the details brochure can be obtained from the following banks on payment of Rs 1,100 from April 3, 2013 to May 2, 2013

List of Banks:

1. Bank of Baroda
2. HDFC Bank
3. Indian Bank

The respective branches can be checked in the advertisement below

You can also download the form on GNIDA website and enclose Rs 1,100 bank draft in favour of Greater Noida Industrial Development Authority payable at Greater Noida.

Scheme Dates:

Application Form Available from: April 3, 2013

Last date of Application Form: May 2, 2013

Expected Date of Draw: August 7, 2013

GNIDA Industrial Plots Scheme – Application Form:

You can download the detailed brochure and Application form by clicking here

Industrial Plots Scheme by GNIDA in Greater Noida – April 2013

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Everyone wants to save taxes but don’t want to spend time to understand How they can do it! In fact saving and investing money is as important if not more than earning it.

Keeping this in mind I have prepared a 43 slides presentation covering all sections under which you can save tax for this financial year FY 2013-14 (AY 2014-15).

The focus of presentation is to give you a Quick, Simple yet Exhaustive list of tax saving sections/ options and respective investments.

This is start of the financial year and it would help you to plan your tax saving investments for the entire year in advance, saving the last minute rush and investing in products which you never wanted

Here are some sample pages:

We always worry about taxes and have questions but don’t know who to ask!

Page 2: Common Thoughts About Taxes

The presentation lists down all the tax saving sections available for individuals. Below is just one of the pages:

Page 5: Sections of Income tax you should know for Saving Tax

The list of investment options available u/s 80C, 80CCC and 80CCD. This is the most popular section for claiming exemption up to Rs 1 lakh. Look at the list and you might find some options of tax saving you might not be aware about!

Page 7: 80C Eligible Investment List

PPF – One of the most popular tax saving options u/s 80C. The slides covers details of all the investment options in similar format listing a brief introduction, the pros and cons and some helpful tips!

Page 9: PPF – Details – Pros & Cons – Helpful Tips

Some components of your salary are fully taxable while there are others which are partially taxable or tax free. In case you get the flexibility to design your salary, you should try to maximize the partially taxable or tax free component

Page 34: Which part of Salary is taxable and What is Tax free?

Example of Tax Free part of Salary – Meal Coupons, LTA, Mobile Phone Bills. The slide lists down some rules under which these allowances are tax free.

Page 36: How can you Save tax by Salary Restructuring?

Download Link:

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Most people consider their bank fixed deposits extremely safe but some recent events in Cyprus (an euro zone country) bust this myth of safety of bank deposits. The Cyprus government has decided to use the depositors’ money in bank account to pay off its debts. Deposits greater than €100,000 were frozen by the government but deposits of up to €100,000 remain protected. This is because deposits in banks up to €100,000 is insured while above €100,000 are uninsured. So the deposit that is insured would be untouched.

If such a thing can happen in Cyprus, the question is can it happen in India and how safe is your deposit with banks?

Here are some facts about your bank deposits in India:

• In case of bank closure, license cancellation or liquidation etc, you can lose the entire amount deposited except the amount which has deposit insurance
• Your deposits and interests up to 1 lakh with banks is insured by Deposit Insurance and Credit Guarantee Corporation (DICGC) which is wholly owned subsidiary of the Reserve Bank of India (RBI)
• All kinds of deposits with banks like fixed deposits, recurring deposits, saving and current account deposits are covered (limited to Rs 1 Lakh per customer per bank)
• The DICGC is liable to pay the depositors the claimed amount within two months of claim receipt
• If you have deposits with more than one bank, the cover will be separate for different accounts
• The cost of deposit insurance premium is borne entirely by the insured bank
• Currently all commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks and cooperative bank are insured
• Deposits of foreign governments, deposits of central and state governments, inter-bank deposits, deposits of the state land development banks with the state co-operative bank is not insured

What should you do?

Given the above situation, you should be careful about choosing your bank.

• The public sector banks are the safest as they are backed by government of India. In case there is some problem with the bank, the government would bail it out in most cases. Remember Government can print currency!
• The bigger private banks are also a safe bet. They are generally too big to fail, as failure of a large bank would lead to domino effect taking a lot of smaller banks with it. Remember the bigger banks like Citibank in US were bailed out while the smaller ones were left to survive.
• Usually smaller co-operative banks have higher risk of license cancellation or closure. So if you must bank with them try to keep your deposit within 1 Lakh limit. If you look in the past, RBI has cancelled licenses of several co-operative banks like Bharuch Nagarik Sahakari Bank Ltd, Chatrapur Co-operative Bank Ltd, Nagari Audyogik Sahakari Bank Niyamit, Ghaziabad Urban Cooperative Bank.

So to be on the safer side, you should diversify your deposits in different banks and bank mainly with bigger well known banks.

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If you have paid attention to newspapers in last few days, there are lots of advertisements from Income Tax Department about paying your advance taxes before March 31, 2013.

Most Salaried individuals are not aware about advance tax and there is a misconception that Advance taxes needs to be paid by businessmen or self employed professionals. But salaried employees too need to pay advance tax under following conditions:

1. If they have any income in addition to salaried income (including interest income from Fixed Deposits/ Saving Accounts, Capital Gains, etc) and
2. The difference in actual tax liability on such income and TDS (Tax Deduction at Source) is more than Rs 10,000

Example:

Lets explain the concept of advance tax by an example.

Mr. Ram has annual salary of Rs 15 lakhs and he falls in highest tax bracket of 30%. He also has Rs 10 Lakhs in fixed deposit with a bank which pays him interest of 9% every year.

Salary Income = Rs 15 lakhs

For salary income, the employer deducts TDS and submits the same to the income tax department and hence Ram need not be worried about advance taxes on his salary income.

Interest income = Rs 10,00,000 x 9% = Rs 90,000

1. As per rule the banks deducts TDS at 10.3%. So the bank would deduct Rs. 9,270 (Rs 90,000 x 10.3%) as TDS and deposit the same on behalf of Ram to income tax department.
2. Since Ram’s income falls in highest tax bracket, his actual tax liability on interest received on Fixed Deposit comes out to be Rs. 27,810. So Ram is liable to pay Rs 18,540 (27,810 – 9,270) more as income tax.
3. Since this income tax liability difference is more than Rs 10,000 Ram would need to deposit advance taxes.

Also Read: How you loose money in Fixed Deposits?

When is Advance Tax Payable?

For individuals, advance tax is payable in three installments in a financial year.

So for FY 2012-13 (AY 2013-14) the advance taxes needs to paid as follows:

1. At least 30% of estimated tax difference by September 15, 2012
2. At least 60% of estimated tax difference by December 15, 2012
3. 100% of estimated tax difference by March 15, 2013

Here the Tax difference means the difference between the actual tax liability and the TDS.

So if we take above example, Mr. Ram had to pay

1. At least Rs. 5,562 (30% of 18,540) as advance taxes by September 15, 2012
2. At least Rs. 11,124 (60% of 18,540) as advance taxes by December 15, 2012 [This included previous installment of Rs 5,562]
3. And Rs. 18,540 before March 15, 2013

The advance tax dates have been extended till March 31, 2013 so the last installment can be paid on or before this date.

How to pay Advance Tax?

Paying advance tax is simple. You need to go to income tax website and fill the relevant form and pay online through your bank account.

You can also do it offline by visiting the nearest bank branch which deals with income tax.

What if you don’t pay Advance Taxes?

As I mentioned earlier, the awareness about advance taxes in not high among salaried class and hence they might have skipped paying advance taxes. In case you have not paid advance taxes, a penal interest of 1% simple interest per month on outstanding tax is charged u/s 234C and 234B.

We take the above example and there are two situations:

Situation 1: Mr. Ram skipped the advance tax payment in September and December and paid on March 31, 2013.

The interest he needs to pay is:

• 1^st installment penal interest: Rs 5,562 x 3 months x 1% = Rs 167
• 2^nd installment penal interest: Rs 11,124 x 3 months x 1% = Rs 334
• Total penal interest = Rs 501

So on March 31, 2013 has to pay Rs 18,540 along with additional Rs 501 as penal interest u/s 234C

Situation 2: Mr. Ram did not pay in FY 2012-13 and pay the tax during filing of Tax Return on July 31, 2013

• In this case there would be additional penal interest from April to July 2013 u/s 234B. This interest comes to be Rs 18,540 x 4 months x 1% = Rs 742

He has to pay this Rs 742 (u/s 234B) along with the Rs 501 (u/s 234C) calculated above as the penal interest.

The easier way out?

In case you do not want to go with all the hassel of calculating taxes and paying advance taxes, the easiest way out is to declare income from other sources to your employer. They would accordingly calculate your tax liability, deduct TDS from your salary and deposit it with income tax department.

Exemption from paying Advance Taxes

1. As stated above, if the difference between your actual tax liability and TDS is less than Rs 10,000 then you are not required to pay advance taxes.
2. Since FY 2012-13 Senior citizens who have no income from business or profession are exempted from paying advance taxes. Accordingly, now the senior citizen could pay tax after the FY ends on March 31 as “self assessment tax” on taxable income before filing returns.

Situations salaried employees need to pay Advance Tax

Here are some situations where I think salaried employees need to take care about payment of advance taxes:

1. If you have large amount of interest income from Fixed Deposits or saving bank Account or Bonds etc
2. In case you have changed jobs in a financial year but have not declared the income from previous employer to your present employer. This would lead to lesser tax deduction and you will need to look into advance tax payment.
3. In case you have made capital gains by selling property, gold, mutual funds, stocks, etc and liable to pay taxes on them.

I am sure you can come out many more such situations but remember to pay advance taxes if you have any other income.

Conclusion:

Today is the last day of FY 2012-13. You must calculate your tax liability for this financial year and pay advance taxes if applicable. You can do it online or go to your bank branches today. The banks and income tax office both are open for business today.

Also its good time to start planning for next year which starts tomorrow. You can download the Income Tax calculator for FY 2013-14 and start planning your taxes accordingly.

Resources:

You can download the following files for calculating your Income Tax liability and also to know How to save Tax!

Advertisement from Income Tax Department

Advance Tax Payment Advertisement from Income Tax Department

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The property tax is based on the annual value (AV) of covered space of buildings and vacant lands.

The entire New Delhi area has been divided into 8 Categories from category A to H. Some colonies in these categories are:

1. Category A: Anand Niketan, Friends Colony, Maharani Bagh
2. Category B: Greater Kailash 1, R K Puram, Defence Colony
3. Category C: Lajpat Nagar, Kalkaji, East of Kailash
4. Category D: Prashant Vihar, Dwarka, Daryaganj
5. Category E: Rohini, Defence Enclave in Mahipalpur
6. Category F: Dawat nagar in Okhla, Daya Basti in Shastri Nagar
7. Category G: Dabri Extension, Dairy Colony in Roshanpura
8. Category H: Daoili Village, Daulatpur

The property Tax rates are based on these categories and type of property.

Property tax rates on Residential Property:

• Category A & B – 12%
• Category C, D & E – 11%
• Category F, G & H – 7%

Property tax rates on Non Residential (Commercial) Property:

• For Hotels, Restaurants (with bar), Shops, Cinema Halls, Malls, Gyms, Petrol Pumps, Clubs etc need to pay 20% Property tax for all categories A to H
• For Guest Houses, Paying Guests Houses, Restaurants (without bars) need to pay 15% Property tax for all categories A to H
• For all other Non Residential (Commercial) Property:
  • Category A & B – 15%
  • Category C, D & E – 12%
  • Category F, G & H – 10%

Property tax rates on Farm Houses:

Farm Houses need to pay 20% property tax for all categories A to H.

Rebate on Property Tax:

• 10% Rebate on property tax would be given to DDA/CGHS flats upto covered space of 100 sq. mt.
• 30% rebate on property tax for Senior citizens, Women or physically challenged for covered space of up to 200 sq mt. This rebate is available even if the above are joint holders of the property. This exemption is available on only one property.

Following is the Advertisement from Municipal Corporation of Delhi:

Property Tax for Delhi for FY 2013-14

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