INVESTMENTS

Muthoot Finance NCD

2011-08-23T00:40:00.000+05:30

Muthoot Finance, the largest gold financing company in terms of loan portfolio, is in the process of raising up to Rs 1,000 crore through a public issue of secured redeemable non-convertible debentures. The issue opened for subscription on 23rd August, 2011.

Muthoot's operating history has evolved over a period of 72 years since M George Muthoot (the father of the Promoters) founded a gold loan business in 1939. Presently, it is the largest gold financing company in India in terms of loan portfolio, according to the IMACS Research & analytics Report (2010).

The NCDs will be listed on the NSE and the BSE and will be used for debt repayments and increasing its market base in the north, east and west zones. The NCD issue has three investment options and yield of up to 12.25 per cent per annum.

Issue Highlights

Minimum Subscription: Rs 5000 (5 NCDs of face value Rs 1000 each)
Attractive coupon rate of 12.25% per annum
Various Modes of Interest Payment (Direct Credit, NECS, RTGS, NEFT, Registered Post / Speed Post)
No TDS on listed debentures (tax to be levied as per the tax slab)
To be listed on NSE & BSE

AAbout the Company :

History of 72 years
Large national presence with 2997 branches as of 30th June 2011
Gold Loan Assets Under Management: Rs 15,728 Crore
Approximately 112 tons of gold held as loan security.
Net Profit for FY 2011: Rs 494 Crore
Net Worth: Rs 2397 Crore

DDetails of the Issue are as follows:

Particulars	Series I	Series II	Series III
Tenure	24 months	36 months	60 months
Minimum Application	Rs. 5000 and in multiples of one bond thereafter
Face Value	Rs. 1000 per debenture
Issue Price	Rs. 1000 per debenture
Interest Payment	Annual
Coupon rate (%)
QIBs	11.75	12	12
Corporates	12	12.25	12.25
Individuals/ HUFs (Investment > INR 5 Lakhs)	12	12.25	12.25
Individuals/ HUFs (Investment < INR 5 Lakhs)	12	12.25	12.25
Effective Yield (%)
QIBs	11.75	12	12
Corporates	12	12.25	12.25
Individuals/HUFs (Investment > INR 5 Lakhs)	12	12.25	12.25
Individuals/HUFs (Investment < INR 5 Lakhs)	12	12.25	12.25

A 12 per cent rate of interest on a debt instrument offers an opportunity for investors to obtain higher yields resulting from a rising interest rate scenario. Secondary market yields on the slightly higher rated AA securities with a residual maturity of two years, are almost two percentage points lower than the rate offered by Muthoot which makes it an attractive instrument. Deposit taking NBFCs with slightly better credit profile are offering anywhere between 9.55-10 per cent on deposits with similar tenors.

Public Issue of Non Convertible Debentures from Manappuram Finance

2011-08-17T14:12:00.008+05:30

Manappuram Finance, a leading NBFC from Kerala, specializes in gold loans, has announced a public issue of Secured redeemable Non Convertible Debentures of Rs.1,000 each. The company will raise up to Rs.400 crore, with an option to retain oversubscription up to Rs.350 crore, aggregating Rs.750 crore.

Mannapuram Finance Ltd. is a part of the Manappuram Group with nine companies having diverse interests in Gold Loans, Asset Financing, Insurance, Foreign Exchange, Money Changing, and most recently, gold jewellery.

Highlights of the issue:

Issue Opens on August 18, 2011
Issue Closes on September 5, 2011
Attractive coupon of 12.20% per annum

No TDS on listed debentures

Details of the two available options:

Option	I	II
Tenure	400 Days	24 Months
Minimum Application	Rs. 5000 & in multiples of 1 bond thereafter	Rs. 5000 & in multiples of 1 bond thereafter
Face Value	Rs. 1000	Rs 1000
Issue Price	Rs. 1000	Rs. 1000
Interest Payment	Cumulative, on maturity	Semi-Annual
Coupon Rate (%)
Resident Individuals/HUF	NA	12.20%
Corporates/Institutions/QIBs	NA	12.00%
Yield (%)
Resident Individuals/HUF	12.00%	12.56%
Corporates/Institutions/QIBs	12.00%	12.34%
Redemption Amount	Rs. 1132.25 for all categories (face value plus redemption premium)	Face value of NCD plus any interest that may have accrued
Nature of Indebtedness	Pari Passu with other secured creditors and priority over unsecured creditors

Under option II, the yield to maturity will be 12.34 per cent in categories I and II, and 12.56 per cent in category III. The interest payment will be semi-annual.

Mr. Unnikrishnan, Managing Director of the company said the market for gold loan financing was largely untapped and would offer a vast potential for further growth. The organised gold loan market was about 1.2 per cent of the value of total gold stock in India.

He said the company was intending to enter the travel and tourism business. As of March 31, 2011, the company's gold loan portfolio comprised more than two million gold loan accounts.

http://www.manappuram.com/

Download prospectus

New Income Tax Rates for the FY 2011-12

2011-02-28T22:59:00.001+05:30

New tax slabs: for Male individual taxpayer

Slabs (Rs)	Rate
1,80,000	Nil
1,80,000-5,00,000	10
5,00,000-8,00,000	20
8,00,001	30

New tax slabs: for female individual taxpayer

Slabs (Rs)	Rate
upto 1,90,000	0
1,90,000-500000	10
500001-800000	20
800001 and above	30

HDFC launches Debt Fund for Cancer Cure

2011-02-23T18:13:00.001+05:30

HDFC has launched a close ended fund , HDFC Debt Fund for Cancer Cure (HDFCC). This will be a capital protection oriented scheme. This scheme will enable unit holders to contribute the dividend declared to Indian Cancer Society. This donation will be eligible for deduction under section 80G of Income Tax Act. Investors may opt to donate either 50 per cent or 100 per cent of such dividend declared. The amount would be automatically contributed to the ICS. The dividends, as is the case with all mutual funds would be tax-free in the hand of the investor. The fund is suitable only for those investors whose primary objective is philanthropy than generating high returns.

The NFO will close on 4th March 2011.
For details visit http://www.hdfcfund.com/

What are Exchange Traded Funds (ETFs)?

2011-02-21T21:56:00.000+05:30

Exchange Traded Funds are essentially Index Funds that are listed and traded on exchanges like stocks. Until the development of ETFs, this was not possible before. Globally, ETFs have opened a whole new panorama of investment opportunities to Retail as well as Institutional Money Managers. They enable investors to gain broad exposure to entire stock markets in different Countries and specific sectors with relative ease, on a real-time basis and at a lower cost than many other forms of investing.

An ETF is a basket of stocks that reflects the composition of an Index, like S&P CNX Nifty or BSE Sensex. The ETFs trading value is based on the net asset value of the underlying stocks that it represents. Think of it as a Mutual Fund that you can buy and sell in real-time at a price that change throughout the day.

PERFORMANCE OF EXCHANGE TRADED FUNDS

Schemes	Latest Price	% Change	Asset Size	NAV	Returns in % (as on Feb 21, 2011)
			(Rs. cr.)	(Rs./Unit)	1wk	1mth	3mth	6mth	1yr	2yr	3yr
Kotak PSU Bank ETF	449.87	0.36	65.73	446.55	1.9	5.9	-11.1	-2.6	42.9	67.9	12.9
PSU Bank BeES	438.00	1.50	9.20	432.29	1.9	5.9	-11.1	-2.6	42.7	65.1	11.7
Bank BeES	1,108.49	-0.00	46.60	1,099.72	1.4	3.1	-9.3	-1.7	29.5	65.5	6.2
Reliance Banking ETF	1,050.00	-0.28	14.55	1,119.86	1.3	3.0	-9.3	-1.7	29.3	65.2	--
Reliance Gold ETF	1,939.35	0.33	340.61	1,932.93	1.4	0.4	1.7	8.6	20.8	12.9	18.1
Gold BeES	1,999.20	0.18	1,633.87	1,987.78	1.4	0.3	1.6	8.6	20.8	13.0	18.8
SBI Gold Exchange Traded Fund	2,028.75	0.43	175.93	2,024.27	1.4	0.3	1.6	8.4	20.8	--	--
Quantum Gold Fund	994.00	0.60	26.63	988.41	1.4	0.3	1.6	8.6	20.8	12.9	17.1
Kotak Gold ETF	1,998.80	0.43	229.93	1,986.46	1.4	0.3	1.6	8.5	20.8	12.9	18.7
UTI Gold Exchange Traded Fund	2,004.05	0.38	449.40	1,987.11	1.4	0.3	1.6	8.5	20.8	13.0	18.7
ICICI Pru SPIcE Plan	186.00	0.00	1.12	190.71	--	-4.0	-6.5	-0.7	13.5	41.4	1.0
Nifty BeES	559.70	1.01	570.04	551.51	0.1	-4.0	-7.3	-1.3	13.5	39.8	1.1
Kotak Nifty ETF	555.77	0.50	13.46	549.79	--	-4.1	-7.3	-1.4	13.5	--	--
Kotak Sensex ETF	185.00	-0.34	17.15	185.11	--	-4.0	-7.0	-1.2	13.3	42.8	--
Junior BeES	109.02	0.51	127.44	108.00	0.1	-4.5	-14.8	-11.0	8.0	61.4	2.2
Shariah BeES	123.50	0.49	0.95	122.18	-0.3	-5.5	-6.0	-0.9	6.8	--	--
Hang Seng BeES	1,377.28	-1.26	62.47	1,395.39	1.5	-4.0	-0.8	8.6	--	--	--
ICICI Pru Gold ETF	2,050.70	0.36	87.35	2,048.46	1.4	0.3	1.5	6.9	--	--	--
HDFC Gold Exchange Traded Fund	2,034.00	0.15	300.66	2,031.48	1.4	0.3	1.6	8.5	--	--	--
Liquid BeES	999.99	0.00	477.15	1,000.00	--	--	--	--	--	--	--
Religare Gold ETF	2,070.00	0.00	38.96	2,042.65	1.4	0.3	1.6	8.6	--	--	--
* Returns over 1 year are annualised.

SOURCE: www.moneycontrol.com

Suzlon is on the way out from Nifty

2011-02-19T19:36:00.000+05:30

Grasim Industries will replace Suzlon Energy in the Nifty index, from March 25. "From S&P CNX Nifty, Suzlon Energy would be excluded while Grasim Industries would get included in the same," according to a statement issued by India Index Services & Products, a joint venture of NSE and Crisil.

Things you shouldn't do when stock markets fall

2011-02-19T19:21:00.001+05:30

A very good article appeared in Hindu BusinessLine on February 5, 2011:

As you watched the Sensex zip past 20,000 in October, you told yourself – “I missed this one! But I'll wait for a correction”. Well, the wait is now over. The Sensex has dipped by over 10 per cent since New Year, with some stocks plunging by as much as 20-30 per cent.

What you, as a young investor, should do now is quite clear. You should be putting away some of your savings (in measured doses) into blue-chip stocks or equity mutual funds for the long term. However, that's easier said that done. So we thought we had better tell you what you shouldn't do in a market fall! Don't:

Head for the exit door

A few months ago, you carefully picked blue-chip stocks and decided to buy them for your retirement. Your ‘portfolio' was doing fine until the markets began to correct. Now, with many of those buys dipping below your purchase price, you wonder if you did the right thing. Should you sell the whole lot now, while the going is good?

Stop right there and think back to why you bought stocks in the first place. Was it because you hoped to double your money in six months? Or was it because you'll have a Rs 1 crore portfolio on retirement? If it was the latter, you should now be buying instead of selling.

Yes, the stocks you hold can sink further in the short term (next six months to a year), but selling them will leave you with no new avenues to meet your goals. Many investors who kept selling their stock and equity fund holdings in 2008 as the markets plunged all the way from 21,000 to 9,000, never had the nerve to re-invest that money at lower levels.

Switch to ‘safer' options

Most people seem to be quite comfortable with the risks of equity investing until they actually come face to face with them! Santhanam, an IT professional in his forties, wanted to build a portfolio of ‘high risk-high return' mutual funds, three months ago. We promptly suggested a few funds that invest in small-cap stocks. Today the portfolio sports a loss of 20 per cent. Santhanam says he wasn't prepared for this. Should he switch into safer fixed deposits which will give him 8 per cent a year?

Shifting money out of stocks or equity funds, after you have made losses on them is the worst thing you can do. By suffering a 20 per cent loss on his portfolio, Santhanam has already borne the brunt of equity risks. Why not stay put to reap its rewards?

In Santhanam's case the stock market has shaved 20 per cent off his wealth in just three months. However, if he switches the money into fixed deposits now, it is going to take him two and a half years just to recoup capital.

The only investment that can help you recoup losses suffered in equities is the equity market itself. So set aside a certain proportion of your savings towards equity investments (say 20 per cent) and don't lose your nerve if markets fall. When it does, buy stocks.

Scrounge for penny stocks

Okay, the market has fallen 10 per cent and most stocks are cheaper than they were just weeks ago. So what should you buy? For most of us, the first impulse is to scrounge for stocks trading at less than a magic figure of Rs 10.

After all, why should I buy 50 shares of ONGC at a stiff Rs 1,200 a share, when I can get 1,70,000 shares of the intriguing Cals Refineries, at 35 paise apiece for the same sum? Well, because ONGC has a running and thriving business in oil refining which makes it a much safer bet.

Blue-chips like ONGC may not multiply in a month, but they offer far greater certainty of long-term returns, than penny stocks like Cals Refineries. Therefore, while you can quite easily bet Rs 35,000 on ONGC if you have a Rs 2 lakh plus portfolio, you certainly shouldn't be investing that big a sum on a dark horse like Cals Refineries.

Wait for the bottom

If you are looking to invest after a market fall, don't wait for the market to ‘bottom' out. The ‘bottom' in any falling market phase is evident only in hindsight.

Sudhish, who started on his first job in January 2009 wanted to make a start on equity investing soon after receiving his first pay packet. The Sensex was hovering at 9,500 levels then. However, thoroughly psyched by predictions on television that the Sensex would head down to 8,000 or even 6,600 levels, he stayed away. Once the up move started, it became more and more difficult to take the plunge; he finally began investing at 14,000 Sensex!

If you are a long-term investor, don't make too fine a point of timing. When market commentators on television tell you that the Sensex has broken through a key ‘support' and is plunging towards the abyss, they are addressing traders who would like to make a quick buck over a day or a week. Not the retail investor who buys a stock for 5 or 10 years. Remember that market ‘forecasts' can change as quickly as the weather!

Try ‘shorting' stocks

Despite all the wise-sounding counsel on television, believe us, no one has a clue on where the markets are headed in the short term. That's why predictions about where the Sensex is headed over a trading day are so often wrong.

That's why you should never be tempted into ‘shorting' a falling market or stock. The problem with selling stocks that you don't own (short selling) is that the price has to fall immediately for you to make money on the trade.

When you buy a stock and it refuses to move up you can always hold on to it, in the hope that you will be proved right in a month or even a year's time. However, when you short-sell a stock, you don't have that luxury.

To square up the position; you will need to buy the stock at a higher price if need be. Shorting is a sure way to lose your shirt in a whimsical market.

source http://www.thehindubusinessline.com

http://www.thehindubusinessline.com/features/investment-world/young-investor/article1159248.ece

Mutual Funds-New Fund offers

2011-02-18T21:52:00.000+05:30

Name Open Date   Close Date
IDFC Infrastructure Fund (D) 14-02-11 28-02-11
IDFC Infrastructure Fund (G) 14-02-11    28-02-11
Canara Robeco Gilt Advantage (D) 14-02-11    21-02-11
Canara Robeco Gilt Advantage (G) 14-02-11      21-02-11
Canara CPOF Sr-1 (36M) A (D) 11-02-11    24-02-11
Canara CPOF Sr-1 (36M) A (G) 11-02-11    24-02-11
IDBI Monthly Income Plan (G) 14-02-11      28-02-11
IDBI Monthly Income Plan (MD) 14-02-11    28-02-11
IDBI Monthly Income Plan (QD) 14-02-11    28-02-11
Reliance Gold Savings Fund (D) 14-02-11    28-02-11
Reliance Gold Savings Fund (G) 14-02-11    28-02-11
SBI Capital Protection Fund- Sr-II 18-02-11    04-03-11

Infrastructure Bonds

2011-02-15T19:22:00.000+05:30

IIFCL infrastructure bonds - issue will close on March 4, 2011
www.idfc.com

REC Infrastructure bonds - issue will close on March 28, 2011
http://recindia.nic.in/

TOP 5 -EQUITY FUNDS - PERIOD (LAST 1 MONTH)

2011-02-12T21:57:00.000+05:30

TOP 5 -EQUITY FUNDS - PERIOD (LAST 1 MONTH)

Rank	Scheme Name	Date	NAV (Rs.)	Last 1 Month %
1	Birla Sun Life Commodity Equities Fund - Gbl Multi Comm - Retail - Growth	Feb 11 , 2011	15.432	5.0332
2	Birla Sun Life International Equity Fund - Plan A - Growth	Feb 11 , 2011	9.8032	4.255
3	Birla Sun Life Commodity Equities Fund - Gbl Agri - Retail - Growth	Feb 11 , 2011	18.387	1.6575
4	ICICI Prudential Equity & Derivatives Fund - I O - IP - Gth	Feb 11 , 2011	13.53	1.1211
5	ICICI Prudential Equity & Derivatives Fund - I O - Retail - Gth	Feb 11 , 2011	13.41	1.055
source: mutualfundsindia.com

TOP 10 -EQUITY FUNDS - PERIOD (LAST 12 MONTHS)

Rank	Scheme Name	Date	NAV (Rs.)	Last 12 Months %
1	Reliance Banking Fund - Growth	Feb 11 , 2011	98.1508	36.2078
2	ICICI Prudential Technology Fund - Growth	Feb 11 , 2011	18.2	32.0755
3	Birla Sun Life Commodity Equities Fund - Gbl Multi Comm - Retail - Growth	Feb 11 , 2011	15.432	29.4262
4	Birla Sun Life Commodity Equities Fund - Gbl Agri - Retail - Growth	Feb 11 , 2011	18.387	27.6503
5	Religare Banking Fund - Regular - Growth	Feb 11 , 2011	19.05	27.3396
6	Birla Sun Life Commodity Equities Fund - Gbl Pre Metals - Retail - Growth	Feb 11 , 2011	14.306	27.1181
7	UTI Banking Sector Fund - Growth	Feb 11 , 2011	40.52	26.7835
8	UTI Pharma and Healthcare Fund - Growth	Feb 11 , 2011	37.83	25.4726
9	ICICI Prudential Banking and Financial Services Fund - Retail - Growth	Feb 11 , 2011	17.19	25.2003
10	Sundaram Financial Services Opportunities Fund - Retails - Growth	Feb 11 , 2011	18.6333	24.5034
source: mutualfundsindia.com

LIC may not issue Infrastructure Bonds in this financial year

2011-02-04T22:52:00.002+05:30

"We are working on a plan to come out with infrastructure bonds... It is unlikely to happen in the current fiscal," LIC Chairman T S Vijayan said today.

To know more about Infrastructure bonds:
http://makemyinvestments.blogspot.com/2011/01/infrastructure-bonds-new-avenue-to-save.html

IIFCL launches Tax Saving Infra Bonds

2011-02-04T22:42:00.008+05:30

The State-owned India Infrastructure Finance Company (IIFCL) has launched today the sale of Infrastructure Bonds having benefits under section 80CCF of the Income Tax Act. The issue closes on March 4, 2011.

These bonds, which carry a tax deduction of up to Rs 20,000, will be issued at a face value of Rs 1,000 and carry interest of 8.15% for the 10-year series and 8.3% for the 15-year series.

The Bonds have been assigned a credit rating of “AAA/Stable” by CRISIL and “CARE AAA” by CARE indicating ‘Highest Safety’ with regard to timely payment of interest and repayment of principal amount of the bonds.

The Lead Managers to the Issue are ICICI Securities Limited, SBI Capital Markets Limited, A.K. Capital Services Limited, Bajaj Capital Limited, Enam Securities Private Limited, Karvy Investor Services Limited, RR Investors Capital Services (Private) Limited and YES Bank Limited

http://www.iifcl.org/

To know more about infrastructure bonds :
http://makemyinvestments.blogspot.com/2011/01/infrastructure-bonds-new-avenue-to-save.html

LIC launches two new plans.

2011-02-02T22:33:00.000+05:30

Life Insurance Corporation of India launched two new non-linked plans today: Bima Account I and Bima Account II. Both are Variable Insurance plans and offer a guaranteed minimum return of 6%.

For details visit www.licindia.in
http://www.licindia.in/bima_account1_features.html
http://www.licindia.in/bima_account2_features.html

ELSS - an efficient tax saving tool

2011-01-23T18:46:00.010+05:30

Equity Linked Savings Scheme(ELSS) is a kind of mutual fund. It can be considered as a diversified equity fund with tax benefits. Under Section 80C an individual can claim tax deduction by investing a maximum of Rs. 1 lakh in ELSS.

Advantages of ELSS are:

Lock in period is only 3 years while other tax saving instruments are having longer lock-in period. NSC - 6 years, PPF -6 years, Bank FD - 5 years.

Dividend option is available. If opted, the investor will get periodic dividends. Most of the fund houses declare dividends annually. Some funds offer dividends even twice a year. By using this option the investor can unlock a part of his investment even before the lock-in period. Another benefit is that dividend is not taxable.

Earning potential is high. Since the investments are made in the stock markets, the returns will depend on the performance of the stock market. Equity is the only investment which can beat the inflation. Even though there is a market risk, the returns will be maximized and the losses will be minimized by the skill of the fund manager. Top 10 ELSS have given 17% -23% returns for the last one year. NSC and PPF offers 8% returns only while 5 year Bank FD offers 8.5%.

Returns are not taxable. Returns from ELSS are treated as long term capital gains and they are not taxable. But returns from NSC and Bank FD are taxable.

SIP is available. The investor can select Systematic Investment Plan (SIP) route for investing in this fund. The minimum amount of SIP is Rs.500 only.

Performance of Top 10 ELSS funds are given below: (NAV as on 25.1.2011 )

Rank	Scheme	Date	Performance
			1 month%	3 months%	6 months %	1 year %
1	Fidelity Tax Advantage Fund - Growth	Jan 25, 2011	-4.25	-7.50	4.21	23.44
2	Quantum Tax Saving Fund - Growth	Jan 25, 2011	-4.07	-5.70	7.45	22.67
3	Axis Tax Saver Fund - Growth	Jan 25, 2011	-3.95	-6.32	5.12	22.43
4	HDFC Long Term Advantage Fund - Growth	Jan 25, 2011	-5.42	-7.15	6.13	21.71
5	HDFC Taxsaver - Growth	Jan 25, 2011	-4.36	-8.22	3.65	19.83
6	JPMorgan India Tax Advantage Fund - Growth	Jan 25, 2011	-5.27	-6.54	5.00	19.46
7	Canara Robeco Equity Taxsaver - Growth	Jan 25, 2011	-3.66	-7.99	1.42	18.89
8	ING Tax Saving Fund - Growth	Jan 25, 2011	-5.08	-7.22	4.41	18.19
9	Sahara Taxgain - Growth	Jan 25, 2011	-3.59	-10.08	2.17	17.90
10	Franklin India Taxshield - Growth	Jan 25, 2011	-4.19	-6.14	5.82	17.83

Infrastructure Bonds: A new avenue to save tax

2011-01-19T23:26:00.001+05:30

If you have exhausted the Rs.100000 limit under section 80C, don't worry; there is another avenue to save tax. A new section 80CCF was introduced in the 2010-11 budget. Under this section an investment upto a maximum of Rs. 20000 in infrastructure bonds would be deductible from your taxable income. This deduction of Rs.20000 will be over and above the Rs.100000 limit of deduction available under section 80c,80ccc and 80ccd.

Long term infrastructure bonds will be issued by

IFCI- Industrial Finance Corporation of india
LIC - Life Insurance Corporation of India
IDFC - Infrastructure Development Finance Company
NBFCs classified as Infrastructure Finance Company by RBI .

These bonds will mature after a period of 10 years. But the investors can exit from the bonds after the 5 year lock-in period.IFCI bond is now closed for subscription. Only IDFC infrastructure bond and REC infrastructure bond are currently open for subscription. The IDFC bond issue closes on February 04, 2011. The REC infrastructure bond isssue will close on March 28, 2011.

                                                   These bonds offer a yield of 8% compounded annually.

For details about REC infrastructure bonds click on http://www.recindia.nic.in/infra.html

                     For  IDFC infrastructure bonds click on http://www.idfc.com/infrastructure_bonds.htm

Famous Quotes by Warren Buffet

2011-01-17T21:06:00.002+05:30

"A public-opinion poll is no substitute for thought. "

"Americans are in a cycle of fear which leads to people not wanting to spend and not wanting to make investments, and that leads to more fear. We'll break out of it. It takes time. "

"Beware of geeks bearing formulas. "

"Chains of habit are too light to be felt until they are too heavy to be broken. "

"Derivatives are financial weapons of mass destruction. "

"Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once unthinkable dosages will almost certainly bring on unwelcome after-effects. Their precise nature is anyone's guess, though one likely consequence is an onslaught of inflation."

"I always knew I was going to be rich. I don't think I ever doubted it for a minute. "

"I am a huge bull on this country. We will not have a double-dip recession at all. I see our businesses coming back almost across the board. "

"I am quite serious when I say that I do not believe there are, on the whole earth besides, so many intensified bores as in these United States. No man can form an adequate idea of the real meaning of the word, without coming here. "

"I buy expensive suits. They just look cheap on me. "

"I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over. "

"I just think that - when a country needs more income and we do, we're only taking in 15 percent of GDP, I mean, that - that - when a country needs more income, they should get it from the people that have it. "

"I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years. "

"I think the most important factor in getting out of the recession actually is just the regenerative capacity of - of American capitalism. "

"If a business does well, the stock eventually follows. "

"If anything, taxes for the lower and middle class and maybe even the upper middle class should even probably be cut further. But I think that people at the high end - people like myself - should be paying a lot more in taxes. We have it better than we've ever had it. "

"If past history was all there was to the game, the richest people would be librarians. "

"In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497. "

"In the business world, the rearview mirror is always clearer than the windshield. "

"It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently. "

TAX PLANNING in INDIA

2011-01-17T00:57:00.074+05:30

"The only things certain in life are death and taxes.” is a famous quote by Benjamin Franklin. There are innumerable quotes like this about tax. Here is another one from Albert Einstein, “The hardest thing in the world to understand is the income tax."
"Death and taxes may be certain, but we don't have to die every year." -- Unknown.

Even though the income tax rates and allowable deductions are published in the Finance Act well before the beginning of the Financial Year, there will be a mad rush by the taxpayers/tax assesses at the fag end of the financial year to buy tax saving instruments. These hasty decisions may force them to park their hard earned money into schemes which are illiquid or with low return. It can be avoided by early tax planning.

Let us take a look at the Income Tax slabs and Income Tax exemptions under various sections of Income Tax Act and Finance Act 2010.

Income Tax Rates for male resident individual below the age of 65

Assessment Year 2011-12 (FY 2010-11)

Income Tax Rate

Upto Rs. 1,60,000 Nil.

Rs. 1,60,001 to Rs. 5,00,000 10 %

Rs. 5,00,001 to Rs. 8,00,000 20 %

Above Rs. 8,00,000 30 %

for female resident individual below the age of 65
Income Tax Rate

Upto Rs. 1,90,000 Nil.

Rs. 1,90,001 to Rs. 5,00,000 10 %

Rs. 5,00,001 to Rs. 8,00,000 20 %

Above Rs. 8,00,000 30%

   For Senior Citizens
       Income          Tax Rate

   Upto 2,40,000    Nil
   2,40,001 to 5,00,000       10%
   5,00,001 to 8,00,000    20%
   Above 8,00,000    30%

Deductions are allowed from income under the following Sections.

Section 80C

We can claim a maximum deduction of up to Rs. 1, 00,000 under section 80C. The various investment options available under this section are :

Life Insurance Premium.
Employees Provident Fund

Public Provident Fund. (Maximum.70000)

National Savings Certificate.

5 Year Fixed Deposits with banks and post offices.

   Tuition Fees paid for children's education.
   ELSS- Equity Linked Savings Schemes (Tax Saving Mutual Funds)

SECTION 80CCF
   Additional investment of 20000 in infrastructure bonds over and above Rs 1 lakh in 80C

Section 80D
     Health Insurance premiums. max. 15000. for senior citizens - 20000.
   Another 15000 is allowed for buying health insurance for parents. (20000 if any of them is senior citizen).
Section 80DD
   for medical treatment of handicapped dependents. 50000 or actual expenses whichever is lesser.

Section 80DDB
   for treatment of specified diseases: max. 40000, for senior citizens - 65000
   neurological diseases.
     Parkinson's disease.
   malignant cancers.
   AIDS
   Thalasaemia
   chronic renal failure
     haemophilia



Section 80E
   Interest paid on educational loan. No maximum limits.

SECTION 80GG
   HRA exemption

SECTION 24
   Interest repayment on housing loan. max.150000.

2010-09-10T16:07:00.000+05:30

   "Investment is the commitment of money or capital to purchase financial instruments or other assets in order to gain profitable returns in the form of interest, income, or appreciation of the value of the instrument.  It is related to saving or deferring consumption.", Wikipedia.