Savings Account Portability

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It is difficult for most of us to remember a bank savings account number. In light of this, it is surely worthwhile considering the viability and implementation of a system that would enable this most vital information to be portable.

After all, the number of our mobile telephone is portable. Indeed, if a user is unsatisfied with his service provider, he can simply switch the provider but still retain the number. Although in place only recently, the concept of portability of telephone numbers is very well understood. On the other hand, the process of changing the 10 digit number can be at best tedious, while informing acquaintances, friends and family of the change can be nothing less than a Herculean task. Nowadays, one's mobile number is tantamount to one's individual identity.

At first glance, it may be challenging for the man in the street to come to terms with the concept of a portable savings account number – after all, the level of confidentiality necessary to protect one's savings far exceeds that required for a telephone, which is, per se, designed to be shared.

A bank account, whether current, savings, term deposit, or no frills, represents a conduit between the customer and the bank and is governed by the Contract Act. Each bank has its own technology and CBS (Core Banking System) to assign an account number. Even though a savings account number is assigned in a serial order, in some cases, it carries extra meaning. Banks issue account numbers in 10, 12, 14 or 18 digit formats according to their individual internal technical requirements. It would be foolish to underestimate both the difficulty of synchronising numbers across the banking system and the enormity of the IT cost that would entail.

The RBI has issued general guidelines on KYC (Know Your Client) and AML (Anti Money Laundering), which require each bank to frame KYC/AML policy and procedures and record documentation requirements. At present, documentation requirements and the scope and scale of due diligence and risk categorisation varies markedly from bank to bank. But, of course, individual banks are responsible for performing due diligence on new accounts as well as for monitoring and reporting suspicious transactions. Notwithstanding the prospective establishment of a central registry for KYC documents, individual banks would remain the final arbiter of whether to open an account or not. The most straightforward route might be to link savings account numbers to the unique number issued by the Unique Identification Authority of India (UIDAI). Implementation could take place once account holders have been allocated a number by the UIDAI. However, the slow pace of the project to date is indicative of the complexity of consolidating information on this scale.

Savings account portability has farreaching implications for the banking system. Any meaningful change to the CBS system is likely to stretch resources, not only financial but also in terms of man power and technology. At the same time, the extent of the cost-benefit ratio is by no means certain. Indian banks have had limited success in penetrating remote areas, and large parts of the population continue to have scant access to basic banking facilities. Nonetheless, the RBI is seeking to stimulate the expansion of bank branch networks into remote areas by waiving licensing requirements. It is more prudent to use these scarce resources to expand basic banking facilities in remote areas.

In October last year, the Reserve Bank relaxed controls on interest rates on savings account deposits, which prompted some private sector lenders to increase rates to as much as 7%. On the face of it, encouraging investors to switch savings account with the same number portability and pursuing the most attractive interest rate offers little obvious benefit to the banking sector as a whole, especially when enhanced returns are already widely available via term deposits.

Clearly, the cost-benefit ratio and its implementation are not yet fully understood by the banks. So when it comes, the debate can be expected to be lively.

  

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. HDFC TaxSaver
2. ICICI Prudential Tax Plan
3. DSP BlackRock Tax Saver Fund
4. Birla Sun Life Tax Relief '96
5. Reliance Tax Saver (ELSS) Fund
6. IDFC Tax Advantage (ELSS) Fund
7. SBI Magnum Tax Gain Scheme 1993
8. Sundaram Tax Saver

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

Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

 

Submit filled up application    Collection canter near you

 

 

 

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

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Check Settlement Track Record of the Insurer before Buying Insurance

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Buy insurance from companies with the best, or at least very high, claim settlement history

   Most people ask about returns, guaranteed or otherwise, premiums, tax breaks (not necessarily in this order) before buying a life insurance cover. Since for many the main purpose of buying life insurance cover during the first three months of every year is an exercise in tax planning, it fits the bill in that context. Rarely do people actually bother to ask whether the insurance company can be trusted to honour a claim. Ironically, this is the most important aspect of an insurance product. In fact, that is the chief function of a life insurance policy – offering financial protection to the dependents of the policyholder on his or her death.

Understanding The Claim Track Record

To be fair, very few know the parameter to be used to ascertain the company's dependability when it comes to approving claims. And, it is very unlikely that your agent will volunteer to share this information, unless his company has an outstanding track record of settling claims. So, how do you get your hands around this key determinant? Well, for starters, you can refer to the Insurance Regulatory and Development Authority's (Irda) Annual Report for 2010-11, which was released recently and put up on its website. Every year, the report lists claim settlement, repudiation (rejection) and pending ratios for all life insurers.
While a thorough research would necessitate studying these ratios for a longer period, even a year's data is not bad to begin with. The data sheet may look complicated, but all you have to do is focus on the percentages mentioned in brackets for each company. For instance, LIC's claim settlement ratio is over 97%.

Claim settlement is an important criterion for all insurance covers, be it a term plan, traditional plan or Ulip, as insurance is the primary consideration. LIC's record can be said to be very good, especially since the public sector giant processed over 7 lakh claims during the year. Some private sector companies, in contrast, have a dismal ratio of merely around 50%, despite handling just a few hundred claims.


Prima facie, the simplest way to choose a policy seems to be to buy one from the company that has the best, or at least very high, claim settlement ratio. However, it may not be entirely correct to go blindly by this data point alone.
While the claims settlement track record would be an important factor when buying a life insurance policy, it would not be advisable to rely solely on this. Some of the new entrants in the insurance industry were initially prompt in settling the claims to establish a good record to capture business. But after having established themselves in the market, they have become worse than the established public sector company. For functioning effectively and surviving over a period of time despite heavy claims, a company must have a broad capital base with sound liquidity and reinsurance, he feels.

Else, a company which may otherwise have a good claims settlement ratio could turn bankrupt in the event of a natural disaster. In addition, you need to probe further to get information on the death claims handed out.

While computing the data on claims settled, pay-out of maturity proceeds is also treated as claim paid. In a way, this helps older companies to clock a better ratio as they are likely to see more maturities every year. Therefore, if you are buying a regular or online term policy, you should ask for claim information specific to these categories in order to get the correct picture.


Then, of course, there are other parameters that pertain to the policyholders themselves that are to be considered. For instance, comprehensiveness of the cover, its cost-effectiveness and, if it features an investment component, the returns track record too.

While buying a policy, try to keep it simple and cover all the possible event risks (such as critical illness) along with life cover. Keeping your life insurance separate from your investment plans is an important consideration. Term plans offer the simplest protection possible at the cheapest cost.


Now, it is quite possible that upon research, you find that the company with the best claim settlement history does not offer a product that suits your needs. Or, that the premiums charged simply do not fit into your budget. In this scenario, can an insurance seeker look for a company with a claim settlement ratio of say over 80%? Or should 90% be the minimum threshold level for the purpose? For any company older than three years, one should look for an acceptance ratio of a minimum 90%. This is extremely subjective and relative. A high claim settlement ratio is important, and the higher the better from the perspective of the insured as you are effectively buying insurance to protect your family. The key, then, may be to strike a balance and look for the best possible alternative.

This apart, there is a view that younger companies are entitled to some leeway as claims arising out of policies less than two-years old typically invite investigation and hence a high claim repudiation ratio is to be condoned, however, refutes this argument.

The law of insurance states that investigation is necessary only in respect of claims lodged within two years of having taken the policy. Unless the claim is absolutely fraudulent due to suppression of material facts, which is unlikely as a medical check-up is a must for taking life insurance, the claim would be payable.

There would be legitimate claims in circumstances like death due to road accident. However, the number of claims would be relatively lower for a new/ younger company, so it ought to have a better claim settlement ratio.

Factor In Claims Pending Ratio

In addition to the claim settlement and repudiation ratios, claim pending ratio is also to be taken into account. The figure is arrived at after deducting claims settled, written back as well as rejected from the total claims filed.
A pending ratio of over 5% demonstrates an inefficient claims management process. A company with a low repudiation but high pending ratio could be seen as postponing decisions on investigation related cases. One needs to study the Turn Around Time (TAT) on the pending data if the percentage seems high.

Also, the company's age could be more pertinent here than on the claim rejection front. Typically, a new company would have a higher claim pending ratio as almost all the policies would be new and would thus require investigation to prevent fraud.

In short, you would do well to adopt a holistic approach and examine all criteria before taking a final decision.

 

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. HDFC TaxSaver
2. ICICI Prudential Tax Plan
3. DSP BlackRock Tax Saver Fund
4. Birla Sun Life Tax Relief '96
5. Reliance Tax Saver (ELSS) Fund
6. IDFC Tax Advantage (ELSS) Fund
7. SBI Magnum Tax Gain Scheme 1993
8. Sundaram Tax Saver

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

Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

 

Submit filled up application    Collection canter near you

 

 

 

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Download REC Tax Free Bond Application Forms

Submit the filled up form to Collection canter near you

Loan on debt investment

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You can take a loan against stocks, mutual fund units, insurance policies and fixed deposits. Bankers say due to associated risks, the margin requirement increases when pledging equity and related investments. Banks sanction up to 50-60 per cent of the current market value of securities.

There are two reasons for which you can borrow against your investments:

i)                     to make up for lower income;

ii) To enhance your loan eligibility. This would also happen to those who pledge unit-linked insurance plans (Ulips). The insurance regulator is likely to disallow policyholders from pledging Ulips.

Debt instruments are safer options, due to their lesser volatility. Hence, these need lower margin. And, though these loans are treated as personal loans, the rate of interest charged is lower. Unfortunately, these documents need to be endorsed in the name of the bank, revoked when the loan is repaid.

Fixed deposits: This can only be done if you have a deposit with the lender. Banks offer a loan anywhere between 75 and 90 per cent of the deposit, varying with each bank and every customer. The loan is structured as an overdraft against your deposits. Many times, it can be taken from the very next day of making the deposit. There is no restriction on the end-use of funds.

The interest charged is 2-2.5 per cent over the fixed deposit rate. Interest will be charged on the amount drawn and not the limit set. Say, you have a deposit of ~1 lakh earning an interest of 10.5 per cent a year. At a 25 per cent margin, your overdraft limit is set at ~75,000. If you need ~30,000, you can withdraw it from the overdraft account at 1212.5 per cent (2-2.5 per cent over deposit rate). The interest will be charged on ~30,000 and not ~75,000.

Debt mutual funds: This is another liquid option preferred by banks. Income funds can be easily liquidated. However, the same cannot be said about fixed maturity plans (FMPs), as the money can be drawn only on a fixed date. So, income and ultra short-term funds will be preferred over FMPs.

Here, you can get up to 80-85 per cent of the investment amount as a loan, at an interest of 12-13 per cent. The dividends can continue to be paid to the holder of units even during the period of lien. However, no units can be redeemed before the loan is repaid.

Gold: A loan against gold is an easy source of raising cash, as most households have gold jewellery available. It is a secured loan, where your jewellery is the security, and that's why there are less documents needed, including no credit score. Non-banking finance companies like Muthoot Finance offer four schemes valuing gold at ~1,035 to 2,260 a gramme at a rate of 12-24 per cent annually. Banks also charge between 12 and 15 per cent every year.

Insurance policies: Not all policies are eligible for loan. You can avail loans on all traditional policies, except money-back plans, only if you have paid the premiums for at least three years. Hence, banks may not always prefer this, as it is less liquid. "You can get up to 85-90 per cent of the surrender value as a loan. The interest rates charged are similar to those for loans against deposits and mutual funds, currently over 12 per cent. Loans are not granted for less than six months," said a senior public sector banker.

Other investments: Long-term investment instruments such as NSC, Indira Vikas Patra, Kisan Vikas Patra can also be used to take a loan, of up to 85 per cent of the investment. 

 

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

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. HDFC TaxSaver
2. ICICI Prudential Tax Plan
3. DSP BlackRock Tax Saver Fund
4. Birla Sun Life Tax Relief '96
5. Reliance Tax Saver (ELSS) Fund
6. IDFC Tax Advantage (ELSS) Fund
7. SBI Magnum Tax Gain Scheme 1993
8. Sundaram Tax Saver

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

Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

 

Submit filled up application    Collection canter near you

 

 

 

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Download REC Tax Free Bond Application Forms

Submit the filled up form to Collection canter near you

DSP BlackRock Mutual Fund renames DSP BlackRock Floating Rate Fund to DSP BlackRock Income Opportunities Fund

 

DSP BlackRock Mutual Fund has decided to rename DSP BlackRock Floating Rate Fund to DSP BlackRock Income Opportunities Fund. The changes will be effective from March 12.

 

 

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. HDFC TaxSaver
2. ICICI Prudential Tax Plan
3. DSP BlackRock Tax Saver Fund
4. Birla Sun Life Tax Relief '96
5. Reliance Tax Saver (ELSS) Fund
6. IDFC Tax Advantage (ELSS) Fund
7. SBI Magnum Tax Gain Scheme 1993
8. Sundaram Tax Saver

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

Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

 

Submit filled up application    Collection canter near you

 

 

 

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Download REC Tax Free Bond Application Forms

Submit the filled up form to Collection canter near you

 

Income Tax Slab 2012 for Senior Citizen

 

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Slab 1

Upto Rs 1.6 Lacs Tax Rate NIL for Men;

Upto Rs 1.9 Lacs Tax Rate NIL for Women;

Upto Rs 2.4 Lacs Tax Rate NIL for Senior Citizen;

Slab 2
Rs 1.6 Lacs to Rs 5 Lacs Tax Rate 10%

Slab 3
Rs 5 Lacs to Rs 8 Lacs Tax Rate 20%

Slab 4
Rs 8 Lacs onwards Tax Rate 30%

 

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. HDFC TaxSaver
2. ICICI Prudential Tax Plan
3. DSP BlackRock Tax Saver Fund
4. Birla Sun Life Tax Relief '96
5. Reliance Tax Saver (ELSS) Fund
6. IDFC Tax Advantage (ELSS) Fund
7. SBI Magnum Tax Gain Scheme 1993
8. Sundaram Tax Saver

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

Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

 

Submit filled up application    Collection canter near you

 

 

 

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Download REC Tax Free Bond Application Forms

Submit the filled up form to Collection canter near you

How to make money in volatile stock market ?

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Current open Infra Bond Application form

 

The stock markets have been volatile since the last few months mainly due to the uncertainty in the developed markets, especially in the Euro region and concern on domestic growth rate. The inflation rate remains high even after many rounds of monetary policy tightening by the Reserve Bank of India (RBI).

Investors have been left wondering what strategy to adopt and how to tackle the volatility. A volatile market provides good opportunities to create wealth. Let us look at how one should go about for this and what should be his or her strategy.

Don't panic

It is important not to value your investment on a daily basis or at a very short interval. The market prices of investments are bound to go up and down in the very short- term and in short-term too but patience is always rewarded in the medium- to long-term.

Be realistic, and exit

It is important to have realistic expectations while investing in equity-based instruments and book profits once the target is achieved. Investors expecting unrealistic returns often end up investing in high-risk instruments and loose their hard-earned money. Suppose you buy a stock for ~100 and have a target to earn 20 per cent in a year's time. However, if the stock moves up sharply on news or business performance in a shorter time span, don't wait for the year, you may exit and invest the same in a fixed income instrument or a bank fixed deposit.

Limit stocks

Investors should not have too many stocks and instruments in their investment portfolios. Having a limited number of instruments in the portfolio makes it easy to track the performances of the investments and have all relevant information about the investments you have made. Also, it is advisable to invest in defensive stocks such as pharma, fast moving consumer goods (FMCG), information technology and so on.

Asset allocation

It is always better to split the investments between debt and equity based on one's risk capacity.

By doing it that way when the market is down 20 per cent to 30 per cent you have money to buy and rebalance the portfolio instead of not having any money to buy since it is all locked up in equities. Debt while delivering lesser returns gives stability and a peace of mind. This makes investors less irrational whenever there is a crash in the equity market. Equity and debt are usually negatively correlated.

Use SIP

Investing in equities via Systematic Investment Plans (SIP) or Systematic Transfer Plans (STP) is a good strategy. By way of SIP, you invest a fixed amount which starts from ~500 on a periodic basis for a defined time period. If you have a lump-sum but wish to invest that every month systematically, you could opt for an STP where money is debited from a liquid fund in the same fund house and transferred to the equity fund as per the period specified by you. If you are in doubt whether you should enter the market now or not, opt for the SIP route of investment via mutual funds. Ideally SIPs should be subscribed for a longer investment period of say two years or greater than two years.

Tip for Nifty traders

An analysis of S & P CNX Nifty for the last one year from January 27, 2011 to January 25, 2012 has thrown up some interesting facts.

Taking the closing value of Nifty as on January 25, 2012 and the average value of Nifty for the last one year, it was found that the Nifty had closed 132 and 145 times above these two values out of the 249 trading days. This meant that in a bearish market too, the index had given positive returns on more than 50 per cent of the days.

 

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

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. HDFC TaxSaver
2. ICICI Prudential Tax Plan
3. DSP BlackRock Tax Saver Fund
4. Birla Sun Life Tax Relief '96
5. Reliance Tax Saver (ELSS) Fund
6. IDFC Tax Advantage (ELSS) Fund
7. SBI Magnum Tax Gain Scheme 1993
8. Sundaram Tax Saver

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

Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

 

Submit filled up application    Collection canter near you

 

 

 

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Download REC Tax Free Bond Application Forms

Submit the filled up form to Collection canter near you

CPs, CDs may get to trade on bourses

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The Securities and Exchange Board of India (Sebi) is planning to allow certificates of deposit (CDs) and commercial paper (CP) with residual maturities of 60 days or less on the exchange platform.

This step is seen as a precursor to the mark to market (MTM, revaluing assets at current worth) requirements for mutual funds (MFs), to be implemented from Day 1. Last week, Sebi brought down the threshold for MTM of debt securities by MFs to 60 days from 91 days.

Sebi wants to take it to Day 1. At present, it is difficult to draw yield curve maturities below 60 days. In the normal course, the short-term yield curve has to be upward sloping. But, since prices are not transparent, we have a flat yield curve.

A CD is a time deposit with a bank. CDs are generally issued by commercial banks and can be bought through brokerages. They bear a specific maturity date, a specified interest rate and can be issued in any denomination, much like bonds.

CP is a short-term debt instrument issued by companies. These, typically, bear coupons marginally higher than that of CDs. At present, in the absence of transparent pricing in the over-the-counter (OTC) market, it is difficult to decipher a fool proof valuation mechanism for these instruments. If it's on an exchange platform, prices can be seen by everyone and it will be easier to draw a curve.

At present, these instruments are traded privately but the trades are reported on the exchanges. The move would be good in the long term. Post-trading reporting is of no great use. If the instruments are actually traded and reported on a real time basis, it will be of great value. This mechanism will make the Net Asset Values (NAV) more realisable. Investors can be sure the NAV they see is what they get, both while purchasing and redeeming. It is important to build the peripheral infrastructure to make the exchange mechanism successful.  

 

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

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. HDFC TaxSaver
2. ICICI Prudential Tax Plan
3. DSP BlackRock Tax Saver Fund
4. Birla Sun Life Tax Relief '96
5. Reliance Tax Saver (ELSS) Fund
6. IDFC Tax Advantage (ELSS) Fund
7. SBI Magnum Tax Gain Scheme 1993
8. Sundaram Tax Saver

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

Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

 

Submit filled up application    Collection canter near you

 

 

 

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Download REC Tax Free Bond Application Forms

Submit the filled up form to Collection canter near you

Make tax saving part of your overall financial plan

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

  

IT IS January, and most companies would have asked their employees to submit their tax-saving proofs immediately. One of the common mistakes most tax savers make is they buy a product that helps them save tax without being sure what they can expect out of that product. For them, saving tax as a goal becomes more important than the potential benefits or returns the investment could provide.

Subsequently, tax savers who have not been able to make their investment in a tax-sensitive and investment-friendly manner will want to sell or close their investments as soon as possible. This would not provide the desired expectation out of the investment.

It is, therefore, important to include tax saving as a part of the overall financial plan. While taxes are inevitable, a smart tax plan will reduce the impact of tax on the income. When planning for investment in tax-saving products, one must consider the need, duration and amount of investment. There are some expenses also which provide tax benefit. The in come tax act provides for tax savings under various sections namely Section 80C, 80CCF and 80D (Please see Table 1). We describe below the maximum and some smart tax saving plans to consider this year.

Consider the amount you need to save under section 80C: Salaried employee's contribution to the employee provident fund (EPF) is an eligible tax-saving investment under Section 80C. As this is a compulsory deduction, this should be the first investment to be considered.

The choices mentioned are also available in case the EPF does not cover the full investment required.

The choice of investment should be made with respect to the overall financial plan of wealth generation and protection. The options also allow for a well thought-out asset allocation strategy.

Ulips: Unit-linked insurance plan (Ulip) is the only investment option that provides tax benefits, risk cover and market-linked returns. Also, any proceeds from such Ulip would come under the ambit of Section 10(10D).

ELSS: It is the tax-saving schemes of mutual funds.

These funds provide a deduction at the time of investment and dividends and capital gains (on sale of units) arising out of income from ELSS are fully tax-free. ELSS also has the least lock-in period of three years.

Tax savers who are looking for a fixed income and capital appreciation should consider investment in PPF , NSC or tax savings bank deposits.

On fully utilising the deductions allowed under Section 80C, consider additional deduction under Section 80CCF: The income tax act allows for an additional deduction up to Rs 20,000 for investment in `long-term infrastructure bonds' under Section 80CCF. These investments have a minimum lock-in period of five years and the investor is liable to pay tax on the interest received. Investment in these bonds can be considered as fixed income as they offer a fixed return of about 9 per cent.

It is suggested that investment in the bonds should be made only on utilising the deduction available under Section 80C as those investments offer benefits of market-linked returns, low lock-in period and a tax-free return in most cases.

With medical expenses on the rise, a health insurance policy is not only an important tax saving option but also an ideal tool that provides adequate health cover for family as well as ageing parents: Health insurance provides security against unanticipated hospitalisation expenses. The income tax act provides for additional deduction on purchase of health insurance. A maximum of Rs 35,000 is allowed as a deduction as under: Rs 15,000:

Premium for policies on spouse, children and self Rs 15,000: Premium towards policies for dependent parents (Rs 20,000, if parents are senior citizens) The above options provides an opportunity to make the most of the tax saving solutions to take control of the basic goals of securing life, health expenses and wealth generation along with an asset allocation investment strategy. A smart tax planning should, therefore, be a part of the overall financial plan that can minimise the tax outflow and provide opportunity for wealth creation, protection and asset allocation for the overall financial objectives and long term goals.  

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

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. HDFC TaxSaver
2. ICICI Prudential Tax Plan
3. DSP BlackRock Tax Saver Fund
4. Birla Sun Life Tax Relief '96
5. Reliance Tax Saver (ELSS) Fund
6. IDFC Tax Advantage (ELSS) Fund
7. SBI Magnum Tax Gain Scheme 1993
8. Sundaram Tax Saver

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

Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

 

Submit filled up application    Collection canter near you

 

 

 

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Download REC Tax Free Bond Application Forms

Submit the filled up form to Collection canter near you

UTI Mutual Fund New Fund - UTI Fixed Term Series XI – II

 

UTI Mutual Fund has announced the launch of new fund offer (NFO) of UTI Fixed Term Series XI - II (400Days). The NFO will be open for subscription only on February 27, 2012.

 

The maturity date will be April 2, 2013.

 

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. HDFC TaxSaver
2. ICICI Prudential Tax Plan
3. DSP BlackRock Tax Saver Fund
4. Birla Sun Life Tax Relief '96
5. Reliance Tax Saver (ELSS) Fund
6. IDFC Tax Advantage (ELSS) Fund
7. SBI Magnum Tax Gain Scheme 1993
8. Sundaram Tax Saver

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Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

 

Submit filled up application    Collection canter near you

 

 

 

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How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Download REC Tax Free Bond Application Forms

Submit the filled up form to Collection canter near you