Capital Gains Tax for Debt Mutual Fund Returns

Debt funds Capital gains tax

Short-term capital gains (if exit is within 3 years) on debt funds will be added to your income and taxed as per your applicable tax slab

f you sell them within 3 years, capital gains on debt funds are treated as short term. It will be added to your income and taxed as per your applicable tax slab. Long term capital gains (if exit is after 3 years) are taxed at 20 per cent with an indexation benefit on your cost.

	Investment holding period	Taxation
Short Term Capital Gain	36 months or lesser	added to income and taxed as per applicable slab rate
Long Term Capital Gain	more than 36 months	20% with indexation or 10% without indexation

Let us take an example, Since we do not have the Cost Inflation Index for future years, we will take an example of past. Say you invested R10 lakhs in 2010-2011. Assuming the fund returned 9 percent a year, and you redeem it for R15,38,624 in 2016-17, your long term capital gain would be R5,38,624.

However, if you index the cost with the Cost Inflation Index (provided by the IT department) for 2010-11 and 2015-16, then the cost would be R1,52,0393 (R10 Lakh * 1081/711). Then the long term capital gain would be R18231 (1538624-1520393). A 20 percent tax on this would be R3646.

So, as per this example, your capital gains tax for this financial year will be R3646.

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Principal Emerging Bluechip Fund

Invest Principal Emerging Bluechip Fund Online

 

 

• Achieve long term capital appreciation by investing in equity of Mid and Small Cap companies
• Stock selection focused on stocks of higher growth companies at attractive valuations
• Performance History of more than 7 years
• Actively managed yet benchmark aware portfolio management

For further information contact SaveTaxGetRich on 94 8300 8300

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For Better Returns Invest in MF SIPs over Stock Market Cycles

Invest SIPs Online

Stock Market returns do not have linear movement

During bull markets, almost all stocks - the good, the not-so-good and the downright rubbish - tend to move up. Everyone seems to be elated because the value of their portfolios are moving up with leaps and bounds. So, you really won't know how resilient your portfolio is until there is a strong down turn. When selling becomes relentless - like it was 2 months back almost all stocks tend to lose ground. And so the cycle repeats. A bull market is followed by a bear market, which is followed by another bull market and then again a bear market. Many a times the retail investor goes out with a loss since he / she may have entered at a previous high and then blames the market. Is there no respite from this cycle? The answer is: No, because it is the inherent nature of markets. So what should investors do?

Markets have been choppy over last 2 years – A live example:

Indian stock markets started its bull run when the NDA Government won the general elections in May 2014. There was a sense of euphoria around the new government's reformist agenda, as investors started pumping money in the markets with a hope of turnaround. Valuations were at an all time high for major mid and small cap companies. However soon in midst of 2015, global and local factors played a spoil sport and Indian stock markets – Nifty corrected. In fact Nifty 50 touched 21 month low in Feb 2016. Again over last 2 months since the Budget was announced, markets have bounced back more than 12%.

This volatility has cause yet again many investors to enter markets at high points due to euphoria around the markets and sell stocks at losses due to fear around falling markets. Meanwhile people who have preferred the SIP route for investing tend to avoid the market volatility due to the concept of rupee cost of averaging. They follow a disciplined approach towards investing a fixed some periodically into mutual fund units in order to fulfil a financial goal.

(S)ystematic (I)nvestment (P)lan

Systematic Investment Plan or SIP, offer a simple and disciplined way to accumulate wealth over long term. Mutual Fund SIPs work pretty much like bank recurring deposits, except they generate superior risk adjusted returns compared to recurring deposits. It brings in a disciplined approach to invest regularly and can be started witha minimum of Rs.1000 per month. SIPs are perfect for people who wish to generate long term wealth without investing too much time, money and efforts into it.

Advantages of SIP Route:

- Need to time the market become irrelevant, since frequent investments ensure entry in the market at both high and low levels. Thus making it favourable in volatile markets

- Averages the cost of investment – which means when the markets are down one gets more mutual fund units and when markets are up one gets better returns

- Professional management of funds and diversification at a very low amount, thus eliminating the need for monitoring the funds on a daily basis

Below a snapshot of the performance of some of our key schemes as on 30^th April 2016

Fund Name	1 Year	3 Years	5 Years	7 years	10 Years
Birla Sun Life Frontline Equity Fund	0.58	12.96	15.35	13.75	14.08
Birla Sun Life Top 100 Fund	-0.19	13.26	15.54	14.08	13.19
Birla Sun Life 95 Fund	3.85	15.33	15.68	14.13	14.24
Birla Sun Life Equity Fund	3.53	17.88	18.24	14.84	13.44
Birla Sun Life Mid Cap Fund	0.06	22.36	20.25	16.65	15.78
Birla Sun Life Dividend Yield Plus Fund	-7.11	9.41	10.52	10.59	12.65
Birla Sun Life India GenNext Fund	2.41	17.35	18.85	17.95	16.58
Birla Sun Life MNC Fund	-1.98	27.41	26.01	23.92	21.93
Indices	1 Year	3 Years	5 Years	7 years	10 Years
Nifty 50 Index	-2.99	5.55	8.46	7.86	8.29
S&P BSE 200 Index	-2.33	7.88	9.93	8.72	8.92
Nifty 500 Index	-2.10	8.70	10.49	9.06	9.02
Nifty MNC Index	-8.41	11.72	13.99	13.24	13.00
Nifty Free Float Midcap 100 Index	2.82	17.95	15.83	12.97	12.36

Mutual Funds have been instrumental in protecting downside and improving upside by selecting the good from the not so good and the downright rubbish. On top of this, SIPs in mutual fund have delivered better than Market performance over various periods. It is a safer way of investing for conservative equity investors through up and down market cycles. So, dear investor, you really have two choices. You either learn by being disciplined and well planned or you will learn by losing money.

The ball is in your court.

Exide Life Sanjeevani

Exide Life Insurance has launched Exide Life Sanjeevani, a comprehensive health cover for heart and cancer related conditions. The plan provides a fixed lump sum benefit on diagnosis of early and major stages of heart and cancer related conditions, waives future premiums and also allows you to claim in addition to any existing health insurance.

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

Top 10 Tax Saver Mutual Funds for 2017 - 2018

Best 10 ELSS Mutual Funds to Invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Tata India Tax Savings Fund 

3. Birla Sun Life Tax Relief 96

4. ICICI Prudential Long Term Equity Fund

5. Invesco India Tax Plan

6. Franklin India TaxShield 

7. Reliance Tax Saver (ELSS) Fund

8. BNP Paribas Long Term Equity Fund

9. Axis Tax Saver Fund

10. Sundaram Diversified Equity Fund

Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

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Call us on 94 8300 8300

 

Is it mandatory to file Income Tax Returns?

The Income Tax Department has made it mandatory to file your returns only in case the gross the total income exceeds Rs 2.5 Lakh

It is mandatory to file your Income Tax returns only in cases where your gross the total income (without allowing any deduction under section 80C to 80U) exceeds R2.5 Lakh. However whether or not it is mandatory to file returns, there are advantages to filing your income tax returns.

 Processing of home, educational and other types of loans require income tax returns to be shown to the lending institutions.

Thus filing returns makes loans easier to process. Further, it is mandatory to have income tax returns for the processing of any Visa in case of travel abroad.

For further information contact SaveTaxGetRich on 94 8300 8300

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You can write to us at

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Virtual Card

1 A Virtual Card is a one-time use online card (no physical existence) that can be used only for online transactions or payments.

2 Anyone with Internet banking facility with transaction rights or a valid debit or credit card can create a Virtual Card.

3 Virtual Cards are valid for a maximum of 48 hours or till the transaction is completed, whichever is earlier.

4 Either the unutilised amount is credited back to the account after the time limit expires or the amount is debited only when the purchase is completed successfully.

5 It protects the user from card related frauds as the primary card or account details are not communicated to the merchant.

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

Top 10 Tax Saver Mutual Funds for 2017 - 2018

Best 10 ELSS Mutual Funds to Invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Tata India Tax Savings Fund 

3. Birla Sun Life Tax Relief 96

4. ICICI Prudential Long Term Equity Fund

5. Invesco India Tax Plan

6. Franklin India TaxShield 

7. Reliance Tax Saver (ELSS) Fund

8. BNP Paribas Long Term Equity Fund

9. Axis Tax Saver Fund

10. Sundaram Diversified Equity Fund

Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

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Call us on 94 8300 8300

Make Salary Tax Efficient





Pay attention to your pay structure to get more in hand and pay less taxes

When negotiating terms of employment with a propsective employer, we focus on in creasing CTC, without paying much attention to the salary structure. Though a high er CTC is an important aspect of salary negotiation, it is equally important to structure it well to maximize take-home pay and minimize tax outgo. While you may not have complete control over the way your salary is structured, employers today are flexible enough to design it your way. However, before taking a final call on a particular pay structure, consider your long-term and short-term financial goals. Modifying the tax structure can simultaneously impact your net take home and your retirement corpus as some components of the package may not come to you immediately and others may be either full taxable or tax-free.Generally the CTC can be broadly divided in four components--basic, allowances, perquisites and retirement benefits contributions. Each component is treated in a different way for tax purposes and can impact your tax liability.

1 BASIC SALARY

It is vital to decide how much of your CTC should make up the basic salary, because it is fully taxable. If the basic is too high, your tax liability will shoot up. Other components of salary exemptions, such as the HRA and Provident Fund benefits, are linked to basic pay. Designing a tax efficient pay structure is always a trade-off between higher take home and maximum tax benefits.

Junior employees need a higher monthly payout. They can get that by opting for a lower basic salary and adding other fixed allowances in the salary structure such as food allowance, medical reimbursement, conveyance allowance, telephone, etc. These allowances are fixed and payable monthly. Employees may get taxed on these to a certain extent, but at a lower rate.

Senior employees fall in a higher tax bracket. For them, tax savings gets priority over a higher take-home salary. Hence, a higher basic salary would fetch additional tax benefits for such individuals.

2 ALLOWANCE

The Income Tax Act has prescribed certain allowances for all salaried individuals which are exempt at source. So if these allowances are a part of the pay structure, the overall tax liability may come down to a great extent.

3 PERQUISITES

The additional benefits or amenities provided by the employer to an employee are termed as perquisites. The Income Tax Act allows exemption for certain perquisites which if included as component of salary can result in tax savings.

4 RETIREMENT BENEFITS CONTRIBUTIONS

The fourth and the most important component of any salary structure is the retirement benefit contribution which is not payable to the employee immediately and is in the nature of long-term savings for them. While these savings help them lead a dignified life post-retirement, they also result in a lower take home package. It is important to decide the right ratio for these contributions. To motivate individuals to save more towards building a good retirement corpus, tax laws allow certain exemptions and deductions for these contributions.

Be diligent while designing your pay structure. Use the table alongside to plan the perfect salary structure.

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

Top 10 Tax Saver Mutual Funds for 2017 - 2018

Best 10 ELSS Mutual Funds to Invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Tata India Tax Savings Fund 

3. Birla Sun Life Tax Relief 96

4. ICICI Prudential Long Term Equity Fund

5. Invesco India Tax Plan

6. Franklin India TaxShield 

7. Reliance Tax Saver (ELSS) Fund

8. BNP Paribas Long Term Equity Fund

9. Axis Tax Saver Fund

10. Sundaram Diversified Equity Fund

Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

OR

Call us on 94 8300 8300

Birla Sun Life Medium Term Plan Online

Invest Birla Sun Life Medium Term Plan Online

When it comes to investing, traditional modes of investment may be a safe option. But when it comes to potential wealth-creation, the need is for a different approach. Or rather, a diversified one!

Birla Sun Life Medium Term Plan (An Open ended Income Scheme)is one such scheme which aims to identify securities which offer superior levels of yield at lower levels of risk and selectively invest in them. The primary objective of the scheme is to generate regular income through investments in debt and money market instruments in order to make regular dividend payments to unit holders and secondary objective is to achieve growth of capital.

For further details on the Scheme, refer Scheme Information Document and Key Information Memorandum on website of the Fund.

For further information contact SaveTaxGetRich on 94 8300 8300

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You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

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Call us on 94 8300 8300

Tax Implication on maturity of Traditional Insurance Policy

For a traditional insurance policy, the maturity proceeds are tax free under Section 10(10D). The maturity proceeds of your  life policy will be tax free if the sum assured of your policy is more than 5 times the annual premium.

Maturity proceeds of insurance policies are tax free for:

• All policies issued up to 31.03.2003
• policies issued between 01.04.2003 to 31.03.2012 if sum assured is more than five times the annual premium
• policies issued from 01.04.2012 and on wards if sum assured is more than 10 times the annual premium

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

OR

Call us on 94 8300 8300