tag:blogger.com,1999:blog-85402485205232097632024-03-05T14:54:43.974-08:00Money For InvestmentGreat place to find secret tips on investment in insurance,mutual funds, retirement planning, tax planning ,credit cards,ELSS etc which no one ever told you.Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.comBlogger169125tag:blogger.com,1999:blog-8540248520523209763.post-34669996444527467292019-11-25T20:03:00.000-08:002019-11-25T20:03:11.902-08:00How to invest Business Cash ?<div dir="ltr" style="text-align: left;" trbidi="on">
One of the dilemmas facing businessmen all over the world is , how do I make the best use of the cash being generated by my business ? Should I reinvest it in the business or is there any other use of the same where I can get better returns?<br />
<br />
So, to answer this question, we must first analyse following ?<br />
1. What is the return expected from your business? Is it less than what you would get from investing in Bank FD or Mutual funds?<br />
2. How much risk appetite you have with this surplus cash ? If your risk appetite is less then you may invest the money in FD with banks. If you can take little bit of volatility , then invest in Mutual funds. If you have stomach for equity markets, then you would be better off investing in direct equities and let the market work its magic on your surplus cash.<br />
3. Whether you would need money in near future to run your business? If you will need this cash in near future , then simply go for FDs which can be liquidated anytime, else look for suitable investment tools basis your time horizon and risk appetite.<br />
<br />
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</div><img border="0" src="https://partners.etoro.com/B11510_A83532_TGet_ADVTrue.aspx" width="1" height="1">Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com0tag:blogger.com,1999:blog-8540248520523209763.post-69097366582742235142019-11-24T21:23:00.001-08:002019-11-24T21:24:52.099-08:00How to invest in "Cheap" Mutual Funds ?<div dir="ltr" style="text-align: left;" trbidi="on">
Investing is all about buying cheap and selling for a profit and thus we all are always on the lookout for the next big investing opportunity where we can buy cheap and sell for a premium. Is this concept possible when it comes to Mutual Funds ? Can we buy cheap mutual funds ? or better are there any cheap mutual funds?<br />
<br />
What are CHEAP Mutual Funds : Lot of people consider mutual funds with Low NAV as being cheap mutual funds to invest , which is a completely wrong notion since NAV being high or low has no bearing on the returns given by the fund. For example , a fund with low NAV may give lower returns than fund with higher NAV is the underlying stocks of the second fund do better. Also low NAV may be indicative of poor past performance . Thus simply investing in mutual funds with LOW NAV may not be same as investing CHEAP for selling for a PREMIUM. Understand this difference.<br />
<br />
So, what should you do if you are looking to invest CHEAP and sell for a PREMIUM? If you are from United States, I would recommend that you start investing in direct stocks which are transparent in terms of their worth since there are multiple metrics to find out their relative premium. One of the most important metrics is Price to Earnings multiple. Always invest in stocks which are trading at relatively lower PE multiple than the overall market and that company has relatively good growth prospects going ahead. This way you shall be able to buy CHEAP and with some patience will be able to SELL at premium and make nice profits. If you want to get started, this is great place to start.<br />
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Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com0tag:blogger.com,1999:blog-8540248520523209763.post-62706970270290953832013-03-19T03:37:00.002-07:002019-11-24T21:10:28.797-08:00Should you buy Gold from Banks ?? <div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
<span style="font-size: small;"><br /></span>
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;">The dream run up in Gold prices in last
few years has enticed all and sundry as an attractive investment asset
class. It has not only proved to be an excellent hedge against inflation
a, reputation it holds with elan since time immemorial, but also, has delivered
returns in excess of debt, equity etc as an asset class. Thus , it has
emerged as the Best Investment Option in last few years. However, skeptics
believe that gold has had its share of dream run and may not be possible
for investors who are entering into now, to expect the same kind returns
in future .</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;">But, if you are on of those who believe
that best years of gold as an asset class is still ahead of us and want
to invest in physical gold then you must be pondering where should you
buy the gold from? These days we have seen most of the banks aggressively
positioning them as place where one can buy physical gold bars/coins etc.
The other option is offcourse our old Jeweller , both <span style="font-size: small;">unorganized</span> and large
organised players like Titan, TBJ etc.</span>
<br />
<span style="font-family: sans-serif; font-size: small;">Before deciding to buy Gold , ponder
on these points:-</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;"><u><b>1. Purity of the Gold:-</b></u> The singlemost
important factor that must guide your decision is the purity of the metal.
Most of small Jewellers dont have the track record to write home about
on thei account. Banks can give you complete assurance on quality. They
give you 24 Carat Gold as against 22 Carat that Jewellers sell. Besides
it is 999 Gold with Certificate of Purity. Some Large Jewellers also give
the same.</span>
</div>
<div style="text-align: justify;">
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;"><u><b>2. Premium Charged-</b></u> Banks generally
charge a premium on the price of Gold over what is the prevailing rate.
Simply put, the Gold that you will buy from Bank will be costlier than
what you wil get in the market.</span>
</div>
<div style="text-align: justify;">
<span style="font-size: small;"><u><b><br /></b></u><span style="font-family: sans-serif;"><u><b>3.Resale Option -</b></u> Most of Banks DO NOT
buy back the gold that they sell. However, Jewellers normally will take
back the gold in case you were to sell it back to them.</span></span>
</div>
<div style="text-align: justify;">
<span style="font-size: small;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-size: small;">You must ,therefore, carefully weigh your options before rushing to buy Gold as an investment asset.</span></div>
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Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com52tag:blogger.com,1999:blog-8540248520523209763.post-36871010583288847032013-03-12T03:33:00.001-07:002013-03-16T06:23:30.931-07:00Does Pension Plans make sense ? - Should you invest in Pension Plans?<div dir="ltr" style="text-align: left;" trbidi="on">
<br style="background-color: white; color: #222222; font-family: arial, sans-serif;" />
<br style="background-color: white; color: #222222; font-family: arial, sans-serif;" />
<span style="background-color: white; color: #222222; font-family: sans-serif;">Recently IRDA has allowed Insurance companies in India to launch Pension plans after a gap of over 2 years . Earlier, the insurance companies did have pension plans in the market, but , the regulator viz IRDA had asked them to withdraw all such plans and as such we had a situation where there were no "Pension" plans available in India for some time. However, it has been allowed again . While doing so IRDA has mandated few changes in the product design/features which are aimed at safeguarding the investors interest like offering minimum guaranteed returns etc.</span><span style="background-color: white; color: #222222; font-family: arial, sans-serif;"> </span><br />
<span style="background-color: white; color: #222222; font-family: sans-serif;">So , as a person wanting to secure your post retirement years, should you be investing in them? The short answer to this question is NO . Let me elaborate on this.</span><span style="background-color: white; color: #222222; font-family: arial, sans-serif;"> </span><br />
<div style="text-align: justify;">
<u style="color: #222222; font-family: sans-serif; font-weight: bold;">1. High charges :</u><span style="color: #222222; font-family: sans-serif;"><b> </b>Most of Pension Plans offered by Life Insurance companies today, have very high cost structure. Most of the Products have charges to the tune of 4-5% of the overall yearly premium/contribution that you make in the plan. This is against 1.5 to 2% charges on most of the well diversified Mutual Funds. Thus it is one of the most expensive ways of planning for your retirement.</span></div>
<br style="background-color: white; color: #222222; font-family: arial, sans-serif;" />
<span style="background-color: white; color: #222222; font-family: sans-serif;"><b><u>2. Lower guarnateed returns offered :</u> </b>Most of these plans have guaranteed returns promise attached with it . While on the face of it, guaranteed returns gets people /investors excited and thats the reason why it is offered in first place. What companies dont tell you that while the guarantee is mostly of the premiums paid only ( or negligible returns over it) what they dont tell you i\with as much enthusiasm is that they charge you for providing you that guarantee too . Yes , they have something like guarantee charge in the cost structure.</span><br />
<br style="background-color: white; color: #222222; font-family: arial, sans-serif;" />
<span style="background-color: white; color: #222222; font-family: sans-serif;"><b><u>3. Lower than FD returns on annuities</u></b></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif;"> : The annuities offered ( pension ) in most of these plans range from 6-7% annually. This is even lower than what Bank FDs pay today . So there is no compelling reason why one shouldnt simply put money in FD ( the corpus if one has) and get superior returns from it.</span><br />
<br style="background-color: white; color: #222222; font-family: arial, sans-serif;" />
<span style="background-color: white; font-family: sans-serif;"><b style="color: #222222;"><u>4. No Option to buy annuity from other company or pension provider.</u> </b><span style="color: #222222;">Another drawback of these plans is that most of them make it mandatory to buy annuities from them only . So if you invest with ABC company , then you are locked with them and will have to necessarily buy the annuity also from them irrespective of the rate they offer you. So , even if there is someone else in the market offering you better annuity rate, you will still not be able to move to that firm for your annuity. This is a serious drawback considering that Pension Sector is proposed to be reformed and opened up in India, which will drive competition among players thereby making it imperative on them to lure customers with better and superior products. </span></span><br />
<span style="background-color: white; font-family: sans-serif;"><span style="color: #222222;">So , short answer is that planning for retirement doesnt have to be done only by investing in Pension Plans offered by Life Insurance Companies . One would be better off investing in PPF , NPS etc for Pension Planning.</span></span><br />
<span style="background-color: white; font-family: sans-serif;"><span style="color: #222222;">What do you think?</span></span></div>
Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com2tag:blogger.com,1999:blog-8540248520523209763.post-77671508265366834372013-03-07T02:02:00.004-08:002019-11-24T21:11:19.300-08:00Retired Recently? -Best investment option for Retired Person <div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
<span style="font-family: sans-serif; font-size: small;"><b><u>Best investment option for Retired
Person</u></b></span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;">There are broadly 2 kinds of retirees
viz 1. Those who draw pension from their employers 2. Those who dont have
any pension from Employers . Now lets look at how each one of them should
approach their investments for post retirement phase.</span>
<br />
<span style="font-family: sans-serif; font-size: small;"><b><u>1. Retired Persons having Pension
from Employers </u></b></span>
<br />
<span style="font-family: sans-serif; font-size: small;"> Since they already have some kind
of pension income coming in they are better placed and have less daunting
task to plan for this phase of their life. They need to do following
things :</span>
<br />
<span style="font-family: sans-serif; font-size: small;"><b>1. Buy a comprehensive Health Insurance
Plan -</b> There are lot of general insurance companies in India who are
offering health covers upto 65-70 years . There are few options from Life
Insurance Companies where one can have the health plan before 70 years
and then can continue to renew it for their lifetime. Example is Health
Assure Plan for HDFC Life. It is an absolute must that you cover yourself
adequately against any untoward health shocks at this stage, since one
such shock can wipe out your entire savings.</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;"><b>2. Invest in Senior Citizens Savings
Scheme</b> - At the time of retirement if you have received any lumpsum
amount, then, invest teh same in Senior Citizen Savings Scheme. Its Govt
of India Scheme meant for providing attractive returns to retired people.
One can invest upto maximum Rs 15 lakhs and get 9% returns payable quarterly
on it.</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;"><b>3. Invest in Debt/Balanced Fund -</b>
Balance surplus investible amount may be invested in good debt or balanced
mutual funds . This will ensure it gives better than FD returns with minimum
risk. You may consider HDFC Prudence in this category.</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;"><b><u><span style="font-size: small;">2</span>. Retired Persons having No
Pension from Employers </u></b></span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;">This set of people need to be very meticulous
in planning their investments. They need to plan to ensure that they get
regular monthly income but also guard against inflation. They must do the
following things:-</span>
<br />
<span style="font-family: sans-serif; font-size: small;"><b>1. Buy a comprehensive Health Insurance
Plan</b> - They too are equally exposed to all the health risks and as
such need to cover themselves adequately. Buy cover for both yourself and
your spouse. </span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;"><b>2. Invest in Senior Citizens Savings
Scheme</b> - Invest upto Rs 15 lakhs in this scheme . This will give
them 9% pa.</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;"><b>3. Invest in Post office Monthly
Scheme -</b> This will ensure that they get decent returns monthly which
will help them keep their basic household expenses going.</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;"><b>4. Invest in good Balanced or Well
diversified Equity Fund - </b>Since they do not get any inflation adjusted
pension income from their employers , they have to ensure that they invest
their money in instruments which gives them superior inflation adjusted
returns. I would suggest they can invest in good balanced fund or well
diversified large cap equity funds like Reliance top 200 ,
BNP ParibasEquity, HDFC Equity etc.</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;">If you stick to this , I think you will
have a comfortable retired life without worrying for paying your next electricity
bill . </span>
</div>
<div style="text-align: justify;">
</div>
<div style="text-align: justify;">
<span style="font-size: small;">What do you think? Pl comment. </span></div>
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<div style="text-align: justify;">
<span style="font-size: small;"><br /></span>
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;">Filing Income Tax returns is one of
the activities about which there is lot of anxiety among lot of people
. We need to understand that while filing ITR is important and necessary
, it is also important that we do so correctly . So what are the things
that you should keep in mind while filing ITR.</span>
<br />
<span style="font-family: sans-serif; font-size: small;"><b><u>1. File ITR within specified time
-</u></b> The first things that you must ensure is that you file the ITR
within the specified period and not delay it. Any delay in filing ITR (
especially wehere you have to pay taxes ) may attract penalty from the
Govt . And as such , sticking to the timeline is a great idea.</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;"><b><u>2. Disclose all incomes - </u></b></span><span style="font-size: small;">The
most common mistake tax payers make is failing to report all the sources
of their income. One type of income that is forgotten by many individuals
is interest earned on a bank savings account and on Fixed Deposits (FDs).
This income is taxable according to your respective tax slab. Usually banks
deduct 10 percent as Tax Deductible at Source (TDS) on the interest income
earned on FDs. However, if you fall under a higher tax slab of say, 30
percent, you are liable to pay tax accordingly. Not reporting these incomes
might attract a notice from the income tax department.<br />
In addition, if you have changed your job recently, make sure that you
report the income earned through your previous employer as well. <br />
Also, any income earned by a minor through investments is taxable according
to the tax slab of the parent with higher income. The income of the minor
is clubbed with that parent’s income while computing net taxable amount.
In case you have made investments in your children’s name, keep this in
mind while filing your taxes.</span>
<br />
<span style="font-size: small;"><b><u>3.Paying tax on House Property -</u></b> Lot of
people assume that there is no tax to be paid on house property . While
the truth is all house property owned by the person attracts tax and one
needs to pay the same.</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-size: small;"><b><u>4.Filing details of income which is tax exempt -</u></b>
Some people assume that we have to file details of income where there is
tax liability and as such do not disclose incomes which are tax free. For
example, Long Term capital gains out of equity invetsments , dividends
received etc are tax free but still need to be disclosed in your tax returns.
This reflects your total income accurately and removes any chances of receiving
any notice from Income Tax Dept since most of the AMCs, brokerages etc
from where you receive this income will anyway report this to the authorities.</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-size: small;"><b><u>5. Give Correct email Id and Postal Address</u></b>
: Since all the necessary information is communicated by the income tax
department via email or post, it is extremely important to enter these
details correctly before filing your taxes. A minor mistake in filling
these details means that you may miss important notifications. So check
and re-check your postal and email address when you file your income tax.</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-size: small;"><br /></span></div>
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Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com1tag:blogger.com,1999:blog-8540248520523209763.post-4156139500398972092013-03-05T02:24:00.001-08:002013-03-16T06:25:23.111-07:00Best Tax Savings Mutual Funds (ELSS) - FY 12-13<div dir="ltr" style="text-align: left;" trbidi="on">
Its that time of the year again when all of us scramble to do tax planning. We have lot of options under Sec 80 C of the IT act to invest upto Rs 1,00,000 and save taxes on it. Some of the options under Sec 80C are as under:-<br />
<br />
1. ELSS<br />
2. Insurance Plans - ULIPs<br />
3.PPF<br />
4.PF and VPF( Voluntary Provident Fund)<br />
5. Tax Saving FDs<br />
<br />
There are quite a few other options as well like deduction on account of paying tuition fees for kids, housing loan deductions etc.<br />
<br />
Out of the 5 options listed above, ELSS is my own favourite for following reasons:-<br />
1. It has lock in period of just 3 years . This is lowest among all the options available.<br />
2. It gives you equity exposure while PPF and FDs give only debt exposure.<br />
3. Is more likely to give inflation adjusted positive returns .<br />
<br />
So , if you are looking to invest in ELSS, following are the top ELSS schemes that you may consider.<br />
<br />
<img height="91" src="https://mail.google.com/mail/?ui=2&ik=62f5bfa29a&view=att&th=13d34484e177897f&attid=0.1&disp=emb&zw&atsh=1" width="640" />
<br />
<span style="font-family: sans-serif; font-size: x-small;"></span><br />
<span style="font-family: sans-serif; font-size: x-small;">Happy Investing!!<br />
</span></div>
Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com2tag:blogger.com,1999:blog-8540248520523209763.post-26507681654056299922013-03-03T21:52:00.001-08:002013-03-03T21:56:32.495-08:00CTS Compliant Bank Cheque - What is it?<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
<span style="font-family: sans-serif; font-size: small;"><b><u>What are CTS Compliant Cheques
?</u></b> CTS is an acronym for Cheque Truncation System . CTS is a new
clearing system proposed by RBI wherein the need for physical movement
of cheques between drawer bank and drawee bank will be eliminated. In place
of physical cheques , only the image of the cheque having relevant information
like MICR code , date of presentation, bank details etc will be sent for
clearing. The cheques used for such clearing are called CTS complaint cheques.</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;"><b><u>What are the advantages of CTS
based clearing system ?</u></b></span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;"><b> Following are the advantages
of CTS based clearing system:</b></span>
<br />
<span style="font-family: sans-serif; font-size: small;">1. Since the need for physical movement
of cheques is removed, the whole process of clearing will be faster . One
will be able to get credits ion their account faster than is possible today.</span>
<br />
<span style="font-family: sans-serif; font-size: small;">2. This will result in lower cost in
clearing since banks will save money which is currently spent in physically
moving cheques from one place to another during the clearing process.</span>
<br />
<span style="font-family: sans-serif; font-size: small;">3. Lower scope of issues arising out
of loss of cheques in transit etc.</span>
<br />
<span style="font-family: sans-serif; font-size: small;">4. Lower frauds related to cheque clearing
since it is much more safe and secure than physical clearing system
currently practised.</span>
<br />
<span style="font-family: sans-serif; font-size: small;">5. Superior customer service .</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;"><b><u>When will it be applicable?</u></b></span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;">CTS based clearing is proposed to go
live from 1st April 2013 and as such CTS compliant cheques alone will be
valid from that day onwards.</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;"><b><u>How to find out if the cheque
you have is CTS complaint ?</u></b></span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;">The new cheque leaves which are CTS
compliant will have following features:-</span>
<br />
<span style="font-family: sans-serif; font-size: small;">1. " Please sign above this line"
notation will be marked on the right hand bottom side of the cheque.</span>
<br />
<span style="font-family: sans-serif; font-size: small;">2. "Payable at par at all branches
" will also be written on the cheque at the bottom.</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;"><b><u>Will alterations on the cheque
be accepted post launch of CTS based clearing?</u></b></span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;">Any kind of ccorrections in payee's
name , amount in figures /words etc will NOT be accepted on CTS complaint
cheques and as such one needs to be very clear both while writing cheques
and also while accepting it.Do not accept any cheque which has over-writing
or corrections done on it since banks will not be able to honor such cheques
and will be returned back. Similarly , while issuing cheques , take
care to ensure that you write the cheque correctly the first time itself
so that there is no need for alterations.</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;"><b><u>What happens to non CTS complaint
cheques /PDCs etc post 31st March 31?</u></b></span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;">All post dated cheques given for EMI
payments should be replaced by new CTS 2010 compliant cheques . The
non complaint cheques given as PDCs etc wont be accepted/valid post 31st
March 13.</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;">Thus , its amply clear that non CTS
cheques needs to be replaced if you already havent. Apply for new cheques
immediately so that there is no last moment rush for you on this account.</span>
<br />
<span style="font-size: small;"><br /></span>
<span style="font-family: sans-serif; font-size: small;">Happy Banking !!</span>
<br />
<span style="font-size: small;"><br /></span></div>
</div>
Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com0tag:blogger.com,1999:blog-8540248520523209763.post-19768527885600920022013-03-03T09:43:00.002-08:002013-03-03T09:46:28.491-08:00RGESS - Is it Good One for Tax Planning?<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
Rajiv Gandhi Equity Saving Scheme ( RGESS) is <span style="background-color: white; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; line-height: 20px;">s a new equity tax advantage savings scheme for equity investors in India. The scheme got it's approval on September 21, 2012. It is exclusively for the first time retail investors.</span></div>
<div style="text-align: justify;">
<br /></div>
<div style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; line-height: 20px; padding: 7px 0px; vertical-align: baseline;">
<div style="text-align: justify;">
The investors who invest up to Rs.50,000 in 'Eligible Securities and MFs<span style="font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit;">' and have gross total annual income less than or equal to Rs.12 Lakhs will benefit from a new section 80CCG under the Income Tax Act, 1961 on 'Deduction in respect of investment under an equity savings scheme' has been introduced to give tax benefits.</span></div>
</div>
<div style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; line-height: 20px; padding: 7px 0px; vertical-align: baseline;">
<div style="text-align: justify;">
<strong style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Example</strong>:</div>
<div style="text-align: justify;">
Let us say, you invest Rs.50,000 under RGESS, the amount eligible for tax deduction from your income will be Rs.25,000. Alternatively, if you invest Rs.40,000 under RGESS, the amount eligible for tax deduction will be Rs.20,000. So you may save about Rs.2,575, Rs.5,150 for income tax slabs 10% and 20% respectively under this scheme.</div>
</div>
<div style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; line-height: 20px; padding: 7px 0px; vertical-align: baseline;">
<div style="text-align: justify;">
<b><u>Who can invest in it ?</u></b></div>
</div>
<div style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; line-height: 20px; padding: 7px 0px; vertical-align: baseline;">
<div style="text-align: justify;">
Individuals who have never invested in equity markets are eligible . Definition of such individuals is as under:-</div>
</div>
<div style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; line-height: 20px; padding: 7px 0px; vertical-align: baseline;">
<div style="text-align: justify;">
- Person who hasnt opened a Demat Account.If Demat is opened , then there should be no transactions.</div>
</div>
<div style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; line-height: 20px; padding: 7px 0px; vertical-align: baseline;">
<div style="text-align: justify;">
- Person who hasnt invested ever in equity -cash and FnO.</div>
</div>
<div style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; line-height: 20px; padding: 7px 0px; vertical-align: baseline;">
<div style="text-align: justify;">
-Resident individual having annual income of less than 12 lakhs.</div>
</div>
<div style="border: 0px; padding: 7px 0px; vertical-align: baseline;">
<div style="text-align: justify;">
<span style="font-family: inherit;"><span style="font-style: inherit; font-variant: inherit; line-height: 20px;">- The second or </span></span><span style="line-height: 20px;">third</span><span style="font-family: inherit;"><span style="font-style: inherit; font-variant: inherit; line-height: 20px;"> holder of the demat account would not be considered as investor having equity exposure . Its only the first holder who shall be considered that way. hence all such people can open a new demat account and take advantage of this scheme.</span></span></div>
</div>
<div style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; line-height: 20px; padding: 7px 0px; vertical-align: baseline;">
<div style="text-align: justify;">
<b style="font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit;"><u>Is it worth it? </u></b></div>
</div>
<div style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; line-height: 20px; padding: 7px 0px; vertical-align: baseline;">
<div style="text-align: justify;">
It is worth it because of following reasons:</div>
</div>
<div style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; line-height: 20px; padding: 7px 0px; vertical-align: baseline;">
<div style="text-align: justify;">
- Helps you save taxes over and above Sec 80 C to the extent of Rs 25000 as direct deduction from taxable income , if your annual income is less than 12 lacs pa.</div>
</div>
<div style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; line-height: 20px; padding: 7px 0px; vertical-align: baseline;">
<div style="text-align: justify;">
- It allows you to take advantage of tax saving even while investing in well diversified Mutual Funds. Of all the tax saving instruments available in India today, ELSS is the best one owing to its low cost and low lockin period besies high return potential. RGESS is just like ELSS only and as such makes sense to invest in it and save extra taxes.</div>
</div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<br /></div>
<div id="sidebar" style="background-color: #e8e8e8; border: 0px; float: right; line-height: 16px; margin: 0px; padding: 0px; vertical-align: baseline; width: 185px;">
</div>
</div>
Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com1tag:blogger.com,1999:blog-8540248520523209763.post-53843550454772798122011-10-16T12:53:00.000-07:002019-11-24T21:11:42.667-08:00HUF AND TAX IMPLICATIONS EXPLAINED<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div style="text-align: justify;">
<span style="background-color: white; color: #ffbf18; font-family: Arial;"><b>What is an HUF?</b></span><span class="Apple-style-span" style="background-color: white; font-family: arial, sans-serif;"> </span></div>
<span class="Apple-style-span" style="font-family: arial, sans-serif;"><div style="text-align: justify;">
<span style="background-color: white; font-family: Arial;">Down the ages, the Hindu community has largely believed in the concept of joint families, joint income and joint property that is shared and enjoyed by all the members of the family. This concept is now recognized as a legal expression in the form of the Hindu Undivided Family (HUF)– a rather efficient tax-planning tool under the Income Tax Act.</span><span class="Apple-style-span" style="background-color: white;"> </span></div>
<div style="text-align: justify;">
<br /></div>
<span style="background-color: white; font-family: Arial;"><div style="text-align: justify;">
<span style="font-family: Arial;"><b>How do you form HUF?</b> As the name suggests, an HUF is a family of Hindus. However, under the tax laws, even Jain and Sikh families can set up HUFs. Typically, an HUF will consist of a person who have lineally descended from a common ancestor, and includes their wives and unmarried daughters. Do note: in Maharashtra, even married daughters are recognised as HUF members.</span><span class="Apple-style-span" style="font-family: arial, sans-serif;"> </span></div>
</span>
<span style="background-color: white; font-family: Arial;"><div style="text-align: justify;">
<span style="font-family: Arial;">While the senior most member is called the karta (manager), the male members are known as coparceners, and the females are referred to as members. In the ordinary sense, an HUF should consist of at least two male members. However, in case the HUF is partitioned, the smaller family that receives the property can constitute an HUF even if it has only one male member.</span><span class="Apple-style-span" style="font-family: arial, sans-serif;"> </span></div>
</span>
<div style="text-align: justify;">
<br /></div>
<span style="background-color: white; color: #ffbf18; font-family: Arial;"><div style="text-align: justify;">
<span style="color: #ffbf18; font-family: Arial;"><b>What income is regarded as HUF income?</b></span><span style="font-family: Arial;"> All the income that arises on the utilisation of the HUF’s assets and on the investment of its funds is regarded as the HUF’s income that is assessed separately and chargeable to tax. Importantly, the income should have been earned using HUF property or funds or property only; if it arises on account of the personal investments of any member, it will generally be regarded as the individual income of the member.</span><span class="Apple-style-span" style="font-family: arial, sans-serif;"> </span></div>
</span>
<span style="background-color: white; font-family: Arial;"><div style="text-align: justify;">
If an HUF contributes funds to the capital of a partnership firm in which it is represented by the karta or any other member who represents the HUF, then the profits and interest received from the firm will be treated as HUF income. This is because the income arises on the investment of HUF funds, and so the income belongs to the family. If, however, the partnership firm also pays the karta (or the member who represents the HUF) a salary for efforts put in by him, the remuneration will be regarded as the individual income of the karta/member. </div>
</span>
<span style="background-color: white; font-family: Arial;"><div style="text-align: justify;">
<span style="font-family: Arial;">It’s important to remember that the same person can be taxed separately as an individual, as well as for and on behalf of the HUF. The two capacities are totally different. And so, the individual and the HUF are totally different units for tax purposes–they are two different assessees.</span><span class="Apple-style-span" style="font-family: arial, sans-serif;"> </span></div>
</span>
<span style="background-color: white; font-family: Arial;"><div style="text-align: justify;">
Since an HUF is a separately entity, it can earn income from house property, income from business and capital gains, and income from other sources. However, since emoluments are given for personal skills, an HUF cannot earn income from salaries. An HUF can also carry on a business that is managed on its behalf by the karta. It can also hold shares, securities, jewellery and any other valuable articles or articles, apart from movable and immovable property. </div>
</span>
<div style="text-align: justify;">
<br /></div>
<span style="background-color: white; color: #ffbf18; font-family: Arial;"><div style="text-align: justify;">
<span style="color: #ffbf18; font-family: Arial;"><b>What are the assets of an HUF?</b></span><span style="font-family: Arial;"> Any gift that is given specifically to an HUF can be treated as HUF property. The assets received on the partition of a larger HUF of which the coparcener was a member is also perceived as HUF property is also treated as the property of the HUF. </span></div>
</span>
<span style="background-color: white; font-family: Arial;"><div style="text-align: justify;">
<span style="font-family: Arial;">Assets can also be bequeathed to an HUF by way of a will that specifically favours the HUF. A point to be noted: in the absence of a will, the assets received on the death of a benefactor after 1956 (when the Hindu Succession Act came into force) will not be regarded as HUF property, but as individual property, even though such assets have been inherited.</span><span class="Apple-style-span" style="font-family: arial, sans-serif;"> </span></div>
</span></span></div>
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Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com2tag:blogger.com,1999:blog-8540248520523209763.post-21021979612837027572011-10-15T07:54:00.000-07:002011-10-15T08:12:57.571-07:00TRAVELLING ABROAD ? TAKE FOREX CARD, GIVE "CASH" A MISS<div dir="ltr" style="text-align: left;" trbidi="on"><span class="Apple-style-span" style="background-color: white; font-family: arial, sans-serif;"><span style="font-family: sans-serif;">For those who travel abroad frequently either due to personal or professional reason have to carry foreign exchange with them for using it during their stay outside the country. Most of the people carry currency notes with them which is fraught with various risks. But if you want to avoid the risk of travelling while carrying currency notes , you may seriously consider taking forex cards given by the banks for this purpose.</span> </span><br />
<span class="Apple-style-span" style="background-color: white; font-family: arial, sans-serif;"><br />
<span style="font-family: sans-serif;"><b>What is Forex Card?</b> Forex card is a plastic based card like a debit card or credit card, which is prepaid in nature. The person taking the card can get the desired amount in the desired currency loaded on the card which can be subsequently utilised while on tour. The person needs to approach the bank and pay in Indian rupees for the equivalent amount in foreign currency which needs to be loaded on the card.</span><br />
<br />
<span style="font-family: sans-serif;"><b>Who issues Forex Card?</b> Most of the to league banks in India do offer forex cards to their customers. One can approach bank like ICICI, SBI, HDFC etc for forex cards.</span><br />
<br />
<span style="font-family: sans-serif;"><b>What are the charges? </b>You may have to pay issuance fee of Rs 100-300 for every forex card that you take. Other than this , you may have to pay RS 50-200 as loading fee while loading the card with the desired foreign currency. You may have to pay 1.5% - 3% on ATM cash withdrawal too.</span><br />
<br />
<span style="font-family: sans-serif;"><b>How much forex can you load on your card?</b> As per current RBI regulations, one can load upto maximum of USD 10000 across all forex cards in a year.</span><br />
<br />
<span style="font-family: sans-serif;"><b>Can I have multiple forex cards?</b> Yes. You can have multiple cards for loading cash in different currencies viz USD, Pound,, Euro etc. </span><br />
<br />
<span style="font-family: sans-serif;"><b>Whats the exchange rate applicable on my spend?</b> You will be charged the exchanged rate of the day when you got the card loaded with the desired currency. The conversion rate is applicable on the day when the rupee is converted in foreign currency which in this case is the day of loading the card in India.</span><br />
<br />
<span style="font-family: sans-serif;"><b>Documents Required</b> ? You will have to give PAN Card copy, Passport,Visa and tickets .</span><br />
<br />
<span style="font-family: sans-serif;"><b>Benefits of the card? </b>Following are the benefits of the card</span><br />
<span style="font-family: sans-serif;"><b>1. This card will provide you immunity against the risk of physical loss of cash while travelling.</b></span><br />
<span style="font-family: sans-serif;"><b>2. It allows you to control the exchange rate applicable . You can choose when to load the card depending on the exchange rate movement. Once loaded, you are not exposed to any adverse movement in currency exchange rate. </b></span><br />
<span style="font-family: sans-serif;"><b>3. Accepted across all major stores and ATM abroad.</b></span><br />
<span style="font-family: sans-serif;"><b>4. Add on benefits like travel insurance and accident insurance being offered by some Banks.</b></span><br />
</span></div>Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com0tag:blogger.com,1999:blog-8540248520523209763.post-19782605913242916942011-10-11T09:30:00.000-07:002011-10-11T09:30:36.222-07:00HOW TO TRANSFER SHARES FROM ONE DEMAT ACCOUNT TO OTHER?<div dir="ltr" style="text-align: left;" trbidi="on">For those of us who have Demat Accounts and want to change from one Demat account to another for any reason will have to first get the holdings transferred to the new Demat Account before the account can be closed and you can fully migrate to the new account. So, if you are wondering how can you get the share holdings transferred from your current Demat account to the new one, then read on.<br />
<div style="text-align: justify;"><b><u>1.Transfer from one Demat Act to another Demat Act of the sole owner :-</u></b> In case , the transfer of shares is from one Demat account to another Demat account held by the same person in his sole capacity, then he/she needs to fill delivery instruction slip giving the details of the shares to be transferred and the same shall be submitted with the depository. These delivery instruction slips are available with the depository and are like cheque leaves which we use to tranfer money from our account.</div><b><u>2.Transfer from Joint Demat Account :-</u></b> In this case too, the delivery instruction slip will have to filled and submitted to the depository. Only difference is that here both the owners need to sign the slip.<br />
<div style="text-align: justify;"><b><u>3.From Sole Demat Account after account holders death:-</u></b> In such cases the holding is transferred to the demat account of the nominee where there is nominee mentioned in the account. For cases where the holding is less than 1 lakh and there is no nomination in the account, the holdings may be transferred to the legal heir without any court order or will. For cases above Rs 1 lakhs holding without nomination, one will have to give court order or will from the deceased alongwith the death certificate for effecting the transfer.</div><b><u>4. From Joint Demat Account after death of one owner-</u></b> In this case, the shares will be transferred to the new Demat Account of the surviving holder. The surviving holder will have to submit an application form alongwith death certificate for effecting the transfer.<br />
<b><u>5.Transfer of Lock in securities:-</u></b> If the Demat has ELSS etc which has lockin then the transfer can be done only post getting them rematerialised . After rematerialisation, the same can be dematerialised in new Demat account.<br />
<b><u>6. Transfer of Holding where there is Lien :-</u></b> For all holdings where there is lien marked , before transferring the same one will need NOC from the party in whose benefit the holding/stock etc is pledged.<br />
<br />
Hope this has helped get you some clarity on the issue.</div>Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com0tag:blogger.com,1999:blog-8540248520523209763.post-87922975329927377602011-10-08T23:29:00.000-07:002011-10-08T23:29:45.032-07:00GOLD LOANS - GOOD OPTION IN URGENCY<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: justify;">Till not very long ago, gold or gold jewellery was considered to be most sacred of family possessions in India, and a family would do its all to avoid selling it or mortgaging gold for taking a loan on it. But, slowly but steadily things are indeed changing in India with many gold loan companies setting up shop and driving home the point that there is nothing wrong in taking loan over gold. One of the gold loan Finance company asks" Jab Ghar me pada hai sona toh phir kyun hai rona?". This has resulted in huge off take in gold loan sales in the country . But does it make sense for you? Do you really understand what it is ? How can you take benefit from it ? Lets try and understand each of these in the following paragraphs.</div><br />
<div style="text-align: justify;"><b>GOLD LOAN - What is it?</b></div><div style="text-align: justify;">Gold Loan is a loan given against the security of the gold bar/coin or jewellery . The loan seeker needs to mortgage his/her gold with the bank/NBFCs against which they get loans upto 75% to 95% of the gold value. These are like Personal Loans where the end use of the loan amount is not defined and the amount may be used in any manner as deemed fit by the borrower.Since these loans are backed by security of gold , the banks/NBFCs charge much lower rate of interest on these loans as compared to lets say a Personal Loan which is unsecured.</div><div style="text-align: justify;"><b>Who Offers These Loans?</b> Most of the banks in India like HDFC Bank, ICICI Bank, Axis,SBI etc offer Gold Loans. Other than banks there are dedicated gold loan companies like Mannapuram Finance, Muthoot Finance which exclusively deal in Gold Loan.Most of the gold loan companies have very wide network and are open on Sundays too,thus making it eminently easy for the borrower to seek loan at his/her convenience.</div><div style="text-align: justify;"><b>Loan Amount?</b> Most of the gold loan financers(NBFCS) provide upto 95% of the gold value as loan to the borrower. But if you approach a bank, they are likely to be conservative in their financing and may be willing to offer only upto 75% of the gold value as loan.But to balance that there rate of interest is lower.So you must decide basis that.If you dont want very high loan amount,it may be prudent to approach banks which will give you gold loans at atleast 2-3% lesser than Muthoot Finance, Mannapuram Finance etc.</div><div style="text-align: justify;">Benefits of taking Gold Loan? There are quite a number of compelling benefits which make gold loan a very good option for lot of borrowers. Some of the major ones are</div><div style="text-align: justify;"><b>1.Quick Loan Disbursal -</b> Gold Loans are probably the loans with smallest TAT(turn around time). You can walkin with your gold coin/bar/jewellery and walk out with loan , all in the smae day in matter of couple of hours. </div><div style="text-align: justify;"><b>2.Safety and Security of your Jewellery-</b> Since the gold jewellery that the borrower mortgages with the financier is kept in safe custody of the bank/NBFCs , it ensures that the same is in safe and secure custody .This also reduces the cost that the person might be bearing on account of keeping that jewellery in a bank locker on his own. bank Locker rent is thus saved while the jewellery still stays in bank locker only.</div><b>3.Lower interest rates -</b> Since these are secured loans, the rate of interest is much lower than a plain vanilla Personal Loan.<br />
<b>4.OD Facility-</b> Some banks also provide overdraft facility on your gold jewellery. This helps those who dont want to take EMI based loans and want to just have facility of overdraft where they pay interest for only usage period .<br />
So next time when you are in urgent need of money , then rather than going for Personal Loan, you may want to consider unlocking the value of gold jewellery in your home .<br />
<br />
</div>Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com3tag:blogger.com,1999:blog-8540248520523209763.post-22918009785405298422011-10-06T06:34:00.000-07:002011-10-06T06:43:41.336-07:008THINGS TO HELP GET FASTER CLAIM UNDER MEDICLAIM POLICY<div dir="ltr" style="text-align: left;" trbidi="on"><span class="Apple-style-span" style="background-color: white; font-family: Arial, Helvetica, sans-serif;">Its not uncommon to find people among us who have suffered at the hands of the mediclaim insurers during claim settlement. There are numerous instances where claim is rejected by the health insurance company on technical/material grounds. This defeats the basis purpose of getting help when needed. So, what can you do to avoid this? Try these steps :- </span><br />
<span class="Apple-style-span" style="background-color: white; font-family: Arial, Helvetica, sans-serif;"><b><u>1. Check Fine Print for Expense Coverage -</u></b> The mediclaim polices generally list down the limit of expenditure that is allowed to reimbursed under room rent/ambulance hire charges etc. This limit varies between policies of various companies and hence before you get yourself admitted to any hospital , it is always advisable to check the expense limit allowed as per your mediclaim .Any extra expenditure done on account of thee heads is generally borne by the patient himself/herself.</span><br />
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><span class="Apple-style-span" style="background-color: white;"> </span><span class="Apple-style-span" style="background-color: white;"><b><u>2. Check for exclusion in Diseases -</u></b> You must also check the number and nature of diseases covered under your mediclaim before you buy it. For example, lot of policies in India dont cover Diabetes at all . This is a major exclusion since Diabetes is very common among Indians and by excluding it the insurer is playing safe. You must select the policy which provides coverage for maximum number of diseases especially the critical one like Diabetes, Heart related, Kidney Related, cancer related etc. </span></span><br />
<span class="Apple-style-span" style="background-color: white; font-family: Arial, Helvetica, sans-serif;"><b><u>3. Time Period Before Coverage of Preexisting Disease-</u></b> Most of the mediclaim policies in India, have a waiting period of anywhere between 1 to 4 years before they cover preexisting diseases.Any claim made for the preexisting disease during the waiting period is likely to be rejected.Hence go for the plan which has least waiting period. </span><br />
<span class="Apple-style-span" style="background-color: white; font-family: Arial, Helvetica, sans-serif;"><u>4. <b>Plastic Surgery , Cataract, Dental Care and Piles Not Covered</b> -</u> Most of the mediclaim policies in India DONOT cover Dental Care, Piles, Cataract etc . Even Plastic Surgery is considered to be part of cosmetic surgery and as such is seldom covered under mediclaim. .</span><br />
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><span class="Apple-style-span" style="background-color: white;"> </span><span class="Apple-style-span" style="background-color: white;"><b><u>5. OPD Not Covered -</u></b> Any claim that you may have on account of expenses towards medicines /Doctor consultancy Charges etc during OPD care is not covered by most of the mediclaim plan in India. </span></span><br />
<span class="Apple-style-span" style="background-color: white; font-family: Arial, Helvetica, sans-serif;"><u>6. <b>Disclose all Material Info </b>-</u> To avoid rejection of any claim made by you which is normally covered under the plan, it is also important for you to have disclosed all material information to the insurer while applying/buying the cover. If the firm finds out that you have willingly suppressed an information which is material in nature, then they are well withing their rights to reject the claim. So be truthful and disclose all the relevant (good and bad) information. It might increase your premium but will ensure that your claim is not rejected when you need the assistance the most.</span><br />
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><span class="Apple-style-span" style="background-color: white;"> </span><span class="Apple-style-span" style="background-color: white;"><u>7.<b> 24 Hr Hospitalization </b>-</u> One needs to be hospitalised for a minimum of 24 hours before your claim is eligible for reimbursement/payment by the insurer. Only exception is Chemotherapy,radiation treatment done in Cancer where 24 hr hospitalisation isnt mandatory.</span></span><br />
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><span class="Apple-style-span" style="background-color: white;"> </span><span class="Apple-style-span" style="background-color: white;"><u><b>8. Submit your Claim ASAP </b>-</u> Any claim submitted beyond the stipulated timeframe by the insurer might lead to its rejection . It is advisable to submit claims within 7 days of getting discharged from the hospital. </span><span class="Apple-style-span" style="background-color: white;"> </span></span></div>Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com0tag:blogger.com,1999:blog-8540248520523209763.post-35869850704710002882011-10-01T10:33:00.000-07:002011-10-01T10:33:59.134-07:00WONDERING HOW TO CHANGE YOUR HEALTH INSURANCE? CHECK OUT HEALTH INSURANCE PORTABILITY.<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: justify;">After stupendous success of mobile number portability introduced by TRAI , IRDA too has taken a cue and introduced health insurance portability in India from 1st October 2011. This is a huge step in the right direction considering there was lot of discontentment among the consumers about the manner in which they were being treated by their health insurers. Some of the common grouses were:</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">1. The health insurance companies mandated on a waiting period for covering pre existing diseases to each and every customer once he comes in their fold, irrespective of whether or not the person had any other policy where he had served out the waiting period. So in effect , every time you changed the company , you would have had to start the waiting period all over again.</div><div style="text-align: justify;">2. The insurers generally were resorting to increasing the renewal premium by a steep margin for those policyholders who have had a claim in the year. This was mostly done to discourage the policyholders from renewing the policy with them. Thus they wanted to get rid of policyholders who they thought could be "claim prone".</div><div style="text-align: justify;">3.In lot of cases, policyholder's request for renewal after a claim was rejected without any material reason from the insurer. This meant a great nuisance for the policyholder since he had to start his waiting period for preexisting disease all over again with the new insurer.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">To address some of these issues , IRDA has mandated health insurance portability now. What exactly does it mean?</div><div style="text-align: justify;"><b>Health Insurance Portability</b> means that a health insurance policyholder can now choose to change his insurance provider without foregoing any of the benefits covered in his/her current policy. For instance, if you have a health insurance/mediclaim plan from ICICI Lombard and if for any reason you are not happy with the company , then you can change over to any other insurance provider without foregoing any benefit that you may be enjoying under your current plan. </div><div style="text-align: justify;">What are the benefits of Health Insurance Portability? Following are the few of the benefits:</div><div style="text-align: justify;"><b><u>1. CHOICE</u></b> - Now as a policyholder , you will have a choice which till now you didn't have. You can now switch over to any health insurance provider . </div><div style="text-align: justify;"><b><u>2. COVERAGE OF PREEXISTING DISEASES</u></b> - Once you move from one general insurance company to another for their health insurance or mediclaim plan, you will continue to get the same benefit that you got in your old plan.For example , if you were covered for Diabetes in Plan A and then you migrated to Plan B , then in the Plan B too , you will have that covered. </div><div style="text-align: justify;"><b><u>3. NO FRESH WAITING PERIOD</u></b> - Once you change over to new insurance provider, you need not start your waiting period for getting preexisting diseases covered all over again. You will have the benefit of counting the number of years you waited in your earlier plan .For example, if the waiting period for covering Diabetes under the Plan A is 4 years and after 2 years you migrated to Plan B from another company where also the waiting period for covering Diabetes is 4 years, then you will have to serve waiting period of only 2 years with Plan B since you have already served 2 years under Plan A. This is a big change for all the policyholders.</div><div style="text-align: justify;"><b><u>4. NO CLAIM BONUS TOO TO BE PAID</u></b> - If you had claim free year in your first policy , then on switching over to new policy , you will be entitled to no claim bonus too from the new insurance provider .</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"><b><span class="Apple-style-span" style="color: red;">How to Change the Policy or Insurance Provider in India?</span></b></div><div style="text-align: justify;"><b><span class="Apple-style-span" style="color: red;"><br />
</span></b></div><div style="text-align: justify;">You will have to do following :-</div><div style="text-align: justify;">1. Apply with the insurance company you wish to change to , at least 45 days prior to your current policy getting over.</div><div style="text-align: justify;">2. Inform the IRDA too about the insurance firm you wish to change to.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"><b><span class="Apple-style-span" style="color: red;">What else should you consider before switching over?</span></b></div><div style="text-align: justify;">Consider the following before you finally sign on the switch application </div><div style="text-align: justify;">a. Check for the new premium rates being charged by the other insurance companies for similar coverage in terms of Sum assured and diseases covered.</div><div style="text-align: justify;">b. Check for the network of hospitals that they have under cashless scheme.The more the merrier.</div><div style="text-align: justify;">c.Also check claim settlement ratio of the firms. The company which doesn't have good record in settling the claims does not merit a chance. </div><div style="text-align: justify;">You should go with the firm which has good claim settlement ration, great hospital network and reasonable premium.</div><div style="text-align: justify;">So its time to pull out your mediclaim policy documents and check if it needs to be from another company .</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Stay wise and happy investing!!</div></div>Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com0tag:blogger.com,1999:blog-8540248520523209763.post-73366985550625583202011-09-27T08:40:00.001-07:002011-09-27T08:52:51.511-07:00TOP 5 TAX SAVING FIXED DEPOSIT (FD)<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<b>Tax saving FDs offered by banks in India are good option for someone looking to save tax under Sec 80 C without taking any risk that is inherent in equity exposure that ELSS offers. So, if you are one of those conservative investors who want to save tax via FDs , then it would be pertinent to know which banks are offering you the best deal currently. </b><br />
<b><br />
</b><br />
<b>Following are the 5 best Tax saving FDs that are being currently on offer ( as on Sept 11).</b><br />
<b><br />
</b><br />
<b> Rank Bank Rate On Int.(p.a.) Rs 10000 will grow </b><br />
<b> 1. Tamilnad Mercantile Bank 10% Rs16386.</b><br />
<b> 2. City Union Bank 9.75% Rs 16186</b><br />
<b> 3. IDBI Bank 9.50% Rs 15991</b><br />
<b> 4. Punjab And Sind Bank 9.50% Rs 15991</b><br />
<b> 5. State Bank of Travancore 9.50% Rs 15991</b><br />
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</b><br />
<b>Happy investing!! </b></div>Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com1tag:blogger.com,1999:blog-8540248520523209763.post-80397177972391242342011-09-26T10:21:00.000-07:002011-09-26T10:21:40.851-07:00BANK CASH TRANSACTION FROM MOBILE PHONE<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: justify;"></div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">There have been times , when we have been faced with situation of transferring money from bank account to another account without visiting bank branch. One can do cash transactions via netbanking if one doesnt want to visit the branch or the branch timings are over. But what if we in a place where internet isnt available and we need to transfer cash immediately . Relax, we have a solution now. Resereve Bank Of India has now allowed cash transaction upto Rs 50000 from mobile phones . To do so , we need to follow the following steps:- </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">1. Register with the bank for interbank Mobile Payment Service (IMPS). <br />
2. Download the application on the mobile phone. <br />
3. Log in to the application <br />
4. Select bank account from which funds are to be transferred. <br />
5. Select mobile money transfer service. <br />
6. Enter 10 digit mobile number, 7 digit MMID and desired amount to be transferred. <br />
7. Confirm all the details. <br />
8. Done. You will recieve sms confirming the same. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"><strong><u>PROS OF THE FACILITY</u></strong> </div><div style="text-align: justify;"><br />
1. Another platform to do non branch based cash transaction besides netbanking . <br />
2. Ease of operation is huge since we are all with our mobuile phones virtually at all times. <br />
3. Increased penetration of banking services in underbanked areas where bank branches arent available. </div><div style="text-align: justify;"><br />
<u><strong>CONS OF THE FACILITY</strong></u></div><div style="text-align: justify;"><strong><u></u></strong><br />
1. Cash transactions of upto Rs 50000 only can be done via this platform as of now. <br />
2. Traning could be an issue for rural folk who are very tech savvy. </div></div>Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com0tag:blogger.com,1999:blog-8540248520523209763.post-80554310220780914192011-09-24T13:37:00.002-07:002013-03-05T02:25:58.757-08:00WANT TO INVEST IN GOLD??<div dir="ltr" style="text-align: left;" trbidi="on">
<span class="Apple-style-span">"The desire for gold is the most universal and deeply rooted commercial instinct of the human race."</span><br />
<span class="Apple-style-span">Gerald M. Loeb</span><br />
<span class="Apple-style-span">The above mentioned adage perfectly sums up the love investors have showered on the precious metal since times immemorial. This metal has retained its numero uno pisition as the "Metal of choice" over centuries. So what really makes this metal so desirable inspite of its very limited medicinal or industrial usage? Following are just the few of many reasons responsible for the same :</span><br />
<span class="Apple-style-span"><b><u>1. Its widespread use in Jewellery -</u></b> It has always been used a metal of choice when it comes to Jewellery. In India, for instance, most of the gold demand is on account on Jewellery .This demand for gold jewellery has made India one of the leading countries as far as gold consumption is concerned.</span><br />
<span class="Apple-style-span"><b><u>2. It was used as Currency -</u></b> Gold emerged as a major currency very early during human civilization where kings across continents used gold coins as currency in their respective kingdoms. It was also used as base for new "paper currency" which sovereign governments printed , till very recently. It is still considered as hedge against dollar , the world's reserve currency.</span><br />
<span class="Apple-style-span"><u><b>3.Excellent hedge against inflation -</b></u> Investors flock to gold because it has been proven beyond doubt that it is the best asset class which provides hedge against inflation . Gold investment protects the purchasing power of your investment/portfolio.</span><br />
<span class="Apple-style-span"><b><u>HOW TO INVEST IN GOLD?</u></b></span><br />
<span class="Apple-style-span">Now, if you are wondering how does one invest in gold , then you may want to explore following 3 options:</span><br />
<span class="Apple-style-span"><b><u>1. Investment in Gold Mining Funds -</u></b> Y<span class="Apple-style-span" style="line-height: 25px;">ou can invest in funds that invest in gold mining funds such as <a class="gen" href="http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=7515" style="color: #004276; text-decoration: underline;">AIG World Gold</a> and <a class="gen" href="http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=5623" style="color: #004276; text-decoration: underline;">DSPBR World Gold</a> Fund. This option will help you own the world's gold reserves and hence as and when gold as an asset class does well, these mining firms will do well and consequently , you as an investor will do well.</span></span><br />
<span class="Apple-style-span"><span class="Apple-style-span" style="line-height: 25px;"><b><u>2. Gold ETFs -</u></b> </span><span class="Apple-style-span" style="line-height: 25px;">Next, you can invest in paper gold through gold exchange traded fund (ETF), wherein you buy the gold units from the stock exchange for which you need a demat account to buy and sell the units on the stock exchange. </span></span><br />
<span class="Apple-style-span"><span class="Apple-style-span" style="line-height: 25px;"><b><u>3. Gold Fund of Funds -</u></b> </span><span class="Apple-style-span" style="line-height: 25px;">And more recently, you have the option of investing in a gold fund of fund, such as <a class="gen" href="http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=12184" style="color: #004276; text-decoration: underline;">Reliance Gold Savings</a>, <a class="gen" href="http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=12458" style="color: #004276; text-decoration: underline;">Kotak Gold</a> and <a class="gen" href="http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=13190" style="color: #004276; text-decoration: underline;">SBI Gold</a> fund, which are all passively managed fund of fund that invests in the open-ended Gold Exchange Traded Fund of their fund houses, which in turn invests in physical gold with 99.5 per cent purity. This structure is convenient for those who do not have a Demat account and want to start a systematic investment plan in gold.</span></span><br />
<span class="Apple-style-span" style="line-height: 25px;"><span class="Apple-style-span"></span></span><br />
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<span class="Apple-style-span">Depending on your convenience and investment needs; you can consider any of the options to invest in gold. Amongst the investing option; ETFs and gold funds should be better for the liquidity they offer and the fact that these invest into physical gold, their value will be closest to that of gold.</span></div>
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Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com0tag:blogger.com,1999:blog-8540248520523209763.post-19907638182485133572011-09-24T12:52:00.000-07:002011-09-24T13:16:11.742-07:00PRECAUTIONS TO TAKE WITH YOUR CHEQUEBOOKWe all use our cheque leaves while making payments to various parties/paying bills etc , but, have we ever wondered what all can go wrong with these cheque leaves? There have been numerous cases of fraud , where the modus operandi has been misuse of the cheque leaf. Hence it is imperative to know ,first, what all can go wrong and then what safeguards to take with your cheque leaves.<div><br /></div><div><span class="Apple-style-span" ><b>What Can Go Wrong?</b></span></div><div><br /></div><div><b><span class="Apple-style-span" >1. Cheque can be misused -</span></b> Lot of fraudsters tamper with the cheque which one writes by adding a name of account number , making alteration, adding digits etc and then countersigning on it. This way they loot the unsuspecting guy , his hard earned money.</div><div><br /></div><div><span class="Apple-style-span" ><b>2. Cheque can be assigned -</b></span> Since cheques are negotiable instruments , it can be assigned from one person to another and as such , one can simply cut the beneficiary name and assign the cheque in ones own name and then bank it with his own banker. This was he wont have to forge the drawers signature. He simply will have to sign for the beneficiary and since the beneficiary's account may not be with the presenting bank /accepting bank , it is difficult to spot the fraud. But thankfully only few cooperative banks do accept cheques which are "assigned to third party".</div><div><span class="Apple-style-span" ><b><br /></b></span></div><div><span class="Apple-style-span" ><b>What safeguards to take?</b></span></div><div><span class="Apple-style-span" ><b>1. Always keep chequebook in safe custody - </b></span>This is the most basic precaution that one must take. Safe custody of the cheque book will ensure that it does not reach in rogue element's hands easily and thus the chances of its misuse is that much lesser.</div><div><br /></div><div><b><span class="Apple-style-span" >2. Always give "Account Payee" cheque -</span></b> Wherever possible avoid giving "Self" or "Bearer" cheques since that opens up lot of possibility of fraud. Anyone with that cheque can go to any branch and get that encashed since it is an open cheque drawn in favour of the presenting party without mentioning its name. So avoid it.</div><div><br /></div><div><b><span class="Apple-style-span" >3. Always write the name of beneficiary -</span></b> Always mention the name of the beneficiary to whom the cheque is being issued. This will enable the bank to cheque Identity details of the presenter in case of any doubt etc. Also as a prudent banking practise, banks do check ID proof before giving large value cash withdrawals to unknown person. So a name on the cheque rather than just"Self" or " bearer" would help.</div><div><br /></div><div><span class="Apple-style-span" ><b>4. Never leave Blank spaces in the cheque leaf -</b></span> Always try to use the full space of the cheque without leaving any space which may be used later for adding name or account number etc. You may cancel the empty space by striking it with a line .</div><div><br /></div><div><br /></div><div><b><span class="Apple-style-span" >5. Dont hand over PDCs to sales executives - </span></b>In lot of fraud cases, Sales executives from Bank DSAs collect PDCs from the customer even before the loan is disbursed/or is about to be disbursed. These cheques then are used by the executives to siphon off the funds from the customers account. Hence, avoid giving PDCs to executive, you must give it to the branch or loan disbursal centre with proper acknowledgement. Also never give cheque without any beneficiary details (lot of people do it) since execs tell them that they will fill that portion later. The same portion may be used by execs to write their own name and thus they are able to withdraw amount from unsuspecting customers.</div><div><br /></div><div><br /></div><div>If you follow these basic guidelines, then I am sure you will be able to stay out of these fraudsters who are out to make quick buck at your expense.</div><div><br /></div><div><br /></div>Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com0tag:blogger.com,1999:blog-8540248520523209763.post-1691733221326655872011-03-01T07:28:00.000-08:002011-03-01T07:55:12.304-08:00Budget 2011-12 - What is in it for tax payers??<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigSW_O1OKTXP46cVdOJFAZzy2IBrDr4yhBv54e3OdQ88clkqiiZKVJEvC_6uOZz906rs-MniBVjDaJ-cKHB-G7J8jTZlU8Kc0M1jalqqvw17O5cUM0XCZqn6jdioI1TJgWgWrDQhZMJuaZ/s1600/Tax-5.jpg"><img id="BLOGGER_PHOTO_ID_5579140553729765794" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 347px; CURSOR: hand; HEIGHT: 346px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigSW_O1OKTXP46cVdOJFAZzy2IBrDr4yhBv54e3OdQ88clkqiiZKVJEvC_6uOZz906rs-MniBVjDaJ-cKHB-G7J8jTZlU8Kc0M1jalqqvw17O5cUM0XCZqn6jdioI1TJgWgWrDQhZMJuaZ/s400/Tax-5.jpg" border="0" /></a><br /><div align="justify"></div><br /><div align="justify">Well like every year , this year too 28th Feb 11 was one of the most awaited days of the year. Everybody was waiting to see what our beloved FM dishes out to common taxpayers via his budget for FY11-12. </div><br /><div align="justify">The budget overall hasn't done much to enthuse common man. There are no major tax breaks for majority of the junta . But, he has done few things which we need to take note of :-</div><br /><div align="justify"><strong><u>1. Increased tax exemption limit for male to Rs 1.8 Lakhs :</u></strong> The tax exemption limit has been increased by Rs 20000 from 1.6 Lacs last year to 1.8 Lacs this year. This is only for males as the tax exemption limit for female taxpayers is already at 1.9 lacs. The additional relief will save 2000 rupees for everyone who falls in ta bracket. Small relief, but, relief nonetheless.</div><br /><div align="justify"><strong><u>2. No need to file ITR for salaried people:</u></strong> Pranab Da has also mandated that those salaried people whose annual income is less than Rs 5 lacs/annum need not file ITR separately. The same will be done by their company. They can decalrae their additional income like FD interest income etc to the employer who will accordingly deduct TDS and file return.</div><br /><div align="justify"><strong><u>3. No Tax till Rs 5 lac income for Very Senior Citizen:</u></strong> In an unprecedented move, Finance Minister has introduced an absolutely new segment in the income tax viz that of Very Senior Citizen. All those taxpayers who are above 80 years of age will be classified as very senior citizen and they wont have to pay any tax till the annual income of RS 5 lacs. This is a huge step taken for welfare of very senior citizens since in India, we dont have any social security and older people have to spend considerably on medical care and as such this was required. Here is thumbs up to Mr FM for doing this. </div><br /><div align="justify"><strong><u>4. Tax Relief under Infrastructure Bond Investment Extended :</u></strong> The Tax relief offered on investing upto Rs 20000 in infrastructure bonds like IDBI, L&T etc which was introduced in FY10-11 has been enxtended for FY11-12 too. So taxpayers can continue to invest in this and save taxes upto Rs6180 under this option.</div><br /><div align="justify"></div><br /><div align="justify">Besides, these there is nothing much to cheer about for normal taxpayer in this years budget. However, with DTC proposed to be launched in FY12-13, things will be much better and simpler for all taxpayers.</div><br /><div align="justify">I only hope that Mr FM is able to deliver on his promise of making DTC operational from 1st April 2012. More Power to you Mr. FM.!!</div>Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com3tag:blogger.com,1999:blog-8540248520523209763.post-11777180942718642902011-01-08T21:26:00.000-08:002011-01-08T21:43:52.708-08:00INFRASTRUCTURE TAX SAVINGS BONDS - SHOULD YOU INVEST??<div style="text-align: justify;">January to March is that time of the year when most of us are rushing towards making our mandatory"tax saving investments". While we are all well versed with tax saving options available to us under section 80CC, but, this financial year government has offered us another option where we can invest in infrastructure bonds and save taxes. Here, an investor can invest upto maximum of Rs 20000 which can be claimed as deduction from his taxable income. This is over and above RS 1 lac that you can save under Sec 80 C. SO question to ask is should you and I invest in it?<br /><br />Lets first examine the pros of this option<br />1. Additional tax saving of Rs 6600 if you are under 30% tax bracket.<br /><br /><br />Other than the above mentioned benefit , there isn't any other major benefit associated with investing in these bonds.<br /><br />Now , lets look at cons too<br />1. <span style="font-weight: bold;">High lock in period -</span> Most of these bonds are of 10 year tenure where minimum lockin is of 5 years and then these bonds will be listed on exchanges where you can sell it provided you find a buyer.<br />2. <span style="font-weight: bold;">Modest post tax returns -</span> The returns offered by these bonds are between 7-8% which is modest at best considering the high lockin. <br /><br /><span style="font-weight: bold;">Should you invest?</span><br />The short answer to this is no if you are a savvy investor since the lockin is high and the returns are nothing to rave about.<br /><br /><span style="font-weight: bold;">So what should you do ?</span><br />One can always invest this money in equity or well diversified mututal fund which will surely give better returns in 5-10 years , besides offering liquidity which these bonds don't offer. Always remember that any "tax saving investment" first MUST qualify as GOOD INVESTMENT and then if it helps save you tax then it is even better , but never, invest in any policy/plan or bond just because it helps you save tax.<br /><br />Happy investing!!<br /><br /><br /></div>Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com0tag:blogger.com,1999:blog-8540248520523209763.post-64581805859914943852010-11-13T09:28:00.000-08:002010-11-13T09:49:29.783-08:00IPO INVESTING IN PSU - GOOD WAY OF MAKING MONEY IN STOCK MARKETS<div align="justify">I have always stayed away from directly getting into equity markets. This was inspite of my firm belief that equity is the best asset class to invest in if one intends to make money over long period of time. The reason why I stayed away was my inability to devote enough time to research the stocks before investing and hence I always relied on Mutual Funds for equity investing. </div><div align="justify">But, I always had this urge of making quick buck in equity markets. The most popular mode of short term investing in stock markets in via trading either intra day or for few days trades. But IPO investing for listing gains can be a great opportunity for common people to make money in stock markets in India. This I can talk from my own experience of investing in CIL IPO. For retail investors there was money to be made in this IPO and I personally made About RS 19000 in this IPO on an investment of Rs 46000. That's cool 46% in less than a month's time. This extra 19000 could be used to pay off my electricity bill, maid -driver salary , petrol bills etc for a month. Not a bad deal. So why is this such a good deal to invest in IPO of PSUs?</div><div align="justify"><strong><span style="color:#ff0000;">1. Attractive Pricing by Government -</span></strong> Since the Central government at helm of affairs is one which espouses "inclusive growth" , they have made a conscious decision to price the IPOs at very attractive price point leaving some money on the table for investors. This gives you enough headroom to account for any volatility on negative side on the day of listing.</div><div align="justify"><strong><span style="color:#ff0000;">2. 5% discount for retail investors-</span></strong> Any investment in IPO or FPO by retail investors makes them eligible for a discount of 5% on the issuance price and as such the retail investors get an additional 5% margin on listing. So ,theoretically, even if the said stock was to list on the issuing price only,retail investors will still make 5% gain on listing. So minimum 5 Guaranteed on listing atleast on the issue price in a months time. Thats not bad money considering one gets at the most 8% returns in bank deposits over 12 months.</div><div align="justify"><strong><span style="color:#ff0000;">3. Most of PSUs enjoy near monopoly status-</span></strong> One of the most important aspects to consider in a company before investing in it is its level of dominance or market share in the industry in which it operates. Warren Bufett says that the best company to invest in is a company enjoying monopoly . While monopoly is an elusive thing in today's globalised world, we still have lot of sectors which are not open to private sector and there the PSUs have almost a complete monopoly and as such they enjoy huge advantage over other companies in terms of potential for growth and profitability. Coal India is a point in case. Hence investing in good PSUs is an ideal thing to do. </div><div align="justify">The mood in the current govt is to continue with disinvestment program to meet their fiscal deficit and as such we as an investor will keep getting good opportunities to participate in the disinvestment program both for short term gains and long term wealth accumulation. So , if you want to make quick money then invest in good IPOs of PSU and sell on listing and if you want to build good portfolio for long term wealth building, then hold on to these stocks which will become multibaggers in time to GOOD PSU stocks . All PSU stocks may not give you same results.</div><div align="justify"> </div><div align="justify">Happy investing!!</div>Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com40tag:blogger.com,1999:blog-8540248520523209763.post-44120943422674829762010-06-30T09:57:00.000-07:002010-06-30T10:17:48.175-07:00Why IRDA v/s SEBI hasnt gone in your favour???<div align="justify">Those of us who are in India, we have been inundated with news of tussle between SEBI and IRDA to control/regulate the ULIPS launched by insurance firms. The SEBI's contention was that since ULIPS are primarily a MF in the garb of insurance plan with huge upfront charges, SEBI should have right over regulating that product, while IRDA position was that since ULIP is an insurance product it will be regulated by IRDA. This dispute was also referred to court,but, finally the finance minister intervened in favour of IRDA. So, it is settled now, IRDA is the regulator who will regulate ULIPS. </div><div align="justify">So what does this mean for an average investor like you and me?? Is it good or bad?? The answer is both, good and bad.</div><div align="justify"> </div><div align="justify">Let us see why </div><div align="justify"><strong>IT IS GOOD BECAUSE</strong></div><div align="justify"><strong>1. ULIPS to become relatively a cost effective saving tool-</strong> My displeasure over ULIPS as an investment product is well known to the readers of this blog. I feel they are one of the worst products that one can invest in.The reason is its atrociously high charges which can be upto 50-80% of your premiums for first few years. But, now the situation is likely to get better after Sept 2010. The IRDA has mandated that charges be brought down and also should be evenly spread over the tenure rather than being just front loaded as it is now. SO the ULIPS as a product will RELATIVELY become better than its earlier AVATAAR.S o in case you like ULIPS and want to invest only in them, then this is good news for you.</div><div align="justify"><strong>2. The lockin to go upto at least 5 years-</strong>IRDA has also mandated that minimum lockin should be 5 years atleast than 3 years currently in vogue. This will ensure that people are stay put in the plan for a longer duration and are able to reap the benefits of long term investing. It will also reduce chances of agents misselling this product as "3 year" saving tool.</div><div align="justify"><strong>3. Charges to be uniformly distributed -</strong> Charges will now be equitably distributed over the term of the plan rather than being front loaded. This will ensure that even if one is surrendering the policy early he isnt heavily penalised because of charges.</div><div align="justify"><strong>4.No charges on policy surrender-</strong> Currently on surrendering the insurance policy in 3- 4 years time, one does not get anything or if you get then that is close to nothing . This is due to prohibitive charges and upfront commission that companies pay out of your premium. But this will change as now no longer companies can charge any fee on surrendering the plan. This is likely to be effective Sept 2010.</div><div align="justify"><strong>IT IS BAD BECAUSE</strong></div><div align="justify">1. It is still a ULIP which will still have charges which may be lower than ULIPS current charges but will still be manifold higher than MF charges. They will still be one of the worst products to invest in.</div><div align="justify">2. With SEBI as regulator, things like high commission etc would have gone and that would have brought charge structure to MF levels and then ULIP would have been a really good product offering you the twin benefits of insurance and MF at a very effective rate.</div><div align="justify"> </div><div align="justify">In the end, I think the FInance Minister's decision is not really in the right interest of an average investor who wants to invest in a saving tool which gives maximum appreciation head room with minimum possible charges/fees.</div>Rajeev Kumar Singhhttp://www.blogger.com/profile/14013277982525884502noreply@blogger.com0