Today Update

The capital gains tax on mutual fund returns depend on which type of fund it is – equity or debt. Similarly, the tax on dividend from mutual funds also depend on fund type. The assets under management of Indian mutual fund industry has crossed Rs 25 trillion mark. As on August 31, 2018, the asset base stood at Rs 25.2 trillion, according to data from AMFI or Association of Mutual Funds in India. The income tax rules on mutual fund gains and dividends depend on the type of fund — debt or equity — and the duration of investment. The growth in the Indian mutual fund industry is also being driven by SIP or systematic investment plan accounts through which investors invest regularly in fund schemes. The total amount collected through SIPs during August 2018 was Rs 7,658 crore and the number of SIP accounts stood at 2.38 crore. Mutual fund taxation rules – How gains or returns are taxed in 10 points: 1) If 65% or more of the corpus of a mutual fund scheme is invested in equities, ...

1. What are Non Convertible Debentures (NCDs)? Investors are forever on the lookout for improved and more sustainable schemes. The market  volatility  sometimes makes some plans overnight stars while at other times even traditional and trusted investments lose their sheen. Non Convertible Debenture or NCD is a scheme that proved to be a dark horse as they started delivering smaller but steady returns over time. Like traditional corporate FDs, NCD too is a fixed-income investment with a specific term and interest income. Companies issue them to raise funds, and evidently you cannot convert it to  equities . To make up for this limitation, investors enjoy supreme returns, liquidity, low risk and tax respite as opposed to convertible debentures. 2. Features of NCDs a. Issuance Companies provide NCDs through open issues, which the potential investors can buy within specific periods. There are options to buy NCDs from stock markets. b. Credit rating Only compan...

The  NIFTY  50 is the flagship index on the National Stock Exchange of India Ltd. ( NSE). The Index tracks the behavior of a portfolio of blue chip companies, the largest and most liquid Indian securities. It includes 50 of the approximately 1600 companies listed on the NSE How Nifty Moves......!! It takes average of below mentioned 50 companies to keep nifty running in any direction the average of these companies move. It is advisable  for traders and investors to keep track of these companies as they are best of best. 1% move in tcs = 12.46 points move in nifty 1% move in ITC = 10.09 points move in nifty 1% move in infosys = 7.36 points move in nifty 1% move in maruti suzuki = 3.52 points move in nifty 1% move in LT = 4.66 points move in nifty 1% move in drreddy = 3.39 points move in nifty 1% move in icici bank= 4.66 points move in nifty 1% move in hdfc = 5.20 points in nifty 1% move in hdfc bank = 6.63 points move in nifty 1% move in tata motors = 2.44 ...

Health insurance is an insurance product which covers medical and surgical expenses of an insured individual. It reimburses the expenses incurred due to illness or injury or pays the care provider of the insured individual directly. Need for Health Insurance Medicare or medical costs are rising year on year. As a matter of fact, inflation in medicare is higher than inflation in food and other articles. While inflation in food and clothing is in single digits, medicare costs usually escalate in double digits. For an individual who hasn’t saved that much money, arranging for funds at the eleventh hour can be a task. This is particularly daunting for seniors, given that most ailments strike at an advanced age. One way to provide for health-related / medical emergencies is by taking health insurance. Health insurance offers considerable flexibility in terms of disease / ailment coverage. For instance, certain  health insurance plans  cover as many as 30 critical illnesse...

Application Supported by Blocked Amount As the name suggests, when an investor applies for investment in primary market ( Initial Public Offer ) the amount gets blocked in bank account as lien amount and if shares are allotted the amount gets debited from bank account and if the shares are not allotted the blocked amount is released. In old days, besides normal mode of cash or cheque payment along with IPO application, Stock Invest was introduced and was welcomed, but finally it was closed due to misuse of it by scrupulous operators and thus a boon in favor of retail investors has seen premature death. In 2008, SEBI introduces ASBA mode i.e. an Application Supported by Blocked Amount for retail investors. ASBA system ensured that the applicant's money remains in his/her bank account till the shares are allotted. Now it has been extended to corporate investors and HNIs as well (from January 1, 2010, onwards). The mechanism requires the applicant to give an author...

SIP or Systematic Investment Plan is regarded as the most efficient and easy method of investing in equity markets. It has been noticed that investors who put their money in mutual funds via SIP, 1 to 2 years ago, have not received good returns.  The value of total investment for some investors has actually declined in comparison to the original investment.  Several investors have gotten yields that are lower than that offered by a savings bank account. The average two year returns of SIP in December 2016 were 2.88 percent for equity mutual funds. The above does not indicate that SIP method of investments need to be reevaluated. T he very first thing that needs to be cleared is the fact that SIP is not an investment option but just a method of investing.  SIP is similar to recurring bank deposits with the main difference being that SIP is speculative and based on the dynamics in the market while recurring deposits come with fixed term and guaranteed yields. Poor ret...

FD Investment – Is this investment a good option? This was during the year 2001 – 2002.  Mr. Shankar, Amit’s father retired few weeks back and he was enjoying his retired life. After retirement he got a hefty sum from his savings as PPF & Gratuity. One day, Amit & his father, Shankar was having a conversation – Amit – Dad, I am very happy to see you enjoying your retired life. But I wonder if you could tell me about your savings. What have you done with it? Shankar – Hey Champ, I have kept this money in three different banks as Fixed Deposit for 5 years. I would be getting average 10% interest per annum which would suffice your mother’s and my expenses. Amit – Ohh.. that’s great.. Good plan Dad.. As per the plan, every month’s income was sufficient though the bank was deducting the Tax (TDS) on the interest offered. But Shankar was comfortable as this amount was enough to fulfill the monthly expenses. Days, weeks, months and years passed and in the year 2007, S...