PERSONAL FINANCE & TAX PLANNING FOR COST ACCOUNTANTS Roven Pereira MCOM, ACMA, CIMA LONDON Pune 13th January ‘18

GOALS INFLATION New Home Holiday Car Childs Education Home Loan repayment Marriage corpus Retirement & life post retirement

EMERGENCY FUND MEANING OF EMERGENCY TACKLING EMERGENCY Hospitalization Family Emergency Job Loss Accident Natural Calamity Having 3-6 Months of your Monthly Household Spends in the Savings account Maintain a Savings Plus account - SBI Savings Plus Account – Threshold 10K INR Alternatively, Liquid Funds of MFs (through APPS)

INSURANCE PRINCIPALS OF INSURANCE TACKLING INSURANCE - Choose Term Insurance Policy / TROP - Health Insurance Policy BASE POLICY THROUGH BANKS TOP UP POLICY - Opt for CRITICAL ILLNESS COVER - Qualifies for Deduction under Section 80D - Protect your assets, protect your peace of mind TACKLING INSURANCE - Never Mix Investments with Insurance - Insurance is a Protection Tool - Avoid Money Back, Endowment Policies, ULIP Policies with Higher Allocation Charges - Monthly Take Home Salary * 12 * 10 - Guard Your Health, Guard yourself - Asset Insurance

WEALTH CREATION PRINCIPLES OF WEATH CREATION CREATING WEALTH 100 – Your age = Equity Single : Minimum 50% of Monthly Take home salary should be saved Married : Minimum 30 % of Monthly Take home salary should be saved DIRECT EQUITY : Shares MUTUAL FUNDS : Never have more than 5 funds Assign Goals to Each Mutual Fund

WHAT IS MUTUAL FUND A Mutual fund is a trust that pools savings of a number of Investors who share a common financial goal. The money thus collected which could be as small as Rs 500 pm, is then invested in different companies by the fund manager to generate returns It is a long term wealth creation tool and has always beaten assured return products handsomely It has been in India since 1964

TYPES OF MUTUAL FUNDS DEBT FUNDS LARGE CAP FUND MID CAP FUNDS SMALL CAP FUNDS DEBT FUNDS Invests in Government Securities,/Treasury Bills Corporate Fixed deposits, Bonds Yield of 7-10% with indexation benefit More tax efficient than fixed deposit. No TDS and 20% after indexation for > 3 yrs Market capitalization /market cap > Rs 200 Bn – 3500 Bn - ONGC - TATA - SBI - CIPLA - Maruthi - Asian Paints - Hero Motocorp Market capitalization /market cap between Rs 50 Bn –200 Bn - Union Bank - UBL - TVS Motors - Ashok Leyland - Glenmark - Havells - MRF Market capitalization /market cap < 15 Bn - Venkys - Jet Airways - VGUARD - Oriental Bank - CEAT - Bata - Voltas

SYSTEMATIC INVESTMENT PLANNING (SIP)

GENERATING INCOME FOR RETIRED DIVIDEND INCOME SYSTEMATIC WITHDRAWAL PLAN - Dividend Income is Tax free as per Income Tax Law - Monthly Dividend and Quarterly Dividend Option available in Balanced Fund with Yield of 10%-12% Tax free returns - History of 13 years in certain funds in India with Dividend Invest in Growth Option Withdraw a certain portion each month from the Fund while the money grows using SWP

YOUTH : TIME & POWER OF COMPOUNDING

TAX SAVING TAX SAVINGS INSTRUMENTS ADDITIONAL 1.5 Lacs Tax Rebate Under 80 C 5 YEAR FIXED DEPOSITS PPF Yield Lock In 15 years Equity Linked Saving Schemes Lock In 3 years Yield Life Insurance Sukanya Samridhi

ESTATE PLANNING LEAVE AN INHERITANCE NOT A MESS Will Must be dated Signed by the Testator ( Person creating the will) Signed in the presence of 2 witnesses Express a desire that the testator wishes must be carried into effect after death It may or may not be registered. Ideally a stamped / notarized agreement should suffice The executor is the person named in the will or appointed by the court with the legal responsibility of executing the will

THANK YOU Roven Pereira ACMA, CIMA (London)