1. Tax & Investment Planning Seminar
Welcome to
Tax & Investment Planning Seminar

4. Section 88 100,000/= Infrastructure bond Rs. 30,000/=
Repayment of Housing
loan principal-20K
ELSS-10K
40,000/=
LIC, PPF, CPF, and
pension plan..etc-40K

5. Other Deductions Section 80 CCC: Jeevan Suraksha upto Rs. 10,000/=
Section 80 D : Upto Rs. 10,000/= towards
mediclaim
Section DD: Handicapped dependant expenses
upto Rs /=
Suraksha plan is a ridiculous plan to be wrapped up immediately. Gives 30% tax break (as it is deducted from Salary) and commits closed to 9% compounded growth for till retirement age + minimum 15 years.
Section 80 DDB: Medical expenses towards
chronic disease - upto Rs. 40,000/=

6. Make a house - don’t just live in it.
Section 24 (I) Upto Rs 1,50,000/- paid towards
interest on housing loan is
deductible from taxable income.
Recommendation
Make a house - don’t just live in it.
Globally, real estate grows at the rate of inflation in the country. India will follow global trends….1994 correction in India was to accommodate independent rampant growth in the past.

7. Insurance Myths: The Facts:
Insurance is just another tax saving instrument.
I do not need an insurance now. May be later...
Why wait for 30 years? - let me take a policy for 15 years (or may be 10).
The Facts:
Lower the age, lower the premium, - higher the age
higher the premium.
As we get older - Health becomes a major impediment to
getting high insurance cover.
Longer the duration of policy - lesser is the premium.

8. A THIEF CALLED INFLATION

9. Inflation ….The silent killer!
Present cost of living RS. 20,000 p.m
30 yrs from now Rs.3,83,887 p.m.
Retire today Rs %
Retire 30 yrs from now Rs.3.83 crores
Can relate to gran mother stories
of a dhela - one third of a paisa
having purchasing power.
Today even Rs. 5/= does not have
too much of power.
The above figures are assuming 10%
rate of inflation.

10. Value Of Re. 1 Invested In 1980
(Rs.)
Period - April 1980 to December 1997 Rs
Stocks Rs
The result of investing 1 ruppee in Bank FD, Company FD and Sensex from 1980 to 1997.
Bnak and Company FD is a straight line curve, howver, the returns are moderate. On the other hand Sensex is a volatile curve, but gives high return.
Co. Deposits
Rs. 4.81
Bank Deposits

11. Value Of Re. 1 After Taxes
(Rs.)
Period - April 1980 to December 1997 15 Rs
Stocks 10
Rs. 5.44
Value of investment after paying taxes year on year. 5
Co. Deposits
Rs. 3.00
Bank Deposits
Apr-80
Oct-82
Apr-85
Oct-87
Apr-90
Oct-92
Apr-95
Oct-97

12. Value Of Re. 1 After Taxes & Inflation
(Rs.)
Period - April 1980 to December 1997
Rs. 3.16
Stocks
…and the figures after adjusting inflation.. Shockingly, bank deposits eroded the purchasing power of the rupee. The creation of purchasing power was marginally there in Company deposit, but quite high in equity market. Howevre, ther has to be long term horizon (more than 5 years) for investing into the equity market to reduce the risk.
Rs. 1.24
Co. Deposits
Re. 0.68
Bank Deposits

13. Post inflation & Taxes
Recap - value of 1 Rupee in 17 years.
In the long term euity is the best option. STAY AWAY FROM BANKS...

15. Equities are the best long term bet
Annulised returns...
Investment avenues

16. How do we invest in equities or Company Fixed Deposits?
Carry out extensive research and identify the right share/company.
Identify a reliable broker.
Track your investment regularly.
Time …is money

17. MUTUAL FUND AS AN ENTITY - IT IS A TRUST
AS A CONCEPT - IT IS A SERVICE
AS A FUNCTION - IT IS INVESTMENT MANAGEMENT

18. What Is A Mutual Fund?
It is an investment company through which an investor can pool his money with other investors who have a similar objective.

19. Mutual Funds: A Packaged Product
Professional
Management
Diversification
Due to economies of scale there is a very high professionalism. Also being leading global,there a lot of pressure on good performance.
Convenience
Liquidity
Tax Benefits

20. Mutual Funds & Tax Benefits
Section 88
INCOME TAX BENEFITS
Section 88 (2)
CAPITAL GAINS BENEFITS
Section 112

21. GOI is trying to encourage the MF industry to safe guard investors from scrupulous players.

22. RISK Vs RETURNS Time RISK RETURN EQUITY SECTOR DIVERSIFIED EQUITY
BALANCED FUND
INCOME FUND
BANK FD
RISK

23. Mutual Fund - The Top Scorer
FDs FI Bonds Open-ended
Mutual Funds
Accessibility Low Low High
Tenor Fixed (Medium) Fixed (Long) No Lock-in
Min. Investment Rs Rs Rs. 500
Tax Benefits None 80L 80L , 112
Liquidity Low Very Low Very High
Convenience Medium Tedious Very High
Transparency None None Very High
Transpareny is the key. Imagine your money with INDIAN BANK OR MADHAVRAO CO_OPERATIVE BANK.
In MF, we at least know on a monthly basis where the money is invested.

24. What Is Wrong With The Way We Save?
Over 50% of our household savings are invested in assets that are
poor inflation fighters
not tax efficient.
Our saving habits are not disciplined and systematic in approach
We face the possibility of outliving our savings.
Another way of reducing risk is to invest in to the equity market relularly - monthly in a disciplined way. Fear and greed rule the common man’s investments in to the equity market and therefore, most of us lose money to stock market and speculators or scam creators. The power of discipline monthly investing ensures:
Victory over fear and greed.
Purchasing more quantity when markets are low and less quantity when markets are high. Thus bringing down average cost of acquisition, thus ensuring good returns. (Please feel free to ask for performance data for last 5 years in such an approach).

25. EFFECT OF COMPOUNDING Rs. 808 BUSINESS OR EQUITY COM LIC FD PPF NSC
(Re. 1 invested for 30 years)
BUSINESS
OR EQUITY
COM FD
LIC
PPF
NSC
Bk FD
Rs. 234 SB
Rs. 67
Today’s surplus of 1 Lac can be
4 Lac or 8 Crore depending on at what rate it grows.
Rs. 17
Rs. 4

26. Who has more money at the age of 60?
Invest Early
BOTH ARE OF
SAME AGE
Anu starts investing at 25 year’s age
Invests Rs monthly for 10 years
Total Investment : Rs. 6 lakhs
Prakash starts investing at 35 year’s age
Invests Rs monthly for 25 years
Total Investment : Rs. 15 lakhs
TIME is extremely powerful - have it on your side - ALWAYS. Start today…NOW.
Who has more money at the age of 60?

27. It costs Prakash Rs. 3.1 crores to wait 10 years
Invest Early
At the age of 60….
TIME is extremely powerful - have it on your side - ALWAYS. Start today…NOW.
Anu has Rs. 4.6 crores
Prakash has Rs. 1.5 crores
It costs Prakash Rs. 3.1 crores to wait 10 years
Assumed 15% p.a. compounded annually

28. START EARLY; SAVE REGULARLY Every Year Counts
Rs /= p.a. or Rs p.m.
10,133,456
Savings
Returns *
7,643,653
4,999,569
TIME IS A CRUCIAL FACTOR…
.DO IT NOW…
350,000
330,000
300,000
Saves from age 25 to Saves from age 27 to Saves from age 30 to 60
* Return of 15% p.a.

29. Strategy To Smart Investing
Identify Objectives
Harness the power of compounding
Start early
Focus long-term - Stay invested
Be aware of the effects of inflation & taxes
Diversify
Some basics of investing.

30. SUMMARY Banks effectively destroy purchasing power.
Manage salary pro-actively and get that raise in salary.
Insure adequately - 5 times annual gross.
Have liquidity in Income Funds.
Use all products - judiciously and maximize your wealth.
Be disciplined.

31. INVESTMENT OPTIONS
MUTUAL FUNDS
LIFE INSURANCE
GENERAL INSURANCE
PRIMARY AND SECONDARY MARKET OPERATIONS
RBI BONDS, POST OFFICE DEPOSITS, NSC
54EA INVESTMENTS
HOUSING LOANS (IDBI BANK)
REAL ESTATE (BUYING AND SELLING OF PROPERTY)
We do not sell products - we advice and service you. Look at us like …family doctors managing financial health.