Simple Saving Boosting Tips

SIMPLE SAVING BOOSTING TIPS

Our country is country of saver not investor. Everyone want save more and more but not able to the same. As cost of living and growing desires of person are big hurdle for saving. For creating wealth one has to save and invest in disciplined manner. By adopting some tips you can increase your saving effectively.

Minimum use of debit and credit card:

These cards are very convenient and easy to use but it also increases your spending dramatically. Due to growing online shopping trend and swipe cards option we often spend more than needed. We purchase those things which we really do not need due to influence of attractive offers and discounts. Adopt cash mode for payment in maximum transaction and try to avoid use your plastic money, it will surely increase your saving. By the end of month, you will be surprised to see your increase in saving.

Keep your money in liquid fund:

It is very good idea to keep your money which you may have need in short notice in liquid mutual fund. There is huge difference between your saving account return and liquid fund return. Your saving bank offers you between 4% to 5 % annual return on your deposit and on other side liquid fund offer almost double return 8% to 9% annual. I always wonder why people do not keep their saving in liquid funds.

Think twice before big purchase:

It would be smart move if you stop and think many times whether you really need it before make a big purchase like, LED TV, Expensive handset, laptop, home etc. Understand the difference between desire and need, it will help you to make smart decision. Try to find out the overall impact of these purchases on your financial plan and you will have more time to find out best product in appropriate rate.

Use ECS or Auto debit facility in investment:

It would be wise to use auto debit from your bank account for investment in mutual fund or paying the insurance premium. In many times we delay our investment plan due to lack of saving but in auto mode there will be forcibly saving happen.

Adopt above mentioned tips for increase your saving. It will sure boost your saving and change your habit of more spending.

If you have doubt about investment product and want more information regarding investment or you need investment services, feel free to ask us. We also conduct the seminar on investment and financial planning. If you are interested for conducting seminar in your city, just drop the mail.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Mr Parag Parikh: An Original Value Investor

Mr. Parag Parikh: A Tribute to original value investor

India’s original value investor Mr. Parag Parikh is no more now. He died in a car accident in Omaha, (US) on 4th May. He was there to attend an investor meet of Warren Buffet’s company. After knowing this news I was sad and not in the state to react. His demise is big loss to Indian financial industry. He was only 60. Mr Parag Parikh was known as a true value investor for his approach based on behavioural finance. He had started broking business in 1979. His broking house was one of the first to have releasing research report with detail. He was running the broking house and financial advisory firm Parag Parikh Financial Advisory Services. In 2014, he winded down the broking business and switched to asset management business- PPFAS Asset Management. He was courageous and spoke his mind, even if that meant loss of business. He was ready to always learn.

His AMC manages only single fund – PPFAS Long Term Equity Fund and no plan to second equity and debt fund. Their equity fund ads clearly mentioned that investor should note that this scheme is suitable for investors who have investment horizon of minimum 5 years. He made it compulsory for all his employees to invest in their schemes. In Feb 2015, employees held approximate 9% units in long term equity fund. You will be surprised his fund’s biggest holding is “Google”- almost 10%. . PPFAS AMC is only AMC to conduct unit holders meeting like a company’s AGM.

He was a great fan of Warren Buffet and implemented his investing philosophy in AMC business. He has written many books on investment philosophy and financial market.

If you have doubt about investment product and want more information regarding investment or you need investment services, feel free to ask us. We also conduct the seminar on investment and financial planning. If you are interested for conducting seminar in your city, just drop the mail.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Do you know about Gift Tax?

Have you gifted money in relative’s bank account?

Although I am not much expert in tax matters but I can give you fair idea on this issue. In general, many tax payer gift to their relatives like parents, spouse and children to save the tax. It is not so simple as the people understand. Many people just transfer the money into their relative or friend’s account and assume that it will help them to save tax because they have gifted away that money and because their relative come under tax exemption limit income so they don’t have to pay any tax.

So today we will understand the tax implication if you transfer some amount to your relatives account. What is the tax implication on involving each party in this transaction? Let us assume you transfer Rs 2 lakh to your wife’s bank account and your income is Rs 15 lakh per annum. Your wife invests this Rs 2 lakh in a bank fix deposit at the rate of 9% and earn Rs 18,000 interest income in a financial year. There are 3 types of tax liability arise in this case.

Tax liability on husband or donor for the amount gifted:

In this case, husband can never claim any type of tax deduction or exemption on that gifted amount (Rs 2 lakh). You have to pay tax on your entire income Rs 15 lakh after deducting eligible available exemption or deduction section 80C etc. After paying tax, he can gift any amount to any relative.

Tax liability on wife or receiver for the amount received:

In this case the wife has no tax liability because she has received the gifted amount from her husband, who comes under specified list of relatives. She can receive any amount from these types of specified list of relatives and still will not be any tax liability. If she receive gifted amount from any other individuals that amount would be taxable on her hand.

Tax liability on income earned from invested gifted money:

In this case wife has earned interest income Rs 18,000 by investing gifted amount Re 2 lakh in bank FD. Although the interest income comes in wife’s account but in this case she has no tax liability and the same interest income clubbed with husband’s income and her husband pay the tax on her interest income.

The interesting point is that if she further invests this interest income Rs 18,000 in bank FD again and earns income on invested amount then she will be liable to pay tax on the interest income earned by investing Rs 18,000 in bank FD.

If you gift the money your parents name and major child then the income earned on that gifted amount will not be clubbed in your taxable income. There are lots of ways to save income tax by restructuring investments in relative’s names. In general, people do not have much time to plan all this and for years they pay higher income tax and never optimize it. You should consult from a good CA for these types of tax saving strategy.

If you have doubt about investment product and want more information regarding investment or you need investment services, feel free to ask us. We also conduct the seminar on investment and financial planning. If you are interested for conducting seminar in your city, just drop the mail.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com