Financial Planning

Avoid last minute IT rush – Income Tax Proof Submission


The end of the financial year 2018-19 is fast approaching, and with that begins income tax woes 😉.

Most people keep the task of tax planning hanging till the end of the year. While doing so many of them get trapped in last minute investment ideas, which seems attractive, but actual calculation, they are not.

A proper tax planning can help you to minimize your tax liability with the help of productive investments.The income tax framework allows various deductions under different heads, which can be used to save tax, as well as link same to attractive returns. Some of the most popular heads are described below.

Section 80C (includes section 80CCC): This section allows taxpayers to claim deduction up to Rs.1.5 lakh per year. Under this section one can claim deductions for a huge list of investments; i.e. PPF, EPF, NSC, Postal, ELSS schemes of Mutual Funds, 5year Bank FD,Life insurance policy premium,Tuition fees (school),Home loan principaletc. Investment in these schemes can potentially save taxes worth Rs. 45,000/-.
To know which one is an ideal investment, click here:


STP – investing in the volatile time

STP Transfer

STP stands for “Systematic Transfer Plan”, which means, one doesn’t want to invest in one GO, but in Parts, over a Period of time. For instance, you have 10 lacs in hand and seeking investment avenues for the entire 10 lacs. Easiest way is to shortlist a fund & invest fully (i.e. entire 10 lacs). But in the current market scenario, where market is swinging every second month (since last one year);is it a wise decision to invest fully?

STP comes as a rescue, where one can make this volatility work for your own benefit. First & foremost, let’s understand, one cannot ever time the market, therefore no point acting like a cowboy, or getting ideas based on celebrity talk-shows/ articles.

Since no one can time the market and the volatility, therefore the first rule is to park the entire funds in some conservative debt fund, where one can earn the base level returns. Next rule, based on your understanding, or with guidance with your advisor (highly recommended), one should now plan monthly transfers, from the debt fund to the preferred funds. Idea is to benefit from all levels of markets, i.e. market ups & downs, and average-out the cost of purchase.

STP is similar to SIP (Systematic Investment Plan), only difference is the source of funds at the time of investment; where SIP comes out of Income (or savings), and STP comes out from Lumpsum invested, usually in a conservative debt fund.

My 1st Home – When & How do I plan?

Buying House-How to plan

Amit and Neha are a perfect love story. They met in a college and it was love at first sight. The college years went by dreaming about their life together, getting married and having their dream home. They used to spend hours imagining how they would decorate their sweet home. After completing their studies and starting their careers, they decided to take the plunge and get married. As their parents happily agreed, the next step was to own a dream home. But they realised that having their dream home was not easy. All these years they dreamed about house but never did the homework of buying a house. They consulted a financial planner who guided them about buying a new home.

First and foremost is to look at the savings that has been made to buy the house. Since they were both salaried pooling of their savings could help them to set aside higher sum for initial payment of the house. Besides this, they looked at the options of borrowing from parents and friends who could lend them for a short duration. They figured out that they will have to save for at least two years before they could decide to buy a house.

The monthly savings also gave them an idea of how much share of their income can go toward payment of home loan. Ideally a share of around 25% of combined income would ensure that there is enough balance to take care of their monthly expense. Based on the prevailing interest rates and longer-term loan of 20 years could help them to know the amount of loan they could avail to buy a house. The financial expert can guide them to regarding the loan procedure like selecting the housing loan company, type of interest rate (fix or float), Interest subsidy under government schemes.

Based on the loan amount, the value of the house can be arrived and then selected based on their budget. Since the New regulations like Real estate regulation Act has protected the rights of buyers they could go for under-construction property that could be ready in couple of years. Here the selection of developer with good track record and flexible payment plan can help them to pay later as the project gets completed. This could give them time and resources to get married as well time to do more savings as their incomes increase. Once the property has been shortlisted completing the paper work will be the next important task which takes time as well as resources.

The journey from dream home to owning it in reality sounds arduous, but the joy of stepping in your own house with your beloved is immeasurable. This not only requires to dream from your heart but adequate financial planning to make it happen.

My MAIL-box is cluttered with Mutual fund mails – What do I do?


Mailbox once a boon for instant communication has become a pain today. Due to lots of promotional and unwanted mails, it becomes difficult to find the relevant mails. As I have invested in mutual funds, it becomes necessary to see these mails. But nowadays the mailbox is flooded with so many mails from the mutual funds that it has become time consuming. Recently SEBI introduced standardisation of various schemes so that investor can understand them. All mutual funds are supposed to communicate the change in fund to investors. There has been a surge in mails mutual fund due to this reason. Another change has been the computation of Expense ratio. With so many mails and technical explanations, common investor is bound to be confused. What is one to do?

The wisest thing to do is to visit websites of financial planning that give updated information of changes in Mutual fund industry in simple terms. They also guide to understand its implication on your mutual fund investments. Second option would be speaking to financial planner who can help you understand the impact of the changes on your portfolio. So rather than spending time on reading mails, just contact your financial planner and clear all your doubts. In fact a good financial planning advisor will update their investor of these changes and guide on its impact on the investments made.

Sabbatical – 1 year freedom from hectic work-life; but how do I plan my finances?

are you prepared for Sabbatical

Exhausted and tired from long day at office and travel, Amit Kumar went to sleep wondering if this is life that he will live all through. He dreamt of his childhood days and all that he could enjoy doing it. He remembered how he was good at telling jokes and doing performances in school and village programs. His wild imagination saw him doing what he loved and making name for himself. Though he earned decent enough he was happy doing it. He liked living in serene countryside in the beauty and solitude of nature. But suddenly his dream was broken to reality as his wife woke him for sleeping late. Fortunately, it was week-end and he kept wondering if he could live his dreams.

He discussed the dream with his wife who made him realize his responsibilities and financial liabilities. His wife also yearned for a life that he talked about, it needed taking a break – a sabbatical from work and find out if things worked. They started financial planning about their monthly expenses and other one-time commitments. They did month by month planning of all the events that would mean outgo of money and how to arrange for it. They looked at all the discretionary expenses they incurred like weekly outing expenses and if that could be reduced to improve savings. They also looked at some money that they had invested for travel plans and if that could be utilized. Increased savings per month helped him to create a buffer of 1-year expenses in 6 months’ time. This made it possible for him to take break from his job to pursue what he loved to do.

Financial Planning for Defence Personnel

Financial Planning for Defence Personnel

The recent news of 23-year young Captain who laid his life while fighting on the border moved my heart. Their patriotism and the willingness to risk life for the nation is commendable. This emotional fervor for them last for few days and then the reality of life dawns on their family. As a financial planner I was wondering about their families and whether they plan their finances.

The soldier life is very demanding, not only for themselves but also for their families which involves long duration of time away from family or frequent moves from one place to another. Since they are driven by strong sense of patriotism, everything else including finance takes a back seat. In such a scenario, it their family who needs actively support in financial planning while the soldier is away on duty.

Since the defence life starts early, the best solution is to invest the savings in your Provident Fund or Defence Services Officers Provident Fund. This is the most secure option which will build up the necessary funds during retirement or in case of any calamity. The next option is to set aside some savings for the family needs. As the government takes care of the housing and medical needs of the defence person as well as his family, the surplus left should be invested in investment options with moderate risk and higher than FD returns. This could provide funds for education, health and housing needs of the defense person and his family. The corpus available on retirement along with regular savings can help a soldier live a life of financial independence. A good financial planner can help to balance their income with risks and future needs.

Financial Planning for Pilots


Our international flight landed at Mumbai airport and I heaved a sigh of relief. I was irritated by Long sitting hours, headache, temporary deafness due to air pressure, booming noise, turbulence and last but not the least-fear of crash. While exiting the plane, a passing thought came to my mind- if air traveler goes through all these what about the staff especially the Air pilot who do their job day in day out!

Beyond the excitement of flying the plane, a Pilot’s career means odd working hours, medical issues, mandatory retirement age and job uncertainty due to airlines going bust.

Just as flight is planned and every contingency thought and taken care of, a pilot needs a financial plan. A financial plan brings the future into the present so one can take action now. It also makes life more certain and a plan is the single most powerful tool for accomplishing a goal.

A good financial planner needs to take into consideration their high earnings along with reduced working years due to health issues. They also need to convince their clients about providing for retirement planning apart from providing for other life goals like marriage, estate, education, health etc. All this can be built over a period of time with systematic investments.

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Reducing FD rates, a concern for retired


Mr. Joshi, a senior citizen is worried man today. His income from FD has been getting less by the day and on other hand monthly expenses have been rising. To add to the worries are the rising medical expenses. For the generation that has retired in last few decades, retirement pension or interest income from FD was the income support in old days.

Changing times call for different approach. A good mix of fixed income and market linked products is the answer to ensure optimal investment returns. Investing Rs 15 lakh in Pradhan Mantri Vayu Vandana Yojana provides assured return of 8% with monthly income of Rs 10,000.

Investments in debt and balanced funds schemes can give higher returns and better protection of capital. These investments are tax efficient if invested over three years. A small exposure to equity mutual funds over 3-5 year horizon can provide for capital appreciation. The increased returns should also be used for having adequate insurance cover to meet medical expenses. A small sum in liquid fund for emergency needs can take care of any contingency.

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