Thursday, November 7, 2013

Thirteen years return of Reliance growth fund whopping 24.75%

Reliance growth fund gave a whopping return of 24.75% in last 13 years from 1 November 2000 to 1 November 2013.

In a SIP Rs 10,000 per month and investment of around Rs 15,70,000 gave you return of Rs 91,86,000

as on 1-11- 2013.

Reference :

Sunday, November 3, 2013

Happy and Prosperous Samvat 2070 !

Wish you all Happy and Prosperous Samvat 2070 !
Everybody make lots and lots of money. 

Friday, October 25, 2013

UTI Mastershare declares dividend

UTI Mastershare has declared dividend of Rs 2.25 per unit and the record date is 29/10/2013.

This is an excellent fund from UTI which has been giving dividend continuously for last 26 years.

Mastershare has given dividend every year without fail. Even when markets were down it continued to gave dividends. This is a large cap oriented fund.

Monday, August 12, 2013

How to create HUF file, create capital for HUF and save tax

What is HUF (Hindu Undivided Family)
HUF is a concept when mostly there were joint familys and people used to have family income. Individuals do have there own income and you can have a seperate family income which belongs to all the members of that family. If your name is Mr. Suresh Bafna and you are married then you can also have your own Suresh Bafna HUF.

Your HUF comes into existence naturally on the day you get married. Any Hindu including Sikhs and Jains can form a HUF file any time after his marriage. once they have a child, then child is automatically a member of his father's HUF. Eldest male member is the KARTA (Karta is the person who manages the affairs of the HUF) of the HUF family. however recently even female member can be the karta.

Steps needed to create a HUF Income tax file.
1. Applying for a PAN card of HUF link
2. Opening a Bank Account in HUF name
3. Rubber stamp of HUF.

Coparcener is someone who has the right to demand the share of the HUF; coparceners are generally the Karta (Main decision maker of family, usually the Father , but an amendment has been brought which stated that Females can become Karta; there can be an all female HUF as well), then sons and daughters.

HUF is treated as seperate individual file for income tax purpose and it gets all the same benefit and exemptions as of individual.

How can you put capital or Funds into HUF

1. Ancestral Property - If there is ancestral property, then income from that property can be classified as HUF income or if ancestral assets are sold then money received from such sale can be transferred to HUF
Movable or immovable property received through a Will by way of inheritance is exempt from tax

2. Gifts - Gifts received by members of HUF on Birthdays,Marriage anniversary are exempt from tax up to Rs 50,000. Gifts received from relatives of members of HUF are exempt from this rule. 

NOTE Do not transfer your own assets or funds into the HUF, any income arising from this asset will be clubbed with your own income and you will be taxed on it. However if you transfer money from your asset and invest in tax free income generating instruments like ELSS mutual funds dividend income then no tax, as it is tax free income.

3. Gifts at the time of marriage are exempt from tax, whether from a friend, relative or colleague. Hence if a member of the HUF is getting married, the gift can be made to the HUF, and it will be exempt from tax in the hands of the HUF.

4. Loans - HUF can take interest free loans from relatives of the members

5. Business - Member or Karta can run a business under HUF name and income arising out of this business can be called as HUF income.

Any income received by the HUF can be further invested into various investment avenues such as mutual funds, fixed deposits, property and so on, and the profit or interest earned will be taxable in the hands of the HUF, as it is income of the HUF.

How to save TAX using HUF

If your salary income is 5lakhs and you want to start a side bussiness and earn another 5 lakhs then you can do that bussines in HUF and that income can be called of as HUF income.

TAX calculation
case 1 (without HUF you have one pan card)
Personal Income      5 lakh
Business Income      5 lakh
Total income is      10 lakh
Invest benefit 80c    1 lakh
Basic deduction       2 lakh
so total taxable income is 7 lakh. (tax laibilty = 90,000 approx)

case 2 (with HUF File you have 2 pan card)
Personal Income     5 lakh
Invest benefit 80c   1 lakh
Basic deduction      2 lakh
Taxable income is   2 lakh ( tax liability 20,000)

HUF Income          5 lakh
invest benefit 80c   1 lakh
basic deduction      2 lakh
Taxable income is  2 lakh (tax liability 20,000)

so when you use HUF then your TAXABLE income is (2+2) 4 lakhs only as against earlier without HUF you have taxable income of 7 lakhs.

so you are saving approximately Rs. 50,000 PER YEAR when you have a HUF file.




I, ____________________________ son Of ___________________________________ Residing at ____________________________________________ aged ___Adult do hereby declare-

  1. That I am Karta of ____________________________________________

  1. That I received on behalf of the H U F gift of Rs. ___________ by way of CASH/CHEAUE from my FATHER ________________________________(name of relative of karta of HUF  on  dt. _______________ this formed the corpus of the HUF.

  1. That the HUF at present is consisting of the followings members-

I)                   Shri _____________________, Adult, Residing at _________________
II)                 Smt. _____________________, Adult, Residing at _________________
III)              Kumari _________________-Minor, Residing at ___________________

  1. That the above statements are true to the best of my knowledge & belief. Declare this on _________________

WITNESS:                                                                              Signature

1. ————————————–
2. ————————————–                                   (_____________________)


Saturday, August 3, 2013

Reliance Infrastructure Fund merged into Reliance Diversified power sector Fund

Reliance Mutual Fund is getting into consolidation phase last week they merged Reliance Natural Resources Fund and today they announced merging of RELIANCE INFRASTRUCTURE FUND into Reliance Diversified Power sector Fund.

The date for the merger is 7 September 2013.

Investors of either of the fund can exit from 8th August 2013 till 6 September 2013 without paying any exit load.

S & P BSE Power Index fund will be the benchmark for Reliance Diversified Power Sector Fund.

Thursday, August 1, 2013

Merger of Reliance Natural Resources Fund with Reliance Vision Fund

Reliance Natural Resources Fund is getting merged with Reliance Vision Fund effective September 7, 2013. 

Reliance Vision Fund will change few of fundamental attributes slightly. Post-merger, the scheme can invest 65-100 per cent of its assets in equity related instruments, against previous 60-100 per cent. Debt and money market instruments can comprise 0-35 per cent share against previous 0-30 per cent.

Reliance Natural Resources Fund was launched in January 2008 and till date it has given negative returns it was amongst few of the worst performing funds from Reliance Mutual Fund. The fund was launched at a time when markets were at peak but this fund has always been an under performer and has less returns then the benchmarks and has been a laggard in its peer group.

Tuesday, July 16, 2013

what is interest rate on PPF ?

Historical Interest rates of PPF over time

01.04.1986 to 14.01.2000   - 12.0 %

15.01.2000 to 28.02.2001   - 11.0 %
01.03.2001 to 28.02.2002   -   9.5 %
01.03.2002 to 28.02.2003   -   9.0 %

01.03.2003 to 30.11.2011   -   8.0 %

01.12.2011 to 31.03.2012   -   8.6%
01.04.2012 to 31.03.2013   -   8.8%

01.04.2013 on wards is   8.7%

Sunday, July 7, 2013

compile error in hidden module 1 of ITR2 while opening excel 2007

ust install " msxml 6.0 service pack1 " for all type of compile errors In ITR excel you can download this utility from the link below

Read more at:
ust install " msxml 6.0 service pack1 " for all type of compile errors In ITR excel you can download this utility from the link below

Read more at:
ust install " msxml 6.0 service pack1 " for all type of compile errors In ITR excel you can download this utility from the link below

Read more at:
If you have any kind  of compile error then just install this utility which is an xml parser
(ITR2 uses macros and xml hence you get this error)

If problem still persist try the solutions mentioned on below forum

ust install " msxml 6.0 service pack1 " for all type of compile errors In ITR excel you can download this utility from the link below

Read more at:

Monday, June 10, 2013

Aviva Life Insurance LifeSaver Plus Review

One Mr. Shah a neighbour of mine showed me his policy taken from Aviva Life Insurance Lifesaver plus with Balanced Fund = 100%. He was purchasing a flat and wanted to surrender and see how much will he get back. He had paid 4 installment of Rs. 50,000 totalling to Rs. 2,00,000.

The details of the policy are as follows.

Base plan = 2,50,000
Policy Term = 20 years
Annual Installment = 50,000
policy start date = November 2009
Balanced Fund = 100%

1. policy admin charges : Rs. 660 First year (Rs 52 per month )
2. Fund Management charges : 1.25% per annum for balanced fund
3. Premium Allocation charge : (White collar Robbery)
      a) Rs 20,000 First year (40% of first year premium)
      b) Rs 15,000 second year (30% of 2nd year premium)
      c) Rs   2,500 third year (5% on third year premium)
      d) Rs  1,000 fourth year onwards (2% on fourth year premium)
4. Mortality charges as per age mortality column

1st year :
Amount invested : 50,000
Total charges : 22,327
Actual Investment : 27,680
Fund value: 30,552  ( Even at 10% return it will only be around 30,552)

2nd year
Amount Invested : 50,000
Total charges : 17,968
Acutal investment : 32,032
Fund value : 68,988

3rd year
Amount Invested : 50,000
Total charges : 6,326
Actual investment : 43,674
Fund value : 1,24120

4th year
Amount Invested : 50,000
Total charges : 5,774
Actual Investment : 44,226
Fund value : 1,85,423

So even after 4 years of investing Rs 2 lakhs you will end up with a fund value of Rs. 1,85,423

Now if you want to surrender this policy you will get back only Rs 1,39,423 because you have to pay there surrender charges which is 25% of the fund value after 4 years.

Had he invested in PPF or even simple Fixed Deposit he would have got 2 lakh plus as ppf gives more then 8%, he would have easily got more then 2,43,330 Approx  (Balanced mutual fund or debt fund would have also given more then this because they have total charges cap of 2.5%)

He has been robbed of  Rs 1,03,907 (2,43,330 - 1,39,423)

Who is responsible for this day light robbery ?
1. IRDA (regulator who regulates such policy)
2. Company ( who design this products )
3. Agent  (who mis-sold the policy)
4. customer (who did not read the policy before buying)

The interesting part about this is the initial document has all this charges written in black and white in fine print.

All I can say is BE AWARE of such legalised fraud

Saturday, June 1, 2013

Historical Returns of Gold, Equity and Debt

Reference : SBI Mutual Insights May-2013, page - 16

Tuesday, May 28, 2013

Bonus declared in UTI ULIP, UTI Childrens Career plan, UTI Retirement Benefit Pension Plan

UTI Mutual Fund has announced declaration of bonus units under
1. UTI Unit Linked Insurance Plan,
2. UTI Children's Career (Balanced Plan) and
3. UTI Retirement Benefit Pension Fund.

Investors will receive 1 unit for every 10 units held.

The record date is May 30, 2013

Monday, May 27, 2013

Role of RBI, Repo and Reverse Repo rate, Bank rate

RBI acts as a banker to the government participating in open market operations, maintaining price stability and ensure adequate flow of credit to productive sectors.

Open Market operations (OMO)
RBI sells or buys government securities in open market transaction depending upon whether it wants to increase liquidity or reduce it.

Reserve Requirements (CRR and SLR)
CRR or cash reserve ratio refers to a portion of deposits which banks have to keep with the RBI. This serves two purposes. It ensures that a portion of bank deposits is totally risk free and secondly it enables RBI to control liquidity in the system and thereby inflation. To control inflation RBI increases CRR and on other hand if it wants growth then RBI reduces it.

SLR is Statutory Liquidity Ration refers to the amount that all banks requires maintaining in cash, gold or approved securities with RBI. This helps RBI to control liquidity in the market.

Repo Rate
It is the interest rate which RBI charges to banks for collateralized short term loan.

Reverse Repo Rate
Reverse Repo is the rate which RBI pays to banks. When banks have surplus liquidity and there are not enough borrowings from banks by consumers banks park money with RBI and earn some interest called reverse repo rate.

Bank Rate
It is the interest rate at which banks, FIs and other approved entities in the interbank market can get financial accommodation from RBI.


Saturday, May 25, 2013

what is Debt ? what is Bond ?

Debt Instruments are contracts in which one party lends money to another on pre determined terms with regards 1) Interest rate, 2) periodicity of interest and 3) tenure of debt after which principal is repayed.

Few common examples of Debt Instruments are Fixed Deposit, NSC, PPF, Bond, Debentures etc

'Bond' is the term used for debt instruments issued by government and 'Debentures' is the term used for instruments issued by corporates or private sector.

There are bonds which are listed on stock exchanges after issuance and are traded regularly on marked to market basis. Trading platform for government securities are NDM - 'Negotiated Dealing System' and WDM- 'Wholesale Debt Market' also called NEAT(National Exchange for Automated Trading) on BSE and NSE.

Terms used in Bonds

Principal : Principal is the actual amount lent or invested or Face value of the bond.

Maturity : Maturity is the length of time until principal amount of bond must be repaid.

Coupon : Is the amount of Interest paid per year expressed as a percentage of the face value of the bond. It is mostly paid semi annually (It is called coupon as intially each bond used to have coupons attached to the bonds and holders receive the interest by stripping off the coupons and redeming them)

Different kinds of bonds

Coupon Bond : Debt obligation of semiannual interest payments generally called bearer bond or vanilla bond

Zero Coupon Bond: This bonds do not pay interest but are issued at deep discount to the face value. this are also known as deep discount bonds

Floating Rate Bond : Bond with variable interest rate is called floating rate bond. The adjustments are tied to certain money market instruments and are set every six months.

Callable Bond : Bond that can be redeemed by the issuer prior to its maturity.

Putable Bond : Bond holder can force the issuer to repurchase the bond before maturity.

Convertible Bond : Bond which can be converted to companys equity at predetermined date at the discretion of the bond holder.

Amortizing Bond: A class of debt in which a portion of principal amount is paid along with periodic interest.

Price of Bond is inversely proportional to the interest rate.

Lets look at an example. A 10 year GOI (Government of India) bond offering 7% fixed coupon has been auctioned today with face value of Rs. 100. We assume we bought it on issue and this bond gets listed on exchanges at Rs. 100. Aftere 3 months due to monetary measures taken by RBI the interest rate in market falles by one percentage to 6%.

As the bond is marked to market and traded. it has to be valued every day. so market price post interest rate cut will go up as the bond carries a higher coupon rate then prevailing market interest rate. However if the interest rate would move upward the same bond would be traded at discount price. therefore we follow the first thumb rule of interest rate and current price of a bond move in opposite direction.

Now the question is how much % price of a bond change due to changes in interest rate. in above case 1% rate cut in interest rate will affect all future cash flows to be received from this bond to the remaining tenor. We can then say that all future coupons will be re-invested at a lower interest rate and resulting in fall in YTM on the day of valuation.

Thursday, April 25, 2013

Asset Allocation for overall balanced portfolio

Ideally, Retail Investor should invest as per ASSET ALLOCATION.

30% Debt  ( PPF - 30%, Long term MF Debt fund -30%, Tax free
Bonds -10%, Bank FDs -10%, Traditional LIC - 10%, short term liquid fund -10% )

30% Real Estate (1st own home, 2nd Home for Rental Income, 3rd Commercial property & 4th
Land or plot)

30% Equity (Large cap MF -30%, ELSS - 30%, Midcap/Smallcap - 30%,  Direct large cap shares -10%)

10% Alternative investments (Gold ETF -30%, Silver -30%, Daimonds - 30%,Antiques paintings etc-10%)

Above Asset allocation is only for reference and one can change or modify it according to his/her situation.

Saturday, March 30, 2013

What is Interest rate on PPF for 2013-2014 ?

Interest rates on PPF (Public provident Fund) and other small savings scheme has been reduced.

PPF Interest rate was 8.8% for year 2012-2013 has now been reduced by 0.1% to 8.7% for year 2013-2014, with effect from 1st April 2013.

Similarly Post office Monthly Income Scheme (MIS) will earn an interest of 8.4% for 5 year maturiy.
The National Savings Certificates (NSC) having maturity of 5years and 10 years will attract 8.5% and 8.8% interest respectively, reduced by 0.10% from previous year.

Friday, March 29, 2013

Top performing Mutual Funds for FY12-13

Following are the Top performing Mutual Funds for the Financial year 2012-2013.

1. SBI Blue Chip Fund        - 18.1
2. Axis Equity Fund (G)    - 17.3
3. Religare Equity Fund (G) - 16.2
4. Birla SL Frontline Equity  - 15.0
5. Escorts Leading Sectors   - 13.5

1. SBI Emerging Busi (G)        - 22.0
2. Taurus Discovery Fund       - 19.8
3. Axis Mid Cap Fund (G)      - 17.6
4. Franklin (I) Smaller Cos      - 17.3
5. Principal Emerging Bluechip - 16.6

1. Birla SL India GenNext     -   17.5
2. ICICI Pru Services Indus.  -   17.4
3. Franklin High Growth Cos -   16.0
4. Tata Equity Management  -     15.3
5. Reliance Equity Oppor     -     14.0

1. Union KBC Tax Saver     -   16.1
2. HSBC Tax Saver Equity   -   15.4
3. Principal Tax Savings -    14.0
4. Axis Long Term Equity     -   13.8
5. DSP-BRTax Saver Fund   -    13.1

1. SBI Magnum Balanced Fund -
2. ICICI Pru Eqty-Volatility Adv. -
3. ICICI Pru Balanced Fund (G) -
4. Principal Balanced (G)     -
5. Tata Balanced Fund (G)      -

BENCHMARK RETURNS  for the same period.
Sensex    -10.0
Nifty       -  9.4
BSE 100 -  9.0

source of data moneycontrol.

Friday, March 1, 2013

STT on Mutual Funds reduced in budget 2013-14

Securities transaction tax is reduced. STT on mutual fund and exchange traded fund redemption is reduced to 0.001% from 0.25% earlier. STT on MF/ETF purchase and sale on exchanges is reduced from 0.1% to 0.001%, only on the seller.

STT on futures has come down to 0.017% to 0.01 %
CTT has been introduced on non agro based commodities at the same rate applicable to equity futures of 0.01% to make it par with STT

But there was some good news for travellers. If you are going abroad, you are allowed Duty-free shopping upto Rs 50,000 for a male passenger and Rs 1 lakh for a female passenger.

Wednesday, January 9, 2013

Fun Movie One idiot by IDFC Mutual Fund

Must watch movie for all youngsters. Its fun movie about investments, life goals, life styles.