Accurate estimation of the return on investment is important to an investor. It not only gives him a clear picture of how his investments have fared, but also enables him to compare the returns of fundamentally different investment options available in the market. The EAR and CAGR are two of the most important concepts/calculators, which cover the investments with a fixed rate of return and those which do not grow at a constant rate and fluctuate widely over the holding period.
Effective annual rate (EAR) Continue reading →
We are in the month of March and the mutual fund market is flooded with new fund offers from almost all the leading asset management companies. Most of these are closed ended debt oriented plans with tenure of three years and above.
Three months have passed since the last late of filing individual tax returns, which was 31st of July. Many of us who applied for a tax refund have already got it, and some are still waiting, and a few may have to wait longer or may not get the refund at all. The general tendency is to blame the Income Tax Department – calling it a typical Indian public sector organization, inefficient, slow, lacking professionalism etc. While this may have been somewhat true in the past, it is not the case today, with the new online version of Income tax India introduced a few years ago.
The finance minister increased the maximum investment ceiling in PPF (Public Provident Fund) from Rs 1 Lakh to Rs 1.5 Lakhs per financial year in the last budget. This makes the already popular PPF more attractive. The PPF is one of the very few investment avenues which still enjoys the EEE benefit – the investment is exempt from tax and eligible for tax rebate, the interest is tax free, and the maturity amount too is tax free.
Krishna is a 40 year old finance professional working with a private firm. His family consists of his home maker wife and two young children. A couple of years back, an article in a magazine made him aware of the importance of medically insuring himself and his family. This prompted him to buy a family floater policy with an annual sum insured of 4 lakhs on which he pays a premium of around 15,000/- per annum. He was pleased with his decision of having adequately provided for any unforeseen medical emergency.
The union budget 2014, one of the most awaited events since the Modi government came to power, was presented yesterday by the finance minister.
Here is what it means/changes for you as a common investor and tax payer-
The main purpose of life insurance is to provide financial stability to the breadwinner’s dependent family members in the event of his untimely death. Today it is more common to find women who are financially independent with careers; yet there are a significant number of them who choose to stay at home and take care of the house and their young children.
In such families, it is usually only the husband who takes a life cover for himself as the housewife is perceived to have no monetary value. Even the life insurance companies prefer insuring working people – many of them do not offer to insure housewives or have an upper limit on the maximum insurance cover which can be provided, that too subject to the husband’s income and existing cover! They do have a seemingly very valid argument for this – while the loss of a stay at home mom or wife is an irreparable loss for the family in emotional terms, since she doesn’t contribute to the family income in any way, it doesn’t have any monetary impact. And since the loss of income is what an insurance policy is supposed to protect against, it doesn’t make sense to insure her and is viewed as an unwanted expense.