Tuesday, December 9, 2014

BSLI Vision LifeIncome Plan

In today's world, we try to plan for all of life's important stages and milestones keeping in mind our growing responsibilities. And, to supplement these efforts, we sometimes wish for an extra source of regular income. Introducing the BSLI Vision LifeIncome Plan, a traditional participating whole life plan that helps you to not only plan your financial goals but also realise your dreams by providing you with a steady income and whole life cover. With survival benefits payable every year from the end of the premium paying term till maturity and a life insurance benefit, this plan offers a perfect blend of income and financial protection for you and your family.

Key Features
  • 5% of the Sum Assured guaranteed plus bonus every year after premium paying term.
  • Comprehensive financial protection for your family with whole life covers to age 100.
  • Premium rebates on high Sum Assured, Annual & Semi Annual modes of payment and ECS method of payment.
  • Access to suitable Rider options for added protection, at a nominal extra cost.
  • Tax benefits under Section 80C, 80D and Section 10(10D) of the Income Tax Act, 1961.

Quick view

Entry Age (age on last birthday)
1 – 60 years
Policy Term
Whole Life to Age 100
Premium Paying Term
15 to 40 years
Attained Age at end of Premium Paying Term is 18 or more
Attained Age at end of Premium Paying Term is 75 or less
Minimum Sum Assured
Rs. 200,000
Minimum Premium
Rs. 18,000
Premium Frequency
Annual, Semi-annual, Quarterly, Monthly

Benefits of BSLI Vision Life Income Plan

In the event the life insured survives to the end of the premium paying term, the policy holder will receive accrued bonuses till date. If he/she survives to the end of each subsequent policy year, he/she will be paid Income Benefit of 5.0% of Sum Assured plus bonus from current policy year.

In the event the life insured survives to the end of the policy term, the policyholder will receive the sum Assured and Terminal Bonus (if any).

Death Benefit
In the unfortunate event of the death of the life insured during the premium paying term, the sum assured plus accrued bonuses as on date of death and Terminal Bonus (if any) will be paid to the nominee. If the life insured dies after the premium paying term, the nominee will receive the Sum Assured plus bonus from current year plus Terminal Bonus (if any). Sum Assured payable on death/maturity shall never be less than 105% of total premiums paid to date (excluding any applicable rider premium and/or underwriting extras).

Additional Insurance Benefits

To enhance protection, BSLI Vision Life Income Plan offers the following riders at a nominal extra cost.
  • BSLI Accidental Death and Disability Rider (UIN: 109B018V02)
  • BSLI Critical Illness Rider (UIN: 109B019V02)
  • BSLI Surgical Care Rider (UIN: 109B015V02)
  • BSLI Hospital Care Rider (UIN: 109B016V02)
  • BSLI Waiver of Premium Rider (UIN: 109B017V02)

Please refer to detailed brochures on riders, consult your financial advisor -APURV GOURAV (+919970506893 )
Tax Benefits
As per extant tax laws, this plan offers tax benefits under Section 80C, 80D and Section 10(10D) of the Income Tax Act, 1961, subject to fulfilment of the other conditions of the respective sections prescribed therein.
Note:- All Content i have taken it from BSLI Website.

Saturday, November 1, 2014

Finance Act 2014

Finance Act 2014 has introduced a new TDS provision under section�194DA in the Income Tax Act, 1961 on the insurance policies.
As per the new section (applicable from 1st October 2014), if the policy proceeds are not eligible for exemption under Section 10(10D) of the Act and your total payout value for a year exceeds
Rs 100,000, then the tax deductions will be as under:
  • At 2% (for valid PAN registered with us)
  • At 20% (for valid PAN not registered with us)
The applicable deduction will be withheld by us before releasing the payment and the same shall be deposited with Government authorities.
In case valid PAN details are not available with us, TDS certificates would not be generated from Income Tax website. Also, in the absence of PAN, TDS credit would not get reflected in Form 26AS.

Thursday, September 19, 2013

Companies Bill 2013 - Highlights

The new Companies Bill will replace the 60 year old regulations of Companies Act,1956 .The Companies Bill 2013 provides for modifying the rules and regulations that earlier governed the companies in the country. It mainly focuses on the social welfare and protection of the investors against the fraud committed. It mainly aims to bring transparency in the working of the company. As many new amendments has been made in the  Companies Bill 2013.  Some of the key highlights on the Companies Bill 2013 are:-

  • The concept of “One Person Company” has been introduced for the first time.
  • Compulsion of e-governance on all compulsory process.
  • Mandatory transfer of 2% of average net profit of preceding three years for corporate social responsibility (CSR).
  • It says about compulsory internal audit for different class of companies.
  • The tenure of appointment of auditors at annual general meeting(AGM) of company has extended to five years , instead of annual appointment /retirement(other than government company)
  • In case of listed companies 1/3rd of total no of directors must be “independent directors”
  • The Companies Bill 2013 considers manager or managing director or chief executive officer, whole time director, chief financial officer and company secretary as key “managerial personnel”.
  • It prohibits insider trading of securities.
  • The maximum no. of member for private company has increased to 200 from 50.
  • National Advisory Committee on Accounting Standards (NACAS) has been renamed has National Financial Reporting Authority (NFRA).
  • It also highlights on annual ratification of appointment of auditors.
  • There is no ceiling on no. of members/partners as to associations or partnership formed by professionals by special acts.
  • It highlights on the appointment of at least one women director in the company.
  • The companies bill redefines’ the term “subsidiary”, “control” and associate “company”.
  • Under the Companies Bill 2013   statutory   status will be conferred upon the Serious Fraud Investigation Office (SFIO).

Saturday, August 10, 2013

Improve your Credit Score

Credit Information Bureau (India) Ltd; CIBIL is India’s first Credit Information Company, also commonly referred as a Credit Bureau. We collect and maintain records of individuals’ and non-individuals’ (commercial entities) payments pertaining to loans and credit cards. These records are submitted to us by banks and other lenders on a monthly basis; using this information a Credit Information Report (CIR) and Credit Score is developed, enabling lenders to evaluate and approve loan applications. A Credit Bureau is licensed by the RBI and governed by the Credit Information Companies (Regulation) Act of 2005

How to Improve your Credit Score 
You can improve your Credit Score by maintaining a good credit history. This will be viewed favorably by lenders and it can be done with 6 simple rules:
  1. Always pay your dues on time
    Late payments are viewed negatively by lenders
  2. Keep your balances low
    Always prudent to not use too much credit, control your utilization
  3. Maintain a healthy mix of credit 
    It is better to have a healthy mix of secured (such as home loan, auto loan) and unsecured loans (such as personal loan, credit cards). Too many unsecured loans may be viewed negatively.
  4. Apply for new credit in moderation
    You don’t want to seem Credit Hungry; apply for new credit cautiously
  5. Monitor your co-signed, guaranteed and joint accounts monthly 
    In co-signed, guaranteed or jointly held accounts, you are held equally liable for missed payments. Your joint holder’s (or the guaranteed individual) negligence could affect your ability to access credit when you need it
  6. Review you credit history frequently throughout the year 
    Purchase your CIR from time to time to avoid unpleasant surprises in the form of a rejected loan application
Factor Affecting Credit Score

There are 4 major factors that affect your score
  1. Payment history
    Making late payments or defaulting your EMIs or dues (recently or consistently) shows you are having trouble to pay your existing credit obligations and will negatively affect your score.
  2. High utilization of Credit Limit
    While increased spending on your credit card will not necessarily affect your score in a negative manner, an increase in the current balance of your credit card indicates an increased repayment burden and may negatively affect your score.
  3. Higher percentage of credit cards or personal loans (also known as unsecured loan)
    Having a balanced mix between the secured loans (such as Auto, Home loan) and unsecured loan (such as Personal loan, Credit Card) is likely to have a more positive affect on your score.
  4. Many new accounts opened recently
    If you have recently been sanctioned multiple loans and credit cards, then lenders will view your application with caution because this behavior indicates your debt burden has increased increase, which will negatively impact your score.

Saturday, June 29, 2013

Have You Disclosed Other Source of Incomes?

The due date for filing personal income-tax returns for the financial year 2012-13 is 31st July 2013.

There are a few more sources of income which one MUST disclose. The disclosure can be done either to our employer (so that they are taken care of in Form 16) or while filing our returns.

Some of the very important disclosures are:

Interest earned from Savings Bank Account
Interest earned from savings account is tax free up to Rs 10,000/-. Any interest earned above that is taxable and should be declared.

Interest earned from Fixed Deposits
Interest received from fixed deposits is taxable as per ones income tax slab.

Most of the times banks deduct 10% TDS when the interest accrued is more than Rs 10,000/- (unless one submits a Form 15 G/H). However, the actual tax liability will be more or less, depending upon the tax bracket one falls under after all incomes and deductions are claimed.

Interest earned from Recurring Deposits
Interest received from recurring deposits is taxable as per one’s income tax slab.

Banks do not cut any TDS on interest earned on recurring deposits and hence it becomes even more important to declare this source of income.

Interest earned on Postal deposits and National Savings Certificates (NSCs)

Interest earned on Postal deposits and National Savings Certificates (NSCs) is taxable and needs to be declared.
Cash Gifts
Cash gifts received for more than Rs 50,000/- should be declared as they are taxable (unless for specific occasions like marriage, will etc)

Capital Gains/Losses
Any Capital gains/losses made from trading equities, selling mutual funds, gold etc should be declared even though they may be non-taxable (e.g. for equities long term capital tax is NIL).

Similarly, any losses should be declared as these help in offsetting gains for subsequent years

Exempt Income
Exempt Income (e.g. Interest earned on PPF/EPF accounts) should be declared for auditing purposes only. This is a tax free income

Dividend Income
Dividend income is tax free in the hands of the investor. However this should be declared while filing income tax returns

Saturday, July 14, 2012

Know Your Income Tax Deduction


Nature of Deduction:
This section has been introduced by the Finance Act, 2005. Broadly speaking, this section provides deduction from total income in respect of various investments/expenditures/payments in respect of which tax rebate u/s 88 was earlier available. The total deduction under this section is limited to Rs.1 lakh only.


Nature of Deduction:
Payment of premium for annunity plan of LIC or any other insurer Deduction is available upto a maximum of Rs.10,000/-
The premium must be deposited to keep in force a contract for an annuity plan of the LIC or any other insurer for receiving pension from the fund.The Finance Act 2006 has enhanced the ceiling of deduction under Section 80CCC from Rs.10,000 to Rs.1,00,000 with effect from 1.4.2007.


Nature of Deduction:
Deposit made by an employee in his pension account to the extent of 10% of his salary.
Where the Central Government makes any contribution to the pension account, deduction of such contribution to the extent of 10% of salary shall be allowed. Further, in any year where any amount is received from the pension account such amount shall be charged to tax as income of that previous year. The Finance Act, 2009 has extended benefit to any individual assesse, not being a Central Government employee.


Nature of Deduction:
Subscription to long term infrastructure bonds.
Subscription made by individual or HUF to the extent of Rs. 20,000 to notified long term infrastructure bonds was exempt for the financial year 2010-11 and 2011-12. However, the exemption is no longer present from financial year 2012-13.


Nature of Deduction:
Payment of medical insurance premium. Deduction is available upto Rs.15,000/ for self/ family and also upto Rs. 15,000/- for insurance in respect of parent/ parents of the assessee.
The premium is to be paid by any mode of payment other than cash and the insurance scheme should be framed by the General Insurance Corporation of India & approved by the Central Govt. or Scheme framed by any other insurer and approved by the Insurance Regulatory & Development Authority. The premium should be paid in respect of health insurance of the assessee or his family members. The Finance Act 2008 has also provided deduction upto Rs. 15,000/- in respect of health insurance premium paid by the assessee towards his parent/parents. W.e.f. 01.04.2011, contributions made to the Central Government Health Scheme is also covered under this section.


Nature of Deduction:
Deduction of Rs.40,000/ - in respect of (a) expenditure incurred on medical treatment, (including nursing), training and rehabilitation of handicapped dependant relative. (b) Payment or deposit to specified scheme for maintenance of dependant handicapped relative. W.e.f. 01.04.2004 the deduction under this section has been enhanced to Rs.50,000/-. Further, if the dependant is a person with severe disability a deduction of Rs.1,00,000/- shall be available under this section.
The handicapped dependant should be a dependant relative suffering from a permanent disability (including blindness) or mentally retarded, as certified by a specified physician or psychiatrist. Note: A person with severe disability means a person with 80% or more of one or more disabilities as outlined in section 56(4) of the “Persons with Disabilities (Equal opportunities, Protection of Rights and Full Participation) Act.


Nature of Deduction:
Deduction of Rs.40,000 in respect of medical expenditure incurred. W.e.f. 01.04.2004, deduction under this section shall be available to the extent of Rs.40,000/- or the amount actually paid, whichever is less. In case of senior citizens, a deduction upto Rs.60,000/- shall be available under this Section.
Expenditure must be actually incurred by resident assessee on himself or dependent relative for medical treatment of specified disease or ailment. The diseases have been specified in Rule 11DD. A certificate in form 10 I is to be furnished by the assessee from a specialist working in a Government hospital.


Nature of Deduction:
Deduction in respect of payment in the previous year of interest on loan taken from a financial institution or approved charitable institution for higher studies.
This provision has been introduced to provide relief to students taking loans for higher studies. The payment of the interest thereon will be allowed as deduction over a period of upto 8 years. Further, by Finance Act, 2007 deduction under this section shall be available not only in respect of loan for pursuing higher education by self but also by spouse or children of the assessee. W.e.f.01.04.2010 higher education means any course of study pursued after passing the senior secondary examination or its equivalent from any recognized school, board or university.


Nature of Deduction:
Donation to certain funds, charitable institutions etc.
The various donations specified in Sec. 80G are eligible for deduction upto either 100% or 50% with or without restriction as provided in Sec. 80G.


Nature of Deduction:
Deduction available is the least of (i) Rent paid less 10% of total income (ii) Rs.2000 per month (iii) 25% of total income
(1) Assessee or his spouse or minor child should not own residential accommodation at the place of employment. (2) He should not be in receipt of house rent allowance. (3) He should not have a self occupied residential premises in any other place.


Nature of Deduction:
Deduction of Rs.50,000/- to an individual who suffers from a physical disability (including blindness) or mental retardation.Further, if the individual is a person with severe disability, deduction of Rs.75,000/- shall be available u/s 80U. W.e.f. 01.04.2010 this limit has been raised to Rs. 1 lakh.
Certificate should be obtained on prescribed format from a notified ‘Medical authority’.


Nature of Deduction:
Deduction in respect of any income by way of royalty in respect of a patent registered on or after 01.04.2003 under the Patents Act 1970 shall be available as :-Rs. 3 lacs or the income received, whichever is less.
The assessee who is a patentee must be an individual resident in India. The assessee must furnish a certificate in the prescribed form duly signed by the prescribed authority alongwith the return of income.


Nature of Deduction:
Deduction in respect of royalty or copyright income received in consideration for authoring any book of literary, artistic or scientific nature other than text book shall be available to the extent of Rs. 3 lacs or income received, whichever is less.
The assessee must be an individual resident in India who receives such income in exercise of his profession. To avail of this deduction, the assessee must furnish a certificate in the prescribed form along with the return of income.

Writer Apurv Gourav is a part time Financial Planning Consultant with Birla Sun Life. He is also pursuing Certified Financial Planning. 

Tuesday, June 26, 2012

10 tips to become a SMART stock market INVESTOR

We've boiled down some of our most salient observations into 10 suggestions we think will make you a better stock investor.
At Morningstar globally, our analyst staff has about a thousand years of collective investment experience. Here, we've boiled down some of our most salient observations into 10 suggestions we think will make you a better stock investor.
1. Keep it simple
Keeping it simple in investing is not stupid. Seventeenth-century philosopher Blaise Pascal once said, 'All man's miseries derive from not being able to sit quietly in a room alone'. This aptly describes the investing process.
Those who trade too often, focus on irrelevant data points, or try to predict the unpredictable, and are likely to encounter some unpleasant surprises when investing.
By keeping it simple -- focusing on companies with economic moats, requiring a margin of safety when buying, and investing with a long-term horizon -- you can greatly enhance your odds of success.
2. Have the proper expectations
Are you getting into stocks with the expectation that quick riches soon await? Hate to be a wet blanket, but unless you are extremely lucky, you will not double your money in the next year investing in stocks.
Such returns generally cannot be achieved unless you take on a great deal of risk by, for instance, buying extensively on margin or taking a flier on a chancy security. At this point, you have crossed the line from investing into speculating.
Though stocks have historically been the highest-return asset class, this still means returns in the 10 per cent to 12 per cent range. These returns have also come with a great deal of volatility.
If you don't have proper expectations for the returns and volatility you will experience when investing in stocks, irrational behavior -- taking on exorbitant risk in get-rich-quick strategies, trading too much, swearing off stocks forever because of a short-term loss -- may ensue.
3. Be prepared to hold for a long time
In the short term, stocks tend to be volatile, bouncing around every which way on the back of Mr. Market's knee-jerk reactions to news as it hits. Trying to predict the market's short-term movements is not only impossible, it's maddening.
It is helpful to remember what Benjamin Graham said: In the short run, the market is like a voting machine -- tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine -- assessing the substance of a company.
Yet all too many investors are still focused on the popularity contests that happen every day, and then grow frustrated as the stocks of their companies -- which may have sound and growing businesses -- do not move. Be patient, and keep your focus on a company's fundamental performance. In time, the market will recognize and properly value the cash flows that your businesses produce.
4. Tune out the noise
There are many media outlets competing for investors' attention, and most of them center on presenting and justifying daily price movements of various markets. This means lots of prices -- stock prices, oil prices, money prices, frozen orange juice concentrate prices -- accompanied by lots of guesses about why prices changed.
Unfortunately, the price changes rarely represent any real change in value. Rather, they merely represent volatility, which is inherent to any open market. Tuning out this noise will not only give you more time, it will help you focus on what's important to your investing success -- the performance of the companies you own.
Likewise, just as you won't become a better football player by just staring at statistical sheets, your investing skills will not improve by only looking at stock prices or charts. Athletes improve by practicing and hitting the gym; investors improve by getting to know more about their companies and the world around them.
5. Behave like an owner
We'll say it again -- stocks are not merely things to be traded, they represent ownership interests in companies. If you are buying businesses, it makes sense to act like a business owner.
This means reading and analyzing financial statements on a regular basis, weighing the competitive strengths of businesses, making predictions about future trends, as well as having conviction and not acting impulsively.
6. Buy low, sell high
If you let stock prices alone guide your buy and sell decisions, you are letting the tail wag the dog. It's frightening how many people will buy stocks just because they've recently risen, and those same people will sell when stocks have recently performed poorly.
Wake-up call: When stocks have fallen, they are low, and that is generally the time to buy! Similarly, when they have skyrocketed, they are high, and that is generally the time to sell! Don't let fear (when stocks have fallen) or greed (when stocks have risen) take over your decision-making.
7. Watch where you anchor
If you read our article on behavioral finance, you are familiar with the concept of anchoring, or mentally clinging to a specific reference point. Unfortunately, many people anchor on the price they paid for a stock, and gauge their own performance (and that of their companies) relative to this number.
Remember, stocks are priced and eventually weighed on the estimated value of future cash flows businesses will produce. Focus on this.
If you focus on what you paid for a stock, you are focused on an irrelevant data point from the past. Be careful where you place your anchors.
8. Remember that economics usually trumps management competence
You can be a great rally driver, but if your car only has half the horsepower as the rest of the field, you are not going to win. Likewise, the best skipper in the world will not be able to effectively guide a yacht across the ocean if the hull has a hole and the rudder is broken.
Also keep in mind that management can (for better or for worse) change quickly, while the economics of a business are usually much more static. Given the choice between a wide-moat, cash-cow business with mediocre management and a no-moat, terrible-return businesses with bright management, take the former.
9. Be careful of snakes
Though the economics of a business is key, the stewards of a company's capital are still important. Even wide-moat businesses can be poor investments if snakes are in control. If you find a company that has management practices or compensation that makes your stomach turn, watch out.
When weighing management, it is helpful to remember the parable of the snake.
Late one winter evening, a man came across a snake on the path. The snake asked, 'Will you please help me, sir? I am cold, hungry and will surely die if left alone.'
The man replied, 'But you are a snake, and you will surely bite me!'
The snake replied, 'Please, I am desperate, and I promise not to bite you.'
So the man thought about it, and decided to take the snake home. The man warmed the snake up by the fire and prepared some food for the snake. After they enjoyed a meal together, the snake suddenly bit the man.
The man asked, 'Why did you bite me? I saved your life and showed you much generosity!'
The snake simply replied, 'You knew I was a snake when you picked me up.'
10. Bear in mind that past trends often continue
One of the most often heard disclaimers in the financial world is, 'Past performance is no guarantee of future results.' While this is indeed true, past performance is still a pretty good indicator of how people will perform again in the future. This applies not just to investment managers, but company managers as well.
Great managers often find new business opportunities in unexpected places. If a company has a strong record of entering and profitably expanding new lines of business, make sure to consider this when valuing the firm. Don't be afraid to stick with winning managers.