News Final-April 2010 - :: Welcome to …€¦ · · 2016-08-12• Housing loans of Rs 10 lakh to cost less till ... • Government to contribute Rs 1,000 per year in each NPS account

Contents Pg.

• Budget 2010 1

• Post Office Schemes / 9% Senior citizen /8% Saving Bond 2

• Mutual Fund Performance / Myths vs Reality 3

• 4

• ULIP Better than Mutual Fund / HDFC Youngstar Super 5

• HDFC Systematic Savings Plan / HDFC Premium Deposits / Public Provident Fund (PPF) 6

Jeevan Anand / Jeevan Saral -165 / Bima Bachat

View Your Mutual Fund Portfolio Online

Office No. 2, 1st Floor, R.N.A. Shopping Arcade, Lokhandwala Complex, Andheri (W), Mumbai - 53.

AMFI Certified Financial Advisor & IRDA Certified Insurance Consultant

GAGAN GUPTA

QUALITY INVESTMENT UNDER ONE ROOF

Portfolio Designer for Insurance & Investments 91- 22 - 2633 8819 / 2635 0236 / 91- 22 - 2639 5714 Fax : 91- 22 - 2632 5363

Website : www. guptainvestments.com E-mail : [email protected]

G

BUDGET 2010 WHAT IT MEANS FOR USBUDGET 2010 WHAT IT MEANS FOR US• Residential units under-construction to cost

more if the builder provides services like preferential location, deemed provision of construction service to buyer.

Fuel• Petrol and diesel now cost more.

Others• Cigarettes, cigars all non-smoking tobacco

such as scented tobacco, snuff, chewing tobacco to cost more.

• Televis ion se ts , re f r igera tors , a i r conditioners, automobiles and other manufacturing products to cost more.

• Toys, LED, microwave ovens, battery chargers, hands-free headphones and water filters to be cheaper.

• Gold and silver to cost more.

Service TaxNew services brought under the service tax net include:

• Promotion of brand of goods, services, events and businesses.

• Permitting commercial use of any event organised by a person or organisation

• Services provided to maintain medical records of employees of a business entity and electricity exchanges.

• Promotion, marketing or organising of games of chance, including lottery.

• Health services provided under insurance schemes offered by insurers (on cashless facility) and health check up undertaken by hospitals or medical establishments for the employees of business entities.

• Renting of immovable property, with retrospective effect from 1st June, 2007.

• Additional services provided by a builder to prospective buyers such as providing preferential location, or external or internal development of complexes on an extra charge.

• Air passenger transport service.

• Copyrights of cinematographic films and sound recording.

Source : Outlook Money

Key Features of Budget 2010-2011

Banking• New players in the banking space expected.

• Housing loans of Rs 10 lakh to cost less till 31st March, 2011 provided the cost of the house does not exceed Rs 20 lakh.

Pension• Government to contribute Rs 1,000 per year

in each NPS account opened in 2010-11, under a new initiative, Swavalamban.

Income Tax• More centres to to provide centralised

processing of income tax returns.

• Four more cities to be covered under 'Seottam', a pilot project by the income tax department that provides a single window system for registration of all applications including those for redressal of grievances as well as paper returns.

• The income tax department to notify SARAL-2 form for individual salaried taxpayers for assessment year 2010-11.

• Deduction of an additional amount of Rs. 20,000 allowed, over and above the existing limit of Rs. 1 lakh on tax savings, for investment in long-term infrastructure bonds as notified by the Central government.

• Contributions to the Central Government Health Scheme also allowed as a deduction under the same provision as health insurance schemes.

Housing• Pending projects to be completed within five

instead of four years to claim deduction of their profits.

Tax LiabilityIncome tax rates and how much you will need

to pay the taxman

Income slabs Tax rates for Men under 65 years(Rs lakh)

Up to 1.60 Nil

1.60- 5.00 10% of total income exceeding Rs. 1.6 lakh

5.00-8.00 Rs. 34,000+20% of total income exceeding Rs. 5 lakh

Above 8.00 Rs. 94,000+30% of total income exceeding Rs. 8 lakh

Income slabs Tax rates for Women under 65 years(Rs lakh)

Up to 1.60 Nil


5.00-8.00 Rs. 31,000+20% of total income exceeding Rs 5 lakh

Above 8.00 Rs. 91,000+30% of total income exceeding Rs 8 lakh

Income slabs Tax rates for Senior Citizens (65 years+)(Rs lakh)

Up to 1.60 Nil


5.00-8.00 Rs. 26,000+20% of total income exceeding Rs 5 lakh

Above 8.00 Rs. 86,000+30% of total income exceeding Rs 8 lakh

PUBLICATION

th thPosted at Mumbai Patrika Channel Sorting Office Mumbai on 7 & 8 of Every Month.

Pages : 6 For Private Circulation Only II OM SHRI SAI RAM II

R.N.I. NO. : MAHENG/2001/5593POSTAL REGD. NO. : Tech–47/1416/MBI/09-11WPP LICENSE NO. : MR/Tech/WPP-206/North/09-11

Saturday - 10.00a.m. to 2.00p.m.

QUALITY INVESTMENT UNDER ONE ROOF April - 2010PRICE Rs. 1/- Volume - IX Issue - 4

April - 2010 Page : 2GUPTA PUBLICATION

Visit us at : www.guptainvestments.com

Capital Gain Tax Exemption Bonds - U/S 54ECNo TDS

National Highway Authority of India (Series-X)

40 mths

15 mths

60 mths

5

ICICI Home FinanceMAAA

“Highest credit quality rating by ICRA”

AAA“CARE AAA (FD) (SO)” BY CARE”

< = 1 Crore< = 1 Crore< = 1 Crore< = 1 Crore

– 7.057.00 7.25

– 7.607.55 7.80– 8.007.95 8.25

Senior Citizen 0.35%

20000 (& in multiples ofRs. 10000 thereafter)

Rs.1 lac & above Monthly

10000 - Cum / 25000 - H.Y.(& in multiples of

Rs. 1000 thereafter)

__

Sr. No.

Company & Rating Period Minimum & Multiple of Interest (%)Interest (%)

The Interest Rate Structure for Fixed Deposit Scheme are as under

2 Years

3 Years1 TATA Motors Ltd.

3

Notes : Any one of the following documents to be obtained for KYC a) Passport b) Voter’s Identity Card c) Driving License d) Telephone Bill e) Bank Statement f) Electricity Bill

g) Ration Card PAN copy for Application > 40,000/- Interest rates are subject to change and the rate applicable will be the rate payable on the date of deposits.

Mahindra Finance FAA

10000(& in multiples of

Rs. 1000 thereafter)

_13 Months

3 Years2 Years2 Godrej Industries Limited

7.508.00

8.50

Fixed Deposit Scheme

1 Years

3 Years2 Years

Senior Citizen &Share holder 0.25%

8.008.869.83

7.758.258.75

–

– –

– – –

– –

– – –

– –

– –

Senior Citizen &Share holder 0.25%

8.00

8.75

8.58– – – – 9.88

Mths Qtr. H.Y Cum(Yield)

30 mths – 7.557.50 7.75

PAN Card Xerox Copy or allotment letter in case PAN card is not allotted.

Cheque in favour of “Respective BANK A/C - 8% Saving (Taxable) Bonds”.

FEATURES : 8% TAXABLE BONDS

• ELIGIBILITY : Individuals, Minors, HUF. NRI’s not allowed. (Trust & Institutions eligible for 8% bonds)

• MIN-MAX INVT. : Rs 1000/- & in Multiples of Rs.1000/- No Limits

• INTEREST OPTION : Hlaf Yearly or Cumulaive Rs.1000/- Becomes Rs.1601/- After 6 yrs. @10.01YTM

• NOMINATION FACILITY : a) This facility will be available for Individual investment for sole holder. b) This facility will not be available for joint holdings and minor investment.

• LIST OF DOCUMENTS : 1) POA executed in India - POA Investment 2) Birth Certificate of the minor-minors Investment 3) Guardians certificate - incase of guardians investment on behalf of minor

8% Saving Bond 2003 9% Senior Citizens

Kindly confirm for ECS Mandate / Enclosure to be attach with Application Form as it differ From Bank to Bank

1) Age 60 years or above on the date of opening of account. 2) Age 55 years or more in case of VRS or beopened within 3 months from the date of retirement and a certificate from the employer should be submitted.

Minimum Rs.1,000/- and in multiple there of up to Rs. 15 Lacs (maximum)

@9% p.a. (Simple) payable quarterly as on 31 st March, 30th June, 30 th September & 31st December. Interest is fully taxable.

Facility is available even in joint accounts.

A) Can be closed at any time after completion of one year from the date of open in the account (B) If closed before expiry of 2 years an amount equal to 1½ percent of deposit shall be deducted. (C) In case account is closed after 2 year but before maturity an amount equal to 1 percent of deposit shall be deducted.

Generally single, joint mode is permitted but ONLY with spouse.

Investment Qualify U/s. 80CCC to extent of Rs. 1,00,000 Lac. for 5 yrs.

Eligibility :

Deposit Amount :

Interest :

Nomination :

Premature Closer :

Mode of Holding :

Tax Benefit :

Kisan Vikas Patra

Interest rate (%)

Term (yrs)

8Yrs, 7mnths

Max. Investment (Rs)

No Limit

Exemption on Investments

None

Taxability on interest

Fully Taxable

Where to buy?

Post Office

Feature

Money doubles in 8 yrs, 7 mnths

b

8.41

National Savings Certificate

Interest rate (%)

Term (yrs)

6


No Limit


Sec 80C


Fully Taxable

Where to buy?

Post Office

Feature5 yrs gets Sec 80C break : Interest earned in first

c

8.00

Post Office Time Deposit

Interest rate (%)

Term (yrs)

1,2,3,5


No Limit


None


Fully Taxable

Where to buy?

Post Office

Feature

Sec 80C benefit on 5-year deposits

a

6.25 - 750

1

PO Monthly Income Scheme

Interest rate (%)

Term (yrs)

6

Max. Investment (Rs)2

9 lakh


None


Fully Taxable

Where to buy?

Post Office

Feature

5 per cent bonus on maturity

8.00

Post Office SchemesInvest Today in Solid, Safe & Secure

Safe Money Sound Returns

Saving Bond 2003

Mutual Fund UpdateApril - 2010 Page :3GUPTA PUBLICATION

Visit us at : www.guptainvestments.com

Source: www.mutualfundsindia.comDisclaimer: The information contained in this report has been obtained from sources considered to be authentic and reliable. However, mutualfundsindia.com is not responsible for any error or inaccuracy or for any losses suffered on account of information contained in this report. This report does not support to be an offer for purchase and sale of mutual fund units.

Mutual Fund Investments are Subject to Market Risk. Please read the offer document carefully before investing

Scheme Name Rank1 Year Rank2 Year Rank3 Year Rank5 year RankSince

InceptionNAV

(18.3.10)

MIP FUND

MIPs : A good fit in your portfolio. With the kind of attention monthly income plans (MIP’s) have drawn over the Past Couple of year this product looks set to establish itself as a must-have in investor Portfolio’s.

Birla Sun Life MIP - Wealth 25 - Growth 16.7894 27.3632 3 10.2683 4 8.5122 5 8.9922 4 9.3037 5

FT India MIP - Plan B - Growth 26.6081 21.4366 5 8.3885 5 9.5658 4 8.9716 5 10.882 3

HDFC MIP - LTP - Growth 20.9946 35.2518 1 15.0229 2 12.887 2 13.1122 2 12.6423 1

HSBC MIP - Savings Plan - Growth 18.3806 23.3506 4 10.929 3 12.3147 3 11.3182 3 10.556 4

Reliance MIP - Growth 20.1384 28.9774 2 19.4757 1 14.5794 1 13.6254 1 11.9527 2

Average 27.2759 12.8169 11.5718 11.2039 11.0673

Minimum 21.4366 8.3885 8.5122 8.9716 9.3037

Maximum 35.2518 19.4757 14.5794 13.6254 12.6423

Indices Crisil MIP Blended Index 1934.6998 15.3821 7.2917 8.6671 8.2633(17.3.10)

Myths vs Reality

• MIPs give you monthly income

• MIPs are income funds

• They are very safe investment avenues

• They give monthly dividends

• They are meant only for conservative investors or for retirees/semi-retirees

• They don't guarantee monthly income, but give steady returns.••

• MIPs are not income funds. Income funds usually invest only infixed income securities (corporate bonds, government securities, treasury bills, cash/call) and fall under the income/debt fund category. MIPs invest 15-20 per cent of their corpus in equity.

• As MIPs invest in equity, they are not very safe. They are less risky than balanced funds, but riskier than pure debt funds or income funds.

• They do not give monthly dividends. It depends on availability of a distributable surplus.

• They could be better investment avenues for achieving short-termgoals, whether you are a conservative investor or aggressive. They provide a better option for investors looking for a combination of debt and equity combination in a single product

DSP B R Saving Manager did so only in March 2009.

Like other MF schemes, MIPs also utilise market opportunities. When higher volatility is expected, they take the conservative approach. Currently, as interest rates are volatile, most MIPs have reduced their average maturity from five years to less than two years. Since they hold most of their debt securities till maturity, they can mitigate interest rate risks to a certain extent.

Myth

Reality

Portfolio

Return Does Matter

Taxing issues

How it Compares with others

What to Choose

Over the past two years, MIPs have returned 16.87 per cent and 6.8 per cent respectively. Some funds, such as HDFC MIP-LTP and Reliance MIP have given returns as high as 33.94 and 28.42 per cent, respectively. These are, however, exceptions as MIPs invest a small part of their portfolio in equity (up to 20-25 per cent). This helps them bring steady returns with little capital erosion and limited volatility, as was the case during the 2008 market crash.

A dividend distribution tax (DDT) of 14.16 per cent (12.5 per cent tax, 10 per cent surcharge and 3 per cent education cess) is levied on debt funds. If you sell the units before a year and there is a gain, short-term capital gains tax is applicable. The net gain will be added to the current income and tax will be levied on that amount. If you sell units after a year, 10 per cent long-term capital gains tax will be levied, or 20 per cent with indexation.

MIPs vs Bank FDs. Unlike MIPs, returns on bank fixed deposit (FDs) are assured. Moreover, unlike MIPs, FDs' returns are taxable as per your tax slab. So, the post tax return could be lower than the actual return.

MIPs vs Post Office MIS. To an extent, MIPs score over Post Office Monthly Income Scheme (MIS). There is an upper limit on Post Office MIS—Rs 4.50 lakh for single account and Rs 9 lakh for joint account. There is no such maximum limit with MIPs. As far as liquidity is concerned, MIPs don't attract any exit load after one year of investment. But, MIS comes with a 2 per cent charge for withdrawal before two years. Unlike MIP, MIS gives you an assured return. It also has premature encashment penalities.

If you're a die-hard conservative investor, and looking for better returns than bank FDs, then MIPs could be a good option. Invest in MIPs if you have a time horizon of more than two years. Don't expect MIPs to provide you monthly returns, but you can surely bank on them for a steady income.

Kundan AT outlookindia DOT com

MONTHLY INCOME SCHEME (MIS - 6 YEARS)Earn Rs.6000/- p.m. + Rs. 45000/- on Maturity

For ECS to be done :-

1) Enclose ECS Form duly attested by the designated Bank. 2) Cancelled / Xerox Copy of Cheque

Required. 3) If it is in Joint Name all the Signature are required. 4) After issue of pass book from

post office then ECS mandate can be made.

Note : ANY INVESTMENT UNDER ANY POST OFFICE SAVINGS SCHEME PAN CARD XEROX COPY REQUIREDABOVE 50,000/- INVESTMENTS.

POST OFFICE SCHEME

Amount of Deposit : Min Rs. 6,000/- Max. Rs.4,50000/- in Single A/c or Rs. 9 Lacs in joint A/c.

Interest : 8% p.a. payable monthly plus 5% Bonus on Maturity.

Effective Yield : 8.83pa.

Premature Withdrawal : Allowed after 1 year, as applicable

For Further details Contact : Narendra Pandit (Business Executive) Mob.: 93219 27291 E-mail : [email protected]

April - 2010 Page : 4

LIC of IndiaGUPTA PUBLICATION


Insurance is a Subject matter of Solicitation

For further detail contact : Pravin Jadhav (Business Executive) 93219 27290

E-mail : [email protected]

Jindgi Ke Saath Bhi..... Aur Jindgi Ke Baad Bhi

for this has been built into the tabular premium rates. Maximum accident cover available under this plan will be Rs. 5 lakh ( this limit excludes accident benefit taken under other plans).

Bonus : If it is a 'with profits' policy note that every year the LIC distributes its surplus among policyholder to 'with profits' polices in the form of bonuses. Substantial bonuses have been declared in the past after each valuation of policy liabilities.

Death Benefits : Sum Assured along with vested bonuses are payable on death during the premium paying term and when policy ceases. An amount equal to the Sum Assured is payable if death occurs after the premium paying term

Simple Reversionary Bonus accrues during the premium paying term and is payable at the end of the premium paying term or on earlier death along with final additional bonus, if any. No Bonus is paid on death after the premium paying term.

Being an endowment assurance + whole life policy, this plan is opt for people of all ages and social groups who wish to protect their femilies from a financial set back that may occur owing to their demise. The amount assured if not paid by reason of his death earlier will payable at the end of the endowment term where it can be invested in an annuity provision for the rest of the policyholder’s life or in any other way he may think most suitable at that time.

•

•

Suitable for

Features :

Special Features

Benefits

Jeevan Anand is a With Profit assurance plan. The plan is a combination of the Whole Life Plan and the most popular Endowment Assurance Plan. It provides pre-decided Sum Assured and bonuses at the end of the stipulated premium paying term, but the risk cover on the life continues till death.

Moderate Premiums High bonus

High liquidity Savings oriented.

Premiums are usually payable for the selected term of years or until death if it occurs during the term period. This policy not only makes provisions for the family of the life assured in the event of his early death but also assures a lump sum at a desired age. The lump sum can be reinvested to provide an annuity during the remainder of his life or in any other way considered suitable at that time.

Survival Benefits : Sum Assured along with all vested bonuses payable at the end of the premium paying term (Endowment term).

Accident Benefit : The Double Accident benefit is available during the premium paying term and thereafter up to age 70. The premium

• •

• •

•

•

Premium Ceasing Age : 75 Premium Ceasing Term : 0

Plan Highlights

Minimum 5 18 1,00,000

Maximum 57 65 No Limit

Term Age Sum

Jeevan Anand

LIC’S BIMA BACHATSingle Premium Money Back Policy (With Profit)

Available toall between age15 to 66 years

Now, Getmoney backafter every

3 years

Bima

Bachat

Benefits

Maturity BenefitMaturity Benefit : Payment of Single Premium (excluding extra

premium, if any) along with Loyalty Additions, if any case of Life

Assured surviving to the end of the term.

For further detail contact : Pravin Jadhav (Business Executive) 93219 27290


Money BackGuaranteedSurvival Benefit payable as follows.

9 yrs. term : 15% of Sum Assured at the end of 3rd & 6th yrs.

12 yrs. term : 15% of Sum Assured at the end of 3rd, 6th & 9th yrs.

15 yrs. term : 15% of Sum Assured at the end of 3rd, 6th, 9th & 12yrs.

Other Benefit

Loan : Loan facility is available under this plan. The rate of interest to be

charged for loan amount would be determined from time to time by the

Corporation. Presently the rate of interest is 9% p.a. payable half-yearly.

In the event of unfortunate death during the policy term,

an amount equal to sum assured will be paid.

Risk Cover

165 - Jeevan SaralTerm Age Sum

Minimum 10 12 50,000

Maximum 35 60 0

Premium Ceasing Age : 70 Premium Ceasing Term : 0

Plan Highlights

LIC's Jeevan Saral is a unique plan having good features of the conventional plans and the flexibility of unit linked plans. To the policyholder it provides -Higher Cover, Smooth returns, Liquidity and a lot of flexibility

On Death : 250 times the monthly premium, plus return of premiums excluding extra/rider premium and first year premium, plus the loyalty addition, if any.

On Maturity: Maturity sum assured, plus The Loyalty Additions, if any

• High risk cover at low premium

• Extended risk cover for one year after 3 years premium payment.

• Optional higher cover through Term Riders

• The policyholder can choose a maximum term but can surrender at any time without any surrender penalty or loss after 5 years

• Any number of withdrawals through partial surrendering

Premium : Minimum premium of Rs.250/- per month for entry age upto 49 years. and Rs.400/- per month for entry age 50 years and above.

No Limit for the maximum premium per month.

Mode : Yearly, Half-yearly, Quarterly and Monthly under Salary Saving Scheme

In case of term rider, minimum and maximum age at entry will be 18 and 50 years respectively. Further minimum sum assured will be Rs.1 lakh.

BENEFITS

SPECIAL FEATURES

OTHER ELIGIBILITY CONDITIONS

Post Retirement Income Get your 1st year premium back* Asset Allocation Option

Unit Linked Pension Super

Start the retirement planning now!

HDFCSTANDARD LIFE

Sar Utha Ke Jiyo

IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICY HOLDER.

Life after retirement should be life without any worry. It’s the golden period that has to be enjoyed to the fullest. Health and emotional needs post retirement can be taken care of, only if the financial aspect is handled well today.

Thus, it’s the right time to invest in HDFC Pension Super from HDFC Standard Life Insurance Company. A small premium invested annually can give a good monthly income after retirement. Sustaining your current lifestyle even after retirement would be a easy.

On your chosen retirement (vesting) date you will get the Fund Value + Bumper Addition* which as per the prevailing government regulation

HDFC UNIT LINKED PENSION SUPER

Benefits

• You can take upto 1/3rd as tax-free lump sum cash.

• The remaining amount can be used to purchase annuity (pension) from us or any other insurer.

• Get your 1st year premium back as Bumper Additions on the vesting* as per the chosen policy term

10 50% of Original Annualised Premium

11+ 50% of Original Annualised Premium

• Death Benefit of FV+fixed Sum Assured

• Freedom from tracking the market with AssetAllocation Option

• Option to invest more than regular premium*

Features

Term Bumper Addition

Start early and get better returns! You need to pay your chosen premium regularly for the entire policy term. At end of the term you will receive the vesting benefits

You will be eligible for tax benefits under Section 80CCC of the Income Tax Act, 1961 subject to provisions contained therein.

• You can save upto Rs. 30,900 from your tax every year (calculated on the highest tax bracket) as premiums up to a maximum of Rs. 1,00,000 are allowed as a deduction from your taxable income.

The above-mentioned tax benefits are subject to change in the tax laws.

How Much Do I Get?

Maximise Tax Benefits

April - 2010 Page : 5GUPTA PUBLICATION


Today, providing a good education, a decent marriage or even establishing a professional career is expensive. With rising costs just imagine how much you would require as your children grow up.

HDFC YOUNGSTAR SUPER

There is no bigger joy than being able to fulfill your child's dream. And that too on your own. With HDFC YoungStar Super you can fulfill your child's immediate and future needs, so tomorrow when your child needs your support you don't have to depend on anyone else.

HDFC YOUNGSTAR SUPER GIVE YOU

=Choice of Double Benefit & Triple Benefit

=Get your 1st year annualized premiums back as Bumper Additions* to fund value on maturity, as per the chosen policy term

=Redirect premiums from one fund to another

THE TAX BENEFITS

You will be eligible for tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961, subject to the provisions contained therein.

=Under Section 80C, you can save up to Rs. 30,900 from your tax each year (calculated on the highest tax bracket) as premiums up to Rs. 1,00,000 are allowed as a deduction from your taxable income.

=Under Section 10 (10D), the benefits you receive from this policy are exempt from tax

The above mentioned tax benefits are subject to changes in the tax laws.

Invest in your child's dreams and secure your self respect.

Impact of Rising CostHDFC Youngstar Super

• Get your 1st year premium back*

• Triple insurance benefit

• Low allocation charge

For further detail contact : Pravin Jadhav (Business Executive) 93219 27290 E-mail : [email protected]

HDFCSTANDARD LIFE

Sar Utha Ke Jiyo

With changes in charges and tax structure, Ulips have become a lot more attractive than mutual funds if you are willing to stay invested for long-term, says Vidyalaxmi

Read my Ulips, it's a better long-term bet

EACTING to the criticism against Ulips, the insurance regulator has brought about Ra number of changes in the way insurance

companies structure these plans. At the same time, there have been changes in the tax structure on Ulips in the Union Budget. Both these measures have worked out in favour of the investor. If you are looking at a 20-year term, ULIPS charges work out to be more favourable than mutual funds.

Change in the charge structure: How does it impact you? In July 2009, IRDA had mandated life insurers to impose a ceiling on their ULIPS charges (except mortality/morbidity charges, which is the cost of providing insurance protection). As per the notification, the difference between the gross return and net return (gross return minus the charges) for policies with tenure of up to 10 years should not exceed 300 basis points, while this gap is to be restricted to 225 basis points for those over 10 years. The fund management charge for policies across maturities was capped at 135 basis points. Following the directive, insurers filed for revised products and phased out the older products by December 2009. “The recent regulatory cap on charges has enhanced the attractiveness of Ulips for customers through higher IRRs and incentives such as guaranteed loyalty additions for staying invested over the long term,” says Vishal Gupta, director of marketing, Aviva Life Insurance.

Change in the service tax: How does it impact you? The finance minister has tweaked the service tax on Ulips, which could increase the net yield by up to 4%. The cost structure of Ulips include policy administration charges, premium allocation charges, mortality charges and fund management charges besides the surrender and fund-switching charges. As per last year's Budget, an investor was paying a service tax of 10% on all of these components. Now, this tax would be levied only on the fund management charges. This implies the

other cost components would be freed from tax, which in turn would add to the internal rate of return (IRR). This change would effectively create a level-playing field for Ulips and mutual funds, which are treated as competitors among the financial products, say insurers. In mutual funds, the service tax is charged only on the asset management company's (AMC) fees. This change in the service benefit would be passed onto both the new as well as old customers as the revised service tax would be applicable on every premium amount paid once the finance bill is passed.

Are you investing in Ulips for the right reason? If you have seen any of the ULIPS advertisements, it refers to child's education or retirement planning. The clear underlying message here is the tenure of the investment. Even insurers define Ulips as a longterm insurance-cum saving ins t rument and hence , the min imum recommended policy term is 10 years. Even if the policy has an option for partial withdrawals or surrender, you have to look at least 10 years to make some decent gains. “Under the new charge structure, the insurer earns the bulk of charges within five years as there is no year on year cap in charges. Even if the policy permits early exit, you will see significant erosion in capital,” says Suresh Sadagopan, a certified financial planner.

What should be your risk appetite? Ulips have something to give to all investor categories because of high flexibility in altering asset allocation. “Every Ulip has an all debt to a healthy debt-to-equity ratio to an all equity component. So every investor can identify with a Ulips. But if an investor is looking at a 10-year horizon, I recommend pure equity-oriented ULIPS,” says Pranav Mishra, senior vice-president & head — Products, ICICI Prudential Life Insurance.

Are Ulips the best investment option? If you are investing for less than 10-years, go for mutual funds. For longer-term investments, Ulips

are a better option following the reduction in the charge structure. Agents, however, mis-sell Ulips by positioning them as a short-term premium payment instrument. “It also becomes easier to tap a customer as you are not forcing him to get into a long-term contract. The concept of a lock-in and annual/quarterly frequency in premium payments is not very popular with customers. Hence, most agents find it easier to sell Ulips than a simple term plan,” says Gaurang Shah, managing director of Kotak Life Insurance.

• ULIP has a high front loading. Hence, stay invested for at least 10 years to earn good gains.

• Don't stop paying premiums after five years and buy another ULIP. This will benefit your agent more than you.

• The narrowing of service tax will increase returns by at least 3.5-4%.

• The returns are mere projections not guaranteed unless written in the policy document. Often you will get the guaranteed return only if you lock in for longer tenure.

• There are various strategies and debt-to-ratio proportions in ULIPs. You can go for high equity quotient if you plan to stay invested at least for 10 years.

• If an investor surrenders the policy, the formula of difference between gross yield to net yield will not apply.

• Choose your fund: depending upon your age and risk profile.

• Use switches effectively: You may have opted for a mix of 75% equity and 25% debt on your ULIP. But when you inch closer towards maturity, minimise your exposure to equity as low as 20%

• Start early: If you start at the age of 30-35, you can create a 20-year long-term investment by systematically investing year on year

• Invest regularly: despite temporary fluctuations

GAINS UNIT-BY-UNIT

2. Click on the tab For “Mutual fund Portfolio Tracker”

3. Type your user ID in the field provided for the same.

4. Type your Password in field provided for the same.

Please note that the password is alpha-numeric

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Dear Investor

April - 2010

Your Personal Investments & Insurance AdvisorOffice No. 2 R.N.A Shopping Arcade,

1st Floor, Lokhandwala Complex,

Andheri (W), Mumbai - 400 053.

, G

91-22-4016 3736

(M) 93238 35902

(D)

91-22-2633 8819 / 2635 0236

Fax : 91-22-2632 5363


Website : www.guptainvestments.com

“Quality Investment under one roof ”

Page : 6

Dimpi Printers,Azad Road, Gundavali, Behind Ganesh-Motor Training School, Andheri (E),

Mumbai-400 069. & Published at Office no 2, 1st Floor, R. N. A. Arcade,

Lokhandwala Complex, Andheri (W) Mumbai 400 053.

GUPTA PUBLICATION

Must ReadI HAVE EVERYTHING I NEED. WHY DO I NEED INSURANCE?

Q) I learn well and save enough. Why do I need insurance?

A) Life is unpredictable. And insurance is the simplest way to copeWith the unforeseen and the unexpected. It is the best back up that you or your dependents can rely on when risk becomes a reality and results in loss of life or property.

Q) I am young, fit and healthy. Why do I need insurance?

A) Plan well and start early. That's the best way to make insurance work for you. Premiums will be low, processing will be minimal and a long term financial cover is in place to take care of later years.

Q) I have no loans or liabilities. Why do I need Insurance?

A) Insurance is a contingency plan to take care of uncertainties. It is a way of providing for your dependents and ensuring continuity of their material needs and wants in your unfortunate absence. It is a way to plan and ensure a regular income whenever you decide to retire.

Q) Isn't Insurance an unnecessary cost and expense?

A) Insurance is responsibility. It ensures security and mitigates risk. It is an assurance to your dependents that you care. Insurance is also an investment tool and provides tax benefits too. Most of all insurance is peace of mind. The price of getting insured is negligible compared to the value that insurance delivers.

Insurance is sensible, Practical and above all, the right thing to do.

Public Provident Fund

HDFCHDFCDEPOSITS

WITH YOU RIGHT THROUGH

A little savingtoday for a

secure tomorrowSystematic

HDFC

Savings Plan (SSP)Product Features

Variable rate of interest: Interest rate on SSP will be variable and would be rest at the beginning of each quarter.

The interest rate applicable currently under this deposit plan is given below:

Systematic Savings Plan (Variable Rate Deposit Plan)

Period (Months) Current Applicable Rate of Interest (%per annum) (Variable)

24-35 7.00

36-59 7.25

60 7.75

Interest Rate are subject to change and the rate applicable would be the rate prevalent on the date of deposit.

For Further details Contact : Narendra Pandit (Business Executive) Mob.: 93219 27291 E-mail : [email protected]

Source : www.irdaindia.org

Notes :- The rate of Interest for deposits of Rs. 1 crore and above would be as per the extant guidelines from time to time.Interest rates are subject to change and the rate applicable will be the rate payable on the date of deposits.

a) Senior Citizens (60 Years +) would be eligible for additional 0.25% p.a.b) The above rates are applicable for deposits of below Rs. 1 Crore.c) Interest is compounded annually for cumulative interest plan.

HDFC Premium Deposits.Let Your Money Grow Safely and Securely Looking for Assured Returns Safely? Invest in

Periods

15 Months

30 Months

45 Months

Min. Amt. Rs.

6.80%

7.30%

Monthly

7.40%

40,000

6.85%

7.35%

Quarterly

7.45%

20,000

6.95%

7.45%

Half-Yearly

7.55%

20,000

-

7.60%

Annual

7.70%

20,000

7.10%

7.60%

Cumulative

7.70%

20,000

Rate Effective

from 8th March,

2010

HDFCHDFCDEPOSITS

WITH YOU RIGHT THROUGH

‘FAAA’ and ‘MAAA’ rating for the Fourteenth Consecutive year by CRISIL and ICRA

HDFC Premium Deposits.

News Final-April 2010 - :: Welcome to …€¦ · · 2016-08-12• Housing loans of Rs 10 lakh to cost less till ... • Government to contribute Rs 1,000 per year in each NPS account

Documents