Author: Anshul

SIP vs lump sum: Which is better for ELSS investment?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Equity Linked Savings Scheme (ELSS), a tax-saving mutual fund, comes with a statutory lock-in of three years.  Under ELSS, funds can be parked using both Systematic Investment Plan (SIP) and lump-sum investment option. In SIP mode, an individual is required to invest a small amount of money in a disciplined way, while in lump-sum investment, he/she can put the fund in one go at the start of the investment cycle.

According to financial experts, deciding whether to go the SIP or lump sum route while investing is dependent on several factors.

“Investing a lump-sum amount makes sense if you are investing at the end of a financial year to claim tax deductions,” said Archit Gupta, Founder and CEO of ClearTax, an income tax e-filing platform.

Also read: Will ELSS lose significance under the new income tax regime? 

“However, at the start of a new financial year, it’s always advisable to take the SIP route, especially if you are salaried and risk-averse,” explained Gupta.

Starting an SIP early in ELSS funds means an individual doesn’t need to indulge in last-minute tax-saving practices which may otherwise result in under-utilisation of the tax exemption limit. ELSS offers tax deductions under the provisions of Section 80C of the I-T Act.

According to Harsh Jain, Co-founder, and COO, Groww – an online investment platform, SIP allows investors to invest steadily with a small sum. This spreads out the financial strain unlike lump-sum mode, in which a large investment amount is needed.

“An SIP lowers the risk of market fluctuations as only a small part of one’s investment faces market volatility. This frees investors from the hassle of timing the market,” he said.

SIP mode of investment also provides the benefit of rupee cost averaging. This allows fund managers to buy more units when the market is low and reduce the per-unit cost of investment.

Another advantage that SIP has over the lump-sum mode is the lock-in period.

“If you invest via the SIP route, you would be able to redeem your fund units sequentially post the lock-in period. For instance, your investment in ELSS using lump sum deposit will mature as a whole after 3 years, whereas deposits made via SIP will start maturing one by one (depending on the months of investment) after the lock-in period ends,” says Jain.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Mastercard CEO Ajay Banga to step down, insider Michael Miebach tapped

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Mastercard’s chief executive officer of 10 years, Ajay Banga, will step down at the start of the next year, the company said on Tuesday, and be replaced by Chief Product Officer Michael Miebach.

Banga, who took charge of the company just after the 2008-09 financial crisis, has seen the payment processor’s revenue triple during his tenure as online shopping gained prominence around the world.

India-born Banga will take on the role of executive chairman, while Miebach will become the company’s president on March 1.

Chairman Richard Haythornthwaite will retire after more than a decade when Banga assumes his new role, the company said in a statement.

Before joining Mastercard as president of Middle East and Africa in 2010, Miebach served as managing director at Barclays Bank and general manager at Citibank.

In connection with Miebach’s appointment as president, Mastercard has entered into a new compensation agreement that adds $750,000 to his annual base salary, the payment processor said in a filing.

Miebach will also receive an equity grant with a target value of $6.25 million.

His compensation as chief executive officer will be determined later, the company added.

Mastercard on Monday warned its first-quarter net revenue would take a hit if coronavirus outbreak persists through the quarter.

Shares of the company were down nearly 2% at $319 in the premarket trade.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

How to take a loan against your mutual fund investment

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The banking sector has transformed considerably over the last few years, and now they even issue loans against mutual fund (MF) investments. The loan amount, in this case, largely depends on the value of the mutual fund units to be used against the loan. The loan against mutual fund units is done in the form of an overdraft facility and the interest is charged on the amount availed as the credit.

Here are the key things to know about loan against MF:

How to apply?

The investor can apply to the bank or financial institution for a loan against the mutual fund units he or she holds. The loan can be received against equity or hybrid mutual funds by approaching any bank or non-banking financial company (NBFC). It can be done in online or offline mode.

Also read: Joint holding a mutual fund? Here are key things to know

“The lender does the due diligence, which involves research on the credit score, assessing the value of units, and determining the loan amount eligibility based on these,” according to BankBazaar, a marketplace for financial products.

According to Harsh Jain, Co-founder and COO, Groww – an online investment platform, “The loan amount that the investor receives is subject to the category of mutual fund he/she invested in and is usually a percentage of the prevailing Net Asset Value (NAV) – ranging anywhere between 50-75 percent.” The interest rate at which the loan has to be repaid is also subject to the initial terms and conditions agreed upon by the borrower and the bank.

Also read: How to invest in mutual funds via SIP?

The application process also involves marking of lien on the mutual fund units in favour of the bank/financing institution. Once a lien is marked, the units cannot be sold or redeemed by the investor. The lein is a permission given by the investor in writing to the bank that allows the bank ownership of the fund units.

“This can be thought of as pledging funds as security or collateral till the time the loan is paid. The lien can be lifted on request once the loan has been paid,” explained Jain of Groww.

Advantages of taking loan against mutual fund

Archit Gupta, Founder and CEO of ClearTax, says the best thing about loans against mutual fund investments is that the investors still enjoy the dividend payouts despite the units being marked with the lien.

“As investors’ mutual fund units secure these loans, they are issued at a lower interest rate,” he said.

The loan against mutual funds can help in raising money for exigencies in short-term against own units which is a great facility. Investors are not required to redeem units prematurely. This also ensures that Systematic Investment Plan (SIP) can continue without any hitch.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Gold prices hit record high. Will it add glitter to your investment portfolio?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gold continued its record-breaking run on Monday after heavy sell-offs in global equity markets over rising Coronavirus cases increased demand for the safe-haven asset. Gold prices surged over 2 percent to their highest in over seven years in the international market at $1,678.58. In domestic markets, the metal was nearly 1 percent up. Seeing this trend, does it make sense for investors to invest in gold now?

What experts say about investing in gold?

Gold is a precious and highly liquid instrument that has the attributes of both commodity and currency.

“It has been used throughout history as money and has been a most popular metal for investment purpose, storage of wealth and as a source of high-quality collateral,” according to Kuvera -an online platform for mutual fund investments.

Experts believe that one should always have gold in their investment portfolio as it creates a good diversification in times of uncertainties. There are strategic and tactical reasons to continue investing in gold, they say.  Over the long term, while gold may not increase the return always, some gold allocation in the portfolio tends to cut the risk.

“It is gold that is helping the households, many small and micro enterprises wade through the liquidity crisis. At the start of the decade, gold demand was firm despite price hitting new record highs,” said Prof Arvind Sahay and Sudheesh Nambiath, India Gold Policy Centre, IIM Ahmedabad.

Every person should invest in gold and follow an asset allocation policy to maximise their returns. “In tough times, gold can be considered as a safe haven. Gold also safeguards against currency depreciation,” says Arpit Jain, VP, Arihant Capital.

How can one invest in gold?

There are many ways to invest in gold, including gold exchange-traded funds (ETF), sovereign gold bonds, digital gold or equity mutual funds. There are plenty of platforms including e-commerce websites as well from where one can buy the same.

Sovereign Gold Bonds bear interest at the rate of 2.5 percent per annum on the amount of the initial investment. The buyer does not have to pay any making charges while buying the gold exchange-traded fund.

Advantages of buying digital gold are surety backing of 24 karat gold, no making charges or storage hassles. One can easily convert ‘Gold’ into ‘Cash’.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Does GST paid on insurance premium qualify for tax benefit?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The tax-saving season is here, which means both the salaried and non-salaried taxpayers would have started looking for ways to claim deductions. There are many tax-saving avenues available in the market, insurance premiums being one of them.

Under Section 80D, one can save tax based on the premiums paid on health and life policies. But, what about the Goods and Services Tax (GST) that is paid on these premiums? Can a taxpayer also claim deduction on the GST paid on these premiums?

Well, the answer is yes. According to experts,  tax benefits on insurance premiums include GST.  The tax saving deduction amount is, however, subjected to an investment limit available under the particular section.

Also read: 5 tax saving options you may not know about 

When an individual pays a premium for a life or health policy, he/she is also required to pay GST, which is calculated as a percentage of the policy. On health insurance, 18 percent GST is charged on the premiums paid as per the current regulations.

The rate of calculation, however, varies from policy to policy. This effectively increases the overall premium.

According to Section 80D, a taxpayer is entitled to tax benefits under insurance policies on the entire amount paid towards the premium of the specific plan, which also includes GST. For example: if a person purchases health insurance, he/she will not only enjoy the tax advantage on insurance premium paid but also the amount chargeable after applying GST.

Tax experts advice employees to claim GST paid on premiums to reduce taxable income, and hence save tax. Employees should keep the documents related to the premium payment, reflecting GST and premium paid towards insurance policies as proof.

Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Joint holding a mutual fund? Here are key things to know

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Many mutual fund investors opt for investments under joint names. A maximum of three person can jointly hold a single investment account in mutual fund. However, all three has to be KYC complaint. If any one of them fails to do it, then he/she cannot be considered as a joint holder, as per the investment rule.

There are several advantages of investing in joint names. According to experts, it is helpful when an individual doesn’t want the other holder to take unilateral decisions on investment.

“The ownership rights are equal, which means it allows one to transact especially in the case of any contingency like illness or death,” said Aarti Raote, Partner, Deloitte India.

In words of Jashan Arora, Director, Master Capital Services – a platform that provides financial services, “Joint ownership is like a double edged sword. Under this, mutual funds can be easily transferred. Joint ownership gives equal rights and authority to all investors. All the joint holders need to sign for any action in the investment.”

As far tax benefits are concerned, holding joint accounts do not provide a tax advantage. According to Raote of Deloitte India, the taxes on interest are payable by the individual who has invested in the scheme i.e the first holder.

“The taxes are deposited in the name of the first holder, in case of tax withholding on interest income. However, now the tax return has the provision to make appropriate declarations so that the credit is given to the right person,” she said.

Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

5 tips to maintain a good CIBIL score

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A good CIBIL score ensures credit facility at a lower interest rate for a borrower. CLBIL score is an important metric that is used by financial institutions to check when they receive a credit request from individuals. Every time an individual applies for a loan or a credit card, the recent CIBIL score is checked. According to ClearTax, any score above 700 is considered excellent. However, that may vary from one bank to another.

Here are a few tips to keep a good CIBIL score:

Make timely and full payment of credit cards

The one thing that helps the credit score the most is timely and full payment of credit card dues and loan EMIs.

“The more you do this, the higher your score is likely to be. Avoid late payments, especially on unsecured debt like credit cards, because one late payment could hit your score hard,” said Adhil Shetty, CEO, BankBazaar – a marketplace for financial products.

Also read: How does a hard or a soft enquiry impact your credit score?

CIBIL scores update on a monthly basis. So keep repaying dues on time and do a monthly credit score check to track the progress.

Maintain old credit cards

The age of the credit lines has a moderate impact on the computation of the credit score.

“The longer you have a credit line, the stronger it reflects upon your ability to keep paying your dues, which is why closing an old credit line such as a credit card may moderately lower your score in some circumstances,” explained Shetty of BankBazaar.

Avoid taking cash from credit cards

One of the common mistakes committed by an individual is taking cash out of a credit card. Debiting cash from a credit card can be costly as lenders charge more interest for it than they do it for making digital purchases.

Also read: Is it okay to take a personal loan to pay off credit card bills? 

Avoid making too many credit inquiries

Making multiple inquires for loans or credit cards also adversely impacts the CIBIL score. According to experts, one should only apply for a credit card or a loan when it is really necessary. Opening a new credit account also lowers the average credit age.

Keep checking for inaccuracies

The financial behaviour may not always be the reason for a lower credit score. There may be errors in the credit history information that may lead to a lower score.

“Verify your CIBIL report for errors; if you find any, you can dispute it. The authorities will verify the details and make the necessary changes in the report. A mistake in the spelling of a name or a missing/additional transaction can flip the score upside down,” according to ClearTax – an income tax e-filing platform.

Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

AGR dues: Government may rope in audit firms to settle dispute, says report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Amid a deepening crisis in the telecom sector, the government is likely to hire third-party audit firms to settle the Adjusted Gross Revenue (AGR) dues row, Mint reported, citing sources. This development comes on the back of differences that emerged in the individual calculations made by the government and telecom operators in terms of AGR dues, the report noted.

The DoT had previously estimated Rs 1.47 lakh crore as dues, including penalty and interest, from Bharti Airtel, Vodafone Idea and other firms. But telecom firms say the amount should be lower. This is likely to lead to more disputes, the report said.

“The government is exploring whether it can get audit firms to settle this,” sources were quoted as saying in the report.

Vodafone Idea made a payment of Rs 1,000 crore on Thursday, making a total payment of Rs 3,500 crore. According to government calculations, Vodafone Idea needs to pay Rs 50,000 crore as AGR dues, but the company believes its dues are half that amount.

Bharti Airtel has so far paid about Rs 10,000 crore for statutory dues of Rs 39,723 crore.  The AGR bill is likely to rise for Bharti Airtel due to a spectrum deal with Videocon Communications nearly four years ago, according to the LiveMint report.

On October 24, 2019, the Supreme Court widened the definition of AGR to include Department of Telecommunication’s (DoT) point of view and asked telcos to pay licence fee and spectrum usage charge dues. The government and the telecom companies were locked in a legal battle in the 14-year-old case over the definition of AGR, on the basis of which the telecom department calculates levies payable by companies.

The verdict inflicted a blow to the telecom sector, resulting in operators raising funds to pay dues.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

You can still file tax return for FY18-19 by March 31. Here’s how

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In case you have not filed your income tax return (ITR) for the financial year 2018-19 (or assessment year 2019-20), you can still do it by March 31, 2020, with a late fine of Rs 10,000. According to the Income Tax (I-T) department, an assessee who does not submit a return of income within the deadline is allowed to file a belated return at a later time. However, certain penalty charges are applicable in case of a belated income tax return (ITR). The deadline to submit ITR for the current financial year was August 31, 2019.

Also read: 5 tax saving options you may not know about 

A belated income tax return attracts a late filing fee under Section 234F of the Income Tax Act. The amount of penalty payable by the assessees filing a late return increases based on the degree of delay.

Income Tax rules state that a fine of Rs 5,000 is applicable if an individual files ITR after the due date but before December 31. The penalty increases to Rs 10,000 if the assessee filed the return next year between January 1 and March 31.

Those who have an annual income of Rs 5 lakh, however, are required to pay Rs 1,000 for filing ITR after the due date

It is compulsory for individuals earning a specified amount of income in a year to file an income tax return (ITR). The I-T department provides various forms for income tax assessees to file their ITR or income tax return.

Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Closing bell: Sensex ends 153 points lower, Nifty settles at 12,081; Cipla, Asian Paints top index drags

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Domestic stock markets erased first half gains to settle Thursday’s session on a negative note. The Sensex lost 152.88 points, or 0.37 percent, to settle Thursday’s trade at 41,170.12. The Nifty declined by 45.05 points, or 0.37 percent, to end at 12,080.85. The Nifty MidCap 100 index, meanwhile, advanced 0.67 percent, while the banking gauge, Nifty Bank gained 0.34 percent on Thursday.

According to analysts, concerns over the economic impact of the coronavirus epidemic on world economy kept investors on edge. Also, investors awaited more clarity on US President Donald Trump’s statement ahead of his visit to India that the two countries were working on a major trade deal.

Top percentage laggards on the 50-scrip index were Cipla, Asian Paints, Hindustan Unilever, TCS and Tech Mahindra, ending between 1.60 percent and 2.41 percent lower. Reliance Industries, TCS and HDFC bank contributed the most to the losses on the Sensex.

Five out of 11 sectoral indices on the National Stock Exchange (NSE) settled lower, with the Nifty IT index ending 0.73 percent lower. PSU banking index gained the most amongst the indices. SBI and Bank of Baroda were the top gainers on PSU banking index.

In stock-specific actions, Escorts recovered 5 percent from lows as ED denied of any probe against the company. Adani Gas surged 15 percent after Petroleum and Natural Gas Regulatory Board (PNGRB) approved TOTAL’s stake buy in the company. Max Financial gained on the reports of stake sale in life Insurance business to Axis Bank.

Market breadth was mildly in favour of gains, with 1,242 stocks settling higher and 1,277 ending lower on the BSE. On the NSE, 937 stocks advanced while 864 declined.

On a weekly basis, Nifty ended flat, while Sensex slipped o.2 percent.
Nifty Midcap index gained 1 percent, while Nifty banking advanced 0.3 percent. The domestic markets will remain closed for Shivratri on Friday.

Catch all other market related news here

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow