Pune 13 th January 18 PERSONAL FINANCE amp TAX PLANNING FOR COST ACCOUNTANTS GOALS New Home Holiday Car Childs Education Home Loan repayment Marriage corpus Retirement amp life post retirement ID: 1029106
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1. Roven PereiraMCOM, ACMA, CIMA LONDONPune 13th January ‘18PERSONAL FINANCE & TAX PLANNING FOR COST ACCOUNTANTS
2. GOALSNew HomeHolidayCarChilds EducationHome Loan repaymentMarriage corpusRetirement & life post retirementINFLATION
3. EMERGENCY FUND TACKLING EMERGENCYHaving 3-6 Months of your Monthly Household Spends in the Savings accountMaintain a Savings Plus account - SBI Savings Plus Account – Threshold 10K INRAlternatively, Liquid Funds of MFs (through APPS)HospitalizationFamily EmergencyJob LossAccidentNatural CalamityMEANING OF EMERGENCY
4. INSURANCE - Never Mix Investments with Insurance - Insurance is a Protection Tool - Avoid Money Back, Endowment Policies, ULIP Policies with Higher Allocation Charges - Monthly Take Home Salary * 12 * 10 - Guard Your Health, Guard yourself - Asset Insurance - Choose Term Insurance Policy / TROP - Health Insurance Policy BASE POLICY THROUGH BANKS TOP UP POLICY - Opt for CRITICAL ILLNESS COVER - Qualifies for Deduction under Section 80D - Protect your assets, protect your peace of mindPRINCIPALS OF INSURANCETACKLING INSURANCE
5. WEALTH CREATIONPRINCIPLES OF WEATH CREATION100 – Your age = EquitySingle : Minimum 50% of Monthly Take home salary should be savedMarried : Minimum 30 % of Monthly Take home salary should be saved CREATING WEALTH DIRECT EQUITY : SharesMUTUAL FUNDS : Never have more than 5 fundsAssign Goals to Each Mutual Fund
6. WHAT IS MUTUAL FUNDA Mutual fund is a trust that pools savings of a number of Investors who share a common financial goal.The money thus collected which could be as small as Rs 500 pm, is then invested in different companies by the fund manager to generate returnsIt is a long term wealth creation tool and has always beaten assured return products handsomelyIt has been in India since 1964
7. TYPES OF MUTUAL FUNDSLARGE CAP FUNDMarket capitalization /market cap > Rs 200 Bn – 3500 Bn - ONGC - TATA - SBI - CIPLA - Maruthi - Asian Paints - Hero Motocorp MID CAP FUNDS SMALL CAP FUNDS DEBT FUNDSMarket capitalization /market cap between Rs 50 Bn –200 Bn - Union Bank - UBL - TVS Motors - Ashok Leyland - Glenmark - Havells - MRF Market capitalization /market cap < 15 Bn - Venkys - Jet Airways - VGUARD - Oriental Bank - CEAT - Bata - Voltas Invests in Government Securities,/Treasury Bills Corporate Fixed deposits, BondsYield of 7-10% with indexation benefit More tax efficient than fixed deposit. No TDS and 20% after indexation for > 3 yrs
8. SYSTEMATIC INVESTMENT PLANNING (SIP)
9. GENERATING INCOME FOR RETIREDDIVIDEND INCOME - Dividend Income is Tax free as per Income Tax Law - Monthly Dividend and Quarterly Dividend Option available in Balanced Fund with Yield of 10%-12% Tax free returns - History of 13 years in certain funds in India with DividendSYSTEMATIC WITHDRAWAL PLANInvest in Growth OptionWithdraw a certain portion each month from the Fund while the money grows using SWP
10. YOUTH : TIME & POWER OF COMPOUNDING
11. TAX SAVINGTAX SAVINGS INSTRUMENTSADDITIONAL 1.5 Lacs Tax Rebate Under 80 C5 YEAR FIXED DEPOSITS PPF Yield Lock In 15 yearsEquity Linked Saving Schemes Lock In 3 years YieldLife Insurance Sukanya Samridhi
12. ESTATE PLANNINGLEAVE AN INHERITANCE NOT A MESSWill Must be datedSigned by the Testator ( Person creating the will)Signed in the presence of 2 witnessesExpress a desire that the testator wishes must be carried into effect after deathIt may or may not be registered. Ideally a stamped / notarized agreement should sufficeThe executor is the person named in the will or appointed by the court with the legal responsibility of executing the will
13. THANK YOURoven Pereira ACMA, CIMA (London)