Beginner Guide To Financial Planning

Beginner Guide to
Financial
Planning
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The only thing permanent in life is change, times change, people change, so does life.
You expect life to be much better tomorrow than it is today. Tomorrow, you hope to
fulfill all your dreams and aspirations. But what happens if things take an untoward turn?
Or, if there is an eventuality!
Perhaps it's time for you to change the way you plan your investments.
1. Cash Flow Planning

2. Insurance Planning
3. Children’s Future Planning
4. Tax Planning
5. Retirement Planning
6. Investment Planning
Don’t just dream... Plan!
Financial Planning is becoming increasingly popular in developed countries all over the
world. Now, with a little help from Bajaj Capital, you too can give yourself the 360°
Financial Planning edge! Get your Financial Plan prepared now
Why do you need Bajaj Capital's 360° Financial Planning?
You may have many dreams, needs and desires. For example, you could be dreaming of:
o Owning a new car Buying a dream house Providing your children with the
best education Planning a grand wedding for your children
o Having a great time after your retirement
But in today's world of skyrocketing costs and increasing inflation, how many of these
dreams can you hope to turn into reality? By planning well, you can utilise your limited
resources to the fullest.
360° Financial Planning helps you see the big picture and invest for specific long-term
and short-term goals well in time.
Who needs 360° Financial Planning?
Everyone does! Because everyone has a right to dream and realising dreams is easier
when you work to a plan that's:
o Reliable Realistic
o Proven
Bajaj Capital's 360° Financial Planning Programme could make a difference to all those
who wish to lead a worry-free, financially secure life.
What is 360° financial planning all about?
360° Financial Planning is a unique software-based simulation that takes a holistic view
of your life-long financial needs and charts a personalised investment strategy to help you
meet them. Broadly, it involves:
o Identifying your current financial status Listing and prioritising your goals
Creating a sound investment plan to achieve them
o Monitoring the plan to facilitate swift corrective action, if needed
360° Financial Planning is based on the premise that every individual has certain basic
financial needs that are expressed at various stages of life (getting married, buying assets
like homes, vehicles, or providing for your children's education and wedding). With the
help of 360°Financial Planning, you can prepare yourself well in time for all these goals.
How will 360° Financial Planning help me?
Instead of investing in an ad-hoc manner, 360° Financial Planning helps you take a
holistic, all-round view. Briefly, 360° Financial Planning comprises:
Cash Flow Planning

To provide for assets and meet the periodic cash requirements
Insurance Planning
To protect yourself, your family and your assets
Children's Future Planning

To give your children a financially secure future
Tax Planning
To save on taxes and increase your income
Retirement Planning
Because retirement is a time to relax, not to get worried
Investment Planning
To make your wealth grow
How do I get my personalised 360° Financial Plan created?
Here’s how Financial Plans are prepared:
o The process begins with identifying your needs with the help of the Need
Analysis Form. Our Financial Planners then use the especially-created 360°
Financial Planning software to generate a personalised Snapshot. The Snapshot
gives you a graphic account of all your financial requirements, at every stage of
your future life. Based on the Snapshot, our experts work out an investment
strategy.
o Once implemented, our experts keep regular track of your investments.
A Financial Planning session takes just 15 minutes
FAQ’s
What is financial planning?
Financial planning is the process of meeting your life goals through the proper
management of your finances. Financial planning helps you make advance provision for
financial needs that will arise in the future. The objective of financial planning is to
ensure that the right amount of money is available in the right hands at the right point in
the future to achieve an individual's life goals.
Why should I make a financial plan?

Financial planning provides direction and meaning to your financial decisions. It allows
you to understand how each financial decision you make affects other areas of your
finances. For example, buying a particular investment product might help you save
adequately to finance your child's higher education or it may provide enough for a
comfortable retirement. You can also adapt more easily to life changes and feel more
secure that your goals are on track.
Who is a financial planner?

A financial planner is someone who uses the financial planning process to help you
determine how to meet your life goals. The key function of a financial planner is to help
people identify their financial planning needs, their present priorities and the products
that are most suitable to meet their needs. He or she normally possesses detailed
knowledge of a wide range of financial planning tools and products, but his major role is
to help clients choose the best products for each need. The planner can take a 'big picture'
view of your financial situation and make financial planning recommendations that are
right for you.
Can I do my own financial planning?

Some personal finance software packages, magazines or self-help books can help you do
your own financial planning. However, you may decide to seek help from a professional
financial planner if:
o You need expertise you don't possess in certain areas. For example, a planner can
help you evaluate the level of risk in your investment portfolio and revise your
asset allocation
o You don't have the time to spare to do your own financial planning;
o You know that you need to improve your current financial situation but don't
know where to start;
o You feel that a professional advisor could help you improve on how you are
currently managing your finances;
o You have an immediate need or unexpected life event such as an inheritance or
major illness;
o You want to get a professional opinion about the financial plan you developed for
yourself.
What should I look for in a financial planner?

A financial planner works for you. His or her loyalty should be to the client, not the
product (s)he is trying to sell. The financial planner should be in a position to provide you
with unbiased advice and recommend products that match your needs and are the best
performing ones available. Look for any affiliations of the financial planner to any
product manufacturer. Until unless the financial planner is truly independent, (s)he will
not be able to give you objective advice.
How can I plan for tomorrow when I can hardly pay for today?
Have a budget. Determine what you actually spend each month. There are fixed expenses
like rent, loan repayments, etc. every month about which we can do little. The variable
items such as food, clothing and entertainment are often what get away from us. Use your
discretion to contain these variable expenses to start saving.
How much should I be saving?

It is hard to apply a rule of thumb toward savings, because it varies with age and income
level. Ten percent is a good start. If you find that is too high for you, don't let that deter
you. You can start by putting a little aside each month and then slowly increasing it.
What if I don't achieve my goals?

Financial planning is a common sense approach to managing your finances to reach your
life goals. It cannot change your situation overnight; it is a lifelong process. Remember
that events beyond your control such as inflation or changes in the stock market or
interest rates will affect your financial planning results.
Why do I have to provide so much personal information?

Consider a visit to your doctor. Without complete and fully accurate details, your doctor
cannot prescribe the best course of action. The same applies to financial planning. In
order to obtain the best service for your 'financial health' all details and specifics must be
disclosed.
What type of information do I have to provide?

Typically, information regarding investments held, number of dependants, income and
expenditure details, savings and financial planning needs, etc. The more accurate
information you give, the better the quality of advice given.
What should a financial plan include?

A financial plan should include a review of your net worth, goals and objectives,
investment portfolio, cash flow, investments, retirement planning, tax planning and
insurance needs, as well as a plan for implementing your goals.
Why is there an evaluation of my insurance needs?

Evaluating your insurance needs is part of personal financial planning. Insurance takes
care of your unpredictable needs and as these needs can arise at anytime, insurance is
extremely important. Investments take care of your predictable needs and ideally should
follow after your unpredictable needs are first addressed. The insurance industry has
changed a great deal over the past few years and there is a whole array of new products
from LIC as well as private insurance companies.
What about taxes?

It is important that financial plans are tax efficient. The financial plan should help you in
minimizing your tax liability and also maximizing your after-tax returns from your
investments. Some financial planners help their clients in preparing and filing their tax
returns.
After a plan is developed, what next?

The best plan is useless unless it is put into action. Your financial planner will assist you
completely in implementing the plan, if and when, desired by you.
How often should I update the plan?

It is good to review the plan when there is a lifestyle change such as marriage, birth,
death or divorce. Any change in financial position should be evaluated as well. Most
people have an annual update that reviews how the plan is being implemented. The
review also considers changing goals and circumstances.
Cash Flow Planning
What Is Cash Flow Planning?
In simple terms, cash flow refers to the inflow and outflow of money.
It is a record of your income and expenses. Though this sound simple, very few people
actually take the time out to find out what comes in and what goes out of their hands each
month
Cash flow planning refers to the process of identifying the major expenditures in future
(both short-term and long-term) and making planned investments so that the required
amount is accumulated within the required time frame.
Cash flow planning is the first thing that should be done prior to starting an investment
exercise, because only then will you be in a position to know how your finances look
like, and what is it that you can invest without causing a strain on yourself. It will also
enable you to understand if a particular investment matches with your flow requirement.
So does it involve looking at future cash flows only? Not really. You should always do a
cash flow for yourself as on date, and you will realize that you could have a potential
savings amount within each month of your working life. This is the amount that you
should look at saving for meeting your financial goals. The best way of doing this is to
have a personal budget.
Cash Flow Planning
Why is cash flow planning important?
Cash flow plans are commonly used by business houses. Without a viable cash flow plan,
a company could easily spend more than its revenue, putting it in peril. Unfortunately,
most of us do not realise that a cash flow plan is as important for people like us as well.
The principles that apply to corporate finance and to our personal lives are largely the
same.
There has never been a bigger need than today for families and individuals to work out
cash flow plans. Without proper cash flow planning one could easily get caught in the
debt trap. Of course, it goes without saying that creating a plan is not enough. One also
needs to implement the plan, besides bringing about a change in the spending habits.
Cash flow plan brings you face-to-face with what you should ideally be saving, and
investing in a systematic and regular manner, and what would it mean to you to withdraw
from your portfolio after a couple of years. It brings down in numbers what your financial
future has in store for you, and gives a crystal clear view (as much as is possible with
inflation and the interest rate scenario).
How to make a Personal Budget?
The first thing you will need to do is to collect all your bills, receipts and other
documents which will help you monitor your spending for the month. A good idea is to
jot down all your expenses in a notebook. Include both fixed and variable expenses in
your list.
Fixed expenses are those that stay the same every month (at least for a relatively long
period). These are expenses that have been committed for a long term. For example, rent,
school fees of your children, wages paid out to domestic helps, etc are all fixed expenses.
Variable expenses, on the other hand, are those that change from month to month.
Expenses on food, clothing, electricity and phone bills, entertainment, etc. could be
clubbed under this head. You have a relatively higher control over some of these.
If you have just started the budgeting exercise, it may be difficult to keep all records. Do
not worry, and do your best to keep records. Start keeping track of as many expenses as
you can. The more accurate and complete this exercise is the easier and more effective
will your cash flow planning be.
Cash Flow Planning
Steps to Creating an Effective Personal Budget
o Make a list of all of your monthly income. If you have received an annual bonus,
divide this number by 12. Do the same to all other lump sum incomes of an
annual nature. It is important to list all sources.
o Next, make a list of all your monthly expenses. If an expense occurs less
frequently, convert it to the monthly format. Be sure to include all expenses as
housing, food, transportation, utilities, entertainment, etc. It is wise to track your
spending for a full month during this stage.
o Now you can see for yourself if your income covers all of your current expenses.
If the answer is no, then you need to cut down on your expenses.
o Depending on the amount of the shortfall, you may choose to reduce some of your
variable expense (such as spending money on movies or junk food!) or increase
your earnings. For example, you could take up a part-time job after your regular
work hours, or give tuitions.
o If your income is in excess of your expenses, consider investing the difference
instead of spending it.
Cash Flow Planning Basics
The idea behind cash flow planning is to match expenses on life goals with the available
income. Cash flow planning begins with identifying the sources and the amount of
income and expenditure.
'Income' includes maturities of investments, income from other sources, dividends, etc.
'Expenses' include loan repayments, and all other outflows etc.
The next crucial step is to list out the life goals and assigning a time frame for achieving
them. For example, your list could look like this:
o Going abroad on a vacation next year

o Buying a car in 2 years
o Buying your child a computer next year
The next step is to prioritise these goals. As you will notice, some of these goals (like
buying your child a computer, which is important for his or her education; or a wedding
in the family) are high priority, while others (such as going abroad on a vacation) could
be assigned a relatively lower priority.
Cash Flow Planning
High priority goals are those where you do not have the liberty of compromising either
on the time frame or on the amount. Low priority goals, on the other hand, can be
tweaked around a bit.
Finally, take care to ensure that you have a contingency fund to tackle an emergency.
Ideally, the size of your contingency fund should be two-three times your monthly
expenditure, if you are a working person. If you are a retired person, the amount should
be three to five times.
Thereafter, your financial planner can help you work out the right investment strategy by
using the principles of Investment Planning. Essentially, this involves calculating the
amount of investment required to realise the goal, taking inflation into account.
Insurance Planning
The Need for Insurance Planning
"Insurance is not for the person who passes away, it for those who survive," goes a
popular saying that explains the importance of Insurance Planning.
It is extremely important that every person, especially the breadwinner, covers the risks
to his life, so that his family's quality of life does not undergo any drastic change in case
of an unfortunate eventuality.
Insurance Planning is concerned with ensuring adequate coverage against insurable risks.
Calculating the right level of risk cover is a specialised activity, requiring considerable
expertise. Proper Insurance Planning can help you look at the possibility of getting a
wider coverage for the same amount of premium or the same level of coverage for the
same amount of premium or the same level of coverage for a reduced premium; hence,
the need for proper insurance planning.
Insurance, simply put, is the cover for the risks that we run during our lives. Insurance
enables us to live our lives to the fullest, without worrying about the financial impact of
events that could hamper it. In other words, insurance protects us from the contingencies
that could affect us.
So what are the risks that we run? to name a few - the risk on our lives that is, the worries
of replacement of the incomes that we contribute to the running of the household), the
risks of medical contingencies (since they have the capability of depleting our wealth
considerably) and risks to assets (since the replacement of these can have tremendous
financial implications). If we can imagine a situation where our goals are disturbed by
acts beyond our control, we can realise the relevance of insurance in our lives.
Insurance Planning
Insurance Planning takes into account the risks that surround you and then provides an
adequate coverage against those risks. There is no risk not worth insuring yourself
against, and insurance should first and foremost be looked as a measure to guard against
risks - the risk of your dreams going awry due to events beyond your control.
Categories:
o Life Insurance
Term | Whole Life | ULIP
o General Insurance
Health (Mediclaim) | Personal Accident | Home | Motor | Travel
Insurance Planning
Life Insurance – FAQ’s
What is Life Insurance?
Life Insurance is a contract between you and a life insurance company, which provides
your beneficiary with a pre-determined amount in case of your death during the contract
term.
Buying insurance is extremely useful if you are the principal earning member in the
family. In case of your unfortunate premature demise, your family can remain financially
secure because of the life insurance policy that you have purchased.
The primary purpose of life insurance is therefore protection of the family in the event of
death. Today, insurance is also seen as a tool to plan effectively for your future years,
your retirement, and for your children's future needs. Today, the market offers insurance
plans that not just cover your life and but at the same time grow your wealth too.
Do I need life insurance?
If you have dependants and financial responsibilities towards them, then you certainly
need insurance. Having a family means dependants; this in turn means financial
commitments. Financial commitments come in the form of loans, children's education,
medical expenses etc.
Imagine what would happen if you were to lose your life suddenly or become disabled
and cannot earn. Being insured in a situation like this is a necessity. When you insure
your life, in effect what you are doing is insuring your earning capacity. This guarantees
that your dependants will be able to continue living without financial hardships even in
case of your demise.
Most insurance plans available today come with a savings element built into it. These
policies help you plan not only for protection against death but also for a financially
independent future, which would enable you to have a comfortable retirement.
Insurance Planning
Who Is an Insurance Broker?
An insurance broker is someone who acts as a go-between for businesses and insurance
companies. They typically have access to dozens of carriers, and can quickly find several
policies for you to consider. Provided, you do not have to pay for the services of a
business insurance broker; the insurance company you end up doing business with pays
the broker a commission. A good insurance broker knows the industry, and can begin
searching for additional insurance plans for you to consider. They know the procedures
and processes of the various companies that offer coverage, and can cut through the red
tape and interpret the jargon found in most contracts.
Is there any other benefit of buying insurance other than the risk cover?
There are several benefits of buying insurance. Other than the risk cover, the most
important benefit you receive is Income Tax Relief under Section 80C of the Income Tax
Act, which means premiums paid by you, reduces your tax liability. Besides it helps you
build up compulsory savings. Also through a valid assignment the beneficiaries of the
policy are protected from claims of creditors. One could also surrender his policy in case
of emergencies. For a policy taken under the MWP Act 1874, (Married Women's
Property Act), a trust is created for wife and children as beneficiaries.
How much does life insurance cost?
In order to buy a life insurance policy, you must pay certain amount as premiums to the
life insurance company. The amount of premiums payable depends upon the type of
policy, term of policy contract, sum assured and your age. You could pay these premiums
monthly/half-yearly/annually or as a single premium.
How much do I insure myself for?
One of the simplest rules is to assume that insurance is a replacement for your lost
earning capacity. Calculate your total income for the years that you expect to work.
Assuming that the prevailing interest rate is 8%, you need to insure your life for at least
12 times your current annual income. Assuming that a family needs Rs.100 annually for
household expenditure and the rate of interest would be at 8%, and then the breadwinner
needs to have a life insurance policy of approximately Rs.1200. If the insurance amount
were to be put in the bank by the family, the family would get a comfortable Rs.96 p.a.,
which would at least let the family maintain the current life style.
Insurance Planning
However to calculate your insurance need more precisely, use the following steps:
o Calculate Monthly Livable Income required (Post tax). This is the monthly
amount that the survivors of the policyholder will need in the event of his
death. This is taken at 70% of the current total family expenses. Denote this as
"M".
o Calculate Monthly Income required (Pre-tax) as M/(100-t)%. Denote this as
"M1". Here t = Tax rate.
o Calculate Annual Income (A) = M1*12.
o Assume Estimated-earning rate on capital as 8%. Denote this as "r".
o Calculate Capital livable income required (C) as (A/r)%.
o Subtract Existing Insurance Cover amount (if any) from "C".
o The final amount you arrive at is the amount for which you should buy
insurance.
Can I buy insurance for my children too?
Yes, we do have a Unit Link Child plan.
Are there any advantages of buying insurance at an early age?
Yes. The premium that you pay on your insurance policy is mainly dependant upon two
things—your age and the tenure of the policy. The younger you are the lower is your
insurance premium amount. At younger age, you would be physically sound and may not
be suffering from illnesses. This would entitle you to a lower premium on the policy.
Therefore it is advisable to buy insurance at an early age to reduce the cost of insurance.
Is there any policy with which I can plan for my retirement?
Yes! We have the Unit Linked Pension Plan, which helps you to regularly invest your
savings during your earning life in order to build up a retirement corpus to take care of
your post retirement needs. Further you may be eligible for a tax deduction on the
premiums paid up to Rs 10,000 (as per current tax provisions) per financial year under
section 80CCC of the Income tax Act.
Insurance Planning
Is insurance better than other savings plan?
Other savings plans like Bank Fixed Deposits, NSC, PPF have short maturity tenures,
compared to life insurance policies. (Eg.: NSC for 6 years, PPF for 15 years & life
insurance can be up to 100 years). Hence, other saving plans have limited impact on
financial planning prospects. Whereas, a Life Insurance Policy pays the Sum-Assured
even if the Policyholder expires before the end of the payment term. Hence, this provides
greater security to the person and his/her family. As such, insurance policy is definitely a
better savings plan.
What is the Unit-Linked Insurance Plan (ULIP)?
ULIP is a market-linked life insurance plan, which invests the premium money in various
proportions in the equity and debt markets. In effect, this ensures that the returns on such
plans are linked to the performances of the markets while also offering the individual an
insurance cover at the same time.
What is Term Insurance?
Term Insurance, also known as pure life cover, is the cheapest and the simplest form of
insurance. Under this insurance policy, against payment of regular premium, the insurer
agrees to pay your beneficiaries the sum assured in event of your premature death.
However, if you survive till the end of the policy term, nothing is payable to you. This
policy has no savings component and the premiums you pay are purely a cost to buy you
life cover. This is suitable for you if you are looking for a low cost life cover without any
savings benefits attached.
You are at that stage in life where insurance cover is vital but you cannot afford high
premium payment due to low income.
Insurance Planning
What is the difference between traditional life insurance and unit-linked life
insurance?
The main difference is in the flexibility in the choice of investments. In the case of unit-
linked life insurance, the insurance company would usually offer a choice of different
funds (say, with a differential mix of bond and equity investments) in which the
policyholder can opt to invest his/her contributions. The policyholder can decide which
funds his/her contributions need to be invested in and in what proportion. Therefore, the
returns under the policy are dependent on the investment choice made by the
policyholder. The policyholder can also opt to invest top-up contributions over and above
the regular contributions at any time and to switch his/her investment pattern at any time
during the term of the policy.
In the case of traditional life insurance, the policyholder is usually offered a guaranteed
sum assured. In addition, non-guaranteed bonuses in the form of a share in the profits of
the fund may also be offered depending on whether the policy is a participating policy or
not. The premium amounts are usually fixed at the outset and the same quantum of
premium needs to be paid throughout the term of the policy.
What is the difference between “term” and “whole life” insurance?
Term plans are the purest and cheapest form of insurance where benefits are payable only
on the death of the policy holder within the term. Whole life plans are a special type of
term assurance wherein the term of the policy is whole of the life. So it follows that
benefits under the policy are payable only on death of the policy holder
I have a physical disability, but I am economically independent. Will it disable me

from getting life insurance coverage?
A physical disability like polio or loss of any limb should not in any way exemplify you
from getting life coverage. However depending on the severity of the disability there
might be an increase in the premium charged.
Can my policy ever be cancelled due to health or other reasons?
Once a life insurance policy is issued, it cannot be cancelled by the insurance company
during the policy period for any reason including changes in health, provided the required
premium payments are made and the information on the application was not misleading
or inaccurate.
Insurance Planning
Do all life insurance policies require a medical test?
Life insurance companies underwrite risk on the basis of the health status of the person.
The amount of evidence of health required by the insurer depends upon the amount of
risk involved i.e. the sum insured under the contract. In the case of a low sum insured of
the life to be insured or younger age, the company might ask only for the statement of
health in the form of a health questionnaire from the customer and not a medical
examination. In other cases a full medical examination may be required.
Can I take policy on somebody else’s name? What is the procedure for this?
Yes, But for an insurance contract to be valid, the insured must have an insurable interest
in the subject matter of insurance. The insurable interest is the pecuniary interest,
whereby the policy-holder is benefited by the existence of the subject matter and is
prejudiced by the death or damage of the subject matter. The subject matter is life in the
case of life insurance. It can be further explained by way of following example:
Husband and wife have unlimited insurable interest in each others life.
Parents can buy a life insurance policy for their children to protect their future just in case
if something happens to the parents.
A creditor has insurable interest in the life of a debtor to the extent of the amount
involved plus a reasonable amount of interest.
Partners in a business have insurable interest in the lives of their co-partners.
A company has insurable interest in the lives of the key employees of the company.
Does the insurance company disclose the investments made in each fund?
The insurance company usually provides investment information at periodic intervals

through news bulletins and other means.
What is underwriting?
The process of evaluating risks for insurance and determining in what amounts and on
what terms the insurance company will accept the risk.
Insurance Planning
Tax Benefit of Life Insurance – FAQ’s
Is there any Tax Benefit on the premium I pay for my life insurance policy?
Rebate is available under Section 80C of Income Tax Act, 1961.
For the financial year 2008-09,

The basic income tax exemption limit has been raised from Rs. 110000 to Rs. 150000.
The exemption for women assesses has been raised from Rs. 145000 to Rs. 180000,
And for senior citizens it’s raised from Rs. 195000 to Rs. 225000.
What are the Tax Benefits in case I opt for a Pension Plan?
Under Section 80CCC, where you have paid premiums for any pension plan, you will
receive pension from a fund referred to in Section 10(23AAB). You will be able to avail
a deduction of upto Rs. 10,000 from the total income.
After the maturity of my policies, will the maturity proceeds be taxable?
Please note that the maturity proceeds of life insurance policies are not taxable. Under
pension plans, you can even withdraw up to one-third of the total maturity amount in cash
and the same would be tax-free.
If I pay the premium on policy for my wife/husband, can I claim Tax benefits?
Life insurance premium paid by you for your wife/husband's policy qualifies for a
deduction under Section 80C of the Income Tax Act, 1961.
For financial year 2008-09, all classes of assesses are entitled to additional relief under
Section 80D. If the medical insurance premiums are incurred for the benefit of the
taxpayer's parents, the maximum exemption under section 80D will be Rs. 50,000 instead
of the earlier Rs. 15,000.
If I purchase a Unit Linked Insurance Plan (ULIP) and I choose to discontinue my

policy, can I claim any tax benefits?
If you chose to discontinue a Unit Linked Insurance Plan, you are not entitled to any tax
benefits.
Insurance Planning
What are the Tax benefits available on medical insurance premiums?
Under Sec 80D you will be able to claim tax benefits on premium paid for any
medical/health insurance. Qualifying amounts under Section 80D is up to Rs. 15,000.
However, a higher amount of up to Rs. 20,000 is allowed if the person, for whose health
insurance the premium was paid, was resident and aged 65 years or more at any time
during the financial year in which the premium was paid.
Is Service Tax applicable on ULIP products?
Service tax is applicable, on the risk cover & fund related charges towards management
of investments of Unit Linked Insurance Products included in life insurance premium in
accordance with Section 65(105)(zx) of Finance Act 1994, as amended by Finance (No.2)
Act 2004 and Section 65(105)(zzzzf) of Finance Act 2008 (inserted w.e.f. May 16,2008)
respectively, at the applicable rates and the same would get deducted by way of
cancellation of units."Service tax is applicable, on the risk cover & fund related charges
towards management of investments of Unit Linked Insurance Products included in life
insurance premium in accordance with Section 65(105)(zx) of Finance Act 1994, as
amended by Finance (No.2) Act 2004 and Section 65(105)(zzzzf) of Finance Act 2008
(inserted w.e.f. May 16,2008) respectively, at the applicable rates and the same would get
deducted by way of cancellation of units.
The risk cover includes charges towards mortality/morbidity while the fund related
charges shall include premium allocation, policy administration, fund management,
switching, partial withdrawal and redirection charges which are levied for services
provided by the insurer to the policyholder in relation to management of investments
under unit linked insurance business.
Insurance Planning
About General Insurance
Health Insurance
Health Insurance (popularly known as Medi-claim Policy) offers protection from

unexpected medical emergencies, providing a financial support.
Health insurance therefore, can be a source of support as it takes care of the financial
burden your family may have to go through. It will help you tackle such situations with
ease by providing you with timely and adequate medical care.
This policy covers individual & ones family from medical expenses during
o Sudden illness,
o Surgeries (acquired in respect of any disease, which has arisen during the
policy period.)
o Accidents including room charges, doctor's fees, medicines, tests etc.
o That may arise in future.
Options available:
1. Family Floater
2. Individual Health Insurance
3. Individual Health Insurance + Critical Care
4. Critical Care
5. Personal Accident
Insurance Planning
Motor Insurance
Motor Insurance is a wide comprehensive cover designed to provide protection to you &
your car. Protection from loss of car or damage to the car – giving a secured driving
It covers:
o Own damage
o Legal liability of insured towards third party personal injury and property
damage arising out of an accident involving the insured vehicle .
o Passengers
o Hired driver
Options available:
1. Car Insurance
2. Two wheeler
3. Commercial vehicles
4. Passenger Carrying Vehicle
5. Three wheeler
6. Tractors etc.
Home Insurance
Home Insurance policy provides a cover to the structure and contents of your home from
all unforeseen natural & man-made catastrophes.
It provides protection for property and interests of the insured and his family members.
It is imperative that you secure your home which gives one peace of mind protecting the
most valued possession.
Coverage’s are:
o Fire & Allied Perils
o Burglary & Theft
o Electrical & Mechanical breakdown (Domestic, Audio & Audio-visual
appliances)
o Public Liability (Third Party Liability)
o Covers Accidental breakage
o Coverage to building & contents
o Personal Accident to self & family
Insurance Planning
Travel Insurance
Travel Insurance / Overseas Medi-claim policy is a basic requirement when one travels
abroad, either it’s for business, sight-seeing, shopping or pleasure.
This policy covers you for any kind of hospitalization which is very expensively priced
overseas. Also covers for:
o Baggage loss
o Passport loss
o Personal accident
o Trip cancellation
o Home Insurance when you are traveling
o Dental Expenses
o Maternity expenses in life saving scenario etc.
It is a single policy which covers all unforeseen risks – medical & non-medical when one
is in a strange place.
Options available:
1. Single Trip
2. Multi Trip
3. Student Medical
4. Senior Citizen
5. Pay per day basis
Personal Accident Insurance
Accidents do not happen when you are driving a car, or away on a vacation. It may
happen anytime & anywhere.
Considering that modern day life is so dangerous, a personal accident policy is a solution
to such vagaries of life.
It’s a Benefit Policy.
Coverage’s are:
o Accidental Death Benefit

o Accidental Permanent Total / Partial Disability Benefit
o Accidental Partial / Temporary Disability Benefit
o Broken Bones
o Burns
Insurance Planning
Insurance Glossary
Insurance Planning
Insurance Planning
Insurance Planning
Insurance Planning
Insurance Company Logos (Indian)
Like every parent, you too must be overjoyed to watch your child grow. All parents want
to give the best possible upbringing to their children. This includes good education and
security, in case of any eventuality. Soon, your little bundle of joy will grow up, and it
will be time to provide for his or her higher education and wedding.
The purpose of Children's Future Planning is to create a corpus for foreseeable

expenditures such as those on higher education and wedding, and to provide for an
adequate security cover during their growing years.
Children's Future Planning acquires added importance because children's education and
wedding are high priority life goals. It can neither be postponed nor there a compromise
on the amount.
Good education has always been the passport to a secure future. Today, career
opportunities have grown manifold, and there are many professional courses that your
child can aspire for. However, costs of higher education have also increased
exponentially.
Like most parents, you might be saving regularly to ensure a safe tomorrow for your
child. However, savings alone is no longer enough. For ensuring adequate funding of
your child's education, you as a parent need to do two things:
o Invest appropriate amount systematically and at regular intervals

o Provide for a financial security blanket to cover any eventuality
It is never too early to start saving and investing for your child's future. Especially in
today's context; for example, the cost of a professional degree today is approximately
Rs.2.5 lakhs. If your child is one-year-old today, after 17 years when he/she goes to
college, you may require a sum of Rs 6.3 lakhs, assuming an annual rate of inflation of
6%.
There are many products which your Financial Planner can use to achieve the above
objectives. For example, he could suggest a Children's Future Plan offered by any good
insurance company, to build a corpus for your child's higher education, and provide for a
security cover in the event of the parent's unfortunate demise.
Children's plans are also available under unit-linked option. Being unit-linked, they offer
access to investments in all kinds of asset classes - equity, debt and cash.
Tax Planning
Proper tax planning is a basic duty of every person which should be carried out
religiously. Basically, there are three steps in tax planning exercise. These three steps in
tax planning are:
Calculate your taxable income under all heads i.e., Income from Salary, House Property,
Business & Profession, Capital Gains and Income from Other Sources.
Calculate tax payable on gross taxable income for whole financial year (i.e., from 1st
April to 31st March) using a simple tax rate table, given on next page.
After you have calculated the amount of your tax liability, you have two options to
choose from:
1. Pay your tax (No tax planning required)

2. Minimise your tax through prudent tax planning.
Most people rightly choose Option '2'. Here you have to compare the advantages of
several taxes saving schemes and depending upon your age, social liabilities, tax slabs
and personal preferences, decide upon a right mix of investments, which shall reduce
your tax liability to zero or the minimum possible.
Every citizen has a fundamental right to avail all the tax incentives provided by the
Government. Therefore, through prudent tax planning not only income-tax liability is
reduced but also a better future is ensured due to compulsory savings in highly safe
Government schemes. We sincerely advise all our readers and clients to plan their
investments in such a way, that the post-tax yield is the highest possible keeping in view
the basic parameters of safety and liquidity
Tax Planning
Tax Planning Tips
First, let's start by assessing your income tax liability. Once you have identified your tax
liability, you can then create the right plan. Please note that this applies only to salaried
individuals.
Following rates are applicable for computing tax liability for the current Financial Year
i.e. April 1, 2009 to March 31, 2010 (Assessment year 2010-2011). Our endeavour is to
present the complex provisions of the Income Tax Act in a simplified manner, which
could be understood by a common investor as well as by a layman.
Tax Planning
The rules for Senior Citizen are the same as for Men as well as Women. Any person who
turns 65 on any day prior to or on March 31, 2009 will be treated as a Senior Citizen.
Tax Planning
Filing of Income Tax Return
1. Filing of income tax return is compulsory for all individuals whose gross annual
income exceeds the maximum amount which is not chargeable to income tax i.e.
Rs. 190000 for Resident Women, Rs. 240000 for Senior Citizens and Rs. 160000
for other individuals and HUF’s.
2. The last date of filing income tax return is July 31, in case of individuals who are
not covered in point 3 below.
3. If the income includes business or professional income requiring tax audit
(turnover Rs. 40 lakhs), the last date for filing the return is September 30.
4. The penalty for non-filing of income tax return is Rs. 5000 (after assessment
year).
Tax Saving Schemes
After assessing your tax liability, the next step is tax planning. It involves selecting the
right tax saving instruments and making investments accordingly.
Deductions from Taxable Income:
Deduction under section 80C
This new section has been introduced from the Financial Year 2005-06.
Under this section, a deduction of up to Rs. 100000 is allowed from Taxable Income in
respect of investments made in some specified schemes.
Tax Planning
Specified Investment Schemes u/s 80C and u/s 80CCC (1):
1. Life Insurance Premiums

2. Contributions to Employees Provident Fund/GPF
3. Public Provident Fund (maximum Rs 70,000 in a year)
4. NSC (National Savings Certificates)
5. Unit Linked Insurance Plan (ULIP)
6. Repayment of Housing Loan (Principal)
7. Equity Linked Savings Scheme (ELSS) of Mutual Funds
8. Tuition Fees including admission fees or college fees paid for full-time education
of any two children of the assessee (Any development fees or donation or
payment of a similar nature shall not be eligible for deduction).
9. Infrastructure Bonds issued by Institutions/ Banks such as IDBI, ICICI, REC,
PFC etc.
10. Interest accrued in respect of NSC VIII issue.
11. Pension scheme of LIC of India or any other insurance company.
12. Fixed Deposit with Banks having a lock-in period of 5 Years
Notes:
1. There are no sectoral caps (except in PPF) on investment in the new section and
the assessee is free to invest Rs. 100000 in any one or more of the specified
instruments.
2. Amount invested in these instruments would be allowed as deduction irrespective
of the fact whether (or not) such investment is made out of income chargeable to
tax.
3. Section 80C deduction is allowed irrespective of the assessee income level. Even
persons with taxable income above Rs. 1000000 can avail the benefit of section
80C.
4. Some of the popular pension plans are Jeevan Suraksha by LIC, Life Time
Pension by ICICI Prudential Life Insurance, Aviva Life - Pension Plus by Aviva
Life Insurance, Max-Easy Life policy by Max New York Life, Nirvana Plus by
Tata AIG Life Insurance etc.
Please note that because the deduction is allowed from taxable income, the exact savings
in tax will depend upon the tax slab of the individual. Thus, a person in the 30% tax slab
can save income tax up to Rs. 30,900 (or Rs. 33,990 if annual income exceeds Rs.
10,00,000) by investing Rs. 100000 in the specified schemes u/s 80C.
Tax Planning
Deduction under section 80D
Under this section, deduction of up to Rs 40000 can be claimed in respect of premium

paid by cheque towards health insurance policy of various General Insurance companies
like Royal Sundaram Health Shield Gold, Reliance Healthwise etc. Such premium can be
paid towards health insurance of spouse, dependent parents as well as dependent children
as per following table:
On whose life health Individual taxpayer, Additional Total

Insurance Policy is his/her spouse, and Deduction for
taken dependent children parents of the
Rs. Individual whether
dependent or not
Rs.
General Deduction 15,000 15,000 30,000
Additional 5,000 5,000 10,000
Deduction if one of
the insured is Senior
Citizen
Total 20,000 20,000 40,000
Accordingly a person who is falls in the 30% tax bracket can save income tax up to Rs
4,635 (or Rs. 5099 if the annual income exceeds Rs 10,00,000) by paying Rs 15,000 as
premium for mediclaim policy in a year.
Deduction under section 24(b)
Under this section, interest on borrowed capital for the purpose of house purchase or
construction is deductible from taxable income up to Rs. 150000 with some conditions to
be fulfilled.
Tax Planning
Tax Free Income
The following incomes are completely exempt from income tax without any upper limit.
1. Interest on PPF/GPF/EPF.
2. Interest on GOI tax free bonds.
3. Dividends on Shares and on Mutual Funds.
4. Any capital receipt from life insurance policies i.e., sums received either on death
of the insured or on maturity of life insurance plans. However, in case of life
insurance policies issued after March 31, 2004, exemption on maturity payment
u/s 10(10D) is available only if the premium paid in any year does not exceed
20% of the sum assured.
5. Interest on savings bank account in a post office.
6. Long term capital gain on sale of shares and equity mutual funds if the security
transaction tax is paid/imposed on such transactions.
Dividend Income
Dividend income from companies /equity-oriented Mutual Funds is completely exempt in

the hands of investors. Dividend is also tax-free in the hands of investors in case of debt-
oriented Mutual Fund schemes.
Gift Tax
Gift tax was abolished with effect from October 1, 1998. The gifts are no longer taxable
in the hands of donor or donee. However, with effect from September 1, 2004, any gift
received by an individual or HUF will be included in taxable income, provided the
amount of gift exceeds Rs 50,000.
However, gifts received from any of the following will continue to remain tax free:
1. Spouse
2. Brother or sister
3. Brother or sister of the spouse
4. Brother or sister of either of the parents of the individual
5. Any lineal ascendant or descendant of the individual
6. Any lineal ascendant or descendant of the spouse of the individual
7. Spouse of the person referred to in (2) or (6)
Tax Planning
Also, gifts received on the occasion of marriage or under a will by way of inheritance are
also tax free.
Banking Cash Transaction Tax was abolished with effect from March 31,2009
Computation of Gross Taxable Income
As per Income-Tax; Income of a Person is computed under the following 5 Heads:
1. Income from Salaries

2. Income from House Properties
3. Profit & Gains of Business & Profession
4. Capital Gains
5. Income from Other Sources
Now we will discuss in detail about the taxability of these sources of income.
1. Salary or Pension Income
Salaried employees are issued a certificate of tax deducted at source from salary income
by their employers in Form No. 16. It also gives the Net Taxable Salary figure.
2. Income from House Property
If the property is self occupied then the Income from House Property is treated as NIL. If
any loan is taken for the purchase of the property then the amount paid towards interest
upto a maximum of Rs.150000/- is deducted from taxable income.
In case property is given on rent, then we have to find out the
a. Annual Rental Income

b. From this deduct Property Tax paid if any
c. From balance amount deduct 30% towards repairs & maintenance
d. From the residual figure deduct the amount of interest paid on loan taken
for the purchase of the property.
e. The resultant figure is the Income from House Property.
Tax Planning
3. Profit from Business / profession
Income as arrived on the basis of Profit & Loss A/c
4. Income from Interest
Interest Income from the following sources is also required to be included in the Gross
Taxable Income:
1. Interest on company deposits.

2. Interest on debentures/bonds.
3. Interest on savings bank account/ fixed deposits with banks.
4. Interest on post office savings schemes like MIS, NSC, KVP etc.
5. Interest on private loans given to relatives, friends or any other entity.
6. Interest on government securities.
Note: Deduction u/s 80 L has been omitted now and accordingly, interest income from
the above sources is fully taxable now.
Retirement Planning
Some like it. Some don’t. But retirement is a reality for every working person. Most
young people today think of retirement as a distant reality.
However, it is important to plan for your post-retirement life if you wish to retain your
financial independence and maintain a comfortable standard of living even when you are
no longer earning. This is extremely important, because, unlike developed nations, India
does not have a social security net.
Retirement Planning acquires added importance because of the fact that though longevity
has increased, the number of working years haven’t.
Our Retirement Planning Service involves:
o Computing that amount that would be required post-retirement. This is done after
taking inflation and time value of money into account.
o Building your Retirement Corpus using Systematic Investment Plans (SIP’s) and
other long-term growth orient products
o Ensuring adequate post-retirement income through safe investments.
The asset allocation and selection of investment vehicles keep changing as your risk-
bearing capacity diminishes.
Retirement Planning
Why plan for retirement?
Plan for a Worry Free Retirement
In simple words, retirement planning means making sure you will have enough money to
live on after retiring from work. Retirement should be the best period of your life, when
you can literally sit back and relax or enjoy your life by reaping benefits of what you earn
in so many years of hard work. But it is easier said than done. To achieve a hassle-free
retired life, you need to make prudent investment decisions during your working life, thus
putting your hard-earned money to work for you in future.
Why is it important?
India, unlike other countries, does not have state-sponsored social security for the retired
people. And after several decades when pensions provided many people with a large
chunk of money they needed to live comfortably after they retired, things are changing.
While you may be entitled to a pension or income during retirement, in the new economic
era, you are increasingly likely to be responsible for providing for your own needs.
Although the compulsory savings in provident fund through both employee and employer
contributions should offer some cushion, it may not be enough to support you throughout
your retirement. That is why retirement planning is extremely important for every one.
There are many reasons for the working individuals to secure their future emergence of
nuclear families and its attendant insecurity, increasing uncertainties in personal and
professional life, the growing trends of seeking early retirement and rising health risks are
among few important risks. Besides falling interest rates and the sustained increase in the
cost of living make it a compelling case for individuals to plan their finances to fund their
retired life
Planning for retirement is as important as planning your career and marriage. Life takes
its own course and from the poorest to the wealthiest, no one gets spared. "Everyone
grows older". We get older every day, without realising. However, we assume that old
age is never going to touch us.
The future depends to a great extent on the choices you make today. Right decisions with
the help of proper planning, taken at the right time will assure smile and success at the
time of retirement.
Retirement Planning
How to Plan for Your Retirement
If you are in young, retirement may be the last thing on your mind. But if you think you
have a long way to go for to plan for retirement, think again.
It is never too early to prepare for retirement, especially if you want to maintain the same
standard of living that you would have got accustomed to by then.
Let us take a hypothetical example. Let's assume that you are a 35 year old, earning Rs.3
lakh per annum. Your salary grows at 5% per annum and you plan to retire after 25 years.
Under these circumstances, assuming your post-retirement requirement would be 60% of
your last annual income (Rs.10 lakh approx); you would need about Rs.6 lakh per annum
after retirement. To achieve this, you need a retirement corpus of Rs.75 lakh assuming
you earn a return of 5% per annum over a period of 20 years. To meet this goal, you
would have to invest more than Rs.9000 per month at 7% per annum for the next 25
years. Inflation and tax implications have not been considered for simplicity.
Steps for making Retirement a Success
People have different plans for retired life. For example you may think of retirement as a
time to relax, to laze around, to spend more time with family, travel or write a
masterpiece.
Interest accrued in respect of NSC VIII issue.
Attaining financial independence after retirement will not be just a dream if the following
steps are followed with steady discipline, perseverance and if smart investment strategies.
Start saving early
Nobody takes retirement seriously. But the fact is that even a small sum of money saved
regularly and invested regularly makes a big amount which will come in very handy after
retirement. One should not believe that after retirement, one can place all savings into
income generating investment and spend rest of life in happiness. If you don't plan early,
you could end up eroding your principal savings in order to have to supplement your
monthly income.
The key to a financially independent future is "sooner the better". Cautious investors
believe in this principal and plan their retirement accordingly. They not only save, they
save early and regularly. The catch is to make the power of compounding work one's
benefit.
Retirement Planning
Retirement should be your top priority
Retirement should be kept as a top priority because if one does not keep it at the top one
might end up depending on one's children, which probably no one would relish.
Create a Retirement Plan
Develop a plan for saving based on your requirements at the time of retirement. The goals
you keep for saving depend on your lifestyle but you will need at least about 66% of your
pre-retirement income to maintain your standard of living when you stop working.
Understand your pension plan
If your employer offers on pension plan, understand carefully your benefit level, financial
stability of plan and the vesting period. Use retirement plans even if you already have
enough money.
With retirement plans your money grows in a tax efficient manner and compounding
interest over time makes it one of the best investment options.
Balance your risk tolerance and your investment strategy
Evaluate your risk profile and then balance your investment strategy to invest in various
avenues to get the most out of your retirement money keeping your risk profile
unhampered.
Diversify your investments & allocate your assets carefully.
Depending on your work profile divide your savings into equity, bonds, Mutual Funds,
and other investment avenues. Don't invest too heavily in one sector or one company,
since the risk associated with putting all your eggs in one basket is indeed very high.
Save and Invest Regularly
Saving and investing regularly makes a big difference at the time of retirement. Investing
at regular intervals builds your retirement fund over time and helps you to minimize risk
and gives a tension free retirement-a time to pursue your hobbies, fulfill your dreams and
passions.
Investment Planning
Everyone needs to save for a rainy day. Once you have saved enough to take care of
emergencies, you should start thinking about investing and to make your money grow.
We can help you plan your investments so that you can reap adequate benefits and
achieve your financial goals.
Bajaj Capital Investment Planning Service includes:
o Risk Profiling
o Asset Allocation and Portfolio Construction
o Creation and Accumulation of Wealth through Systematic Investment Plans
(SIP)
o Regular review of progress and Portfolio Rebalancing
Essentially, Investment Planning involves identifying your financial goals throughout

your life, and prioritising them. Investment Planning is important because it helps you to
derive the maximum benefit from your investments.
Your success as an investor depends upon your ability to choose the right investment
options. This, in turn, depends on your requirements, needs and goals. For most investors,
however, the three prime criteria of evaluating any investment option are liquidity, safety
and return.
Investment Planning also helps you to decide upon the right investment strategy. Besides
your individual requirement, your investment strategy would also depend upon your age,
personal circumstances and your risk appetite. These aspects are typically taken care of
during investment planning.
Investment Planning also helps you to strike a balance between risk and returns. By
prudent planning, it is possible to arrive at an optimal mix of risk and returns that suits
your particular needs and requirements.
Investment Planning
Importance of Investment Planning
Investment means putting your money to work to earn more money. Done wisely, it can
help you meet your financial goals like buying a new house, paying for college education
of your children, of your enjoying a comfortable retirement, or whatever is important to
you.
You do not have to be wealthy to be an investor. Investing even a small amount can
produce considerable rewards over the long-term, especially if you do it regularly. But
you need to decide about how much you want to invest and where. To choose wisely, you
need to know the investment options thoroughly and their relative risk exposures.
Who needs Investment Planning?
Investment planning is necessary for every one who wishes to achieve any financial goal.
You have to plan your limited resources to avail the maximum benefit out of them. You
should plan your investments to fulfill major needs like:
o Creating wealth over the long term

o Acquring assets like a dream house or a dream car
o Fulfulling your need for financial security
Thus, Investment Planning is nothing but a holistic approach to meet your life's goals.
Choosing the Right Investment Options
The choice of the best investment options for you will depend on your personal
circumstances as well as general market conditions. For example, a good investment for a
long-term retirement plan may not be a good investment for higher education expenses.
In most cases, the right investment is a balance of three things: Liquidity, Safety and
Return.
Liquidity - how accessible is your money?
How easily an investment can be converted to cash, since part of your invested money
must be available to cover financial emergencies.
Investment Planning
Safety - what is the risk involved?
The biggest risk is the risk of losing the money you have invested. Another equally
important risk is that your investments will not provide enough growth or income to
offset the impact of inflation, which could lead to a gradual increase in the cost of living.
There are additional risks as well (like decline in economic growth). But the biggest risk
of all is not investing at all.
Return - what can you expect to get back on your investment?
Investments are made for the purpose of generating returns. Safe investments often
promise a specific, though limited return. Those that involve more risk offer the
opportunity to make - or lose - a lot of money.
To a large extent, the choice of the right investment option will also depend upon your
financial goals. For example, if you want to invest for funding your vacation next year,
don't choose an investment vehicle that has a three-year lock-in. Similarly, if you want to
invest for your daughter's marriage after 10 years, don't invest in 1yr bonds for the next
10 years. Instead, choose an option that matches your investment horizon.
Investment Strategies
You can make your own investment picking approach or adopt one after consulting
financial experts or investment advisors. Whatever method you use, keep in mind the
importance of diversification, or variety in your investment portfolio and the need for a
strategy, or a plan, to guide your choices.
Investment approaches
The options you choose to put your money in reflect the investment strategy you are
using - whether you realize it or not. Most people adopt the following approaches:
Conservative
These investors take only limited risk by concentrating on secure, fixed-income

investments etc.
Moderate
Such Investors take moderate risk by investing in mutual funds, bonds, select blue-chip
equity shares etc.
Investment Planning
Aggressive
These are investors who take major risk on investments in order to have high (above-
average) returns like speculative or unpredictable equity shares, etc.
As a matter of fact, the investment approach of an investor is directly linked to his or her
ability to shoulder risk. The ability to take risks depends largely on personal
circumstances and factors like age, past experiences with investing, level of
responsibility, etc.
Risk Vs Returns
Risk and returns go hand in hand. Higher the risk, higher is the possibility of earning a
good return. Thus, it follows that all types of investment have some form of risk attached
to it. Theoretically, even 'safe' investments (such as bank deposits) are not without some
element of risk. Broadly, here are the various types of risks that you might have to face as
an investor.
Credit Risk
The risk is that the issuer of the security will default, or not repay the principal amount.
This is valid for corporate bonds etc.
Liquidity Risk
If you invest in securities, stocks, bonds, you are risking their sell-ability. In other words,
your money gets stuck unnecessarily, creating an asset-liability mismatch.
Market Risk
Financial markets are volatile in nature. Volatility means sudden swings in value from
high to low, or the reverse. The more volatile an investment is, the more profit or loss you
can make, since there can be a big spread between what you paid and what you sell it for.
But you also have to be prepared for the price to drop by the same amount. Those who
invest in stocks and mutual funds typically run this risk.
Investment Planning
Interest Rate Risk
Depending on the interest rate movement in the economy, the rates of interest investment
instruments may go up or come down, resulting in a subsequent reverse movement of
their prices. Such a scenario of economic instability might affect mutual funds etc.
The whole idea behind investment planning is to evaluate the risk associated with various
types of investments and take steps so as to balance it with the desired return.
Investment Planning Steps
Investment Planning is the key to successful investing. It is a scientific process, which, if

done in the right sprit, can help you achieve your financial goals. Here are the basic steps
of Investment Planning
Step 1:
Identify your financial needs and goals
The starting point of a sound investment plan is to begin with a clear understanding of
you financial needs and goals. Typically, any financial need or goal would translate into
determining the tenure of your investment (investment horizon). All investment needs
and goals can therefore be translated into short-term (less than 1 year), medium-term
(more than 1 year) and long-term (more than 5 years). Here is an example of the financial
goal of a typical household (a couple with two children’s).
Investment Planning
Step 2:
Understanding investment choices
There are three basic investment categories: Equity, Debt and Cash. Any investment can
be classified into one of these three categories, or asset classes. The key to investment
success lies in understanding how each asset class performs over the various investment
horizons, the choices within each category and the risks involved in making investment
decisions in each of these choices.
Equity or Stocks are ownership shares investors buy in a corporation. When you make
equity investments, you become part-owner (to the extent of your shareholding) of the
company you have invested in. However, there is no particular rate of return indicated
while investing. The current value of your holding is reflected in the price at which the
stock/share is traded in the stock markets. Hence, these constitute a relatively riskier form
of investment.
Debt instruments or Bonds are loans investors make to corporations or the government.
They promise a fixed return at the time of making the investment. Also the promise of
getting the money back is dependent on who is making the promise. In case of the
Government, the promise will certainly get fulfilled, but if the issuer of debt is a company
or an institution, the quality of the issuer needs to be adjudged, to ascertain its ability to
keep the promise. Debt investments, therefore, provide you with the promise that your
principal will be returned along with the interest payable thereon.
Cash includes money in bank savings accounts and other liquid investment options.
Investment Planning
Step 3:
Decide an appropriate mix of various investment choices (Asset Allocation Plan)
Making an asset allocation plan is about determining the proportion of investments in

each of the three basic asset classes. Essentially this depends upon your profile as an
investor. Whatever stage of life you are at, you would need to invest part of your money
for security and liquidity. A part of your investments should generate regular income and
part of it should contribute to growth and capital appreciation. The proportion however,
will vary based on individual goals, time horizons available to meet those goals and one's
risk profile (the tolerance reaction to any down turn in the stock/debt markets). The key
to investment success lies in determining the appropriate mix of the above mentioned
categories and not just the individual investments that are done within each category.
Investment Planning
Inflation Devil
Inflation, the rate at which the general level of prices for goods and services rises, can
steadily erode the purchasing power of your income. That is why you should invest a
portion of your savings at a rate higher than the inflation rate to recover the loss of
purchasing power.
This means that over time a rupee will be able to buy a lesser amount of goods and
services. If the inflation rate is 5%, then Rs. 100 worth of goods will cost Rs. 105 after a
year. The following table indicates how the value of Rs 100000 will change over time at
different levels of inflation.
Table indicating the value of Rs 100000 at different levels of inflation over time
Investment Planning
The Power of Compounding
Regardless of where you choose to put your money - cash, stocks, bonds, or a
combination of these - the key to saving for the future is to make your money work for
you. This is done through the power of compounding.
Compounding investment earnings is what can make even small investments become
larger, given enough time. You are probably already familiar with the principle of
compounding. The money you put into a bank account earns an interest. Then, you earn
interest on the money you originally put in, plus on the interest you have accumulated. As
the size of your account grows, you earn interest on a bigger and bigger pool of money.
The following table shows how much your money would grow when you invest a fixed
amount per month over a period of 10, 15, 20, 25, and 30 years, assuming an interest rate
of 10% p.a.
How power of compounding makes your money grow, when you invest a fixed amount
every month
Investment Planning
Here's how much your money would grow if you make a lump sum (one-time)
investment and leave it untouched. The interest rate has been assumed to be 10%.
The real power of compounding comes with time. The earlier you start saving, the more
your money can work for you. To attain certain amount of corpus within a set period of
time, a pro-active investment style is preferable. Thus, no matter how young you are, the
sooner you begin saving for the future, the better it is.
Investment Planning
Risk Thermometer (Example)
Investment Planning
Investment Planning
Investment Planning
Risk Thermometer (Example)
Investments
Fixed Deposits | Real Estate | Post Office | Govt of India Bond | Mutual Funds | IPO
Fixed Deposits
(Investments)
Company Fixed Deposits
Fixed Deposits in companies that earn a fixed rate of return over a period of time are
called Company Fixed Deposits. Financial institutions and Non-Banking Finance
Companies (NBFC’s) also accept such deposits. Deposits thus mobilised are governed by
the Companies Act under Section 58A. These deposits are unsecured, i.e., if the company
defaults, the investor cannot sell the documents to recover his capital, thus making them a
risky investment option.
Benefits of investing in Company Fixed Deposits
o High Interest
o Short-Term deposits
o Lock-in period is only 6 months
o No Income Tax is deducted at source if the interest income is up to Rs 5,000 in
one financial year
o Investment can be spread in more than one company, so that interest from one
company does not exceed Rs. 5,000
Like most investment option, Company Fixed Deposits are a mixed bag. Company FD’s
can be an interesting investment option if you know how to select the right FD, and how
to avoid the no-so-good ones.
Here are some of the points that investors should keep in mind.
Spread your risk

The deposits should be spread over a large number of companies engaged in different
industries. This way, you'll be able to diversify your risk among various
industries/companies. Try not to put more than 10% of your total investments in one
particular company.
Choose the right period of deposit

Ideally, the investment should be for 1 to 3 years depending upon the rate of interest.
Periodic review
The performance of the companies should be reviewed at maturity. This will help you
decide whether to renew or reshuffle the deposit. It is also wise to keep a track of these
companies by checking their share prices, annual reports and other details reported in
newspapers.
Investments – Fixed Deposits
Fixed Deposits
FAQ’s
What is Company Fixed Deposit?

Company Fixed Deposit is the deposit placed by investors with companies for a fixed
term carrying a prescribed rate of interest.
Why is interest from Company Fixed Deposit higher than Banks?

Company Fixed Deposits have always offered interest which is 2-3% higher than Bank
Deposit rate, because they have to pay higher interest to banks for borrowing money.
How is interest payments made?

Interest is paid on monthly/quarterly/half yearly/yearly basis or on maturity, and is sent
either through cheque or through Electronic Clearing System basis.
When is TDS deducted on the interest from Company Fixed Deposits?

TDS is deducted if the interest on fixed deposit exceeds Rs.5000/- in a financial year.
Is there any scope of appreciation of principal?

No, at the end of deposit period, the principal is returned to the deposit holder.
How to choose a good company deposit scheme?

o Ignore the unrated Company Deposit Schemes. Ignore deposit schemes of little
known manufacturing companies. For NBFC’s, RBI has made it mandatory to
have an ‘A’ rating to be eligible to accept public deposits. One should go further
and look at only AA or AAA schemes.
o Within a given rating grade, choose the company with a better reputation.
o Once you decide on a company, choose the schemes that have given a better
return. Unless you need income regularly, you should prefer cumulative schemes
to regular income options since the interest earned automatically gets reinvested
at the same coupon rate, resulting in better yields. It also gives you a lump-sum
amount at one go.
o It is better to make shorter deposit of around 1 year to 3 years. This way, you can
not only keep a watch on the company’s rating and servicing, but also have your
money back in case of an emergency.
o Check on the servicing standards of the company. You should not invest in
companies that care little about investor services, like promptly sending interest
warrants or the principal cheque.
o Involve your Financial Planner / Investment Advisor for advice in all your
transactions. Do not bypass and invest directly.
o Check whether the company accepts outstation cheques and makes payment
through at par cheques, especially if you do not live in the same city where the
company is situated.
Investments – Fixed Deposits
Which companies can accept deposits?
Companies registered under the Companies Act 1956, such as:

o Manufacturing Companies.
o Non-Banking Finance Companies.
o Housing Finance Companies.
o Financial Institutions.
o Government Companies.
Upto what limits can a company accept deposit?
A Non-Banking Non-Finance Company (Manufacturing Company) can accept deposits

subject to following limits.
o Upto 10% of the aggregate of paid-up share capital and free reserves if the
deposits are from shareholders or guaranteed by the directors.
o Otherwise upto 25% of the aggregate of paid-up share capital and free
reserves.
A Non-Banking Finance Company can accept deposits upto following limits:

o An Equipment Leasing Company can accept four times of its net owned fund.
o A Loan or Investment Company can accept deposit upto one and half time of
its net owned funds.
What is the period of the deposit?
Company Fixed Deposits can be accepted by a Manufacturing Company having duration

from 6 months to 3 years. Non-Banking Finance Companies can accept deposit from 1
year to 5 years period. A Housing Finance Company can accept deposit from 1 year to 7
years.
Companies where you should not invest
o Companies that offer interest higher than 15%.

o Companies that are not paying regular dividends to the shareholders.
o Companies whose Balance Sheet shows losses.
o Companies that are below investment grade (A) or less rating.
There is an old saying “Don’t Put All Your Eggs in One Basket”.
Company Deposits should be spread over a large number of companies. This will help
you to diversify your risk among various companies/industries. Never put more than 10%
of your total investible funds in one company.
Real Estate
(Investments)
About Bajaj Capital “Intelli Realty” TM
Intelligent Property Investment Solutions
Intelli Realty TM is the group concern of Bajaj Capital Group (pioneer in financial
advisory and serving to society since 1965) and is one of the fastest growing
consultant/service providers in commercial, residential, industrial real estate in India. We
offer the most comprehensive services portfolio in the industry.
We have a team of top notch professionals & expertise who keeps their eyes on market
trend and changes which enable us to upper hand than other Property consultants/Service
Providers. We always focus on our clients and their requirement and committed to
provide the best deal to them.
Our work is not based on guess or assumption, "RESEARCH", is the only way we follow
to accomplish our client's requirement of real estate. We are supported by our property
experts and extensive property and client database, which enable our professionals to
access regional property opportunities and to pursue client interest in a cost-effective
manner.
Our clients include Locals, NRI's, HNI's Institution; they demonstrate the quality we
deliver to them and we are the foremost choice to our existing clients and they choose us
whenever they do any dealing in Real Estate.
Our Services
Intelli Realty TM is focused towards providing the following services:
Property Services
o Sale/purchase of residential property
o Sale/purchase of commercial property
o Residential and Commercial leasing
o Housing loans (tie-up with leading banks)
Areas of Operation
We are primarily active in Delhi & NCR. However, we also undertake projects in various
Indian cities on a case-to-case basis.
Investments – Real Estates
Home Loan
As we are the complete solution in all aspects of Real Estate, Home Loan facility is one
of them. We are the channel partner of some reputed Bank and we facilitate in getting
Home Loan as well. There are different types of Home Loans available in market to meet
your needs, some of them are as follows: -
o Home Purchase
o Home Improvement
o Home Construction
o Home Extension
o Home Conversion
o Land Purchase
Our Projects
1. DLF
Projects are:
o Belaire (Centrally air conditioned, earth quake resistant luxury apartments in
DLF City Phase V)
o Park Place (Air conditioned apartments in DLF City, Phase V, in close
proximity to DLF Golf Links. Choice of "3 bed rooms + servant" and "4 bed
rooms + servant" apartments)
o Kings Court and Queens Court in GK-II, Delhi
2. UNITECH
Projects are:
o Habitat, Greater Noida
o Harmony, Gurgaon (2-4 bedroom apartments of international standard with
fitted modular kitchens and air conditioning in every room are placed within a
setting of pristine natural beauty)
o Escape, Nirvana Country, Gurgaon (2-3 bedroom apartments with fitted
modular kitchen and air conditioning in every room)
o Fresco, Nirvana Country, Gurgaon (a new, modern residential community,
this high rise project comes with a fully fitted kitchen and air-conditioning in
the rooms)
o Uniworld Resorts, Gurgaon
3. OMAXE
Projects are:
o OMAXE - The forest, SurajKund Road, Faridabad
o Omaxe Heights - Faridabad (2/3 Bedroom apartments with every conceivable
amenity close at hand. Located at Sector - 86, Faridabad hi-tech security &
fire fighting system)
o Omaxe Riviera - Rudrapur (An integrated township par excellence, Omaxe
Riviera offers peaceful living in the lap of nature,fully laced with world class
amenities.)
o Omaxe City - Sonepat (Omaxe City, Sonepat is an integrated township
comprising plots, independent floors and villas in a sprawling expanse of 332
acres. With all facilities and amenities such as schools, hospital, theme parks,
state-of-the-art club, local shopping centre, grocery store and more....all
within the township)
4. PARSVNATH
Projects are:
o Exotica
o La Tropicana
5. MGF EMAAR
6. VIPUL
Projects are:
o Tatvam - Villas – Gurgaon
7. ANSAL API
8. REALTECH
9. BESTECH
Projects are:
o Park View Residency Palam vihar
10 Amrapali
11 Silver Glades
12 Jaipuria Group
13 Vatika & Tata Housing
14 Alpha G : Corp (Formely GESCO Ltd)
15 Eros Group
We have a process of builder approval from the management before suggesting the
properties to any of our client.
Buying Real Estate
The real estate sector is one of the fastest growing sectors in India and is poised to grow
manifold with the thrust on infrastructure expansion. Highways, airports, SEZ’s,
townships, commercial properties etc. are coming up all over the country, representing a
great wealth creation opportunity for investors.
According to Merill Lynch (world's leading financial management and advisory

company), the Indian realty sector will grow from $12 billion in 2005 to $90 billion by
2015. Knight Frank, the real estate consultancy group, has predicted a 20% growth rate,
year on year for the organized sector in India. This year, the Government of India has
added fresh impetus to real estate sector by allowing 100% FDI. This relaxation of FDI
ceiling rate has opened the doors for the international real estate developers to come to
India.
Real Estate as an investment
According to the Financial Planning approach pioneered by Bajaj Capital, real estate is an
important asset class. Investing in a carefully selected mix of asset classes is the ideal
way to achieve long term investment success.
The real estate sector in India has always been viewed as an unorganized sector but the
past few years have seen a shift in the key that drives the growth. Returns from real estate
investment in India have been higher than in other Asian countries.
Real estate is an important resource that assists wealth creation. The real estate scenario
in India has undergone a paradigm shift to include sectors like entertainment, hospitality,
retail etc. along with the residential and office spaces. The Government of India's
decision to allow 100% FDI in real estate construction has been another favorable step.
Investment in real estate has begun to look competitive and is turning out to be a good
investment option as compared to other investment options like equity. It attracts
investors by giving a possibility of stable and predictable income yields, moderate capital
appreciation and tax structuring benefits. Overall, real estate is expected to offer good
investment alternatives to stocks and bonds in the coming years.
Our Presence
We are having all India network and having 146 Branches, In Real Estate business we are
currently functioning in Delhi and NCR and about to launch these services in all around
country, which is including but not limited to Chennai, Kolkatta, Mumbai, Bangalore,
Hyderabad, Pune, Jaipur, Ludhiana, Chandigarh, Lucknow, Cochin, Ahmadabad,
Dehradun, Coimbatore, Baroda......
Post Office Schemes
(Investments)
Why should you invest in Post Office Schemes?
o These schemes are offered by the Government of India.

o Safe, secure and risk-free investment options.
o No Tax Deduction at Source (TDS).
o Nomination facility is available.
o Nomination can be changed at any time
o These instruments are transferable to any part of India.
o Attractive rates of interest.
Post Office Schemes:
o Post Office Monthly Income Scheme

o Post Office Time Deposit Scheme
o Post Office Savings Account
o National Savings Certificate
o Kisan Vikas Patra
Govt schemes offered through Post Offices and Nationalised Banks:
o Public Provident Fund

o Senior Citizen's Savings Scheme
Investments – Post Office Schemes
Public Provident Fund (PPF)
Salient Features
o The rate of interest is 8% compounded annually.
o The minimum deposit is 500/- p.a
o The maximum is Rs. 70,000/- p.a
o Interest is totally tax free.
o Tax saving instrument under section 80C.
o Loan facility available from third year.
o The Public Provident Fund Scheme is a statutory scheme of the Central
Government of India.
o The Scheme is for 15 years.
o One deposit with a minimum amount of Rs.500/- is mandatory in each financial
year.
o The deposit can be in lumpsum or in convenient installments, not more than 12
installments in a year or two installments in a month, subject to total deposit of
Rs.70,000/-.
o It is not necessary to make a deposit in every month of the year.
o The amount of deposit can be varied to suit the convenience of the account
holders.
o The account in which deposits are not made for any reason is treated as
discontinued, account and such an account cannot be closed before maturity.
o The discontinued account can be activated by payment of the minimum deposit of
Rs.500/- with default fee of Rs.50/- for each defaulted year.
o The account can be opened by an individual or a minor through the guardian.
o Joint account is not permissible.
o Those who are contributing to GPF Fund or EDF account can also open a PPF
account.
o A Power of Attorney holder can neither open nor operate a PPF account.
o The grand father/mother cannot open a PPF on behalf of his/her minor grand
son/daughter.
o The deposits shall be in multiples of Rs.5/- subject to minimum of Rs.500/-.
o The deposit in a minor account is clubbed with the deposit of the account of the
guardian for the limit of Rs.70,000/-.
o No age is prescribed for opening a PPF account.
o Interest is not contractual but the rate is notified by the Ministry of Finance, Govt.
of India, at the end of each year.
o The facility of first withdrawal in the 7th year of the account subject, to a limit of
50% of the amount at credit preceding three year balance.
o Thereafter one withdrawal in every year is permissible.
o Premature closure of a PPF Account is not permissible except in case of death.
o Nominee/legal heir of PPF Account holder on death of the account holder cannot
continue the account.
o The account has to be closed in such case.

o The account holder has an option to extend the PPF account for any period in a
block of 5 years at each time.
o The account holder can retain the account after maturity for any period without
making any further deposits.
o The balance in the account will continue to earn interest at normal rate as
admissible till the account is closed.
o One withdrawal in each financial year is also admissible in such account.
o A PPF account can be opened either in a Post Office or in a Nationalsed Banks.
o The Account is transferable from one Post Office to another and from Post Office
to Bank or from a Bank to a Post office.
o Account is transferable from one Bank to another bank as well as within the bank
to any branch.
o Deposits in PPF qualify for rebate under section 80C of Income Tax Act.
o The interest on deposits is totally tax free.
o Deposits are exempt from wealth tax.
o The balance amount in the PPF account is not subject to attachment under any
order or decree of court in respect of any debt or liability.
o The Best option for long term investment.
Post Office Monthly Income Scheme (MIS)
Salient Features:
o Interest rate of 8% per annum payable monthly.

o 5% bonus also payable on maturity. Maturity period is 6 years.
o Minimum investment amount is Rs.1500/- or in multiple thereof.
o Maximum amount is Rs. 4.50 lakhs in a single account and Rs. 9 lakhs in a
joint account.
o Premature encashment facility after one year.
o No TDS.
o Account can be opened by an individual, two/three adults jointly, and a minor
through a guardian.
o A minor having attained 10 years of age can open an account in his/her own
name directly.
o Non-Resident Indian / HUF cannot open an Account. Minors have a separate
limit of investment of Rs. 3 lakhs and the same is not clubbed with the limit of
guardian.
o A separate account is opened for each deposit.
o Any number of accounts can be opened subject to the maximum prescribed
limit.
o Facility of automatic credit of monthly interest to saving account if accounts
are at the same post office.
o Facility of premature closure of account after 1 year to 3 years @ 2.00%
discount.
o Deduction of 1% if account is closed prematurely at any time after three years.
o Facility of reinvestment on maturity of an account.
o Interest not withdrawn does not carry any interest
o Maturity proceeds not drawn are eligible to earn savings account interest rate
for a maximum period of two years.
o Account is transferable to any Post Office in India, free of cost.
o Rebate under section 80C is not admissible.
o Most suitable scheme for senior citizens and for those who need regular
monthly income.
o Deposits are exempt from Wealth Tax.
6 years National Savings Certificate 8th Issue (NSC)
Salient Features:
o Rs. 1000/- grows to Rs. 1601/- in six years.

o Minimum investment Rs. 500/-
o Maximum no limit.
o Certificates can be pledged as security against a loan to banks/ financial
Institutions.
o A Tax saving investment under Sec 80C
o Individual or minor can apply
o Rate of interest 8% compounded half yearly
o Two adults, individuals, and minor through guardian can purchase.
o Companies, Trusts, Societies or any other Institutions are not eligible to
purchase.
o Non-resident Indian/HUF cannot purchase.
o No premature encashment.
o Annual interest earned is deemed to be reinvested and qualifies for tax rebate
for the first 5 years under section 80 C of the Income Tax Act.
o Maturity proceeds not drawn are eligible to Post Office Savings Account
interest for a maximum period of two years.
o Facility of reinvestment on maturity.
o Facility of encashment of certificates through banks.
o Certificates are encashable at any Post Office in India before maturity by way
of transfer to desired Post Office.
o Certificates are transferable to any Post office in India.
o Certificates are transferable from one person to another person before
maturity.
o Duplicate certificate can be issued for in case the original one gets lost, stolen,
destroyed, mutilated or defaced certificate.
o Facility of purchase/payment to the holder of Power of Attorney.
o Tax Saving instrument - Rebate admissible under section 80C of the Income
Tax Act.
Kisan Vikas Patra (KVP)
Salient Features:
o Money doubles in 8 years and 7 months.

o Facility for premature encashment
o No maximum limit on investment.
o No TDS.
o Rate of interest 8% compounded annually.
o Two adults, individuals and minor through guardian can purchase.
o Companies, Trusts, Societies or other Institutions are not eligible to purchase.
o Non-Resident Indian/HUF are not eligible to purchase.
o Maturity proceeds not drawn are eligible for Post Office Savings account interest
for a maximum period of two years.
o Facility of reinvestment on maturity.
o KVPs can be pledged as security against a loan to Banks/Govt.Institutions.
o KVPs are encashable at any Post Office before maturity by way of transfer to
desired Post office.
o KVPs are transferable to any Post Office in India.
o KVPs are transferable from one person to another person before maturity.
o Duplicate can be issued for lost, stolen, destroyed, mutilated and defaced patras.
o Facility of purchase/payment of Kisan Vikas Patras to the holder of Power of
Attorney.
Post Office Time Deposit Account
Salient Features:
Interest payable annually but calculated quarterly at following rates:
o Minimum amount of deposit is Rs.200/-.

o No maximum limit.
o Account can be closed after 6 months but before one year without any interest.
o Facility of redeposit on maturity of an account.
o No interest is payable on un-drawn interest amount.
o Account can be opened by an individual, two adults jointly and minor through
guardian.
o A Minor who has attained the age of 10 years can open the account in his/her
own name to be operated directly.
o Non Resident Indian / HUF can not open the account.
o Any number of accounts can be opened.
o Two, three and five years accounts can be closed after one year at a
discounted rate of interest.
o Deposits not drawn on maturity are eligible to saving account interest rate for
a maximum period of two years.
o Account can be pledged as security against a loan to banks/ Government
institutions.
o Accounts are transferable from one Post office to any Post office in India.
o Interest income is taxable.
o Deposits are exempt from wealth tax.
o No T.D.S.
o Nomination facility available.
Post Office Saving Bank
Salient Features:
o Minimum amount Rs 20/- in case of non-cheque account, Rs.500/- in case of

cheque account.
o Minimum balance of Rs.500/- is to be maintained for a cheque account.
o Account is opened with cash only.
o Maximum balance permissible is Rs. 100000/- in a single account and
200000/- in a Joint account.
o Two/Three adults, individuals, minor through guardian can open an account.
o A minor having attained 10 years of age can also open an account directly.
o One individual account and one joint account can only be opened at a Post
Office.
Senior Citizen's Saving Scheme

(Post Office Schemes)
Salient Features:
o 9% interest per annum payable quarterly.

o Minimum Deposit: Rs 1000 and multiples thereof.
o Maximum Limit 15 Lakhs.
o The scheme is for 5 years and can be extended for a further period of 3 years.
o Premature closure facility is available after 1 year with nominal penalty
o Risk free investment.
o Individual aged of 60 years and above can invest.
o Retiring employees aged 55 years and above can invest under scheme.
o A tax saving instrument
o Joint account can be opened with spouse.
o Best Return
o Very Safe investment - A central Government scheme
Objective of the Scheme
We are all well aware that interest rate on Small Saving Scheme has been reduced to 5%
in the last four years. The decline in interest rate was initiated from January 2000.
The interest rate on December 31, 1999 in Monthly Income Scheme was 13% which
came down to 8% with effect form March 31, 2003. The decrease in the interest rate had
a negative impact on the lives of Senior Citizens. The dwindling interest income was
cause of concern and hardship for them. Interest income is a lifetime benefit for the
senior citizens. The Budget for 2004-2005 had two beneficial aspects, as far as small
Saving Schemes are concerned. The first one is that rates of interest on small savings
have been kept stable with no change in rate of interest in any Post Office scheme. The
second benefit came with the introduction of Senior Citizen Saving Scheme-2004
offering a higher rate of interest as compare to any other small savings scheme. The
scheme has come into operation from August 2, 2004. The main objective of the scheme
is to provide relief to the senior citizens and to check the further decline in their interest
income.
Government of India (GOI) Bonds
(Investments)
Bonds
Bond refers to a security issued by a company, financial institution or government which

offers regular or fixed payment of interest in return for borrowed money for a certain
period of time.
Tax Free Bonds
6.5% Tax free bonds has been withdrawn from the market. This will not effect the
investments already made.
Taxable Bonds
The salient features of the Bond areas follows:
Eligibility for Investment:
The Bonds may be held by:

an individual, not being a Non-Resident Indian (NRI)
in his or her individual capacity, or
in an individual capacity on joint basis, or
in an individual capacity on anyone or survivor basis, or
on behalf of a minor as father/mother/legal guardian
a Hindu Undivided Family
Charitable Institution' to mean a Company registered under Section 25 of the

Indian Companies Act 1956 or
an institution which has obtained a Certificate of Registration as a charitable
institution in accordance with a law in force; or
Any institution which has obtained a certificate from Income Tax Authority
for the purpose of Section 80G of the Income Tax Act, 1961.
"University" means a university established or incorporated by a Central, State or

Provincial Act, and includes an institution declared under section 3 of the
University Grants Commission Act, 1956 (3 of 1956), to be a university for
the purposes of that Act.
Investments – Government of India Bonds
Limit of Investment
There is no maximum limit for investment in the Bonds.
Tax Treatment
Income-Tax: Interest on the Bonds will be taxable under the Income-Tax Act, 1961 as
applicable according to the relevant tax status of the bond holder.
Wealth Tax: The Bonds will be exempt from Wealth-tax under the Wealth- Tax Act,
1957.
Issue Price
The Bonds will be issued at par i.e. at Rs.100.00 percent.
The Bonds will be issued for a minimum amount of Rs. 1000/- (face value) and in
multiples thereof. Accordingly, the issue price will be Rs.1000/- for every
Rs.1000/-(Nominal).
Subscription
Subscription to the Bonds will be in the form of Cash/Drafts/Cheques. Cheques or drafts
should be drawn in favour of the Receiving Office, specified in paragraph 10 below and
payable at the place where the applications are tendered.
Date of Issue
The Bonds will be issued with effect from 21st April 2003.
The date of issue of the Bonds in the form of Bond Ledger Account will be the date
of receipt of subscription in cash or the date of realisation of draft/cheque.
Form
(i) The Bonds will be issued and held at the credit of the holder in an account
called Bond Ledger Account (BLA).
(ii) New Bond Ledger series with the prefix (TB) are to be opened. All investment
in 8% Savings (Taxable) Bonds by an existing BLA holder will be viewed as
a new investment under a new BLA.
(iii) The Bonds in the form of Bond Ledger Account will be issued by and held
with designated branches of the agency banks and SHCIL as authorised by
Reserve Bank of India in terms of paragraph 10 below.
(iv) The Certificate of Holding in respect of Bond Ledger Account will be issued
in Form TBX or Form TBY as applicable for non-cumulative and cumulative
investments respectively.
(v) The Certificate of Holding in respect of cash applications may be issued on
the same day as per the extant instructions.
Applications
Applications for the Bonds may be made in Form ‘A’ (Annex 2) or in any other form
as near as thereto stating clearly the amount and the full name and address of
the applicant.
Applications should be accompanied by the necessary payment in the form of
cash/drafts/cheques as indicated in paragraph 6 above.
Applicants who have obtained exemption from tax under the relevant provisions of
the Income Tax Act, 1961, shall make a declaration to that effect in the
application (in Form 'A') and submit a true copy of the certificate obtained
from Income-Tax Authorities.
Receiving Offices
Applications for the Bonds in the form of Bond Ledger Account will be received at:
Authorised Branches of State Bank of India, Associate Banks, Nationalised Banks,

four private sector banks and SHCIL as specified in the Annex 3.
Any other bank or branches of the banks and SHCIL as may be specified by the
Reserve Bank of India in this regard from time to time.
Nomination
A sole holder or a sole surviving holder of a Bond, being an individual, may nominate in
form B (Annex – 4) or as near thereto as may be, one or more persons who shall be
entitled to the Bond and the payment thereon in the event of his/her death.
Transferability
The Bond in the form of Bond Ledger Account shall not be transferable.
Interest
The bond will be issued in cumulative and non-cumulative form, at the option of the
investor.
The Bond will bear interest at the rate of 8% per annum. Interest on non-cumulative
bonds will be payable at half-yearly intervals from the date of issue in terms
of paragraph 7 above. Interest on cumulative bonds will be compounded with
half-yearly rests and will be payable on maturity along with the principal. In
the latter case, the maturity value of the Bonds shall be Rs.1601/- (being
principal and interest) for every Rs.1000/-(Nominal). Interest to the holders
opting for non-cumulative Bonds will be paid from date of issue in terms of
paragraph 7 above upto 31st July/31st January, as the case may be and
thereafter at half-yearly for period ending 31st July/31st January on 1st
August and 1st February. Interest on Bond in the form of "Bond Ledger
Account" will be paid, by cheque/warrant or through ECS by credit to bank
account of the holder as per the option exercised by the investor/holder.
Advances/Tradability against Bonds

The Bonds shall not be tradable in the secondary market and shall not be eligible as
collateral for loans from banks, financial Institutions and Non Banking Financial
Companies, (NBFC) etc.
Repayment
(i) The Bonds shall be repayable on the expiry of 6 (Six) years from the date of
issue. No interest would accrue after the maturity of the Bond.
Mutual Funds
(Investments)
Mutual Funds are among the hottest favorites with all types of investors. Investing in
mutual funds ranks among one of the preferred ways of creating wealth over the long
term; in fact, mutual funds represent the hands-off approach to entering the equity
market. There are a wide variety of mutual funds that are viable investment avenues to
meet a wide variety of financial goals. This section explains the various aspects of
Mutual Funds.
What are Mutual Funds?
A Mutual Fund is a trust that pools together the savings of a number of investors who
share a common financial goal. The fund manager invests this pool of money in securities
- ranging from shares and debentures to money market instruments or in a mixture of
equity and debt, depending upon the objectives of the scheme.
Why choose Mutual Funds?
Investing in Mutual Funds offers several benefits:
Professional expertise:
Fund managers are professionals who track the market on an on-going basis. With their
mix of professional qualification and market knowledge, they are better placed than the
average investor to understand the markets.
Diversification:
Since a Mutual Fund scheme invests in number of stocks and/or debentures, the
associated risks are greatly reduced.
Relatively less expensive:

When compared to direct investments in the capital market, Mutual Funds cost less. This
is due to savings in brokerage costs, demat costs, depository costs etc.
Investments – Mutual Funds
Liquidity:
Investments in Mutual Funds are completely liquid and can be redeemed at their Net
Assets Value-related price on any working day.
Transparency:
You will always have access to up-to-date information on the value of your investment in
addition to the complete portfolio of investments, the proportion allocated to different
assets and the fund manager’s investment strategy.
Flexibility:
Through features such as Systematic Investment Plans (SIP), Systematic Withdrawal
Plans and Dividend Investment Plans, you can systematically invest or withdraw funds
according to your needs and convenience.
SEBI regulated market:

All Mutual Funds are registered with SEBI and function within the provisions and
regulations that protect the interests of investors. AMFI is the supervisory body of the
Mutual Funds industry.
Types of Funds
There are a wide variety of Mutual Fund schemes that cater to your needs, whatever your
age, financial position, risk tolerance and return expectation. Whether as the foundation
of your investment program or as a supplement, Mutual Fund schemes can help you meet
your financial goals. The different types of Mutual Funds are as follows:
Diversified Equity Mutual Fund Scheme:

A mutual fund scheme that achieves the benefits of diversification by investing in the
stocks of companies across a large number of sectors; as a result, it minimizes the risk of
exposure to a single company or sector.
Sectoral Equity Mutual Fund Scheme:

A mutual fund scheme which focuses on investments in the equity of companies across a
limited number of sectors - usually one to three.
Index Funds
These funds invest in the stocks of companies, which comprise major indices such as the
BSE Sensex or the S&P CNX Nifty in the same weightage as the respective indice.
Equity Linked Tax Saving Schemes (ELSS):

Mutual Fund schemes investing predominantly in equity, and offering tax deduction to
investors under section 80C of the Income Tax Act. Currently rebate u/s 80C can be
availed up to a maximum investment of Rs 100000. A lock-in of 3 years is mandatory.
Monthly Income Plan Scheme:

A mutual fund scheme which aims at providing regular income (not necessarily monthly,
don't get misled by the name) to the unit-holder, usually by way of dividend, with
investments predominantly in debt securities (upto 95%) of corporate and the
government, to ensure regularity of returns, and having a smaller component of equity
investments (5% to 15%)to ensure higher return.
Income schemes:
Debt oriented schemes investing in fixed income securities such as bonds, corporate
debentures, Government securities and money market instruments.
Floating-Rate Debt Fund:

A fund comprising of bonds for which the interest rate is adjusted periodically according
to a predetermined formula, usually linked to an index.
Gilt Funds:
These funds invest exclusively in government securities.
Balanced Funds:
The aim of balanced funds is to provide both growth and regular income as such schemes
invest both in equities and fixed income securities in the proportion indicated in their
offer documents. They generally invest 40-60% in equity and debt instruments.
Fund of Funds:
A Fund of Funds (FoF) is a mutual fund scheme that invests in other mutual fund
schemes. Just as fund invests in stocks or bonds on your behalf, a FoF invests in other
mutual fund schemes.
How to choose the right Mutual Fund scheme?
Once you are comfortable with the basics, the next step is to understand your investment
choices, and draw up your investment plan relevant to your requirements. Choosing your
investment mix depends on factors such as your risk appetite, time horizon of your
investment, your investment objectives, age, etc.
What should be kept in mind before investing in Mutual Funds?
Mutual Fund investment decisions require consistent effort on the part of the investor.
Before investing in Mutual Funds, the following steps must be given due weightage to
decide on the right type of scheme:
A. Identifying the Investment Objective

B. Selecting the right Scheme Category
C. Selecting the right Mutual Fund
D. Evaluating the Portfolio
A. Identifying the Investment Objective
Your financial goals will vary, based on your age, lifestyle, financial independence,
family commitments, level of income and expenses, among many other factors.
Therefore, the first step is to assess you needs. Begin by asking yourself these simple
questions:
Why do I want to invest?
The probable answers could be:

o I need a regular income
o I need to buy a house/finance a wedding
o I need to educate my children, or
o A combination of all the above
How much risk am I willing to take?
The risk-taking capacity of individuals varies depending on various factors. Based on

their risk bearing capacity, investors can be classified as:
o Very conservative
o Conservative
o Moderate
o Aggressive
o Very Aggressive
To ascertain your risk appetite, try out our Risk Thermometer.
What are my cash flow requirements?
For example, you may require:

o A regular Cash Flow
o A lumpsum after a fixed period of time for some specific need in the future
o Or, you may have no need for cash, but you may want to create fixed assets for
the future
B. Selecting the scheme category
The next step is to select a scheme category that matches your investment objectives:
o For Capital Appreciation go for equity sectoral funds, equity diversified funds
or balanced funds.
o For Regular Income and Stability you should opt for income funds/MIP’s
o For Short-Term Parking of Funds go for liquid funds, floating rate funds,
short-term funds.
o For Growth and Tax Savings go for Equity-Linked Savings Schemes.
C. Selecting the right Mutual fund
Once you have a clear strategy in mind, you now have to choose which Mutual fund and
scheme you want to invest in. The offer document of the scheme tells you its objectives
and provides supplementary details like the track record of other schemes managed by
the same Fund Manager. Some important factors to evaluate before choosing a particular
Mutual Fund are:
o The track record of performance over that last few years in relation to the
appropriate yardstick and similar funds in the same category.
o How well the Mutual Fund is organized to provide efficient, prompt and
personalized service.
o The degree of transparency as reflected in frequency and quality of their
communications.
D. Evaluation of portfolio
Evaluation of equity fund involve analysis of risk and return, volatility, expense ratio,
fund manager’s style of investment, portfolio diversification, fund manager’s experience.
Good equity fund should provide consistent returns over a period of time. Also expense
ratio should be within the prescribed limits. These days fund house charge around 2.50%
as management fees.
Evaluation of bond funds involve its assets allocation analysis, return's consistency, it’s
rating profile, maturity profile, and it’s performance over a period of time. The bond fund
with ideal mix of corporate debt and gilt fund should be selected.
How to calculate the growth of your Mutual Fund investments?
Let's assume that Mr. Gupta has purchased Mutual Fund units worth Rs. 10,000 at an
NAV of Rs. 10 per unit on February 1. The Entry Load on the Mutual Fund was 2%. On
September 15, he sold all the units at an NAV of Rs 20. The exit load was 0.5%.
As on Account No of NAV MF Entry Exit Applicable Actual

Date Units per Unit Worth Load Load N.A.V Unit
Purchase
Nos. Rs. Rs. % % Rs. Nos.
(a) (b) (c) (d) (e) (f) (g) (h) (i)
01/02/10 Purchase 1000 10 10000 2% = - (d)+(f)=(h) (e) / (h) = (i)
Rs. 0.20 10.20 980.392
15/09/10 Sale 1000 20 20000 - 0.5% = (d)-(g)=(h)

Rs. 0.10 19.90
Growth / Returns on Investment (ROI) = {(19.90) – (10.20)/(10.20) * 100} = 95.30%
His growth/ returns is calculated as under:
1. Calculation of Applicable NAV and No. of units purchased:
(a) Amount of Investment = Rs. 10,000

(b) Market NAV = Rs. 10
(c) Entry Load = 2% = Rs. 0.20
(d) Applicable NAV (Purchase Price) = (b) + (c) = Rs. 10.20
(e) Actual Units Purchased = (a) / (d) = 980.392 units
2. Calculation of NAV at the time of Sale
1. NAV at the time of Sale = Rs 20

2. Exit Load = 0.5% or Rs.0.10
3. Applicable NAV = (a) – (b) = Rs. 19.90
3. Returns/Growth on Mutual Funds
(a) Applicable NAV at the time of Redemption = Rs. 19.90

(b) Applicable NAV at the time of Purchase = Rs. 10.20
(c) Growth/ Returns on Investment (ROI) = {(a) – (b)/(b) * 100} = 95.30
Points to Remember
o Do not speculate: Always evaluate risk-taking capacity.

o Do not chase returns: Because what goes up must come down.
o Do not put all eggs in one basket: Diversification reduces the risk.
o Do not stop working on Mutual Funds: Continuous evaluation of funds is a must.
o Do not time the market: Every time is good for investments.
o Mutual Funds are subject to market risks and there is no assurance that the fund
objective will be achieved.
o NAV’s fluctuate depending on forces affecting the Capital market.
o Past performance may or may not be sustained in the future.
Assets Management Company (AMC):

A highly regulated organisation that pools money from many people into portfolio
structured to achieve certain objectives. Typically an AMC manages several funds –open
ended/ close ended across several categories- growth, income, balanced.
Balanced Fund:
A hybrid portfolio of stocks and bonds
Close Ended Fund:

They neither issue nor redeem fresh units to investors. Some closed ended funds can be
bought or sold over the stock exchange if the fund is listed. Else, investor has to wait till
redemption date to exit. Most listed close ended funds trade at discount to the NAV.
Open Ended Fund:

A diversified and professionally managed scheme, it issues fresh units to incoming
investors at NAV plus any applicable sales charge, and it redeems shares at NAV from
sellers, less any redemption fees.
Entry/ Exit Load:

A charge paid when an investor buys/sells a fund. There could be a load at the time of
entry or exit, but rarely at both times.
Expense Ratio:
The annual expenses of the funds, including the management fee, administrative cost,
divided by the fund under management.
Growth/Equity Fund:
A fund holding stocks with good or improving profit prospects. The primary emphasis is
on appreciation.
Liquidity:
The ease with which an investment can be bought or sold; A person should be able to buy
or sell a liquid asset quickly with virtually no adverse price impact.
Net Assets Value:

A price or value of one unit of a fund; it is calculated by summing the current market
values of all securities held by the fund, adding the cash and any accrued income, then
subtracting liabilities and dividing the result by the number of units outstanding.
Interest Rate Risk:

The risk borne by fixed-interest securities, and by borrowers with floating rate loans,
when interest rates fluctuate; when interest rates rise, the market value of fixed-interest
securities declines and vice versa.
Credit Risk:
Credit risk involves the loss arising due to a customer’s or counterparty’s inability or
unwillingness to meet commitments in relation to lending, trading, hedging, settlement
and other financial transactions.
Capital Market Risk:

Capital Market Risk is the risk arising due to changes in the Stock Market conditions.
Fund Manager (An Outlook)
Indian growth story is continuing with reasonable surety. Withdrawal of stimulus

package can be easily compensated by some aggressive push on the reform side. Growth
is the solution for most ills on inflation and deficit side. Unfortunately all the easy
hanging fruits to pursue higher growth have already been taken out. Now there is a need
for real action on the ground in terms of acceleration of projects, reduction in red-tapism
and corruption etc. Global capital is willing to support capacity expansion, capital
formation at very competitive and low rates. India has to seize the moment and our likely
response will be in the usual style of two steps forward and one step backward. Clearly
this will put pressure on economy as it swings from acceleration to deceleration. Stock
markets will swing even more with additional influence from global markets.
The world with lots of liquidity and much less opportunity can provide huge capital to
India for accelerating its growth over a longer term period. We believe India will move
on the path of higher growth like Japan in the 70’s or South East Asian Nations in the
80’s or China in the 90’s. That augurs well for Indian equity markets in the long term.
However, markets usually like to discount or ignore all the factors swinging between
greed and fear. Markets had run away a Ted ahead of its fundamentals and gave a small
correction last month. It will be futile to wait for such correction to invest into the market.
We will recommend investors to ignore such volatility and focus on longer term outlook.
The common sensical way of investing on a regular basis through systematic investment
plan and asset allocation which will produce wonders for investors over longer term. We
reiterate systematic investing and asset allocation as tools for meaningful wealth creation.
We have a wide range of well performing funds and recommend these to investors.
Nilesh Shah
Deputy Managing Director & Chief Investment Officer, ICICI Prudential AMC Ltd
FAQ
PAN (Permanent Account Number) for MF Investments
Whom does it apply to?

All investors, including NRI’s, PIO’s and Guardians in case of Minors; POA and Lien
holders need not submit the documents.
Applicable to which transactions?

All fresh purchases, additional purchases, SIP’s registered with effect from 02-Jul-2007.
Which transactions are not covered?

Redemptions, Switches, STP’s, Dividend Payouts, Dividend Reinvestments and SIP are
registered prior to 02-Jul-2007.
Which are the documents to be submitted for applications greater than and equal to
Rs.50000?
PAN copy duly attested
Or if PAN is not available, Form 60 with proof of address along with copy of Form 49A
(application for PAN) duly acknowledged
Which are the documents to be submitted for applications less than Rs.50000?
PAN copy duly attested
Or copy of Form 49A (application for PAN) duly acknowledged
Who should certify the PAN?

Self certification
And
Attestation by
Bank Manager/ Notary (clearly mentioning their name and designation, affixing their
respective seal/ stamp and sign in original)
Or
Distributor (thru whom the investment is mobilised, affixing the ARN code stamp,
clearly mentioning the name of the person attesting the document and signing in original)
Or
AMC/ Registrar (clearly affixing the AMC/ Registrar stamp and sign in original of the
employee clearly mentioning his/ her name and/ or employee ID no)
Can we accept an application, if 1st unit-holder has a PAN; joint holders do not
have a PAN, and have not even applied for the same?
No, we cannot accept that application because as per the new guideline of SEBI, every
holder has to submit his/her PAN card while investing irrespective of any amount. For
example, Mr. A and Mr. B have applied jointly for investment in one of the mutual fund
schemes. In that case, both of them are required to have their Pan card or PAN card
acknowledgement as a proof that they have applied for the same
What if, a client is investing in MF for quite sometime now, since PAN card has
been made compulsory now, Will it affect already invested money?
PAN Card has been made mandatory for all fresh mutual fund transactions irrespective of
any amount w.e.f. 02-Jul-2007. However, redemptions or switches can be made without
PAN card copy or other documents i.e. Form 49A. Payouts/ Dividend reinvestments and
SIPs registered before 02-Jul-2007 will be processed without a PAN.
What will be the treatment for mutual funds investment documents after 31-Dec-
2007?
All those investors who have applied for their PAN card and submitted the PAN
acknowledgement as a proof that they have applied for PAN card, must submit duly
attested photocopy of their original PAN card on or before 31-Dec-2007. From 01-Jan-
2008 , submitting a copy of the evidence of having applied for PAN/ Form 60/Form 61
will not be valid and it will be mandatory for all the investors to provide a certified copy
of the PAN card for all kind of fresh transactions
Does the investor have to give copy of PAN along with every fresh investment?
Yes. The investor has to give a copy of PAN with every fresh transaction.
In case of single applicant with nominee, whether PAN number is required for the
nominee?
No. PAN card of nominee is not required.
Is PAN required for fresh investments even through SIPs?
Yes. A PAN card is required for every fresh purchase of SIP (at the time of first
transaction only)
IPO (Initial Public Issues)
(Investments)
IPO (Initial Public Issues) of good and growing companies keep on coming in the market.
History shows investors who bought equity shares of reputed companies during their
initial public issues have now become rich and prosperous.
FAQ
IPO (Initial Public Issues)
What is an IPO?
An IPO is defined as an exercise when an unlisted company makes either a fresh issue of
securities or an offer for sale of its existing securities or both for the first time to the
public. From an investor point of view, IPO gives a chance to buy shares of a company,
directly from the company at the price of their choice (In book build IPO's). Many a
times there is a big difference between the price at which companies decides for its shares
and the price on which investor are willing to buy share and that gives a good listing gain
for shares allocated to the investor in IPO.
What is Follow on Public Offering or FPO?

Follow on Public Offering (FPO) is public issue of shares for already listed company,
coming up in market with further equity dilution / stake sale.
What is primary & secondary market?
Primary market is the market where shares are offered to investors by the issuer company
to raise their capital.
Secondary market is the market where stocks are traded after they are initially offered to
the investor in primary market (IPO's etc.) and get listed to stock exchange/s.
What are Book-built & Fixed-Priced issues?
In case of book building issue, shares are offered in a price band and the demand of the
share at a particular price can be known everyday during the issue period.
Unlike the book-building route, the price is known in advance to investors in case of offer
of shares through normal public issue (Fixed priced issues).
Investments – Initial Public Issues
How can one apply for an IPO?
Physical Application:
An investor needs to first obtain an IPO application form through a share broker, an
investment consultant or from the collecting banks. The investors are required to fill up
the form and remit the amount after calculating the number of shares applied for in the
bank, which has been designated as a collecting centre for the particular IPO.
Apply online:
To apply in IPO's online an investor has to have a Demat account which provides this
facility. There is almost no paperwork involves in applying IPO's online.
ASBA Process:
Applications Supported by Blocked Amount (ASBA) Process, is the alternative payment
method (optional) for IPO application where the IPO bidding amount remains in
investors account, but blocked by the bank until allotment is done. The purpose of adding
this new payment option is to reduce the turn around time for IPO Stock listing and to
make the refund process faster. It is available exclusively for retail individual investors
through participatory banks (SCSB's).
What is the floor price in case of book building?

Floor price is the minimum price (Lower Tag of price-band) at which bids can be made in
book built issue.
How is the Retail Investor defined as?

Retail individual investor refers to an investor who applies or bids for securities of or for
a value of not more than Rs.100000. An individual investor above Rs. 100000
investments comes under HNI / NII quota (Lesser reserved).
Can one change/revise his/her bid?

Yes, the investor can change or revise the quantity or price in the bid using the form for
changing/revising the bid that is available along with the application form. However, the
entire process of changing of revising the bids shall be completed within the date of
closure of the issue.
Investments – Initial Public Issues
What proof can a bidder request from a trading member for entering bids?
A bidder can request for a transaction registration slip as proof of his/her having entered
the bid. Whenever a bid is entered by trading members into the system, a unique
transaction registration slip is automatically generated. Transaction registration slip gives
details regarding number of shares bid for, price, the client name among other details.
What is a red herring prospectus?

RHP is a prospectus which does not have details of either price or number of shares being
offered or the amount of issue. This means that in case the price is not disclosed, the
number of shares and the upper and lower price bands are disclosed. On the other hand,
an issuer can state the issue size and the number of shares are determined later.
In the case of book-built issues, it is a process of price discovery and the price cannot be
determined until the bidding process is completed. On completion of the bidding process,
the details of the final price are included in the offer document. The offer document filed
thereafter with ROC is called a prospectus.
What are Risk Factors?

Here, the issuer’s management gives its view on the Internal and external risks faced by
the company. Here, the company also makes a note on the forward-looking statements.
This information is disclosed in the initial pages of the document and it is also clearly
disclosed in the prospectus. It is generally advised that the investors should go through all
the risk factors of the company before making an investment decision.
How much tax one has to pay on returns (capital gains) for a particular IPO?
If an investor sells IPO allocated shares with in 12 month of IPO Allotment, he comes
under short-term capital gains and all such gains are taxed.
Getting Started
(Investment Tips for Beginners)
Investment means putting your money to work to earn more money. Done wisely, it can
help you meet your financial goals like buying a new house, paying for a college
education, enjoying a comfortable retirement, or whatever is important to you.
The articles posted here will help you grasp the basics of investing wisely.
How to achieve Lifetime of Investment Success?
Follow Bajaj Capital's time tested Investment Philosophy:
o Do not invest directly in the stock market. Take the Mutual Funds route.
o Safety of principal should be of prime importance. We believe in a controlled
(risk) approach to investments.
o Do not let inflation eat up your money in a savings bank account. Go for
superior and stable returns.
o Have a look at your financial objectives. Your investments should depend
upon them.
o Take the long-term approach to equity investments.
o Diversify your investments. Do not put all your eggs in one basket.
o Keep a reasonable amount of liquid cash to meet your emergency needs.
o Take a balanced approach to investing. Avoid risky investments as well as an
overly cautious approach to Investing.
o Monitor your investments once a month and take corrective action, if
required, immediately.
o Do not try to time the entry and exit of your investments.
o Every time is a good time to invest if you have a long- term outlook and keep
investing regularly.
o Put no more than 10% of your total investments in one company.
Getting Started
Investment Mantras for the Uninitiated
Planned investments are the way to go, if you wish to become a successful investor...
All of us are not born with a silver spoon in our mouth. But each one of us wish to strike
gold and has a desire to be rich. There is a constant urge in us to make our money grow at
a pace that not only provides for our financial goals but also helps us to improve our
standard of living from good to better.
This makes it really essential for all of us to plan the allocation of our available financial
resources in such a way that we can generate the maximum possible return. The term
'allocation of resources' means putting your money in the various asset classes such as
debt, equity and cash.
However, this cannot be done by following an ad-hoc approach to investments.
One is required to plan investments in a systematic manner so that he gets maximum

returns with minimum risk. Also, the allocation should be regularly reviewed at periodic
intervals.
For this, one can either plan investments oneself, or refer to an expert (a Financial
Planner) who not only helps you invest appropriately but also monitors the performance
of your portfolio so that you do not miss on the best opportunities available in terms of
investing and also do not take undue risk on your portfolio.
A financial planner will give meaning to your investments by linking the same to your
financial goals. This way one would know where one is going and it will become easier
to chart out an appropriate path way towards the relevant destination point.
An investment decision is a trade off between the risk & return. However, the investment
avenue will definitely depend upon certain factors. Some of the questions you need to
answer are:
o What is your age?

o How many dependents do you have?
o What are your financial goals?
o How much money would you need to fund each goal?
o What is the time horizon of your goals?
o How much are you concerned about liquidity?
o What is your risk profile?
Getting Started
All these questions will help your advisors to chalk out a plan which can match the
suitable products with your goals.
Your need could be:

o Cash Flow Planning
o Insurance Planning
o Children’s Future Planning
o Tax Planning
o Retirement Planning
o Investment Planning
Cash flow Planning:

Cash flow Planning takes care of the timing of cash inflows and outflows. It basically
helps in analysing the income and expenses and intends to maintain a regular flow of
income in the family. It is a holistic approach to meet the life goals.
Insurance Planning:
Insurance is not the person who passes away but for those who survive. It takes care of
the financial loss which may arise on the happening or non happening of an event.
Insurance Planning relates to two fields of insurance:
Life Insurance:
It takes care of the financial needs of the dependants of the deceased bread earner
of the family.
General Insurance:
It takes care of the risk of financing of property.
Children's Future Planning:

Children's Future Planning takes care of regular expenses on your child's education and
higher education. It also helps you to make arrangements for your children marriage.
Tax Planning:
It implies arrangement of the person's financial affairs in such a way that it reduces the
tax liability.
Retirement Planning:
It takes care of the cash flows during retirement when the person is not working. Usually
people are not concerned about retirement at an early age. But planning for retirement at
an early stage is necessary in order to maintain the same standard of living.
Investment Planning:
Investment Planning takes care of investment decisions i.e. to say this decision relates to
appropriateness of an investment, inflation factor, etc.
Getting Started
Investment Ideas
Here are the currently popular investment options:
Mutual Funds:
o DSP ML Top 100 Equity Fund:

An open ended growth scheme that seeks to generate capital appreciation by
investing in to equity & equity related securities of 100 largest corporate by
market capitalization
o HDFC Equity Fund:

An open ended diversified equity fund which aims to invest mainly in Large
Caps Companies. The fund has given 48.63% returns (CAGR) in last 1 year
(as on 17/8/06)
Life Insurance
o LifeTime Super from ICICI Prudential Life Insurance Company Ltd:

A plan that helps you creates wealth while giving you life insurance cover.
o SaveGuard STP from Aviva Life Insurance Company Ltd:

A Whole life Plan with STP option giving a market- linked return.
General Insurance
Vehicle Insurance:
Auto Secure from Tata AIG is one of the most hassle-free vehicle insurance
schemes in the market, offering cashless claims.
Cashless Medical Insurance:

Royal Sundaram’s Health Shield Gold covers you for your health expenses while
helping you save tax. It also has additional features like maternity benefits,
cashless medical expenses reimbursements, etc.
Fixed Income Schemes:

o 9% Senior Citizen’s Scheme.
o Post Office Monthly Income Schemes (8% interest)
o PO Time Deposit (6.25%-1 year, 6.5%-2years, 7.25%-3 years, 7.5%-5 years)
o 8% GOI Bonds (Taxable)
Getting Started - ELSS
Articles
Equity Linked Savings scheme
About ELSS:
ELSS means Equity Linked Savings Scheme. ELSS as the name clearly suggests is a
savings scheme linked to equity markets.
Key Features of ELSS are:

o ELSS is a fund with a lock-in period of 3 years.
o It gives an investor tax benefit
o Investment has to be for long term, any expectation of short term gains is not
appropriate.
o Involves a little bit of risk because of equity allocation.
Exemption from night mares:

All investors constantly track SENSEX and NIFTY and judge their investment’s NAV to
these returns and try to speculate. But this is not the right way to keep invested in the
market. The investor should not be worried about daily ups and downs in the market but
should follow the investment philosophy of staying invested for a long term and ELSS
helps serving this cause by locking in the money for three years.
Tax Benefit:
Upto March 31,2005 an investor could claim only rebate under Section 88 if invested in
ELSS and the maximum amount that could be invested in ELSS was only Rs.10,000/-.
But from March 31, 2006 the investment limit in ELSS has been increased to
Rs.100000/- and this entire investment is eligible for deduction under sec 80C of Income
tax Act, 1961.
Revised Tax Slabs for the FY 2008-09:

o Upto Rs. 1,50,000 - Nil
o Rs. 1,50,001 to Rs. 3,00,000 - 10%
o Rs. 3,00,001 to Rs. 5,00,000 - 20%
o Above Rs. 5,00,000 - 30%
CASE I
Resident Individual who DOES NOT invest in ELSS
If your income is Rs. 300000 for financial year ending March 31, 2009
Then,
Net taxable income =
Rs. 300000 MINUS Income exempt Rs.150000 (upto Rs.150000 = NIL)
I.e. Net Taxable income = Rs.150000
Therefore the tax payable is:

Rs. 15000 (10% tax on Rs.150000) PLUS Education Cess@3% Rs. 450 = Rs.15450
CASE II
Resident Individual invests in ELSS
Now if you invest Rs 100000 in ELSS then the taxable income would be:
Net Taxable income =

Rs. 300000 MINUS ELSS investment Rs. 100000 = Rs. 200000
LESS:
Income exempt from Tax as per slabs Rs. 150000
Therefore Tax has to be paid on the amount Rs. 200000 – Rs 150000 = Rs. 50000
I.e. Net Taxable income = Rs.50000
Therefore the tax payable is:

Rs. 5000 (10% on Rs.50000) PLUS Education Cess@3% Rs. 150 = Rs. 5150
The above calculation shows a pure saving of Rs. 10300 after ELSS investment (in Case
II) as compared to Case I Other tax saving schemes also show the same benefits but when
it comes down to returns ELSS wins hands down.
Other Tax Saving Schemes V/s ELSS and the winner is
ELSS: 25%-40% return on an average in last two to three years
Beneficial to Investors and Fund managers:
There are certain groups of people who are scared of investments into Equity. But history
shows that none of the investors who have put their money into ELSS have lost money
and most of the years Tax saver funds have been the front runners in terms of returns to
investors.
In case of plain vanilla open ended equity funds, one can put money today and withdraw
tomorrow which makes life of fund manager very difficult but in case of ELSS the fund
manager can stay invested even if the sentiment is bearish in short term because of the
clause of 3 year lock-in period and take advantage of long term compounding benefit.
Blessing in Disguise:
Your invested money is LOCKED for a period of 3 years. i.e., once invested in a Tax
Saver fund, your money cannot be taken out for a period of 3 years. But this is a blessing
in disguise, because Tax Saver funds generally yield healthy returns during a 3 year
period.
Conclusion:
Persons who are looking for Capital Appreciation and Tax - Benefits amounting to
Rs.100000/- must look towards investing through ELSS
Getting Started - Interpret Ratios
Articles
How to Interpret Ratios?
Sharpe Ratio:
Sharpe ratio gives a single value to be used for the performance ranking of various funds
or portfolios. It measures the risk premium of the portfolio relative to the total amount of
risk in the portfolio. This risk premium is the difference between the portfolio's average
rate of return and the risk less rate of return.
Formula:
Rp- Irf
---------
SDp
where;
Rp = Return on Portfolio
Irf = meaning Risk free rate of return which in India is considered either to be the
bond rate or 181 days Treasury bill.
SDp = Standard deviation of Portfolio, which is the total risk
The advantage of Sharpe Ratio is that it assigns highest values to assets that have best
risk adjusted average rate of return. It is also known as reward to volatility ratio.
Continued…
Example: A company is considering the ranking of two industries based in India
Risk free rate of return is 7% and return on market portfolio is 16%
Rank both these industries.
Putting the above mentioned formula we get
Rp- Irf
FMCG: ----------
SDp
We get (18 - 7) / 2 = 5.5%
Similarly we get 3.33% for banking.
So FMCG industry is better because the return on risk taken is higher in comparison to
Banking.
The greater the portfolios sharpe ratio, the better is the risk adjusted performance. In
Simple terms, Sharpe Ratio indicates the clear difference between the portfolios created
by two different funds. For e.g. If XYZ Fund has given 50% returns in 1 year & has a
Sharpe Ratio of 1 & there is another fund ABC which has given 35% return over the
same period with a Sharpe ratio of 2, then on the basis of Sharpe ratio, ABC fund is a
better choice as it comes with a lesser risk but higher risk adjusted performance.
Expense Ratio:
It measures expenses incurred by the investment company to operate mutual funds. The
costs of owning a fund are called the expense ratio. This is distinct from the costs of
buying a fund, which are the sales loads. The expense ratio represents the percentage of
funds assets that go purely towards the expense of running the fund. The expense ratio
covers the fees paid to fund manger, costs incurred in record keeping, custodial services,
taxes, legal expenses, audit fees, accounting fees. It is also known as management
expense ratio. Operating expense includes the fees paid to fund manager, costs incurred
in record keeping; custodial services, taxes, legal expenses, audit fees, accounting fees.
Alpha:
Alpha takes the volatility in price of a mutual fund and compares its risk adjusted
performance to a benchmark index. The excess return of the fund relative to the returns of
benchmark index is a funds ALPHA.
It is calculated as a return which is earned in excess of the return generated by CAPM.
Alpha is often considered to represent the value that a portfolio manager adds to or
subtracts from a fund's return.
A positive alpha of 1.0 means the fund has outperformed its benchmark index by 1%.
Correspondingly, a similar negative alpha would indicate an underperformance of 1%.
If a CAPM analysis estimates that a portfolio should earn 35% return based on the risk of
the portfolio, but the portfolio actually earns 40%, the portfolio's alpha would be 5%.
This 5% is the excess return over what was predicted in the CAPM model. This 5% is
ALPHA.
Beta:
Beta measures the sensitivity of the stock to the market. For example if beta=1.5; it
means the stock price will change by 1.5% for every 1% change in sensex.
It is also used to measure the systematic risk. Systematic risk means risks which are
external to the organisation like competition, government policies. They are non-
diversifiable risks. Beta of the market is always 1. The best index fund will have beta
value equal to the market namely 1.
If beta > 1 then aggressive stocks

If beta < 1 then defensive stocks
If beta = 1 then neutral
Price to Earnings ratio:
Popularly known as P\E Ratio
Market Price per Share = P\E ratio

Formula: = ----------------------------------------
Earnings Per share
E.g.: Consider the share price of reliance (RIL) to be Rs.500/-; Earnings of the company
be Rs. 500000/- and number of outstanding shares be 5000
Rs. 500000 = Rs. 100/-

Where EPS= ----------------------------
5000
500 = 5
Then P\E = -----
100
Conclusion: an investor is willing to pay Rs 5/- for every rupee company would be
earning in future.
Important point: If the P\E of two stocks A & B is:

A 20
B 10
It does not mean that stock A is overvalued and stock B is undervalued. It just means that
the investors have more confidence in the growth story of stock A rather than stock B.
However, the P/E ratio doesn't tell us the whole story by itself. It's usually more useful to
compare the P/E ratios of one company to other companies in the same industry, to the
market in general or against the company's own historical P/E. It would not be useful for
investors using the P/E ratio as a basis for their investment to compare the P/E of a
technology company to a consumer goods company as each industry has much different
growth prospects.
The biggest drawback in case of P\E valuation is that the Earnings in the denominator are
an accounting concept which is prone to manipulation by the company.
Price-to-Book Ratio:
A ratio used to compare a stock's market value to its book value. It is calculated by
dividing the current closing price of the stock by the latest quarter's book value per share.
It measures how aggressively the market values the firm. A lower P/B ratio could mean
that the stock is undervalued. However, it could also mean that something is
fundamentally wrong with the company.
Price To-Sales Ratio:

It is a ratio which is used to value start-up firms, since they do not have profit to show so
a sale is considered. Price to sales is calculated by dividing a stock's current price by its
revenue per share for the trailing 12 months
A low P/S ratio is better since the investor would be paying less for each unit of sales
Price Earnings to Growth ratio:
Commonly known as PEG ratio
It measures the value of the firm while taking into account the earnings growth.
Price earnings ratio

PEG Ratio = -----------------------------
Annual EPS Growth
Investors prefer to use PEG ratio to value the firm instead of P/E ratio because PEG takes
into consideration the factor called growth.
A lower PEG means that the stock is undervalued.
Keep in mind that the numbers used are projected and, therefore, can be less accurate.
Also, there are many variations using earnings from different time periods (i.e. one year
V/s five year). Be sure to know the exact method your source is using.
Getting Started – SIP
Articles
Systematic approach to investments:
S.T.P (Systematic Transfer Plan), or S.I.P (Systematic Investment Plan)
o Are you saving something from your regular income?

o If you are saving, is it getting added to your investment corpus?
o If you are creating a corpus, are you getting above inflation return on it?
Systematic approach towards investments is the best way to save, accumulate and create
wealth for your future. Two such strategies are Systematic Investment Plan (SIP) and
Systematic Transfer Plan (SIP). In SIP, a fixed amount is invested in a particular scheme
at periodic intervals. SIP is a very good strategy for salaried people, or those who receive
a periodic inflow of cash.
Advantages of SIP:
o Saving and wealth accumulation

o Inculcates disciplined habit of investing
o Entry at various market levels (averages out the possible risk associated with the
equity market)
o Hassle-free mechanism (one-time arrangement; instructions are given at the time
of initial transaction)
o Power of Compounding
o Investments synchronised with your cash inflows/salary
Advantages of STP:
If you have a lumpsum amount, but do not want to expose the entire amount to equity at
one go, you can make an arrangement where some amount gets transferred to an equity
scheme from a debt scheme periodically. This system is known as Systematic Transfer
Plan.
Publications
Investors India
Do you want to make money in Shares/Mutual funds/ULIP?
Read Investors India, a magazine published by Bajaj capital ltd., your trusted investment
advisor having 43 years of experience in wealth creation and management. The magazine
is managed by the high powered research team of Bajaj Capital and consists of expert
views and advice on all aspects of investing. READ, INVEST and REAP the benefits.
o Spectrum of topics covered in INVESTORS INDIA

o Life & General Insurance
o Mutual Funds
o Stock pick
o Investment strategies
o Financial & Lifestyle Planning
o Analysis of debt and equity markets
o Portfolio management
o Views of leading economists, insurance heads, fund managers and research
analysts
Investors
Individuals:
Why do you need an Investment Advisor and Financial Planner?
Why do you go to a doctor when you fall ill? Or, visit an architect when you want to
build your house? It’s because they are specialists in their respective fields.
Similarly, an investment advisor is a qualified and experienced specialist who is capable

of advising you and managing your money.
The growing complexities of the money market and the panoramic range of financial
instruments make financial planning and money management an intimidating task for the
average person. That’s why you need a reliable investment advisor and financial planner.
Bajaj Capital’s FREE Investment Advisory Services
Bajaj Capital, one of India’s oldest Investment Advisory organisations, offers you
comprehensive and scientific Investment Advice. With our experience of over four
decades, we are perfectly poised to offer you the best possible investment advice.
We have qualified, trained and experienced investment advisors who have in-depth
knowledge of the financial markets.
These investment advisors are backed by a team of investment researchers at the Bajaj
Capital Centre for Investment Research, who keeps track of every minute change in the
market, every new product and the latest investment trends.
This is what provides Bajaj Capital’s Investment Advisory Service its cutting edge.
What’s more, Bajaj Capital’s Investment Advisory Service is offered absolutely FREE!
And that’s not all. We also offer FREE Investment Assistance; that means no hassles
either!
Investors
Corporate:
Bajaj Capital La Premier’s Institutional Advisory Services
Bajaj Capital offers specialised services to Corporates and Institutions through the La
Premier Institutional Advisory Group.
It is a strategic service arm comprising handpicked professionals that provides an

exclusive and world-class service to a select group of clients.
We have a presence in all Metros in India, and an annual mobilisation of over Rs 15,000
crores. Our Assets under Management (AUM) is to the tune of Rs 3,200 crores, and we
enjoy the patronage of over 750 quality relationships.
High Net-worth Investors:
Introducing Bajaj Capital La Premier
Our interactions with hundreds of High Networth Individuals and family-owned

businesses have helped us to understand the special needs and requirements of such
investors.
Bajaj Capital La Premier was created to cater to the needs of High Networth Individuals.
It is a specialised group comprising handpicked professionals that provides exclusive and
world-class wealth management services to a select group of clients.
Investors
Non-Resident Indians (NRI’s)
NRI’s can make direct investments in proprietary/partnership concerns in India as also in

the primary issues of shares/debentures of Indian companies.
They can also make portfolio investments, i.e. purchase of shares/debentures of Indian
companies through stock exchanges in India. These facilities are available on both
repatriation and non-repatriation basis.
In order to facilitate NRI’s to set up new companies in India; the Reserve Bank of India
(RBI) vides its Notification NO. FERA 143/93 RB dated 26th April 1993, has granted
general permission to NRI’s to subscribe to the Memorandum and Articles of Association
and to take up the shares of Indian companies for their incorporation.
The general permission empowers such Indian companies to issue shares to NRI’s,
provided that the company is not engaged into activity relating to agricultural and
plantation.
A. Direct Investment
NRI’s are permitted to make direct investment in partnership/ proprietorship concerns in

India as also by way of subscription to shares/ debentures of Indian companies. They are
also permitted to place funds in company deposits.
Investments made will either be on repatriation or on non-repatriation basis depending on

the terms and conditions applicable under the existing schemes for NRI investment.
Wherever the investments are allowed with repatriation benefits, the funds for the
purpose should be received by inward remittances from abroad or from the investors
NRE/FCNR Accounts. However, in respect of investment on non repatriation basis, funds
in NRO Accounts could also be used.
Investors
B. Portfolio Investment
NRI’s/OCB’s have to obtain prior permission of RBI to acquire shares/debentures of

Indian companies and units of domestic Mutual Funds on both repatriation and non-
repatriation basis through stock exchanges in India.
The application for permission is to be submitted to RBI through a designated Bank

branch in one of the prescribed forms. RBI approval is valid for a period of 5 years from
the date of issue. Regulations regarding Portfolio Investment (i.e. investment through
Stock Exchange) in shares/debentures by NRI’s /OCB’s have been explained below:
1. Portfolio investment in shares/debentures by NRI’s/OCB’s is permitted only

though designated branches of authorised dealers preferably located at centres
having stock exchanges. Authorised dealers should inform the names of such
branches to Central Office of Reserve Bank and obtain approval. Non-resident
investors can also authorise Indian residents or stock exchange brokers as their
agents in India to purchase/sell shares on their behalf under the schemes but all
transactions should be routed through the designated branch of authorised dealer.
2. NRI’s/OCB’s will be permitted to make portfolio investment in shares/debentures

(convertible and non-convertible) of Indian companies, with or without
repatriation benefits provided the purchase is made through a stock exchange and
also through designated branch of an authorised dealer. NRI’s/OCB’s are required
to designate only one branch authorised by Reserve Bank for this purpose.
3. Investment in equity shares and convertible debentures will be permitted subject

to an overall ceiling of
o 10 per cent of the total paid-up equity capital of the company concerned; and
o 10 per cent of the total paid-up value of each series of the convertible
debentures issued by the company concerned for all NRI’s/OCB’s taken
together both on repatriation and on non-repatriation basis.
4. The purchase of shares and debentures under the scheme is required to be made at
the ruling market price.
Investors
5. NRI’s/ OCB’s intending to invest on non-repatriation basis should submit their

applications in the prescribed form, through a designated branch of an authorised
dealer to purchase shares/debentures of Indian companies, securities (other than
bearer securities) of the Central or State Government and Treasury Bills on behalf
of the NRI/OCB subject to the condition that the payment of such investment is
received through inward remittance or from the investors
NRE/FCNR/NRO/NRSR account. The general permission granted by Reserve
Bank would be initially valid for a period of five years. Authorised dealers may
themselves renew the permission granted by Reserve Bank to individual NRI’s as
well as OCB’s for a period of five years at a time.
6. NRI’s and OCB’s intending to invest with repatriation benefits should submit
their application through a designated branch of an authorised dealer in prescribed
form. Reserve Bank will grant general permission to the designated branch for
purpose of shares/debentures of Indian companies, securities (other than bearer
securities) of the Central or any other State Government and Treasury Bills
subject to the conditions that:
o The payment is received through an inward remittance in foreign exchange or

by debit to the investors NRE/FCNR account.
o Investment made by any single NRI/OCB investor in equity/preference shares
and convertible debentures of any listed Indian company does not exceed 5%
of its total paid-up equity or preference capital or 5% of the total paid up value
of each series of convertible debentures issued by it.
o NRI’s/OCB’s take delivery of the shares/convertible debentures purchased
and give delivery of the shares/convertible debentures sold under the scheme.
The general permission granted by Reserve Bank will be valid initially for a
period of five years. Authorised dealers may themselves renew the permission
granted by Reserve Bank to individual NRI’s as well as OCB’s for a further
period of five years at a time.
7. Shares/debentures purchased by NRI’s/OCB’s should be held and registered in

the name of either the investor himself or an authorised dealer or the letters
nominee/s. Shares/debentures can be purchased by NRI’s in joint names with
other NRI’s with permission of Reserve Bank.

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Beginner Guide to

1. Cash Flow Planning

Don’t just dream... Plan!

Why do you need Bajaj Capital's 360° Financial Planning?

Who needs 360° Financial Planning?

What is 360° financial planning all about?

How will 360° Financial Planning help me?

Cash Flow Planning

Children's Future Planning

How do I get my personalised 360° Financial Plan created?

Here’s how Financial Plans are prepared:

A Financial Planning session takes just 15 minutes

Why should I make a financial plan?

Who is a financial planner?

Can I do my own financial planning?

What should I look for in a financial planner?

How much should I be saving?

What if I don't achieve my goals?

Why do I have to provide so much personal information?

What type of information do I have to provide?

What should a financial plan include?

Why is there an evaluation of my insurance needs?

What about taxes?

After a plan is developed, what next?

How often should I update the plan?

What Is Cash Flow Planning?

Why is cash flow planning important?

How to make a Personal Budget?

Steps to Creating an Effective Personal Budget

Cash Flow Planning Basics

'Expenses' include loan repayments, and all other outflows etc.

o Going abroad on a vacation next year

The Need for Insurance Planning

Life Insurance – FAQ’s

What is Life Insurance?

Do I need life insurance?

Who Is an Insurance Broker?

How much does life insurance cost?

How much do I insure myself for?

Can I buy insurance for my children too?

Yes, we do have a Unit Link Child plan.

Are there any advantages of buying insurance at an early age?

Is there any policy with which I can plan for my retirement?

Is insurance better than other savings plan?

What is the Unit-Linked Insurance Plan (ULIP)?

What is Term Insurance?

What is the difference between “term” and “whole life” insurance?

I have a physical disability, but I am economically independent. Will it disable me

Can my policy ever be cancelled due to health or other reasons?

Do all life insurance policies require a medical test?

Partners in a business have insurable interest in the lives of their co-partners.

The insurance company usually provides investment information at periodic intervals

Tax Benefit of Life Insurance – FAQ’s

Rebate is available under Section 80C of Income Tax Act, 1961.

For the financial year 2008-09,

After the maturity of my policies, will the maturity proceeds be taxable?

If I purchase a Unit Linked Insurance Plan (ULIP) and I choose to discontinue my

What are the Tax benefits available on medical insurance premiums?

Is Service Tax applicable on ULIP products?