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The Interesting Case Of Sadashiv Phene

September 19, 2013 Leave a comment

wealthymatters

Yes I do have my monthly SIPs and I do have a mutual fund portfolio,but long term readers know I lean towards investments where I have a greater degree of control and in general I like to keep things simple and predictable.And I like to invest directly into an asset rather than buy derived products.To me,mutual funds are savings products or places to park cash till better investments turn up.

Today I came across the story of Sadashiv Phene. Here is a gentleman who has built up a respectable net-worth on the basis of mutual funds.Do read the links below.I guarantee you ,you will not waste your time.

I enjoyed reading his story because it opened my mind to new possibilities. Read more of this post

Filed under Entrepreneurship, Paper Assets, Tool Kit Tagged with investing in mutual funds, mutual fund advisor, mutual fund distributorship, Mutual Funds, postaday, Sadashiv Phene

Saving Tax On Savings Bank Interest – Sec 80TTA

September 14, 2013 Leave a comment

wealthymatters.com

By the Finance Act, 2012, a new section called 80TTA was added to the Income Tax Act – 1961. This section allows an income tax deduction of up to Rs 10,000 to an individual or a HUF for interest earned on the savings bank account held with a Bank, Post Office or a Society.This section is applicable with effect from April 01, 2013 and will apply from AY 2013-14 onwards.

If the interest earned out of saving bank account is more than Rs 10,000 . You will have to pay tax on the remaining amount over and above Rs 10,000 .This tax deduction is over and above Rs 1 lac deduction under Sec 80C.

Rs 10,000 is the total deduction allowed by combining all the saving bank accounts interest. If you earn Rs 6,000 from each of 3 different accounts (Total Rs 18,000) , you will get deduction of Rs 10,000 and pay tax on remaining Rs 8,000.

So you can keep upto 2.5 lacs as balance in a savings bank offering 4% or 1.4 lacs in a bank offering 7% and enjoy nil tax-liability.

Filed under Paper Assets, Tool Kit Tagged with income tax deduction, maximum balance in a savings bank account, postaday, section 80TTA of the Income Tax Act – 1961, tax deduction on interest from savings bank account, tax free income from savings bank

Stick To The Shares Of Private Banks

September 12, 2013 Leave a comment

wealthymatters

The higher interest rates and slower GDP growth imply declining loan growth and rising NPAs in the banking system, most particularly in the cheap state-owned banks.

Current Indian gross NPAs are at 3.7% of total loans, but there are also another 4.6% of loans which are in the restructured category.

So despite the temptation to buy cheap banks on a contrarian basis, stick with the expensive quality private sector banks geared to the consumer space, since it is far from evident that India has passed the worst.

It is also the case that the credit problems are primarily in the corporate and infrastructure related sectors.

Filed under Paper Assets Tagged with HDFC shares, ICICI Shares, investing in shares, postaday

FII Facts

September 12, 2013 Leave a comment

wealthymatters

Foreigners currently own an estimated 22% of Indian equities.

The reason why foreign funds are not exiting India quicker is because they are heavily invested into quality expensive stocks, which are not worth selling at this point of time.

The long-term investment returns for foreign holders of the likes of HDFC or ITC have declined dramatically. Thus, the compound annual average return over five years of an owner of these two stocks in US dollars terms is now only 4% and 20%, respectively, compared with 13% and 30% in rupee terms.

The foreign ownership of Indian government securities is only 1.61% at the end of March, though it is up from 0.88% at the end of March 2012.