Plan Your Financial Future with ELSS or else…

If you are someone who is looking at Section 80C investments not just for tax-savings, but also for aligning your long-term investment goals such as retirement planning or buying a house ELSS could be you’re the right choice of investment for you.

Tax planning is not only about saving taxes but also an opportunity for wealth creation to achieve future financial goals. If you are genuinely looking capital appreciation then why not look at ELSS as an investment option where the returns have outperformed all the other investment options by a huge margin.

What are ELSS Funds?

ELSS or equity-linked savings schemes are tax saving mutual fund investments which invest the majority of their corpus in equity and equity-related instruments. ELSS is the only option under Section 80C which allows you to reap the benefits of the returns generated by the equity markets and at the same time offer complete tax shield at the lowest cost possible.

How Can ELSS Funds Benefit You?

Here are some of the important benefits that make ELSS, the best mutual funds to invest in tax saving:

ELSS Returns: Gives You the Opportunity for More

These funds primarily invest in equities and equity-related instruments. Though equity returns are extremely volatile in short-term, in the long run, equities can provide superior returns. An investor with a long-term investment horizon can expect annualized returns between 12 to 15%.

Lowest Lock-in period

As compared to other tax saving investment options under Section 80C of the Income Tax Act, 1961 ELSS have the lowest lock-in period of 3 years. In all the other alternatives the lock-in period varies from anywhere between 5 to 15 years with the restriction on withdrawals.

Tax Efficiency

From a taxation perspective, ELSS enjoys the triple tax advantage. The amount invested in ELSS up to the limit of Rs.1.5 lakh is exempt under Section 80C. ELSS funds are equity-oriented with dividend income and the long-term capital gains on them are exempt from tax thus making the maturity proceeds entirely tax-free for an investor.

Whereas, in case of tax-saving FDs, post office FDs and NSC the interest earned is taxable as per your income tax slab; investments in NPS and pension plans are taxed at the time of maturity. Insurance is also an EEE (exempt-exempt-exempt) investment but it is not a pure investment product. Though PPF enjoys the EEE benefit like ELSS, investments in PPF are extremely illiquid with the highest lock-in period.

Opportunity to Create Wealth with ELSS

Equity markets though volatile in the short run, historically, is the best asset class for wealth creation. ELSS funds are professionally managed which offer tax advantage and opportunity to participate in the equity markets.

Yes, the equity market has market risks but it doesn’t have the other risks like interest rate risk, reinvestment risk, liquidity risk, etc. Also, the investment allocation is conducted by fund managers who have adequate research and expertise to make the most out of the investment.

Hence, ELSS works as an easy investment option for multiple purposes and allows you to develop a healthy investment habit for a worry-free future.

 

 

Gift Yourself A Happy Retirement: National Pension Scheme

‘Baby Boomers’ or our ‘Mommas’ and ‘Papas’ have been lucky to be the last generation of people who have received pensions from their employers, post-retirement. At least some of them did. At their time, it did not matter whether a person worked in a government school or a private company; they were eligible for a pension. However today, except for people working in Government services and organizations, the private sector does not offer pensions. Even the pension for Government employees may not be enough for the rising cost of living and deal with inflation.

National Pension Scheme is one such investment that can be made during an individual’s employed or self-employed days to sustain themselves post-retirement. This not only acts as savings but helps you to save tax as well, when you invest in it. It is indeed a gift that you give your future-self.

What is National Pension Scheme (NPS)?

The Government of India started the National Pension Scheme under the Pension Fund Regulatory and Development Authority (PFRDA). National Pension Scheme is an after retirement age security coverage to all citizens who have opted for this scheme. It is a voluntary scheme that can be subscribed for pre-retirement.

Tax Benefits of National Pension Scheme

Based on Union Budget 2019, NPS now qualifies to be an Exempt-Exempt-Exempt (EEE) category product. This means that NPS tax is exempted at all 3 stages. Here is how you benefit from it:

  • Tax deductions up to 1.5 lakh per annum under Section 80CCD of the Income Tax Act.
  • Additional tax deduction up to Rs. 50,000 under Section 80CCD(1B) in a financial year. (only Tier 1 accounts are eligible, not Tier 2)
  • At term completion or 60 years, 60% of the amount received is free from tax, while the rest 40% has to be invested in annuity.

Other Benefits and Features of National Pension Scheme

National Pension Scheme comes loaded with certain features and benefits that can prove to be useful for both your long-term and short–term goals:

  1. Returns: You can expect a return of up to 12% NPS. The return percentage is dependent on the type of National Pension Scheme that an individual chooses which is then calculated by the government-appointed Pension Accounting Office.
  2. Regular Income Post-Retirement: The scheme investor is eligible to receive monthly pension amounts to be able to sustain a comfortable living for their future.
  3. Flexible: An NPS account can be operated from every nook and corner of India irrespective of individual employment and location. You can also switch between funds in NPS.
  4. Portable: NPS scheme holders can move from one sector to another like Private to Government or vice versa or Private to Corporate and vice versa. The NPS account will always be the same no matter wherever you go. Even if you leave your job, you can continue using the same account.           

Eligibility Criteria for National Pension Scheme

The following criteria should be met to be eligible for investing in the National Pension Scheme:

  • Applicant should be a citizen of India.
  • He/she/they should be over 18 years of age and less than 60 years of age.

Types of National Pension Scheme Accounts

There are two types of accounts for NPS and individual may subscribe for:

  1. Tier 1
    It is a mandatory account for all those who opt for NPS.
  • The Government employees have to contribute 10% of their salary (salary = basic + DA), and the government will make equal contributions as well.
  • For others opting this scheme, the initial contribution is Rs. 500/- at the time of account opening and minimum annual contribution is Rs. 1000.
  1. Tier 2
    Not a compulsory account like Tier 1. You can withdraw funds at any time, and hence, it provides high liquidity. There are no contributions from the government or the employers and include no tax exemptions either. There are three critical points to make a note of:
  • The minimum amount required to open this account is Rs. 1000/-
  • Minimum monthly contributions amount to Rs. 200/-
  • Necessary to hold a minimum balance of Rs. 200/- every financial year.

What Investment Options Do I Get?

  1. Active-choice: With this investment option, an investor gets to mix equity, corporate debt, and government securities as per his/ her choice. However, the allocation of equity can be a maximum of 50%.
  2. Auto- choice: Allocation is done based on the investor’s age.
Equity Till the age of 35, the equity portion is 50%, post which it reduces 2% yearly till it becomes 10% by the age of 55.
Corporate Debt Till the age of 35, the corporate debt is 30 %, post which it reduces 1% every year until it becomes 10% by the age of 55.
Other Options 1. Aggressive life-cycle fund – begin with an equity allocation of 75%
2. Conservative life-cycle fund – start with an equity allocation of 25%
Reduce as per the investor’s age advances.

Where to Create a National Pension Scheme Account?

Opening an NPS account is not that difficult now. It’s just a click away. You can easily invest in NPS online through the Fisdom App. We are a new-age app that makes it easy to invest in mutual funds, in a matter of minutes.

Withdrawal and Exit From NPS Account

If you retire at 60:

  • 40% of withdrawals are free from tax.
  • From the balance 60%, 40% minimum has to be used to purchase an annuity. The remaining 20% can be used to either buy an annuity or withdrawn by paying tax according to the tax slab.

If you retire before 60 years:

  • You would use 80% of your corpus to buy an annuity.
  • And withdraw the remaining 20% by paying the amount taxable according to the tax slab.
    Remember, the taxation of the amount via annuity is according to your tax slab. In the event of the account holder’s death, the nominee receives the entire amount.
Documentation for NPS Withdrawal

There are certain documents that require to be submitted for withdrawing money from your NPS account:

  1. A filled and signed withdrawal form
  2. Original PRAN card
  3. Copy of your Proof of Identity which must be self-attested
  4. A cancelled cheque of your active bank account

Now that you have a good idea about a National Pension Scheme and how it works it’s never too late to open an NPS account on Fisdom App.

Happy Investing!

 

Muhurat Trading is live

Hurry, Muhurat Trading time is running out! Invest now for prosperous life

Muhurat Trading is already live until 7:15 pm! Any trade during these 60 minutes is considered auspicious and is thought to bring great prosperity and wealth.

If you are a long term investor, you should take advantage of Muhurat trading by starting a SIP. Our research team recommends “Axis Bluechip Fund-Growth/Direct”, which has delivered 16.43% returns (past 3 years). You can start an SIP of Rs.500 in just 5 mins.

Invest now, before time runs out. Click on the button below:

Muhurat trading is around the corner

Muhurat Trading hour is starting in a few minutes, get ready to invest!

Muhurat Trading is just a few minutes away (from 6:15 pm to 7:15 pm)

This auspicious hour also embarks the beginning of the Hindu calendar year (Vikram Samvat 2076), and hence, any trade during these 60 minutes is considered to bring great prosperity and wealth.

If you are a long term investor (and not a trader), you can still take advantage of this shubh Muhurat trading by starting an SIP to get blessings of goddess Lakshmi.

Our research team’s recommendation is “Axis Bluechip Fund Direct Plan-Growth”, which has delivered 16.43% returns in the last three years. You can invest as low as Rs. 500 with SIP within just 5 mins.

Click on the button below to invest in Axis Bluechip Fund Direct Growth:

Muhurat Trading

Start a SIP during the auspicious hour of Muhurat Trading

Diwali, the festival of lights, is considered to bring wealth & prosperity with the blessings of Goddess Laksmi to fulfill your financial dreams along with good fortune and happiness.

Well, it’s not just us! For more than half a century, stock traders all around India trade stocks on Diwali for one hour (popularly known as “Muhurat Trading.”) This auspicious hour also embarks the beginning of the Hindu calendar year (Vikram Samvat 2076). Hence, any trade during these 60 minutes is considered to bring great prosperity and wealth.

This year the Muhurat Trading is scheduled to be held on October 27 with the opening bell ceremony at 6.15 pm, and trading will continue for an hour up to 7.15 pm.

However, even in the most auspicious hour, one cannot avoid risks such as high volatility and lack of diversification in stocks trading. Hence if you are a long term investor (and not a trader), you can instead start an SIP during the “Muhurat” to get blessings of goddess Lakshmi.

Don’t worry, we will remind you few minutes before “mahurat” (6:12 pm on October 27) to invest in “Axis Bluechip Fund – Direct/Growth” (5-star fund recommended by our research team) which has delivered 16.43% returns in the last 3 years. Within just 5 mins, you can start an SIP of Rs.500 while still making the most of your precious time with your family.

Click the button below to explore the Axis Bluechip Fund now (to make sure that you are ready to invest immediately during Muhurat trading hour, instead of wasting time on the day of Diwali).

Happy Diwali from our team at MyWay Wealth!

Dhanteras

This Dhanteras buy 24K Digital Gold and get 5% goldback!

The most awaited season for the celebration is just around the corner. That’s right!
October 25 the first day of Diwali, marks the festival of wealth “Dhanteras”. It is considered the most auspicious and apt day to buy precious metals, especially Gold, as it brings in wealth and prosperity. And why not? Gold investments have delivered upto 20% returns since the beginning of this year.

Though physical gold is the most preferred form of Gold among us Indians, its carries disadvantages such as storage trouble, fear of theft, no yield and high making charges. However, given our traditions and customs, we shouldn’t let go of the tradition of buying Gold on this special occasion, isn’t it?

You can buy this yellow metal and add it to your portfolio by buying it in its safest form with 24K Digital Gold. When you buy Digital Gold, every rupee is utilized in buying only pure gold thereby avoiding the inconvenience of making charges (which is stored in the secure locker from BRINK’s, a global leader in gold custodian services with 100% insurance cover).

Dhanteras offers! Buy gold instantly for as low as Rs. 1000 and get a 5% gold-back. You can also get hassle-free delivery of gold coins/bars to your doorstep with 50% off on delivery and making charges.

Happy Dhanteras from our team at MyWay Wealth!

large&midcap

It’s time to invest in this Large & MidCap Fund

The finance ministry’s corporate tax rate-cut gift to India Inc. last weekend was well-received by capital market participants as domestic & foreign investors pumped in the capital in expectation of a spur in the earnings recovery rate. Modi’s visit to the Oval Office is expected to garner positivity for the Indian economy – especially around strengthened trade relations, improved tourism sentiment, and an influx of foreign capital into the home economy.

Having said that, Indian capital markets have been quite resilient in the face of such escalating tensions between two super-economies as it basked in the comfort of an immediate consumption and earnings revival.

Investors are advised to continue investing in a systematic fashion, sticking to asset allocation. If permitted by one’s risk & investment profile, preferences can be skewed towards a large & midcap allocation blend (large-cap orientation) and funds with meaningful exposure to banks, automobiles & IT as sectors.

One such large & midcap fund is “Mirae Asset Emerging Bluechip Fund Direct-Growth.

  • This 5-star rated fund (rated by Morningstar, CRISIL, and Value Research) provides a CAGR of 17.06% (past 5 years), which is 7.59% more than its benchmark (NIFTY Large Midcap 250 Total Return Index @ 9.47% past 5 years) — thus making it the #1 in the Large & MidCap category.
  • This fund provides a perfect blend between large and mid-caps by investing 99.64% in Indian stocks, of which 52.41% is in large-cap stocks, 34.03% is in mid-cap stocks and only 13.2% in small-cap stocks — hence managing the above-average risk it faces.

Check out this fund that delivered 129% absolute returns in the past 5 years!

SBI Small Cap Fund – Direct Plan

★★★★★ (Morningstar Rating)

Ranked #1 in Small-Cap category by last 5Y returns

Return Capacity: High
Risk level: Moderately High
Category: Open-ended and Equity: Small Cap
Last 5 yr returns: 18.05% (as of Oct 04, 2019)
Minimum SIP Amount: Rs. 500

To boost the total returns of your financial portfolios, our Registered Investment Advisor recommends you to take some risk by allocating at least 5-10% of the total portfolio in small-cap funds. SBI Bluechip Fund (rated 5 stars both from Morningstar & Value Research) is the perfect choice for the same.

  • Even though markets are down in past months (causing this fund’s benchmark, S&P BSE Small-Cap, to give 5.19% 5Y returns), SBI Small Cap Fund has yielded an excellent CAGR of 18.05% (past 5Y), which is 12.86% more than the returns of its benchmark.
  • To reduce the risk that comes with equity exposure, the fund is well-diversified between small-/mid-/large-cap stocks (out of its 88.16% investment in Indian stocks, 3.09%/14.55%/67.67% is in large-/mid-/small-cap stocks respectively.
  • Fund manager’s insistence on diligence and long enough time perspectives have helped the fund in delivering consistently high returns with this fund when compared with other funds in the small-cap category.

Subscribe to this hot-selling NFO at Rs. 10/unit!

When a fund house introduces a new mutual fund scheme, it goes by the name New Fund Offer, allowing the firm to raise capital for purchasing securities. One such fund house – Motilal Oswal has launched a New Fund Offer in the large & midcap category – Motilal Oswal Large & Midcap Fund. The category & NFO is expected to benefit from the evolving economic scenarios by way of capturing the uptrend and insulating against headwinds in an optimal fashion.

The fund is suitable for investors having a long-term investment horizon and seeking optimal appreciation across cycles.

Fund Overview:

  • The best part of this NFO is its price for its early investors. Be it the NAV or the exit load, this NFO is the best in its category because the rate at which the NAV is offered is just INR 10/unit and the fund has an exit load of 1% if redeemed within 15 days and none thereafter.
  • The investment objective is to provide medium to long-term capital appreciation by investing primarily in Large and Mid-cap stocks with a targeted ratio at 50:50. However, the AMC may have an underlying philosophy of maintaining at 35:35 with the rest being flexible for allocation between equities and debt. Thus giving you an excellent balance of relative conservatism with great growth opportunities.
  • Given our research team’s primary interaction & understanding with the executives at Motilal Oswal, the fundamentals and philosophy seem well-positioned considering currently evolving market dynamics.

Its simple, be an early adopter, get lower NAVs and achieve higher gains!

NFO

Motilal Oswal Large & Midcap Fund (27 Sep’19-11 Oct’19)

Motilal Oswal has launched a New Fund Offer in the large & midcap category – Motilal Oswal Large & Midcap Fund. The category & NFO is expected to benefit from the evolving economic scenarios by way of capturing the uptrend and insulating against headwinds in an optimal fashion.

The fund is suitable for investors having a long-term investment horizon and seeking optimal appreciation across cycles.

Fund Overview:

The fund will be managed by Aditya Khemani & Abhiroop Mukherjee (star fund managers at Motilal Oswal). The targeted ratio between large & midcap is expected to be at 50:50; however, the AMC may have an underlying philosophy of maintaining at 35:35 with the rest being flexible for allocation between equities and debt. The fund has an exit load of 1% if redeemed within 15 days and none thereafter. Offer NAV at INR 10/unit.

Given our primary interaction & understanding with the AMC, the fundamentals and philosophy seem well-positioned considering currently evolving market dynamics.

Rationale:

The case for large-caps (NIFTY15) remains evergreen as it has known to withstand headwinds and leverage tailwinds effectively while continuing to grow efficiently. The case for large-caps is further strengthened by the current stimulus-orientation with the understanding that such measures will percolate from top to bottom of the market-cap pyramid across sectors.

As far as midcaps are concerned, Midcaps’ relative valuation (P/E) vs. NIFTY is at 2012-13 level lows – also the zone which marked the beginning of the midcap bull rally through 2014. The Nifty Midcap-100 market-cap is currently at a 5-year low with the rolling1-yr differential b/w NIFTY midcap-100 & NIFTY being at a historical extreme. Though there’s a strong case for a revival in the midcap space (albeit by tagging-along with the broader market), quality of stock-selection has become all the more critical within the space. We are confident that Motilal Oswal through its fund management team & framework along with institutional depth has the ability to deliver.