Know Your Important Dates

Know Your Important Dates:

It is necessary and mandatory to know few important days for financial planning. Key days need to be noted and kept in front of you always.

Mentotax recommends you to keep the following days handy.

Equated Monthly Installment:
You need to know your loan installment due date. Nowadays people have multiple loans so it is essential to know the EMI due date. Missing instalment will end you in penalty and return charges. Missing installment can affect your credit score. Mentotax recommends you to keep the installment date handy.

Premium Payments:
Remember to pay your Life, Health and General Insurance premium before due date. Life cover , Health cover and other protection gets ceased on the due date. Missing insurance premium payment may end up in financial loss and Mentotax recommends you to note down  various Insurance payment dates.

Systematic Investment Plan:
Investment via SIP is preferred mostly by all categories of investor. Investing via SIP is more beneficial and Investor need to know the SIP dates to avoid ECS/other return charges. Mentotax recommends to fund your debit account in advance and remember the SIP debit date.

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Teach Money Management To Kids

It's always important to impart money management concepts in kids for better understanding and utilisation of money. Children learn how to handle money only by seeing the parents. your attitude about money matters, be careful to set good example.

Teach to save: Encourage your child to save. Set up a process for saving money in piggy bank or in account. Monitor at intervals. Use the money for acheiving child goals.

Teach to share: Boost your child savings and help them to identify the ways to spend money for helping others.

Teach to shop: Before your child purchases , tell them the alternate ways to spend the money.  Teach them to shop by comparing prices and quality.

Teach to Invest: Start preaching small concepts of money as they grow. Simple Interest, Compounded interest , etc.. make them understand the power of money. To make money, one needs money.

Involve them in financial planning: your children play a vital role in your life goals. Tell them how they contribute to achieve the goals. Let child know your budget.

Mentotax recommends you to teach your kids with the best ways to utilise the money. Involve them in all the financial decisions of your family.

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Atal Pension Yojana

Atal Pension Yojana is a pension scheme stated in May 2015 by Government of India initially for  unorganized sector workers and opened for all subscribes later. APY is administered by Pension Fund Regulory and Development Authority.

Atal Pension Yojana can be availed by all citizens in age between 18 to 40 Year's. Subscribe must have savings bank account to apply for APY. Subscribes can select their monthly pension between Rs 1000/- and Rs 5000/-

APY subscriber who had started investing at 18 years need to pay monthly contribution of Rs 42 for Rs 1000 and Rs 210 for Rs 5000/-

If subscriber has selected higher pension, APY will start paying Rs 5000 from 60 years until the diemeise. Then pension will be paid to the spouse of the subscriber and nominee will receive the corpus after the dismissal of subscribers spouse.

Mentotax recommends you to Invest in Atal Pension Yojana for Maximum Pension amount of Rs 5000/- Also advises to start as a couple so that monthly pension of Rs 10000/- can be availed.

Contribution towards Atal Pension Yojana is exempted from income tax under sec 80CCD(1B).

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Ways to Utilise Your Tax Refund

Ways to utilise the Tax Refund:

Tax filing season has started, it is always advised to file tax at the earliest and get back the tax refund. Rupee today is more valuable than rupee tomorrow. Mentotax has recommended the following ways to utilise the tax refund.

Boost the Emergency Corpus:

It is always recommended to have emergency corpus equivalent to 6 month salary/expenses. Emergency corpus plays a vital role in financial planning. Every year our salary grows, so you can utilise the tax refund to boost the emergency corpus.

Pay Credit Card Bills:

Employ your tax refund to pay off the credit card dues. Using credit cards will never help you to attain financial freedom. It eats your future income and savings. Mentotax advises to use the tax refund to pay off the credit cards.

Park Your Funds in PPF/NPS/ELSS:

You can park the tax refund in any of the tax saving instruments like PPF/NPS/ELSS. Tax Refund is like extra income to you. Mentotax recommends utilising the funds to reduce the tax burden and thereby increase the return from investments. Your direct return from investments will be up to your tax slab plus return from (PPF/NPS/ELSS) investments.

If you are in 20% Tax bracket and parking funds in PPF, your return from investment will be (20% + 8% =28%).

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Know About The 3'S of Mutual Funds

Mutual Fund is a professionally managed investment fund that pools money from many investors to purchase the securities. There are three important aspects we need to know in mutual funds.

• Systematic Investment Plan
• Systematic Withdrawal Plan
• Systematic Transfer Plan

If these three are used in right manner, Investor can avail lot of benefits and create wealth over the time.

Systematic Investment Plan: Systematic Investment Plan allows you to invest specific sum of amount on regular intervals it can be Weekly, Monthly, Quarterly, and Yearly. In the long time horizon, Disciplined SIP Investments can average the Highs and lows of the market giving investors the better rupee cost averaging and compounding.

• Advantages: SIP can be used as a tool to start funding your financial goals and to accumulate wealth. SIP admits to invest small amount, Reduces market volatility, SIP encourages saving money. Investors need not time the market, flexible for investors to select any regular interval.
• Disadvantages: If any SIP is missed because of Insufficient funds in the investor account, Bank may charge the ECS return fee. It is always advised to keep sufficient funds in your savings account.

Systematic Withdrawal Plan: Systematic Withdrawal Plan is opposite to the Systematic Investment Plan. SWP is a facility offered by mutual funds to redeem Specific units/Specific amount          at regular intervals.  SWP allows the investor to exit the investments for meeting the short term goals and to meet monthly expenses. SWP can be availed Monthly, Quarterly and Yearly.

Systematic Withdrawal Plan can be used in distribution phase of life. SWP to create income from the investments for things like, Monthly income after retirement, Surplus Funds parking, Children Education, Pay Emi, Pay Bills etc .

• Advantages: SWP helps to redeem the investment without any exit load up to certain limit. SWP helps to rebalance the portfolio; Investor can avoid Long Term Capital Gain tax up to Rs 1.00 Lakh on gains redeemed amount per financial year. Better rupee cost averaging on the withdrawn amount.
• Disadvantages: Customer may incur exit load charges if the redeemed amount is higher than the free limit. Investor need to maintain minimum funds with the AMC. Investor will get only returns on the invested portion.

Systematic Transfer Plan: Systematic Transfer Plan is an automated process of moving funds from one fund to another fund. STP helps to mitigate the risk associated and help to deploy money in different funds. When Investor wants to Split the Lump sum credit in one fund to several funds, STP helps to transfer money in various asset classes like equity and Debt.

• Advantages: STP will help you to mitigate the risk wisely and Investor can regularly transfer from high risk exposure to low risk exposure based on risk appetite and age of Investor. Steady Returns and Fixed Income can be generated via STP. Reallocation and Rebalancing of funds can be done using STP
• Disadvantages: Investor may incur Exit load on transfer of funds. Investor needs to maintain minimum investment prescribed by AMC. Debt funds transferred before 3 years attract STCG Tax.

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Attributes of Systematic Investment Plan

Systematic Investment Plan is an investment vehicle offered by Mutual Funds to investors allowing them to invest small amounts regularly. SIP are planned approach towards Investment.

There are various features of systematic Investment Plan.

* Investor can choose Any Date for SIP
* Investor can invest any amount without restriction via SIP
* Investor can increase or decrease SIP amount anytime.
* Investor can redeem partially or fully any time
* Investor can Stop SIP anytime.
* Investor can cancel Sip and Let the funds to grow.
* Investor need not time the market to start SIP.

Mentotax recommends you to invest  via SIP to create wealth in different asset classes.

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Utilise the Best Out of Your Bonus

Bonus season has started!! Appraisals , Yearly Increments and Performance Bonus. Bonus is reward for the excellent contribution you made for the growth of the organisation. This is the month where you get extra credit into your salary account. There are many ways to put your bonus work for you.

Mentotax is here to guide you to utilise the funds wisely.

Plan your family vacation:
You have worked so hard for the year and earned good appraisals. It's time to celebrate the occasion and relax to make yourself powerful. Plan a trip along with family using your bonus.

Pay off Debts:
Paying off the credit card bills, personal loans are recommended as they charge high interest. Utilise the bonus to prepay the debts.

Build Emergency Corpus
Employ your bonus to build the Emergency corpus equivalent to six months expenses of your family. Emergency corpus plays vital role in financial stability.

Invest in yourself:
Use the bonus to enhance your skills, start participating in workshops, seminars, conference. Pay subscribtions to periodicals, Association using the bonus. 

Reduce your taxes:
Work with your bonus to earn maximum salary to your pocket instead of paying taxes. Invest your bonus in NPS, ELSS Funds, PPF account based on your risk appetite, Time horizon and Tax Slab.

Boost your Insurance Portfolio:
Enhance your term insurance plans and top up your health insurance utilising the bonus. Have a maximum cover so that your family will not face any trouble in your absence.

Start new SIP/STP:
Invest wisely to get maximum out of bonus, park Ur bonus in liquid fund and start STP in equity funds. And enhance your existing SIP by 10% for better returns.

Invest for your childrens future:
Direct the bonus in savings scheme like Suganya Samruthi Yojana, Childrens Fund to save for the child future. Longer the Investment, better is the compounding and return.

Start Investing on New Initiatives:
Utilise the bonus to set up your own band , start a small green house farming for vegetables, Buy a musical instrument , make your home energy efficient to reduce electricity bills, buy a bicycle for cycling , Buydgets to enhance your effeciency.

Mentotax recommends to utilise your bonus wisely and make most out of it. Plan your finances well and attain financial freedom.

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