Roven PereiraMCOM, ACMA, CIMA LONDONPune 13th January ‘18

PERSONAL FINANCE & TAX PLANNING FOR COST ACCOUNTANTS

GOALS

• New Home• Holiday• Car• Childs Education• Home Loan repayment• Marriage corpus• Retirement & life post

retirement

INFLATION

EMERGENCY FUND

TACKLING EMERGENCY• Having 3-6 Months of your Monthly Household

Spends in the Savings account• Maintain a Savings Plus account - SBI Savings Plus Account – Threshold 10K INR• Alternatively, Liquid Funds of MFs (through

APPS)

• Hospitalization• Family Emergency• Job Loss• Accident• Natural Calamity

MEANING OF EMERGENCY

INSURANCE

- Never Mix Investments with Insurance - Insurance is a Protection Tool - Avoid Money Back, Endowment Policies, ULIP Policies with Higher Allocation Charges - Monthly Take Home Salary * 12 * 10 - Guard Your Health, Guard yourself - Asset Insurance

- Choose Term Insurance Policy / TROP - Health Insurance Policy BASE POLICY THROUGH BANKS TOP UP POLICY - Opt for CRITICAL ILLNESS COVER - Qualifies for Deduction under Section 80D - Protect your assets, protect your peace of mind

PRINCIPALS OF INSURANCE

TACKLING INSURANCE

WEALTH CREATION

PRINCIPLES OF WEATH CREATION• 100 – Your age = Equity• Single : Minimum 50% of

Monthly Take home salary should be saved

• Married : Minimum 30 % of Monthly Take home salary should be saved

CREATING WEALTH• DIRECT EQUITY : Shares• MUTUAL FUNDS : Never have

more than 5 funds• Assign Goals to Each Mutual

Fund

WHAT IS MUTUAL FUND

- A Mutual fund is a trust that pools savings of a number of Investors who share a common financial goal.

- The money thus collected which could be as small as Rs 500 pm, is then invested in different companies by the fund manager to generate returns

- It is a long term wealth creation tool and has always beaten assured return products handsomely

- It has been in India since 1964

TYPES OF MUTUAL FUNDS

LARGE CAP FUND• Market capitalization /market

cap > Rs 200 Bn – 3500 Bn - ONGC - TATA - SBI - CIPLA - Maruthi - Asian Paints - Hero Motocorp

MID CAP FUNDS SMALL CAP FUNDS DEBT FUNDS• Market capitalization

/market cap between Rs 50 Bn –200 Bn

- Union Bank - UBL - TVS Motors - Ashok Leyland - Glenmark - Havells - MRF

• Market capitalization /market cap < 15 Bn

- Venkys - Jet Airways - VGUARD - Oriental Bank - CEAT - Bata - Voltas

• Invests in Government Securities,/Treasury Bills Corporate Fixed deposits, Bonds

• Yield of 7-10% with indexation benefit

• More tax efficient than fixed deposit. No TDS and 20% after indexation for > 3 yrs

SYSTEMATIC INVESTMENT PLANNING (SIP)

GENERATING INCOME FOR RETIRED

DIVIDEND INCOME - Dividend Income is Tax free as per Income Tax Law - Monthly Dividend and Quarterly Dividend Option available in Balanced Fund with Yield of 10%-12% Tax free returns - History of 13 years in certain funds in India with Dividend

SYSTEMATIC WITHDRAWAL PLAN• Invest in Growth Option• Withdraw a certain portion each

month from the Fund while the money grows using SWP

YOUTH : TIME & POWER OF COMPOUNDING

TAX SAVING

TAX SAVINGS INSTRUMENTSADDITIONAL 1.5 Lacs Tax Rebate Under 80 C- 5 YEAR FIXED DEPOSITS - PPF Yield Lock In 15 years- Equity Linked Saving Schemes Lock In 3

years Yield- Life Insurance - Sukanya Samridhi

ESTATE PLANNING

• LEAVE AN INHERITANCE NOT A MESS• Will Must be dated• Signed by the Testator ( Person creating the will)• Signed in the presence of 2 witnesses• Express a desire that the testator wishes must be carried into effect after death• It may or may not be registered. Ideally a stamped / notarized agreement should

suffice• The executor is the person named in the will or appointed by the court with the legal

responsibility of executing the will

THANK YOURoven Pereira ACMA, CIMA (London)