Thursday, 8 April 2021

Here’s how I have helped my family to save tax liability.


Dear Readers,
Sharing self-experience sometimes gives a great help to those people to whom we are unknown. Through this post, I am going to share my experience on how I have saved Tax Liability.
Recently I have purchased an under construction house which will get finished after 3-4 years. The payment criteria is in a manner that we have to pay after six months and for that, we took a home loan. Now we have some Funds that we need to manipulate in a smart way. We thought that we will pay some money in our loan payments and rest will invest for our child’s future. The home loan, which we took, will not give any tax relaxation because it is on under-construction money and the amount we invested in FDs are taxable.  Here my point of concern was how I would get that information which will save the Tax Liability of my family.
My family and friends suggested that I invest in Mutual Funds but I have no knowledge of Mutual Funds. And from here, my journey of getting financial knowledge moved on. Given below is the questionnaire, which I raised for myself to understand the concept of Mutual Funds and related terms, which helped in tax saving.

What is a Mutual Fund?
Ans: Mutual Fund means when a large number of investors invest for the common objective and then whatever income has generated from that investment, further distrusted proportionally amongst investors after deducting relevant expenses permitted by applicable laws. 
Which Mutual Fund will save tax?
Ans: ELSS means Equity linked saving scheme helps in saving tax as per current tax laws, but also has statutory lock-in period of 3 years .
How the ELSS Mutual Fund works?
Ans : If you have high income then you need to pay high taxes and vice versa. Then Indian Government introduced Section 80 C under Income Tax Act 1969. This section helps to reduce the tax liability on the total income if the people invest their money in permitted investment options. If we invest money in the ELSS Mutual Fund then we get relaxation in tax payment. ELSS Mutual Funds invest in Equity securities where we can invest in two ways that is Lump Sum or systematically i.e. through SIP.

What is the duration of ELSS Mutual Fund?
Ans: There is a minimum 3 years of mandatory investment period. That is termed as Lock-in Period. This amount can be invested in Lump Sum means you need to pay the amount in one go but SIP means you need to pay in regular pre-decided frequency. In both the cases, your investments will attract the Lock-in period of 3 years from the date of investment.
How can I save tax through ELSS Mutual Fund?
Ans: As per the Income Tax slab applicable to us, we need to pay tax on our yearly income. There is a provision of saving tax on investment of upto Rs.1,50,000  in permitted investment option as per section 80 C of Income Tax Act, 1969 and ELSS Mutual Fund is one of the permitted investment option under Section 80C.

Which ELSS Mutual Fund is good?
Ans: There are many options in the market but if you ask me, I would suggest my readers to check  ELSS page of L&T Mutual Fund
Now you all are eager to know my decision.
Previously I have invested money in PPF and FDs and they both have a fixed amount of return. However, after investing in ELSS Mutual Fund I will get the return based on the market. When I decided to open an account in L&T Mutual Fund, I checked and studied all the details on the website, which cleared all my queries. I used its calculator to check how much tax I will save and through the SIP calculator, I get to know my monthly investment. I took a smart step to save tax, and invest to aim for good return.


Before investing money, we set our financial goals and then calculated the amount through illustrative SIP Calculator


Benefits of SIP
It is a systematic Investment plan (SIP), which aims to give you higher return with little market risk. You can invest in small amounts and it will grow more than any RD or FD. SIP gives you flexibility in terms of deposit and withdrawal, subject to applicable exit load. As PPF will not allow you to withdraw at any time but SIP gives you this flexibility.
I decided to invest in the ELSS Mutual Fund through SIP. Now I have started my SIP with Rs.1000 per month but you can start with Rs. 500/- only. Through this small amount of monthly investment. I aim to fulfill my long-term goals.
Always have the habit of reading the scheme related documents before investing to understand the scheme type, investment patterns and the risk factors associated with particular investments and consult your financial advisor to understand the implication of any investment. The provisions pertaining to tax applicability and exemption are as per the current tax laws and are subject to change

Disclaimer: This information is for general information only and does not have regard to the particular needs of any specific person who may receive this information. L&T Investment Management Limited, the asset management company of L&T Mutual Fund or any of its associates; does not guarantee/indicate any returns/and shall not be held liable for any loss, expenses, charges incurred by the recipient. The recipient should consult their legal, tax, and financial advisors before investing. The recipient of this information should understand that statements made herein regarding future prospects may not be realized or achieved.
 Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Wednesday, 7 April 2021

F- for Fossil Fuel #BlogchatterA2Z


Fossil Fuels are made up of decomposing plants and animals. These fuels are found in the core areas of the earth. Fossil fuel is an asset as well as liability of a country. It is an asset because it is the major source of energy which ease the life of a man whereas it is a liability because it emits those gases which is not good for our environment. 

As these fossil fuels are beneath the earth surface so people who stay in contact with these fossil fuels have to face major health issues and mainly lungs problems. 

Combustion of these fossil fuels can be a major environmental threat as it emits carbon dioxide, carbon monoxide and few more gases which affect directly to the layers of our atmosphere and also increases the air pollution.   

Fossil fuels are non-renewable source of energy and it should saved for future use. 

This blog post is the part of #BlogChatterA2Z. The platform is https: Kanchanf rom Blogchatter® (