Budget Expense

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Budget Expense

  1. 1. Equity Shares <ul><li>Current Yield – Low </li></ul><ul><li>Capital Appreciation – High </li></ul><ul><li>Typical Returns - 19.25% as per SENSEX returns since 1979 </li></ul><ul><li>Risk – High </li></ul><ul><li>Marketability / Liquidity – High </li></ul><ul><li>Tax Treatment - No long term capital gains tax after 365 days. Dividends received are tax free </li></ul><ul><li>Convenience - High </li></ul>
  2. 2. Debentures <ul><li>Current Yield – Moderate </li></ul><ul><li>Capital Appreciation – Moderate </li></ul><ul><li>Typical Returns - 8% depending on company </li></ul><ul><li>Risk – Low </li></ul><ul><li>Marketability / Liquidity – Average </li></ul><ul><li>Tax Treatment - Interest received is taxable </li></ul><ul><li>Convenience - Average </li></ul>
  3. 3. Mutual Fund - Equity <ul><li>Current Yield – Low </li></ul><ul><li>Capital Appreciation – High </li></ul><ul><li>Typical Returns - 39% Average over 3yrs Highest return - 69% </li></ul><ul><li>Risk – High </li></ul><ul><li>Marketability / Liquidity – High </li></ul><ul><li>Tax Treatment - Section 80C benefits for Equity Linked Savings Schemes. No long term capital gains tax after 365 days. No tax on dividends received. </li></ul><ul><li>Convenience - Very High </li></ul>
  4. 4. Mutual Fund - Debt <ul><li>Current Yield - Moderate </li></ul><ul><li>Capital Appreciation – Low </li></ul><ul><li>Typical Returns - 8% Average over 1yr </li></ul><ul><li>Risk – Low </li></ul><ul><li>Marketability / Liquidity – High </li></ul><ul><li>Tax Treatment - Dividends received are tax free </li></ul><ul><li>Convenience - Very High </li></ul>
  5. 5. Bank Deposits <ul><li>Current Yield – Moderate </li></ul><ul><li>Capital Appreciation – Nil </li></ul><ul><li>Typical Returns - 8% Average </li></ul><ul><li>Risk – Negligible </li></ul><ul><li>Marketability / Liquidity – High </li></ul><ul><li>Tax Treatment - Section 80C benefits for 5 year deposit. All interests are taxable </li></ul><ul><li>Convenience - Very High </li></ul>
  6. 6. Public Provident Fund <ul><li>Current Yield - Moderate but locked till end of the term </li></ul><ul><li>Capital Appreciation – Nil </li></ul><ul><li>Typical Returns - 8% </li></ul><ul><li>Risk – Negligible </li></ul><ul><li>Marketability / Liquidity – Low </li></ul><ul><li>Tax Treatment - Section 80C benefits. Maturity tax free. Can not be attached in case of insolvency </li></ul><ul><li>Convenience - Low </li></ul>
  7. 7. Life Insurance Policies - Endowment <ul><li>Current Yield - Moderate but locked till end of the term </li></ul><ul><li>Capital Appreciation – Nil </li></ul><ul><li>Typical Returns - 5.5% Average </li></ul><ul><li>Risk - Moderate </li></ul><ul><li>Marketability / Liquidity – Average </li></ul><ul><li>Tax Treatment - Section 80C benefits and Section 10 (10)D benefits </li></ul><ul><li>Convenience - Low </li></ul>
  8. 8. Rent from house <ul><li>Current Yield – Low </li></ul><ul><li>Capital Appreciation – High </li></ul><ul><li>Typical Returns - 5% Maximum </li></ul><ul><li>Risk – Negligible </li></ul><ul><li>Marketability / Liquidity – Low </li></ul><ul><li>Tax Treatment - Expenses can be deducted before calculating tax </li></ul><ul><li>Convenience - Fair </li></ul>
  9. 9. Gold and Silver <ul><li>Current Yield – Nil </li></ul><ul><li>Capital Appreciation - Moderate </li></ul><ul><li>Typical Returns - Matching inflation </li></ul><ul><li>Risk – Average </li></ul><ul><li>Marketability / Liquidity – High </li></ul><ul><li>Tax Treatment - No tax benefits capital gains tax applicable </li></ul><ul><li>Convenience - High </li></ul>
  10. 10. ULIP's with minimum 5 times cover <ul><li>Current Yield – Nil </li></ul><ul><li>Capital Appreciation – High </li></ul><ul><li>Typical Returns - 28% Average over 3 yrs </li></ul><ul><li>Risk - Can be adjusted based on market conditions </li></ul><ul><li>Marketability / Liquidity - High (but after three years) </li></ul><ul><li>Tax Treatment - Section80C and Section 10(10)D benefits </li></ul><ul><li>Convenience - High </li></ul>
  11. 11. ULIP Pension plans <ul><li>Current Yield – Nil </li></ul><ul><li>Capital Appreciation – High </li></ul><ul><li>Typical Returns - 28% Average over 3 yrs </li></ul><ul><li>Risk - Can be adjusted based on market conditions </li></ul><ul><li>Marketability / Liquidity - High (but after three years) </li></ul><ul><li>Tax Treatment - Section 80C benefits & 1/3 tax free commutation on maturity amount. Pension received is taxable </li></ul><ul><li>Convenience - Average </li></ul>

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