In this presentation we discussed in simple way about fixed income, fixed income Investment options, which fixed income option is best, and Fixed income investment avenue and about more tax efficient investment option.
4. FIXED INCOME INVESTMENT AVENUES
Category Investment Period Taxation Liquidity
PPF 15 years
Deduction under Section 80-C of the Income Tax Act, 1961 and
taxation of income covered under section 10(11) of the Income
Tax Act, 1961
Fixed Period
Post Office Savings 1-5 Years Section 80-C of the Income Tax Act, 1961 With Penalty
Traditional
Investment
Avenue
1 month -5 Years Full Tax on Interest With Penalty
Tax Free Bonds 10 Years, 15 Years Interest Tax Free Moderate
High Yield NCDs 3 -5 Year Full Tax on Interest Low
Fixed Maturity Plan
1 year - 5 years &
above
Depending on investment tenure Low
Debt Mutual Funds 1 day - 5 years & above Depending on investment tenure High
5. “People don’t lose as
much money in market
corrections, as they lose
in long sideways
consolidation”
6. IS EQUITY THE ONLY WAY TO CREATE WEALTH ? Think again
7.
8.
9.
10.
11. Importance of FIXED INCOME
in an Investors Portfolio
03
01
04
02
Lower volatility as compared
to Equity
Diversification
from Equities
Regular Cash flows
Flexibility in investment horizon
12. More TAX EFFICIENT investment compared to other avenues
Perception of DEBT FUNDS
HIGHER LIQUIDITY compared to traditional investment
Ability to generate BETTER RETURNS on a gross basis
FLEXIBLE Investment Horizon
Other reasons, which makes debt funds attractive
13. DEBT FUNDS v/s Traditional
Investment Avenues
One can invest for time periods ranging
from 1 day to multiple years by choosing the
relevant type of debt fund.
Using SIP, STP and SWP investment options
provide added convenience.
Useful for investing both in rising and falling
interest rate scenarios.
Indexation benefits are available for debt funds
whose tenure is equal to or above 36 months
Why Debt Funds
over Traditional fixed
income investments?
Particulars 5 Year Rolling Returns(%) 10 Year Rolling Returns(%)
IPRU Debt Scheme Scheme Benchmark IPRU Debt Scheme Scheme Benchmark
Min 6.44 5.10 7.46 6.36
Max 9.83 9.50 9.29 8.36
Average 8.32 7.46 8.37 7.47
Debt Scheme
14. More TAX EFFICIENT investment compared to Bank Deposits
Bank Deposit Debt Fund
Amount of Investment (Rs.) 10,00,000 10,00,000
Post Expenses Yield (p.a)* (CAGR) 6.00% 7.50%
Tenor (in days) 1265 1265
Final Pre-Tax Maturity Amount) 1223782 1284855
Gain 2,23,782 2,84,855
Indexed Cost NA 12,15,506
Indexed Gain/ (Loss) NA 69,348
Tax Rate 34.94% 22.88%
Tax 78,189 15,867
Post Tax Gain 1,45,592 2,68,988
Total Amount Realised 11,45,592 12,68,988
Post Tax CAGR 4.00% 7.12%
15. How You Spend Tomorrow
Depends On How You
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