The document is a newsletter from Wealth Vistas published in January 2015 discussing investment opportunities under Section 80C of the Indian Income Tax Act. It summarizes that individuals can claim a tax deduction of up to Rs. 1.5 lakhs by investing in specified instruments like PPF, ELSS, life insurance etc. It analyzes PPF and ELSS as popular options, with PPF providing tax-free returns but a 15-year lock-in, while ELSS offers lower lock-in of 3 years but involves stock market risk. It estimates higher returns of around Rs. 46-63 lakhs by investing Rs. 1.5 lakhs annually for 12 years in either PPF or ELSS

1. WEALTH VISTAS
Wealth Vistas | January 2015 | www.agroy.com
Now avail
the benefit of
enhanced
deduction of
Rs.1.50 lacs
u/s 80C
Wishing you a very
happy new year!
W i t h m a r k e t s
scaling lifetime
high and Sensex
inching towards
the magical 30K
mark, 2015 indeed
promises to be a happy and
prosperous year.
Agroy Wealth Vistas aims at not
only updating you with latest
economic developments which
effect your wealth, but also to
provide you with smart insights
and wisdom for intelligent
investing.
The basic principle of returns
and investment taught in schools
is “higher the risk higher will
be returns”. Sadly, stock
markets are largely considered
to be extremely risky, but that is
because the investors are
usually reckless and expect
abnormally high returns from
them. Smart investing is all
about, minimising the risk
factors in markets and still
consistently enjoying yields
better than any alternate
investment avenues.
Not just Tax Saving, but Wealth Generation under 80C
Under the provisions of section 80C of the Indian
Income Tax Act 1961, an individual or a Hindu
undivided family, is allowed a deduction from
income of an amount not exceeding one lakh fifty
thousand rupees with respect to sums paid or
deposited in the previous year, in certain
specified instruments. The assessee is free to
invest in any one or more of the eligible
instruments within the overall ceiling of Rs.1.50
lakh. Hence if you are in the highest tax bracket
of 30%, then you can save tax of Rs.45,000.
Some of the eligible instruments are Public
Provident Fund (PPF), Life Insurance Premium
(LIP), Equity Linked Saving Schemes (ELSS),
National Savings Certificates (NSC), Infra
Bonds, 5 Year Bank FDs, Home loan principal
repayment, Employee share of Provident Fund
(PF), Unit Linked Insurance Plan (ULIP). In this
issue, we will focus on PPF and ELSS which are
themostpopularchoice.
PPF - PPF is one of the only instrument in the
rare exempt-exempt-exempt (EEE) category,
which means, not only the amount you invest
gets you tax break, but the interest earned and
the redemption amount, both are tax free.
However, it carries a long maturity of 15 years
and a compounded interest of 8.75%pa.
Moreover,HUFsarenotallowedtoinvestinPPF.
If you keep investing Rs.1.50 lacs in PPF every
year for 12 years, and redeem after 15 years,
youcanexpecttogetbackRs.41.6lacs.
ELSS - ELSS schemes of mutual funds invest
your amount in Stock Markets. These schemes
carry a lock-in of only 3 years. Though stock
markets are perceived to be risky with no
guarantee of returns, however based on historic
data of Sensex and performance of the ELSS
schemes, one can safely assume a return of
atleast 12%. The dividend received from these
schemes is tax exempt in hands of the investor,
and the redemption proceeds are also tax free
since they qualify as Long Term Capital Gain on
Equity investments. The biggest advantage of
ELSS is the possibility of Systematic Investment
Plan (SIP).ASIP of 2000 to 5000 per month is a
Investment under
80C
Value after 15
years
PPF: 1.50 lacs per
annum
46.96 lacs
ELSS: 1.50 lac per
annum
62.62 lacs*
PPF: 90000 pa
ELSS: 5000 pm
53.23 lacs*
* Assuming 12% yield on ELSS and 8.75% yield on
PPF
smart investment technique which
inculcates regular saving discipline without
much disturbing the monthly budgets. If you
keep investing Rs.1.50 lacs in ELSS every
year for 12 years, and redeem after 15
years, you can expect to get back Rs.57
lacs.
To minimise risks along with save taxes and
followaregularsavingdiscipline,itwouldbe
best to invest Rs.90,000 in PPF and take an
ELSS SIP of Rs.5000 per month. Keep
doing this for 12 years, then after 15 years,
youcanexpecttogetbackRs.47lacs.
In the above case, we have not even
considered the impact of taxes which you
save every year under 80C. Hence,
irrespective of tax savings, we would like to
call PPF and ELSS as Wealth Generation
Schemesundersection80C.
Tushar Agarwal
FCA, MBA (UK)
CEO Agroy

2. WoWwords of wisdom
Sensex has been trading at its life time high during the March 2014.
Does this mark the beginning of the return of the Bulls? Let us try to
understandafewstatisticswhichdopointtowardsthis.
FIIs have remained net investors since January 2014 and have
invested a record Rs.9500 Crore in March 2014 as compared to
Rs.1400 Crore in February and Rs.700 Crore in January. It seems as
though internationally they are fully convinced of a stable economic
friendly regime in India post general elections in May. Last time this
kind of confidence was imposed by FIIs in the Indian Markets was in
runupto2010bullphase.
Closing above 22,000 in March 2014, the Sensex would give an
annualised return of 17% for the year 2013-14, which is highest any
asset class has given this year. The year-on-year growth of different
assetclassesasonMarch2014areasfollows:
a)Sensexat22000:17%
b)Goldat29000:-4.3%
c)USDat60:10.5%
d)RESIDEXat196:-3%
(Note: RESIDEX is an index of value of properties across few select cities in India being
compiled by National Housing Bank and considered by Govt of India as a reasonable
benchmarkofrealestateprices.)
Table below shows the annualised compounded yields from Sensex
duringlast10years.
Noticethatthe5yearannualised
yields on Sensex have remained in the range of 30-40% during the
previous bull phase of 2005 to 2010, and the same have been
consistently declining since 2010 (i.e. during the entire era of UPA-2).
We do see a strong reversal happening now in 2014. An interesting
extrapolationtonotehere(assumingthatmarketswillonlygetstronger
from here on) is that, to achieve a 5 year annualised yield of 18%,
Sensexshouldcross30,000endofMarch2015.
Wehavealsotriedtocomparethe4differentpopularassetclasses,i.e.
Stocks (Sensex), Gold (as per CME), Property (as per RESIDEX by
NHB) and Currency (USD as per XE). Table below shows the year on
yeargrowthratesforthelast20years.
Going a step further, we believe that the 5 year annualised
compounded yields offer a much better indication of returns and
investorsentimentinanyassetclass.
Year 2014-15 - The year of return of the Bulls
Below is an article published by us last year in March 2014....
It can be seen from the above table, the y-o-y growth rate spikes that
can be seen in case of Sensex in 2000, 2004, 2006, 2010 are
unprecedented and have marked the peak of several bull runs during
last 20 years. It can also been seen that Property was the favourite in
2009 and Gold was the favourite in 2011. However, both these asset
classesareclosingatanegativeyieldin2014.
Further as can be seen in Table above, at the end of 2014, the 5 year
compounded annualised yield of Sensex is the highest, marking the
beginning of the next bull run. What it means from the above is that if
you invested a sum 5 years ago, then Sensex would have given the
best yield. If you would have invested a sum 10 years ago then Gold
would have given the highest yield and Property would have given the
highestyieldonlyifyouhadinvested15yearsago.
It is not just the rate of returns, but also the other factors like Liquidity,
Regulation, Transparency and Low cost of transactions which makes
the stock markets look most attractive. It is a popular saying that Stock
Market is a barometer of Economy... and if it is, then surely things do
lookgoodfromnowon.
At the
end of
SENSEX
1yr 5yr 10yr
2005 16.1% 34.5% 21.0%
2006 73.7% 43.6% 20.6%
2007 15.9% 44.7% 20.7%
2008 19.7% 48.5% 18.9%
2009 -37.9% 31.5% 19.4%
2010 80.6% 27.6% 16.0%
2011 10.9% 14.3% 19.8%
2012 -10.5% 11.0% 20.3%
2013 8.2% 7.1% 21.9%
2014 16.8% 17.8% 14.7%
Year Sensex GOLD RESIDEX USD/INR
1994 3,779 NA 4,598.00 NA NA NA NA NA
1995 3,261 -13.7% 4,680.00 1.8% NA NA NA NA
1996 3,367 3.3% 5,160.00 10.3% NA NA NA NA
1997 3,361 -0.2% 4,725.00 -8.4% NA NA 35.79 NA
1998 3,893 15.8% 4,045.00 -14.4% NA NA 39.48 10.3%
1999 3,740 -3.9% 4,234.00 4.7% NA NA 42.32 7.2%
2000 5,001 33.7% 4,400.00 3.9% NA NA 43.59 3.0%
2001 3,604 -27.9% 4,300.00 -2.3% 33.56 NA 46.56 6.8%
2002 3,469 -3.7% 4,990.00 16.0% 35.57 6.0% 48.73 4.7%
2003 3,049 -12.1% 5,600.00 12.2% 43.29 21.7% 47.47 -2.6%
2004 5,591 83.4% 5,850.00 4.5% 50.34 16.3% 43.35 -8.7%
2005 6,493 16.1% 7,000.00 19.7% 67.45 34.0% 43.62 0.6%
2006 11,280 73.7% 8,400.00 20.0% 90.27 33.8% 44.53 2.1%
2007 13,072 15.9% 10,800.00 28.6% 100.00 10.8% 43.59 -2.1%
2008 15,644 19.7% 12,500.00 15.7% 73.00 -27.0% 40.02 -8.2%
2009 9,708 -37.9% 14,500.00 16.0% 121.00 65.8% 50.86 27.1%
2010 17,528 80.6% 18,500.00 27.6% 124.00 2.5% 44.97 -11.6%
2011 19,445 10.9% 26,400.00 42.7% 126.00 1.6% 44.40 -1.3%
2012 17,404 -10.5% 31,799.00 20.5% 168.00 33.3% 50.87 14.6%
2013 18,835 8.2% 30,295.00 -4.7% 202.00 20.2% 54.28 6.7%
2014 22,000 16.8% 29,000.00 -4.3% 196.00 -3.0% 60.00 10.5%
Period Sensex Gold Residex Dollar
20 Yrs 9.21% 9.45% NA 3.53%
15 Yrs 12.54% 13.42% 14.54% 2.35%
10 Yrs 14.68% 17.40% 14.56% 3.30%
5 Yrs 17.78% 14.90% 10.13% 3.36%
Do not save what is left after
S P E N D I N G
but spend what is left after
S A V I N G
-Warren Buffet-
Wealth Vistas | January 2015 | www.agroy.com

3. Key Market Indicators (as on 29-Jan-2015)
80
90
100
110
120
130
140
150
160
170
Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14
Global Indices Vs Nifty
(rebased to 100 as on Jan-2013)
Nifty Nikkei Nasdaq DJIA Hang Seng
-5.0 0.0 5.0 10.0 15.0 20.0
Nifty
Auto
Bank
Energy
Finance
FMCG
IT
Media
Metal
Pharma
Realty
Sectoral Performance- Jan2015
(Source: IISL sectoral indices)
% Change from previous month
All investors are required to be compliant. This
means your PAN and address details are registered
on a central database for all capital market
intermediaries to use. You can check your KYC status
on
KYC
https://www.cvlkra.com/
What’s
New
OFS: Online Offer for Sale by Government for
Disinvestment in PSUs. Clients of Agroy could easily
participate in the recently concluded COAL INDIA
OFS which resulted in 100% allotment.
Key Indices CMP
Sensex 29681.77 2473.16 9.1%
Nifty 8952.35 778.25 9.5%
DJIA 17416.85 -613.36 -3.4%
NASDAQ 4683.41 -90.06 -1.9%
Nikkei 17606.22 -202.53 -1.1%
Hang Seng 24595.85 -211.43 -0.9%
Gold ($/oz) 1285.90 112.40 9.6%
Silver ($/oz) 16.95 1.28 8.2%
Brent Crude ($) 49.03 -11.21 -18.6%
USD / INR 63.18 0.00 0.0%
EUR / INR 61.95 -14.57 -19.0%
CMP Change
328.40 75.7%
109.95 61.1%
172.70 42.6%
514.75 34.0%
629.50 29.7%
CMP Change
97.85 -89.8%
88.90 -89.3%
193.15 -82.2%
63.80 -81.8%
69.30 -79.4%
Monthly Change
Rs. In Crore
12919
1036
13753
87778
Net FII Investment
Top Monthly Gainers
Sun Pharma Advanced
Research Company Ltd.
Housing Development &
Infrastructure Ltd.
79708
Jan-2015
Dec-2014
Nov-2014
Year to Month
Last Year
Top Monthly Losers
Tata Coffee Ltd.
Minda Corporation Ltd.
Jubilant Life Sciences Ltd.
Jet Airways (India) Ltd.
Adani Enterprises Ltd.
Bank of Baroda
Hathway Cable & Datacom
Ltd.
Corporation Bank
Wealth Vistas | January 2015 | www.agroy.com

4. FOR PRIVATE CIRCULATION ONLY. This document has been prepared by AGROY Finance & Investment Ltd (AGROY). This
document is subject to changes without prior notice and is intended only for the person or entity to which it is addressed to and may contain confidential
and/or privileged material and is not for any type of circulation. Kindly note that this document does not constitute an offer or solicitation for the purchase
or sale of any financial instrument or as an official confirmation of any transaction. The information contained herein has been compiled from publicly
available data or other sources believed to be reliable, Though all effort will be made to keep the above information updated, AGROY or any of its
Directors or employees are under no obligation to keep the information current or to keep providing this document on regular basis to anyone. This
document is prepared for information only and is not intended to be and must not alone be taken as the basis of an investment decision. The user
assumes the entire risk of any use made of this information.
Wealth Vistas | January 2015 | www.agroy.com