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360° Financial Planning

Financial Planning

Financial Planning is the process of meeting your life goals through the proper management of your finances. It involves the process of assessing your financial situation, determining your objectives and formulating a plan to achieve them. The objective of financial planning is to ensure that the right amount of money is available in the right hands at the right point in the future to achieve an individual's life goals. It also allows you to understand how each financial decision you make affects other areas of your finances.

Who needs Financial Planning?

It is useful to everyone. Very few can consider themselves too rich to engage in Financial Planning. There are many instances of highly paid employees who came to financial grief merely because they did not plan for their post-career years. Similarly even people earning small amounts of income should undertake this process, as it will help them in prioritizing their goals so that their limited income can be used more efficiently. Financial planning provides direction and meaning to your financial decisions. It allows you

Equity

Everyone needs to save for a rainy day. Once you have saved enough to take care of emergencies, you should start thinking about investing and to make your money grow. Stocks are a part, if not the cornerstone, of nearly any investment portfolio.Over the last few decades, the average person's interest in the stock market has grown exponentially. What was once a toy of the rich has now turned into the vehicle of choice for growing wealth. This demand coupled with advances in trading technology has opened up the markets so that nowadays nearly anybody can own stocks. We at Invest Right can help you plan your investments so that you can reap adequate benefits and achieve your financial goals.

Wealth Desk

Online software for consolidated management of Mutual Fund /FD / Postal Savings, Life Insurance & General Insurance

Use it from any part of the world. Our Online Wealth Account generates a World Class “Tension Free” account for our clients. This software will manage the investments in All Mutual Fund Schemes, Fixed Income Instruments which includes - Bank Deposits, Company Fixed Deposits, Bonds, Debentures, PPF, Debentures, NSS, Postal Savings, Life & Non Life Insurance with excellent graphically represented reports for our Clients:

The below mentioned Reports are generated in Wealth Account :

  • Consolidated Wealth Allocation Report .
  • Current Valuation Report .
  • Interest Income Report.
  • Mutual Fund Valuation Report.
  • Mutual Fund Transaction Report .
  • FD Maturity Report .
  • Life & Non life Insurance premium due report .
  • Pop-up Reminder for SIP, Insurance and FD's

The clients will get following SMS & Email Alerts from Us:-

  • Monthly MF valuation alert.
  • Profit booking alerts.
  • Dividend earned alert .
  • Alert by Targeted NAV / Date & Valuation
  • Life insurance Premium Due alert .
  • Policy maturity alert .
  • Vehicle insurance premium due alert.
  • Health Insurance premium due alert.
  • FD & Postal Scheme Maturity alerts

NRI Corner

NRI Corner

Who is a Non-Resident Indian (NRI)?
A non-resident Indian (NRI) is an Indian citizen or a person of Indian origin who stays abroad for employment, business or vocation outside India, or stays abroad under circumstances indicating an uncertain duration.

Who is a Person of Indian Origin (PIO)?
A Person of Indian Origin means a citizen of any country (other than Bangladesh or Pakistan), if the person: (a) at any time held an Indian passport; or (b) or the person's parents or grandparents were citizens of India; or (c) is a spouse of an Indian citizen, or of a person referred to in (a) or (b) above.

Who is a Foreign Institutional Investor (FII)?
An FII is an institution established or incorporated outside India which proposes to invest in Indian securities and is registered with SEBI.

Who is an Overseas Corporate Body (OCB) ?
An OCB includes overseas companies, partnership firms, societies and other corporate bodies owned predominantly by non-resident persons of Indian nationality or origin outside India.

Can an NRI maintain a bank account in India?
Yes. NRIs can maintain accounts in rupees as well as in foreign currency.

What types of rupee accounts may NRIs maintain?
There are 4 types:
1. Non-resident (External) Rupee Accounts (NRE)
2. Non-Resident (Special) Rupee (NRSR) Account
3. Ordinary Non-resident Rupee Accounts (NRO)
4. Non-resident (Non-repatriable) Rupee deposit accounts (NRNR)

What are NRE, NRO and FCNR accounts?

Non-Resident (External) Rupee (NRE). This is a Rupee account from which funds are freely repatriable. It can be opened with either funds remitted from abroad or local funds which can be remitted abroad.

Non-Resident Ordinary Rupee (NRO). This is a Rupee account and can be opened with funds either remitted from abroad or generated in India. These funds are non-repatriable. However, under certain circumstances, these are allowed to be repatriated.

Fully Convertible Non-Resident Rupee (FCNR). This account is similar to the NRE account except that the funds are held in foreign currencies and can be maintained in Pound Sterling,U.S. Dollar, Euro and Japanese Yen. FCNR accounts can be maintained only in the form of 'term deposits', i.e. a deposit kept for fixed periods ranging from 6 months to 3 years.

How do NRE, NRO and NRSR accounts differ?
Balances held in NRE accounts can be repatriated abroad freely, whereas funds in NRSR and NRO account cannot be normally remitted abroad but have to be used only for local payments in rupees. Consequently, funds remitted from abroad or local funds which can otherwise be remitted abroad to the accountholder can only be credited to NRE accounts.

Can an NRI, and FIIs invest in mutual funds in India?
Yes. The following summary outlines the various provisions related to investments by Non-Resident Indians ('NRIs'), Persons of Indian Origin ('PIOs') and Foreign Institutional Investors ('FIIs') in the Schemes of the Mutual Fund and is based on the relevant provisions of the Income-tax Act, 1961 ('the Act'), regulations issued under the Foreign Exchange Management Act, 1999 and the Wealth-tax Act, 1957 (collectively called 'the relevant provisions'). The following information is provided for general information only. However, in view of the individual nature of the implications, each investor is advised to consult with his or her own tax advisors / authorised dealers with respect to the specific tax and other implications arising out of his or her participation in the funds.

Can an NRI, and FIIs invest in mutual funds in India?
Yes. The following summary outlines the various provisions related to investments by Non-Resident Indians ('NRIs'), Persons of Indian Origin ('PIOs') and Foreign Institutional Investors ('FIIs') in the Schemes of the Mutual Fund and is based on the relevant provisions of the Income-tax Act, 1961 ('the Act'), regulations issued under the Foreign Exchange Management Act, 1999 and the Wealth-tax Act, 1957 (collectively called 'the relevant provisions').

The following information is provided for general information only. However, in view of the individual nature of the implications, each investor is advised to consult with his or her own tax advisors / authorised dealers with respect to the specific tax and other implications arising out of his or her participation in the funds.

Purchase Applications.
NRIs can invest in mutual funds on a Repatriable/Non-Repatriable basis as per the provisions of Schedule 5 of the Foreign Exchange Management (Transfer or issue of Security by a Person Resident Outside India) Regulations, 2000 ('the Regulations') as explained below.

A Common Application Form duly completed together with cheques or bank drafts should be remitted through Investor Service Centres. All cheques/demand drafts accompanying the application form must be made in favour of the scheme names and crossed "A/c payee" only and should be made payable at a city where the application is accepted by any Investor Service Centres.

Repatriable Basis - NRIs, PIOs.
When NRIs and PIOs apply to purchase units on a repatriable basis, payments may be made inward remittances, or by cheques drawn on the NRE/FCNR account of the investor [Clause 3(2) of the Regulations] payable at the city where the application form is accepted by any Investor Service Centres.

Non-Repatriable Basis - NRIs, PIOs.
When NRIs/PIOs apply for units on a non-repatriable basis, payments may be made by inward remittances, or by cheques/demand drafts drawn on the NRE/FCNR/NRO/NRSR account of the investor, payable at the city where the application form is accepted by any Investor Service Centres.

FII Investors.
FIIs may pay for their purchases with funds held in a Foreign Currency account or Non-resident Rupee account maintained in a designated branch of an authorised dealer. Payments may be made by cheques payable at a city where the application is accepted by any Investor Service Centres..

Applications from FIIs should be accompanied by appropriate documentation supporting the status of the investor and should be sent to the AMC/ISC , so as to reach them not later than 7 days after the date of the subscription.

Similarly, in case of an application under a Power of Attorney or by an FII, the original Power of Attorney or the relevant resolution/authority to make the application (or a duly notarised certified true copy thereof), along with a certified copy of the Memorandum and Articles of Association and/or bye laws and Certificate of Registration should be submitted to the ISC within 7 days from the date of the application. The officials should sign the application under their official designation.
The NRIs/PIOs/FIIs may also be required to furnish other documents needed to process their investments.

Does an NRI, FII require any approval from the RBI to invest in mutual funds?
No special approval is required. NRIs/PIOs/FIIs have been granted a general permission by RBI [Schedule 5 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000] for investing in /redeeming units of the funds subject to conditions set out in the aforesaid regulations.

Can an NRI invest in foreign currency?
An NRI cannot make the investment in foreign currency. He needs to give a Rupee cheque from his NRE, NRO, NRSR bank account in India. He may also send a Rupee cheque from abroad payable in a bank in India. However, for an NRI to invest, it is mandatory that he maintains a bank account in India.

What is the mode of payment for Repatriation and Non-Repatriation Basis?
Repatriable Basis. Payments for the purchase of the units may be made by Indian Rupee drafts purchased abroad, or by cheques drawn on the NRE/FCNR Account of the investor, payable at the city where the application form is accepted by any Investor Service Centres.

Non-Repatriable Basis.
Payments for the purchase of the units may be made by Indian Rupee drafts purchased abroad, or by cheques/demand drafts drawn on the NRE/FCNR/NRO/NRSR/NRNR account of the investor, payable at the city where the application form is accepted by any Investor Service Centres.

FII Investors.
FIIs may pay for their subscription amounts by Indian Rupee drafts purchased abroad, or from funds held in a Foreign Currency account or Non-resident Rupee account maintained in a designated branch of an authorised dealer. The Indian Rupee drafts/cheques should be made payable at a city where the application is accepted by any Investor Service Centres.

When will my NRI purchase take effect?
If an application is received before the 3 p.m., Indian Standard Time on any business day, the allocation of units will be based on the NAV of that business day. All applications received after the prescribed time will be treated as having been received on the next business day and the units allotted accordingly.

How does an NRI redeem funds?
In the open-end schemes of mutual fund units can be purchased or redeemed at any point in time. To redeem funds, submit the redemption request to the nearest Investor Service Centre. Your form must contain the investor's folio number and the amount / units you would like to redeem. Redemption requests by telephone, telegram, fax or email that lack valid signatures will not be accepted.

How will the redemption proceeds be paid?
Redemption proceeds will be paid by cheque. The cheque will be payable to the first unitholder and will include the bank account number. Redemption proceeds/repurchase price and/or dividend or income earned (if any) will be payable in Indian Rupees only.

How can the redemption proceeds be repatriated?
The investments shall carry the right of repatriation of capital invested and capital appreciation so long as the investor continues to be a resident outside India.
In the case of an FII, the designated branch of the authorised dealer may allow remittance of net sale/maturity proceeds (after payment of taxes) or credit the amount to the Foreign Currency account or Non-Resident Rupee account of the FII, maintained in accordance with the approval granted to it by the RBI.
In any other case, where the investment is made out of inward remittance or from funds held in the NRE/FCNR account of the investor, the maturity proceeds/repurchase price of units (after payment of taxes) may be credited to the NRE/FCNR/NRO/NRSR account of the non-resident investor maintained with an authorised dealer in India

What about redemption proceeds where investments were made on a non-repatriable basis?
Where the purchase of units is made on a non-repatriable basis, the maturity proceeds/repurchase price of units (after payment of taxes) will not qualify for repatriation and may be credited to the NRO/NRSR account of the non-resident investor.
Where the investment is made out of funds held in a NRSR account, the maturity proceeds/ repurchase price of units (after payment of taxes) may be credited to the NRSR account maintained by the investor with an authorised dealer in India.
Similarly, investments in units purchased in Rupees, where the investor was a resident of India and subsequently becomes a non-resident, will not qualify for repatriation of repurchase proceeds of units.
The entire income distribution on the investment will, however, qualify for full repatriation. Investors are advised to contact their banks/tax consultants if they desire remittance of the income distribution on units abroad.

Is the income/dividend on mutual fund units repatriable?
The investments shall carry the right of repatriation of capital invested and capital appreciation so long as the investor continues to be a resident outside India. In the case of an FII, the designated branch of the authorised dealer may allow remittance of net sale/maturity proceeds (after payment of taxes) or credit the amount to the Foreign Currency account or Non-resident Rupee account of the FII maintained in accordance with the approval granted to it by the RBI. In any other case, where the investment is made out of inward remittance or from funds held in NRE/FCNR account of the investor, the maturity proceeds/repurchase price of units (after payment of taxes) may be credited to NRE/FCNR/NRO/NRSR account of the non-resident investor maintained with an authorised dealer in India.

What is the tax liability on redemptions?
Under Section 2(42A) of the Income Tax Act, units of the fund held as a capital asset for a period of more than 12 months immediately preceding the date of transfer, will be treated as a long-term capital asset for the computation of capital gains, thus qualifying for the long-term capital gains tax rate. In all other cases, it would be treated as a short-term capital asset and would be taxed at the short-term capital gains tax rate.

What is the tax liability for income received from your mutual funds?
As per Section 10(35) of the Income Tax Act, 1961, income received from mutual fund units specified under Section 10(23D) is exempt from income tax in India and the mutual funds are subject to pay distribution tax in debt oriented schemes. Hence all dividends are tax-free in the hands of non-resident investors and no TDS is applicable on the same.

Is it mandatory to have a Permanent Account Number (PAN)?
It is not mandatory to have a PAN for an NRI even if the investment amount is greater than Rs. 50,000. PAN would however, be required if the NRI is required to file a return in India or claim a refund of any taxes paid.

How does one apply for a PAN?
An application is required to be made in Form 49A� (Download)

What is the proof of the Tax Deduction at Source?
A TDS certificate is issued in the name of the investor mentioning the details of the transaction and the tax deducted. The TDS certificate is commonly known as Form16 A.

When will the TDS certificate be issued?
A TDS certificate (Form 16A) will be despatched to the investor at his or her registered address along with the redemption warrant.

Can an NRI have a joint account in a mutual fund with a resident Indian?
Yes. An NRI investor can jointly own a fund account with a resident Indian or a Non-resident Indian.

Is the indexation benefit available to NRIs?
Yes, if units are held for more than 12 months i.e. on long-term capital gains.

Are fund units liable to the wealth tax?
No. Units issued to overseas investors will not be treated as assets as defined under section 2(ea) of the Wealth-Tax Act, 1957 and hence will not be liable to wealth tax.

Can dividend received from a mutual fund in an NRO account be repatriated?
Yes. Income generated from investments (dividend, in this case) done on a non-repatriable basis qualify for full repatriation.

Can an NRI fax a request followed by the original documents?
No. Units cannot be redeemed or allotted on the basis of fax applications. A request that lacks a valid signature cannot be processed due to legal restrictions.

Can a Power of Attorney (POA) invest on behalf of the NRI investor?
Yes. unlike banks where a POA holder cannot open an account on behalf of the NRI, in a mutual fund the POA has the authority to invest on behalf of the investor and sign documents for initial and additional purchases as well as redemptions.
While applying for purchase of units the POA holder needs to submit the original POA or a copy duly notarised should be submitted. The Power of attorney should contain the signature of both the first holder and the POA holder. Only when the POA is registered does the POA holder have the right to transact on behalf of the NRI investor. His signature will be verified for processing any transaction/request.

Is nomination by NRIs allowed in Mutual Funds?
Yes. It is allowed only for Individuals/HUFs.

Can a resident Indian have an NRI as nominee?
Yes. The same rules apply for nominees to resident Indian accounts. An NRI can be a nominee to an account which is in the name of a resident Indian.

Investments by U.S Person
There are certain mutual funds which do not permit investments in their schemes as these are entities who are also governed by the laws in US (for eg Franklin Templeton Mutual Fund) and the Schemes have not been registered in the United States of America under the Securities Act of 1933 which is a mandatory requirement for these fund houses. Applicants for Units may be required to declare that they are not a U.S. Person and are not applying for Units on behalf of any U.S. Person.
The term "U.S. Person" shall mean any person that is a United States Person within the meaning of Regulations under the United States Securities Act of 1933, as the definition of such term may be changed from time to time by legislation, rules, regulations or judicial or administrative agency interpretations.
Funds presently not eligible for investments by US residents are:
Fidelity Mutual Fund
Franklin Templeton Mutual Fund
HSBC Mutual Fund
PNB Principal Mutual Fund

Overseas Citizenship of India (OCI)
Who is eligible for OCI?
Persons of Indian Origin, who migrated from India after 26 January, 1950, and
1. who were citizens of India on or at anytime after 26.01.1950 or
2. who were eligible to become Indian citizens on 26th January, 1950 or
3. belonged to a territory that became part of India after 15th August, 1947 and
4. their children and grand children,
whose present nationality is such that the country of nationality allows dual citizenship in some form or the other under the local laws, will be eligible to be registered as OCI. Minor children of such persons are also eligible for registration as OCI. However, minor children, whose both parents are Indian citizens, are not eligible for OCI.
OCI is a passage to become Indian Citizen
The grant of OCI is extended to citizens of all countries (which allow dual nationality) other than those who had ever been citizens of Pakistan and Bangladesh. The amended legislation further reduces the period of stay of ‘two years’ to ‘one year’ in India for OCI, who is registered for five years, to become eligible for grant of Indian citizenship.
Article 9 of the Constitution of India clearly states that a person shall cease to be a citizen of India, if he voluntary acquires the citizenship of any foreign State. Therefore, one cannot have citizenship of any other country, if he is an Indian citizen. The expression ‘dual citizenship’ is, therefore, a misnomer. However, the technical term used for the scheme in the Citizenship Act, 1955 (as amended vide Amendment Act, 2005) is ‘Overseas Citizenship of India (OCI)’.
Persons registered as OCI are not Indian citizens. This is a new category of citizenship created under the statute with certain restricted rights as compared to Indian citizens.
OCIs holder can not hold the following positions:
1. Public employment,
2. election to Constitutional offices like President/Vice President/Judges of the Supreme Court or High Courts
3. Members of Parliament or Legislative Assembly/Council or
4. right to vote under Representation of People Act, 1950.
A person registered as OCI is entitled to the following benefits:
1. Grant of multiple entry, multi-purpose lifelong visa to visit India;
2. Exemption from registration with FRRO/FRO for any length of stay in India; and
3. Parity with NRIs in economic, financial and educational fields except in matters relating to acquisition of agricultural/plantation properties.

Insurance

Essentially life insurance provides financial protection to your family and dependents in the event of any unforeseen event or your untimely death. To cover you under a life insurance policy, an insurance company will charge you a certain sum of money (called the premium) periodically. The premium paid helps cover the risk that the life insurance company takes by insuring your life and in turn entitles your family to receive a fixed lump sum.

The premium you pay depends on a variety of factors including age, health and the amount of life cover you want to name a few. However, premiums are typically lower for younger, healthier people, so starting early is always beneficial for you. Thus, through insurance, a person buys security and protection.

Article

The 10 Commandments of Successful Investing:-

 

Commandment 1: Don't attempt to time the market

Timing the market is no guessing matter. To the little investor, timing the market is like taking a random walk. Most people only recognise the correct path after already having set foot on the wrong one. One exception to this is “bottom-fishing”, an approach to buy stocks that you want in your portfolio at prices below the prevailing levels. This entails biding your time and buying into a market downturn before the others do (the age-old philosophy of buying low, selling high). The downside of this approach being that the stock you want may never see the downside you expect.

Commandment 2: Don't try to outguess the market

Market psychology is for shrinks, not for couch potatoes like we humans. What captures the imagination of the market is transient. This means that what is “in” today is “out” tomorrow. Most people only recognise the pattern after it has become apparent to almost everyone else and is too late to act upon. For example, if investment in technology appears to be the current flavour, you are probably already too late to cash in on the trend. In this instance, you should only invest in technology as part of a long-term balanced approach.

Commandment 3: Treat investing like marriage--go for the long haul

Short-term investing could go either way. Invest for the long term. Almost all market pundits and investment studies show that stock investing should be part of a long-term strategy, lasting for five to ten, or even 20, years or longer. Beware that not every year will result in a positive return on your investment. However, over time the plus will likely overwhelm the minus by a substantial margin.

Commandment 4: Stay clear of broker's advice, hot tips and "multibaggers"

Every portfolio advisor is not Invest Right (J) who swears by sound investment principles. Think. Wouldn't most brokers be tempted to make their living by goading their clients to constantly move in and out of positions, thus garnering commissions? This is diametrically opposite to Commandments 1, 2 and 3. For most people, stock advice is like a game--of darts! Only accept advice if the person has your financial interest in mind and is not making a living by selling your stock. Of course never buy from someone who calls on you and gives you advice. J

Commandment 5: Almost always invest in blue chips and blue chips-to-be

Do invest in companies that are considered blue chips. These include not only the BSE 100, but also the others that are slowly stepping into the big league. Invest only in established companies with a good track record. Beware that not every blue chip will rise after you buy it, and that even these otherwise stellar performers will have their good months/years and bad months/years. But over time, the fluctuations will even out and you would be left with a considerable net plus. Also invest in companies that have a good record of declaring dividends (and if you find the solitary one that increases its dividend pay-out each year...you know what to do).

Commandment 6: Prefer steady installment-like buying of stock to buying at one go

Investing should never be done in panic or be treated as an emergency. Purchasing your favourite few is best accomplished at a steady rate over time, so as to avoid the ups and downs of the market. This is called rupee cost averaging and is one of the safest approaches to investing. It works just like any other habit: you buy, regardless whether the price is up or down, until you reach the desired number of shares of that stock.

Commandment 7: Diversify, diversify and diversify

Do diversify your portfolio, both within your selected sectors and within the overall industry. For example, don't invest in only technology because it happens to be in vogue but consider the other industries as well.

Commandment 8: No shopping with borrowed money and maintain a core reserve

Never use margin money to buy stocks. You should not invest money you don't have. A simple and basic rule is to not leverage yourself to an extent that when the tide turns against you, all you are left with is nothing.

You never know when a financial emergency might arise. That's why you must keep a comfortable cash reserve in your savings account, so you do not have to tap into your long-term investments. A reserve equal to six months of salary should be just about ideal.

Commandment 9: Set realistic financial goals

Treat a 500% return with as much derision as you would a 5% return. Decide what you need the money for: To retire early, to finance your kid's college education or to fund your daughter's marriage or just to preserve and build wealth? Whatever the goal you set, make sure it is reasonable and attainable. Expecting too much will only lead to disappointment down the road. Aim for an expected return level that is realistic--not mediocre or overambitious.

Commandment 10: There are 10 more commandments

For those who thought that was the last of the ten commandments I have good news. There's more. Ensure that your portfolio size is controllable (15 stocks is about ideal) and your stocks are well researched. Checkpoints: Is the management quality above board? Does the company have a positive cash flow? Does it have the capability to compete on a global scale? Most importantly, is it shareholder friendly?

Finally, leave your emotions behind when you enter the world of investing. Follow the ten commandments. Time is on your side. Investment success won't happen overnight, so stay focused on long-term returns and avoid overreacting to short-term market swings. Remember, investment success depends on time, not timing.

 

 
 

 

 
Welcome

Invest Right Financial Services has an extremely strong focus on client relationship. The team at Advisory has seven years of proven track record in Financial Services, Equity Advisory and Investment Advisory domain and brings with it strong research and investment advisory capabilities keeping in mind the regulatory framework and the volatility in the investment climate. We offer a progressive planning practice that differentiates itself by being disciplined, well researched and profitable. We are a privately owned company and therefore core decisions regarding our processes and practices start at grassroots, ensuring all angles are covered in the decision making process. It is our belief that by providing a personalized and consistent service experience, we ensure long and fruitful relationship

 
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