Your CA Guide📚📖

What is Sukanya Samriddhi Yojana (SSY)? This government scheme aims to securing a bright future for the girl child in India. This is done by facilitating the parents of a girl child in building a fund for the proper education and marriage expenses of their child. The beneficiary of this scheme can be any girl child who is a resident Indian, from the time of opening the account and till the time of maturity or closure. Parents or legal guardian of a girl child who has not attained the age of 10 years can easily open the account. The guardian is allowed to deposit the amount and operate the account. Do note that the account has to be mandatorily operated by the girl child after she attains 18 years age. There will be only one account per girl child. Also, accounts can be opened for a maximum of two girl children in one family, including those adopted. The SSY account can be opened in any post office or authorized branch of bank. A minimum of ₹ 250 and a maximum of ₹ 1.5 lakh can be inv...

What is investment in Government Securities (G-Secs)? Government securities are bonds, both short- and long- term, issued by the Government of India to raise funds for their expenditures. The government pays a specified coupon or interest rate on these bonds that may be payable annually or semi-annually or for any other specified frequency. The G-Secs which have a tenure less than a year are called treasury bills. The G-Secs, which mature after a year, are called bonds. G-Secs offer a whole host of advantages as an investment avenue. There is a Sovereign Guarantee. G-Secs are guaranteed by the Government of India. Hence, they carry almost zero credit risk. G-Secs allow you to lock in attractive interest rates for tenures ranging from 91 days to 40 years. Such long-term interest rate assurance is unparalleled because even banks FDs offer a maximum tenure of 10 years. G-Secs have no TDS (Tax Deducted at Source). Like bank FDs, there will be no tax deduction. Thus, you can pay taxes as ...

What is Post office Monthly Income Scheme (MIS)? Another traditionally popular investment avenue is Post Office Monthly Income Scheme Account (MIS). You can invest in multiples of ₹ 1,500. The maximum investment limit is ₹ 4.5 lakh in single account and ₹ 9 lakh in joint account. For calculation of share of an individual in joint account, each joint holder has an equal share in each joint account i.e. 50% for two holders. Post Office MIS account can be opened by an individual. Such an account can be transferred from one post office to another. Any number of accounts can be opened in any post office but they will be subject to maximum investment limit by adding the balance in all such accounts. A Post Office MIS account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account. The maturity period of a Post Office MIS account is 5 years from 1.12.2011. The interest generated can be drawn through auto credit into savings account standing ...

What is Public Provident Fund (PPF)? The Public Provident Fund (PPF) scheme was started by the National Savings Organization in 1968 to promote small savings. It is an extremely popular long-term investment avenue. The avenue offers an investment option with decent returns together with income tax benefits under Section 80C. Only an Indian resident citizen can open a PPF account. You can open only one PPF account. You cannot have two PPF accounts. Good news is that minors (i.e. below 18 years) can open a PPF account based on a legal age proof.  A PPF account can be opened in designated bank branches and post offices by submitting a PPF account opening form, along with photograph, ID proof and address proof. There are some banks that allow you to open PPF account online, if you are an existing bank customer. In this case, you can open a PPF account online is a few minutes. If you prefer the traditional way of banking, you can visit a branch to open a PPF account. How to open a P...

What is a Fixed Deposit? Fixed Deposit is the safest investment avenue depending on where you have invested. FDs help you grow your savings. They also offer stability and safety of principal amount. By investing in a FD, you can take control of your investments. You have reasonable flexibility, assured returns and high stability. FDs can be done with recognized banks and eligible non-banking financial companies (NBFCs) which are allowed to collect deposits. Bank FDs are the more secured in comparison to corporate/NBFC FDs. FDs require one-time investment. If you want to open new FDs, you need to invest more separately. FDs can generate interest income for a wide range of time, from 1 day to 10 years. You can choose your interest payment frequency, i.e. after a fixed interval or at the end of the tenure (cumulative). The interest income generated by FDs are taxed at the rate of your respective income slab. Some FDs come with premature withdrawal facility, and some FD comes with no pre...

What are Financial Goals? The word ‘goal’ brings to our mind the visual of a goal post and a football screeching past the goal line into the net. Just like 11 players on a football team work together to score a goal, our financial goals require coordination. A financial goal is monetary objective of an individual. It is a purpose. A financial goal is determined by the future requirement for money. Retirement can be a financial goal. Saving for child’s marriage 10 years later could be a financial goal. Saving for making the down payment of your home loan will qualify to be a financial goal. Saving money for a foreign trip 7 months later can also be a financial goal. Financial goals always exist. Only the smart individuals recognize the goals. Recognition is half the job done. Once you know your financial goals, you need to work towards them. A lot of people don’t acknowledge the importance of managing financial goals. Naturally, they do not even plan for their financial goals. Regardl...

"Many earn money and save money. But only a handful are able to create wealth. There is no magic formula or shortcut for wealth creation. Stay disciplined, focus and give time.  Find out about to implement ideas and let your money work as hard as you do." What is Investing? A few people stumble into financial security. They are born with a silver spoon. They get what they want without even asking. But for most people, the only real way to attain financial security is to save and invest over a long period of time. There is no two ways about it. To be financially secure, you will need to have your money work for you. That is the essence of investing. Imagine you earn ₹ 50,000 (take home pay) at the end of the month. Your household expenses are ₹ 40,000 per month. Will the savings of ₹ 10,000 lying in your bank help you when you have no income? If you need ₹ 40,000 to survive for a month, you will need to save for 4 months (₹ 10,000 x 4 = ₹ 40,000) It is not possible to save...

“Individuals and families are putting a lot of effort to save and invest, but they are not preparing a solid plan when it comes to transferring the wealth to the next of kin. After the death of an individual, his/her closest people realize that they have been unaware of the financial picture, investments etc. It is important to hand over the legacy in a planned way. In this blog, we will understand how you can accomplish this task.”   Succession Planning These are exciting times for Indians and their families. Promising opportunities and wealth creation offer plenty of prospects for sustained growth and asset diversification. Most families are witnessing better times. Indian families are built on a strong foundation of values, culture and tradition. It is ensured that good values are passed on through generations. Like each individual, each family has a vision for the future and is fully committed to the success. However, the demise of the main person in the family can lead to ...