Yep, what will you do with an extra Rs 45,000 in Tax Savings ?
If you fall in the 30% tax bracket (i.e. if you earn > Rs 10 lakhs p.a.), that’s how much you can save if you invest in Tax Saving Mutual Funds, also popularly known as Equity Linked Savings Schemes ( ELSS Funds ) – That’s like Rs 45,000 of free money which you would have otherwise paid to the Government of India in taxes.
- If you earn between Rs 2.5 to 5 lakhs, your tax slab is 10% and you can save ~ Rs 15,000
- If you earn between Rs 5 to 10 lakhs, your tax slab is 20% and you can save ~ Rs 30,000
Why does the Income Tax Department provide an incentive to save taxes through investment?
Unlike the USA or other developed nations, in India we do not have social security. Government does not contribute anything major for our retirement years. They want you to save enough during your earning life so that you are fully covered for your retirement. Under section 80C of Income Tax, you can invest upto Rs.1,50,000 per year in specified investment products and claim tax benefit as high as Rs 45,000 (assumed 30% tax bracket). This tax benefit acts as an incentive for most of us to save. However, mostly people commit mistake in choosing the right financial product.
Here are a few popular saving options that qualify for tax savings u/s 80C:
- Life insurance premium paid towards life of self, spouse or any child.
- Contribution towards Public Provident Fund Scheme.
- Subscription to the NSC (VIII Issue).
- Mutual fund Equity Linked Savings Scheme.
- Term Deposit (Fixed Deposit) for 5 years or more with Scheduled Bank in accordance with a scheme framed and notified by the Central Government.
So yes, if you need to make investments towards tax savings, you can do so for free through Finqa.
Finqa offers a free online investment platform for easily making your tax saving investments. If you have an existing demat account, just enter your details here and we will schedule your investments. You make the payment online and receive the proofs via email.
No filling paper forms or hunting for an agent to get your work done at the last minute.
All those who invest through us are eligible to win prizes via our ‘Lucky Dip’. Just answer one simple question: ” What will you do with an extra Rs 15 / 30 / 45,000 that you will save in taxes ? ”
What do you stand to win ?
- All participants get complimentary filing of Income Tax returns.
- Top 20 answers get a complimentary ‘Starter Plan‘ worth Rs 2500 each.
- One’Lucky Dip’ Prize Winner : A Moto G (2nd Gen) smartphone from Motorola
A brief overview about Finqa
We started out last year by providing pure Financial Planning services on a paid model. Over the last couple of months, we realised that while everybody wanted financial advice / guidance about where they should invest their money, they didn’t necessarily want to get a complete detailed financial plan. They also weren’t sure about paying up without experiencing our service.
To meet this requirement, we now have a Free plan – It’s a guidance based model where we validate your investment objectives, guide you and provide an online platform to make your investments. There are no strings attached and you only execute if you completely understand our recommendations and are comfortable with them.
This also gives you an opportunity to try our service before you sign up for a financial plan. Yes, we do make money and you can read about how we do it here.
More info about us is available at www.finqa.in
P.S: It will be great if you can help spread the word among friends / family who may need to make tax saving investments. And if you work at a corporate and can help connect us to your HR department, it will make our day even better 🙂
Cheers
Ishani
Catchy heading… got me to click but was disappointed to read content.. anyway good strategy.. keep it up!
arpit shekhar
very good
Abhik Prasad
Hi Neil,
Thank you for your feedback.
Since you are in this business, you must also be aware how low financial literacy and awareness is in India. We are all taught in school and college to make money but not how to manage it. Our elders advocate saving but fall short on how to grow it.
Our target market is a mix of those who have no clue about investing, those who have some idea about the need to start but don’t know where to begin and the ‘sophisticated’ ones.
One of our key focus areas is improving financial literacy and making sure our clients understand exactly what advice they are getting and how it will help them. That’s why we built http://www.fin10.com – It’s a basic financial guide with 100 lessons on topics which everyone should be aware of.
For us, Product sales is the last priority. Our aim is to understand individual goals and then provide a solution appropriate to that person. Yes, some of them are difficult to deal with and it’s tough to get people to pay for financial advice, but that’s where the opportunity lies.
There is a huge trust deficit in the market on account of Financial Product mis selling by banks and insurance agents…Even today, if someone goes to a bank, the salesman will try and sell them a ULIP simply because it earns them a higher commission (We think ULIP’s are toxic and advise all our clients to absolutely stay away from them)
Yes, our model will not make a lot of money initially…but then again, we aren’t looking for a 1 year relationship with our clients. Infact, that’s why we have a free plan so that people can experience our service for a year and then sign up for a paid plan once they see value in our offering.
Our approach is a long term and we are looking at relationships with our clients spanning a couple of decades (not just years) and aim to eventually provide them with all personal finance related services under one roof (think loans, tax filing, life, vehicle, property insurance, credit cards etc)
As they grow older and and their investments grow and they make money, so will we.
Yep, it’s a very long term game but we are ok with it 🙂
Abhik Prasad
The reason why I put sophisticated in quotes is because it’s a very subjective term, especially in the case of investors.
Also, most of the advice from the suits at E&Y, Deloitte etc is designed to churn client’s portfolios in the name of Active Portfolio Management…and that’s probably because the concept of 2/20 isn’t very popular here yet so more product sales / trades = more commission / brokerage.
Also, I did not say we don’t want to break our heads to make our rich clients richer…we just don’t want to do it illegally. ( as you would have noticed in the article, the brokers did get fined)
I wasn’t being critical or defensive about your idea…apologies if it came across that way.
Since you took the time to share your feedback, that’s why I was explaining our focus areas…which is the long tail.
You can have 100 clients worth 100 crores each.
We want to get to 1 lakh clients worth 10 lakh each eventually. Same difference and equally hard to do.
Just a different market segment we are after (those who earn between Rs 3 lakhs – Rs 1-2 crores a year) – A segment which is not served by either the banks or the suits from E&Y etc
+ We hate wearing suits 🙂
Again, appreciate you taking time out to share your POV though and all the best in your endeavor.
Ishani
????
When did i mention anything abt sophisticated clients? or anything similar to it?
asha chaudhry
hey abhik,
can’t see neil’s comments. looks like he deleted them…??
Sanchita Dutta
I have been a financial Advisor ( which in reality is something like Commission Agent, as the only source of income was commission) in the past selling insurance, infrastructure bonds, mutual funds, trading accounts and what not. To be fair, while the customer interests were always around but it was the commission which mattered the most.
The Goose laying the golden eggs was cut by the agents themselves as eventually agents got greedier, customers lost money, markets went down, insurance companies to survive cut down commissions, mutual funds had to abolish the 2% commission fully, bonds lost sheen and suddenly the entire business looked dim for every corner.
No wonder you are bang on when u say majority of agents left (including me 🙂 ) which is a good thing since those left now have atleast reasonably large chunk to survive on. But the issue of self interest Vs customer interest will always be there…. whether you wear suits or not. ( Reminds me of the other kejriwal who just today was trending for travelling in business class after shunting around in buses and blue wagon R not so long ago)
Notwithstanding, its an earnest effort and I really feel for you and wish that you guys succeed. Mutual Funds were the last product which I gave up and abolishing of the commission there actually harmed the customers much more as most of them missed out the current rally due to ignorance and lack of those zestful and ever following sales agents…
Regards, Sanchita (http://www.indiacod.com)
Vinay Chhoda
I don’t think any of the Suits at E&Y, Deloitte are into Active portfolio management and churn their client’s money…Thats a bit of misrepresentation there in your comment. There is a difference between between being a financial advisor and running a corporate advisory.
Also, the 2/20 concept is completely different then traditional mutual fund sales because the 2/20 concept also entails a significantly higher risk/return profile level in terms of investments hence the higher fees. I’m not justifying these fees here, I am only trying to be factually correct.