Vipin Khandelwal

3 last-minute tax saving tips 2016

March 30, 2016 by Vipin Khandelwal

The date today is March 30, 2016. Normally, it is expected that by this time the tax savings for the year would be done and over.

However, the reality is very different. Based on the emails and comments I have received, it seems that some of us are still far from it, desperately searching for “last-minute tax saving tips”.

In this desperate attempt to “do something“, wrong investment products are being invested into which can make your portfolio suffer for a very long time.

Why wrong? Because they are not understood. The ultimate goal that will be served by those investments is not considered. There is only one thing driving the decision now – save tax.

Here is an example. Manish, a Chartered Accountant, works in the taxation department of an MNC. It is a well paying job. Though working for a few years now, he has not been able to save any money so far, for various reasons. This year he decided to put some money to work. He told his father about it who got him to meet his insurance agent.

How Kisan Vikas Patra offers assured 12% returns?

March 30, 2016March 27, 2016 by Vipin Khandelwal

I was visiting the post office the other day to enquire about the Senior Citizens Savings Scheme.

The friendly person at the desk mentioned that since the rate is going to be revised lower from April 1, 2016 there has been a huge inflow recently into the scheme.

I agreed with him and said “Of course, everyone wants to lock in at the higher rate.”

“Not just that even Kisan Vikas Patra or KVP has witnessed a huge surge in investments, to the tune of several crores.”, he mentioned with a delight.

I was curious and asked why would that be? Kisan Vikas Patra was not even an option I considered for investments.

“Simple na, it doubles your investment in just 100 months. Who wouldn’t go for a thing that offers 12% assured returns.”

Now I was taken aback. 12% assured returns on Kisan Vikas Patra? This is not what I know? Or is this a new form of KVP that has been introduced.

How Saina Nehwal invests, worries me

March 15, 2018March 25, 2016 by Vipin Khandelwal

In case you do not know about Saina Nehwal, she is an ace badminton player, former World no. 1, currently no. 2. She has represented and won for India in several tournaments and won the first Olympic medal for India as well. She is a sportsperson par excellence.

Recently, she gave an interview to Economic Times on her investment preferences and style. Here is a link to that interview.

I was shocked and devastated to read it.

Well, you might say it is none of my business as to how she invests money and probably you are right. But when the same is published in a national newspaper with wide reach and influence, I do tend to get worried.

My first worry starts at the sub text of the headline that says “Saina Nehwal advises savers to put their valued income in LIC or FDs as she finds these two are best options and are also hassle-free.”

Her personal investment style has been made to sound like a gospel for the general public. It is not.

Moreover, her investment style comes across as unthought of and random. I wonder who her investment advisor is!

I am taking up two big points she mentioned in the interview and help you (and hopefully her, if she reads this) see the truth.

Sundaram Select Midcap Fund – A report

May 13, 2016March 22, 2016 by Vipin Khandelwal

(This report on Sundaram Select midcap fund originally appeared on the Unovest Blog.)

What’s the thing about midcaps?

Ask any seasoned investor and he would agree that the potential available with midcaps (as they grow and turn themselves bigger) could be huge. However, midcap stocks can be very volatile.

For those investors who would want the exposure to midcaps but not take the pain of looking at individual stocks, they can invest through midcap funds and make them a part of their long term portfolio.

Midcap funds would mimic the behaviour of midcap stocks as they ultimately invest in them. They can take you on a real topsy-turvy ride. Thus, it is important to select the right fund for your portfolio.

There are several midcap funds out there in the market. It sometimes becomes real difficult to pick one over the other.

Yes, performance is what you would look at but in my view one needs to go real deep – beyond just the performance numbers – and see which fund fits in his/her portfolio and financial goals.

We will make an attempt today with one of the funds.

In this report, we cover one of the oldest funds from the midcap space – Sundaram Select Midcap.

As mentioned, we will attempt to go beyond the performance and understand the fundamental nature of the fund and evaluate how well it has done with respect to its mandate – things that you should look at before making it a part of your portfolio.

Let’s get started.

Small savings rates – what REALly matters?

March 20, 2016 by Vipin Khandelwal

So, small savings rates across the spectrum have been cut including that of the ever popular PPF, Senior Citizens Savings Scheme and the Sukanya Samriddhi Yojana.

In fact, the rates will now be reset every quarter.

Here is the new rate structure applicable on Small Savings Instruments from April 1, 2016:

People are shocked and dismayed at this drastic cut.

Unfortunately, if you too are, then you are missing the real picture. To see this real picture, you would have to add another column to the above table, that of inflation rate.

Why am I not investing in NPS?

February 6, 2018March 17, 2016 by Vipin Khandelwal

NPS - why i will not invest in national pension scheme

Well, as you would know, under section 80CCD, an additional Rs. 50,000 of investments in National Pension Scheme or NPS can be claimed for tax deduction. Basically, you do not have to pay tax on investment upto Rs. 50,000 in NPS.

So, my friends have been calling me asking “Should I invest in NPS? There is an additional tax saving on Rs. 50,000 of investment.”

My simple answer to them is “I would not invest in NPS“, to which I receive surprised uhhs, ahhs and a variety of other expressions. In some cases, they strongly put forth their arguments as to why I am wrong.

It is amazing that tax savings still continue to drive our investment decisions. In this case too, the die hard fans of NPS are actually not the fans of NPS, but merely hunters of more tax benefit.

The ‘bhakts’ of this benefit leave no stone unturned to make you believe that this is the best reason that one should invest in a high lock-in product like NPS.