In the last two decades, Indian women have fearlessly challenged social norms to become financially independent. It is heartening to see more and more women making a career and earning a living for themselves.
Along with financial independence, it is also important for women to learn about financial management and tax savings. The objective of tax planning is to make the best use of government concessions and minimize the tax liability.
The Income Tax Act has several provisions that can help women do this. Income tax liability can be reduced by claiming deductions or through tax-saving investments.


Below mentioned are three recommendations on how to reduce tax liability.

  1. Health insurance
    Section 80D allows taxpayers to claim a deduction for the premium amount paid towards health insurance up to ₹ 25,000. The premium payment can be on behalf of the individual, her spouse, or parents. An additional deduction of ₹ 5,000 is allowed when health insurance is purchased for senior citizens.
  2. Home loans
    Availing of home loans offers tax benefits to women on both, the principal as well as the interest to be paid. Section 80C allows a tax exemption of up to ₹ 1.5 lakh every year for the principal amount. Additionally, Section 24 has a provision for tax exemption of up to INR 2 lakh per annum towards interest.
  3. Education loans
    Education loans are eligible to be claimed for tax exemption under section 80E. The maximum exemption allowed for interest payment per year is INR 1.5 lakh for up to seven assessment years. The loan may be availed for self, spouse, or children.


Tax saving is very important when it comes to managing personal finances. However, it is also important to enhance the value of your money for long-term financial benefits. There are several tax-saving investments that can be used for this purpose. Popular investments include Equity-Linked Savings Schemes (ELSS), Public Provident Fund (PPF), National Savings Scheme (NSC), tax-saving fixed deposits (FDs), and Unit-Linked Insurance Plans (ULIPs).


Equity Linked Saving Scheme or ELSS is a tax saving mutual fund where you can save up to ₹1.5 lakh in a financial year under Section 80C.
For women who want to know how to save income tax, checking ELSS funds is a good option. ELSS, an innovative tax-saving product, effectively addresses this problem. ELSS funds offer relatively higher returns while also being eligible for tax deductions. Here are five features of ELSS.

  1. Equity-focused investment
    More than 80% of the ELSS corpus is invested in equity and related securities. Investors can buy ELSS online or offline to reduce their tax liability.
  2. Long-term investment
    ELSS is designed as a long-term investment and has a lock-in period of three years. However, to maximize returns, it is recommended that individuals stay invested for five to ten years. Long-term investment in ELSS enables fund managers to focus on delivering stellar returns instead of volatile short-term fluctuations.
  3. Flexibility
    ELSS allows investors to set the pace of their investment. One can make a lumpsum investment, or create a Systematic Investment Plan (SIP) based on their individual preference. Furthermore, investors may buy ELSS online or offline as per their convenience.
  4. ELSS returns
    The value of an ELSS unit is reflected in its Net Asset Value (NAV). The NAV changes daily due to market forces. These schemes do not offer a fixed rate of return as most of the corpus is invested in equities and related instruments. The value of the investment is naturally subject to fluctuations due to the nature of the equities. However, long-term investment in these funds has historically provided returns that are far better than any other tax-saving investment.
  5. Tax-saving investment
    The most attractive feature of ELSS is that investment in these products qualifies for tax exemption of up to INR 1.5 lakh under section 80C of the Income Tax Act. The principal, dividends, and maturity proceeds are all exempt from taxes.
    The aforementioned are some tips to help women understand how to save income tax using the different tax-saving products available today. However, like all other investment options, it is important to understand the pros and cons of various choices to make an informed decision.
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Normally when you approach a bank or a home finance company for a mortgage loan, they will insist on some margin from your side. That is meant to reduce the financer’s risk and ensure that your own money is also committed to the asset. The margin required may range from 10% to 20% and depends on the age of the customer, the income level and the price of the property. Remember, the home loan value is calculated on the overall cost of the apartment including the cost of the house, cost of interiors, registration and stamp duty. Most banks will fund up to 85% of this value. Some banks travel that extra mile to finance you for your furniture and woodwork within the house. Either ways, the principle should be to reduce the loan to the extent possible by bringing in as much money as you can afford as margin. After all, your home is a lifetime asset and you have to put your best foot forward.
Normally, for a small apartment costing ₹75 lakhs in a metropolitan city in India, your personal margin will be close to ₹10 lakhs. Obviously, nobody carries this kind of liquidity and hence you need home loan down payment assistance.
Here are some ways you can do it with the pros and cons of each one of them:


This is a very smart and intelligent way of planning for your home loan down payment. When you are planning to purchase 5 years down the line with a margin of ₹10 lakhs, then you can start a SIP with around ₹12,000 per month. Instead of taking the risk of an equity fund, you can opt for a balanced fund, which will give you an average return of around 13% per annum. By saving just ₹12,000 per month in this SIP, you invest a total of ₹7.20 lakhs of your money while the balance ₹2.80 lakhs comes in the form of market returns. Of course, you can also get a higher return by opting for an equity fund but then 5 years is not exactly a time frame during which equities will necessarily generate returns as per your expectations. Hence a balanced fund will hedge your risks better. The moral of the story is that when you plan your home purchase well in advance, you can make the power of compounding work in your favor.


This is an option you do have provided you are sitting in the midst of a bull market and are sitting on healthy profits from your equity holdings or your equity mutual funds. The question is whether you should be taking money out of your investments. Remember, buying a home is one of your major lifetime goals and you can always make that exception. Again, we are not suggesting touching the principal amount invested. You can just swipe the profits out and use to pay the margin money.


Not many are aware of this but premature withdrawal from your provident fund is permitted for special purposes and purchasing a home is one of them. The entire process of withdrawal takes about 21 days. While the PF department promises to release the funds in 1-week time, it is always safer to provide for delays since this request will have to be forwarded through your employer. When you plan to use your PF money to pay for the home loan margin, provide for the extra time of 21 days. Also, remember that if your PF has been continuing for more than 5 years only then you can withdraw the money without any tax implications. Else, the withdrawal is treated as an income in your hand and you will have to pay a steep tax on that.


Normally, the bridge loan to finance your home loan margin is given provided you are willing to give some hypothecation against the loan. If you have another property ownership or shares or bonds or even endowment policies with assured surrender value then you can hypothecate these assets with your bank and actually get a much lower rate for the margin loan. Normally, secured loans attract a relatively lower rate of interest compared to unsecured loans. However, in principle you will still be adding to your overall debt and you need to be cautious about that.


Personal loan is an unsecured loan your bank will provide that is based on your credit history. A basic caveat needs to be understood here. Personal loans being unsecured are high cost loans. The average cost of the loan can range from 16-18% and is best avoided unless it is absolutely inevitable. Many home buyers use the personal loan as an interim financing measure till the time other sources of money can be brought in. Here you need to remember that personal loans carry a 6 months lock-in and there is an exit load of up to 5% on these loans for premature closure. All these can substantially add to your costs.
So, in reality there are a variety of ways to finance your home loan margin. But as prudent investors we suggest to use the SIP route to plan your margin well in advance. That way your money also works hard for you.
Source : Angel bee

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7 Things You Need To Stop Doing To Be More Productive, Backed By Science

Working smarter, not harder, is the key to better results

When I was 17 years old, I used to work and study for about 20 hours a day. I went to school, did my homework during breaks and managed a not-for-profit organization at night. At that time, working long hours landed me countless national campaigns, opportunities to work with A-list organizations and a successful career. As I got older, I started to think differently. I realized that working more is not always the right, or only, path to success.

Sometimes, working less can actually produce better resu

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ELSS : Tax Savings Plus Wealth Creation

  • If you are young and have more years of service ahead, you can put a major portion of your tax saving investment in equity linked savings scheme
  • ELSS is mutual fund investment, which also gives you tax benefit. Here is how you can use it to work for you in terms of investment and taxation

The beginning of a financial year is a good time to plan your investment. It is also a good time to put your money in investment basket and get tax benefit as well. One such product is equity linked savings scheme (ELSS). ELSS is mutual fund investment, which also gives you tax benefit. Here is how you can use it to work for you in terms of investment and taxation.

What is it?

An ELSS scheme invests in equity mutual fund. “At least 65% of the corpus is invested in equities. It cannot be less than that.
These funds are meant for long-term wealth creation by participating in equities and should be able to deliver alpha (active returns) over the benchmark.

According to Value Research, currently around 37 asset management companies provide open-ended ELSS schemes and six asset management companies provide close-ended ELSS schemes. the total number of open-ended schemes in the market is 42 whereas the number of close-ended ELSS schemes in the market is 28. There are no sub-categories or types within ELSS schemes as such but the customer has the liberty to choose among ELSS schemes that invest in small-, mid- and large-cap stocks.

As an investor, you can choose either the growth or the dividend options in ELSS schemes. “In growth schemes you will get a lump sum on redemption. In dividend option, you will get regular dividends from the profit generated by the scheme,” said Krishna Kumar. According to financial planners, a growth-based ELSS scheme generally fares better than dividend-based ELSS schemes. “When you are paid a dividend out of your ELSS scheme, the net asset value (NAV) takes a hit. If you need money after your lock-in you can always redeem it without affecting the NAV of the scheme at all. Hence a growth scheme is better,” said Suresh Sadagopan, founder of Ladder7 Financial Advisories. If you have a salary income and are not looking for regular income from your investment, then you should opt for growth option. “Also you cannot be certain that your scheme will generate returns and the fund manager will declare a dividend. For example, in the year gone-by, the returns were hardly 2-3%,” said Sadagopan. If you invest in ELSS, you can claim tax benefit under section 80C of the income tax Act for up to ₹1.5 lakh.

Considering ELSS in your portfolio

There are a couple of parameters that you can keep in mind before zeroing down on a particular ELSS scheme. “Consistence in beating the benchmark, historical returns, the kind of underlying assets they invest in, fund manager’s performance and expense ratio are some of the parameters you should look at,” said Vishal Dhawan, founder of Plan Ahead Wealth Advisors. According to financial planners, you should not have more than two ELSS scheme in your portfolio. “Depending on your age and risk profile you can decide which kind of ELSS scheme suits you but multiple schemes are not required,” said Melvin Joseph, founder of Navi-mumbai based Finvin Financial Planners.

Remember that ELSS has a three-year lock-in, hence, you can withdraw only after three years. “If the scheme continuously underperforms after the lock-in period, you can pull out from the ELSS scheme. If you want to invest gain after pulling out for tax-saving purposes, then you can look at a different ELSS scheme. For the same reason, when you are studying your scheme’s performance and returns, it is essential to compare it with the performance of the peer schemes and then analyse if it is underperforming or not,” said Dhawan.

Now are you wondering of all the 80C options, where does ELSS stand? “It is difficult to compare ELSS with other taxsaving options because of the difference in the nature of products. Let’s take the example of PPF. ELSS and PPF are inherently different products so who should invest in which product is completely contextual and depends on your risk profile,” said Sadagopan. If you are young and have more years of service ahead, you can put a major portion of your tax saving investment in ELSS as equity investment can help in growth.

Source : Live Mint

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Behavioural Mistakes To Avoid While Investing

It’s often said that an investor’s worst enemy is he himself. If our house is on fire, we listen to our intuition and run for safety. This helps us survive. However, in the case of investment decisions, this behaviour can land us in trouble. The moment we see signs of panic in the stock market, we run to sell all our stocks; when we see euphoria, we jump into the market. We tend to behave irrationally and in a biased manner in many investment situations. 

Our long-term investment success is determined by our ability to control our‘inner demons’ and ‘psychological traps’. The good news is that human behaviour is irrational in a predictive manner, as examined by Professor Dan Ariely in his book ‘Predictably Irrational’. Once we recognise these ‘inner demons’, we can develop approaches to tackle them. A thoughtful investor can leverage this predictable irrationality by remaining un-swayed by the noise and making rational decisions, thereby taking advantage of others’ ‘behavioural biases’. One of the inner demons is ‘over-confidence’. Time and again we tend to overrate our ability, knowledge and skill. Watching 24-hours news channels and listening to ‘experts’ we tend to believe that we are experts and make investment decisions that are not thought through. We think we can predict and time every up and down of daily price movements and invest accordingly. Overconfidence can lead to excessive trading and poor investment decisions. To be a successful investor, one needs to follow a zero-based approach towards decision-making. Investors need to be prudent to not sell their winners too soon and nor hold on to their losers too long.

Another important psychological trap we need to avoid is ‘herding’. People tend to follow the actions of a larger group, independent of their own knowledge. Large-scale social imitation can lead to significant gaps between actual value and price. This herd-like behaviour phenomenon can create profitable opportunities for an individual stock. But taking advantages of collective irrationality, either for a specific stock or for the market as a whole, is difficult. Since most of us have a strong urge to be part of the crowd, acting independently is not an easy feat.  However, if we’re able to control this behaviour, it can result in significant investment gain for us. Warren Buffet sums this up by saying: 

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful”.

 It requires significant control over one’s emotions to practice in real life.  Focus on avoiding silly behavioural mistakes. Research has shown that behavioural mistakes can reduce the return on investments by 10% to 75%. So what do you need to do avoid this? It can be summarized in one word: discipline. One need not always focus on becoming smart. Avoiding silly behavioural mistakes can help one become a successful investor in the long-term. Warren Buffet once said, “You only have to do a very few things right in your life, so long as you don’t do too many things wrong”. If we can avoid making a big mistake, the right decisions would take care of themselves.  As the central theme of the Mahabharata, the battle for investment success is about systematic adherence to dharma – financial dharma. As stated in the epic, “The road to heaven is paved with bad intentions.” Our journey towards financial heaven is filled with inner demons, which need to be identified and tamed for long-term superior returns. Just as mental discipline and willingness are required to forego short-term pleasure to wake up every day and jog for good health, a similar discipline and willpower are required to follow the simple but powerful mantras of enhancing long-term financial health. 

 Key Takeaway Points • Always use a ‘checklist ‘approach towards entry/exit of stock. Keep it short and reasonable.  

• It is better to do your due diligence before investing. Keep a safety margin while ; never invest to lose.

• Adopt a ‘buy and hold’ strategy with periodic review.

• The less frequently you track the market and check your portfolio, the less likely you will be to react emotionally to the natural ups and downs of the stock market.

• Be more thoughtful while taking a long-term investment decision. Losing one day’s return will not matter if you want to keep the stock for 10 years. When you see a sign of panic or euphoria, the best advice would be to wait for another day. If the investment is meaningful from a long-term perspective, the opportunity will continue to remain a good one, even in the future.

• Have appropriate asset allocation, and rebalance your portfolio periodically.

• Be humble, and learn from your mistake. When you succeed, evaluate which of your actions contributed to the success, and which ones did not. Don’t claim the credit for successes that have occurred by chance. Avoid rationalisation when you fail.

• Don’t exaggerate the role of bad luck in your failures

Happy Investing!

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