Harnessing the power of Forgiveness to Bring Harmony to your life.

In this world, we keep having conflict and disputes with our surrounding people day in day out.

The Boss will put the blame on subordinates for not completing the work in time, and doing the work carelessly.

The Subordinates will blame the boss, for wrong decisions, lack of resources, tons of workload and low salaries.

The Son will blame the father for not giving him sufficient exposure in the childhood or for not affording admission in a good B-School, which could have changed his fortune,

while the parents will blame the kids, for being arrogant, disobedient, and never putting efforts on studies.

Normally, we tend to find the fault in the other person, for the lack of success and accomplishments, which we deserve, but could not reach to.

These negative thoughts, which keep coming to our head, repeatedly, occupy the most part of our thought process, which often lead to a bad relationship with the concerned people. We tend to make the notions for people and keep thinking about the shortcomings.

What is the result of these negative thoughts?

1.   Our energy drains out in generating the counter arguments, proving ourselves right.

2.   The Actual quarrel would have lasted for a few minutes, but we tend to give hours after that thinking about the same. No constructive thinking happens in this time.

3.   We stop taking the responsibility of the failure on self, and try to put the blame on someone else, thus lacking that extra mile, which we ought to go, to get the success to our court.

4.   Our energy is blocked resulting in more negativity and in turn attracting more failure to self.

What ought to be done:

Finding goodness in something, is a habit to be developed. Never ever it can be a situation, that the other person, might not have done a good deed to you. Finding that one deed of goodness, will not only relieve you from the mind blockage, but will give you positive boost to accomplish better things, which otherwise were getting lost in nurturing the negative feelings.

Have we ever thought, with an open mind, what good that person has done to us.

Did the Subordinate never recognise, that the boss, having identified your capabilities, only did choose you for the team, which several others were aspiring to be in. And how many times, has he suppressed the wrong doings, of yours, and taught you of the better way of doing the things.

Did the Boss ever remember that the subordinate has given his family time, working late on the project, which he was faced to do, due to lack of resources and other competent team members or paucity of time.

Did the kids, ever remember, his parents curtailing their needs, and compromising their dreams, to give a decent education and living to the kids, or the worries, which have gone, while the exams were going on and the mental support the parents have given, in the time of need.

Did the parents ever recognise the difference in the environment and circumstances, which have changed, since they themselves were kids. Or the satisfaction and love, they have got, from having those wonderful kids, and what their social status and position had been, had they no kids at all.

Let us free ourselves, from the negative feelings and blockage of energy, which is stopping our progress, and let us strive for a world, full of positivity, where everyone is your supporter and helping you grow and flourish. Whenever, you feel negativity rising head, in your thoughts, let us start thinking, consciously, about the good deeds or favours, that other person has done for us.

And for all the past ill feelings, which are still alive, in our minds, draining all our energy, stopping our progress, today is the day, to get free from all of these.

Today, on this auspicious day of Shamavani, let us all remember all our family, friends and acquaintances, with which we have been fighting or having the ill feelings, and let us ask from them, forgiveness, to free themselves and ourselves, from those blockages of energy.

Let us recite the following verses which Lord Mahaveer has taught to his followers:

खामेमि सव्व जीवे, सव्वे जीवा खमंतु मे,

मित्ती मे सव्व-भूएसु, वेरं मज्झ न केणइ


I forgive all living beings, may all souls forgive me, I am in friendly terms with all, I have no animosity toward any soul. May all my faults be dissolved.

CA. Alok Jain

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8th Wonder of the World : Power of Compounding

Albert Einstein had once called power of compounding as the eighth wonder of the world. This is one investment principle which makes money making simple. There are two facets of power of compounding which if you follow as an investor, creating wealth becomes easy. First is to start investing early and giving time to your investment and second stay invested, do not withdraw money in between and let it grow.

In simple terms compounding is nothing but reinvestment of interest/income earned at the same rate so that interest/income earned also generates additional return at the same rate in future. Let me explain this with simple example :
If you invested Rs. 1,000/- in an instrument giving 10% return in a year. At the end of year 1, value will go to Rs. 1,100 and in year 2 you will earn return on Rs. 1,100 and not on original investment of Rs. 1,000/-.

But why is it so important in world of investment and how can it create wealth for investors ?
Let’s try to understand this with simple story of chess & grain. Chess was invented by Grand Vizier Sissa and then he gave it to a king in India. The king offered anything in return; Vizier said that he would be happy merely to have some wheat: one grain for the first square of the chessboard, two grains for the second square, four for the third, eight for fourth and so on. The king was amused by the ‘small thinking’ of Vizier but the king could not fulfill the desire of the inventor of chess. Why? The number of grains for the whole board = 18,446,744,073,709,551,615. This is more wheat than in the entire world; in fact, it would fill a building 40 km long, 40 km wide, and 300 meters tall. So, the moral is if one uses the ‘Power of compounding’ smartly, then becoming rich is not a dream.

Let me explain the same concept in investment parlance. Let us understand a story of a tortoise and hare. The hare saves Rs. 10,000 every year for the first 10 years. After that he saves nothing. However, he compounds his money at the rate of 15% for 30 years. The tortoise starts at the year 11 and keeps saving Rs. 20,000 every year (double of what hare saved) for the next 20 years. Like the hare, he too compounds his savings at 15% every year. So hare invests only Rs. 1 lakh and tortoise invests Rs. 4 lakhs. Let’s tally the score at the end of 30 years. Tortoise makes a respectable Rs. 23,56,202 whereas the hare makes Rs. 38,21,468! This is nothing but power of compounding for hare and cost of s15.5 lakh for starting late for tortoise.


So there are two simple logic of generating compounding impact on your portfolio:

  1. Start investing early in life. No matter how small that investment is but start investing whatever small amount you can save. Ideally starting point should be 1st month of pay cheque of your life. So as soon as one starts earning, he/she should start investing.
  2. Let your investment grow consistently without doing unnecessary withdrawals in between.

The same logic of compounding applies to retail investors approach. No matter how small you start with, important is to start investing early so that your money gets time to compound over a period of time. As investor starts early and has time on his side, he can look at higher return potential asset class like equity to generate positive real return and create wealth over a period of time. Important is not how much you invest, more important is for how long you stay invested.

Rule of 72 might help you in understanding this concept. Rule of 72 gives you doubling period. In short it explains how long your investment will take to double. This rule says that to know doubling period you divide compound rate of return into 72 and you get doubling period in number of years. e.g. if your investment generates 12% return then 72/12 = 6 is the number of years require to double your money.

So if you park your money in fixed deposit giving 9% return you will require 72/9 = 8 years to double your money whereas if you park your money in mutual funds generating 15% return you can double your money in 4.8 years.

(Initial investment of Rs. 1 lakh)
Year End Value @ 9% Value @ 15%
1 Rs. 109,000 Rs. 115,000
2 Rs. 118,810 Rs. 132,250
3 Rs. 129,205 Rs. 152,088
4 Rs. 141,158 Rs. 174,901
5 Rs. 153,862 Rs. 201,136
6 Rs. 167,710 Rs. 231,306
7 Rs. 182,804 Rs. 266,002
8 Rs. 199,256 Rs. 305902
9 Rs. 217,189 Rs. 351,788
10 Rs. 236,736 Rs. 404,556

As you can see from the above graph, investment of Rs. 1 lakh will grow above Rs. 2 lakh by 5th year at 15% compounding while it takes 8 years in compounding at 9%.

As Albert Einstein said, ‘compounding is something one who understands earns it and one who doesn’t understand pays it’. Remember compounding works best with equity asset. That may be the reason why world’s richest men list include people who have created wealth by taking advantage of compounding with their equity investment.


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The new taxation norms in ULIPs will be applicable from February 1, 2021.

Budget 2021 proposed to limit exemptions on proceeds from unit-linked insurance plans that have so far allowed large investors to receive tax-free returns. The government proposed to amend the clause in the Income Tax Act pertaining to taxation of proceeds from ULIPs, according to the Finance Bill, 2021. For ULIPs taken on or after Feb. 1, the maturity proceeds of policies with an annual premium of more than RS 2.5 Lakh will have to pay tax on proceeds.

ULIPs combine life insurance and investments into equity and debt. In the event of the policy holder’s demise, either the sum assured or proceeds of the investments, whichever is higher, is  paid out  to nominee. The amount paid to nominee will continue to be free from taxes.

Under the existing provisions, all proceeds from ULIPs are tax free, irrespective of the amount paid by the individual.

“Instances have come to the notice where high new worth individuals are claiming exemption under this clause by investing in ULIP with high premium”, According to the memorandum explained in the Finance Bill. Allowing this exemption in policies with large premiums, the memorandum said, defeated the legislative intent of the clause, which is aimed at providing benefit to small and genuine cases of life insurances.

ULIP gained prominence after the introduction of capital gains tax on investments in equity and equity linked instruments in Budget 2018. Long term capital gain tax of 10% was levied on the returns on such investments held for more than one year.

“Investments into ULIPs became lucrative as a result of reintroduction of capital gains tax on equity linked products”. This cap on exemptions bring parity between ULIP and long term investments into equity mutual funds.

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Retail investors can directly invest in government securities with RBI.

Investing in government securities is set to become easier. In the Reserve Bank of India’s (RBI) monetary policy announcement made earlier today, the Governor retail investors will be given online access to the government securities market – both primary and secondary- along with the facility to open their gilt securities accounts –with the RBI. This facility will be called Retail Direct. The details of the facility will be announced later. This is not the first time that the RBI has encouraged retail investors to invest in g-secs. So far, there has been a lukewarm response. But experts predict that the latest move ought to bring in more retail investors in the g-secs market. Here’s what you should know about RBI’s latest move and how it can benefit you.

What are government securities (g-secs)?

These are debt instruments issued by the Reserve Bank of India, on behalf of the Central Government. The state governments also raise money by issuing such instruments; those are called State-Development loans.

G-secs come in varying tenures; from 6 months to up to 40 years. Interest is generally paid twice a year and taxable at your income-tax slab rates. The 10-year government security bond yield is a widely tracked number by market participants to assess the long term interest rate movement in the economy. It is typically referred to as a benchmark security. The 10-year g-sec current yield is 6.11 per cent.

You will now be able to buy any of these bonds, directly from the primary and secondary market. G-secs are backed by the central government and do not carry any credit risk.


Does that mean they are entirely zero-risk?

No. Although government securities do not carry credit risk, they are not a risk-free instrument. They are subject to interest rate risk. If the interest rates go up, the bond prices fall.

And here’s where, you as an investor should be careful, given the times we are in at present. Budget 2021 has announced a massive borrowing program, which is bound to push up bond yields, sooner or later. When this happens, prices of debt securities- including g-secs- will fall.

In the last three years ended February 4, 2021 gilt mutual funds (schemes that invest in g-secs) gave 9.49 percent returns on the back of falling interest rates. This will not continue for long once interest rates begin to go up again.

G-secs are old instruments. But why have retail investors avoided them secs so far?

Since g-secs carry low risks, the commensurate returns offered are also low. Interest rates have not been attractive when compared to other fixed-income instruments like company fixed deposits, small saving instruments and non-convertible debentures. For example, Power Finance Corporation, a CPSE issued a 10 year NCD at 7 percent coupon which was higher than the 10 year G-sec yield quoting tad below 6 percent. “Retail investors looking for high yield on their fixed income investments typically find investments in government bonds unattractive,”

Poor liquidity in the secondary market is a cause of concern for most investors. Though NSE-GoBID facility or platform allows investors to buy gilts in the auctions and receive it into their demat accounts, baring rare cases, there are no volumes on the exchanges. The only way out for the investors to sell these bonds is to transfer them to a constituent subsidiary general ledger (CSGL) account and then sell it.

Most investors do not understand how CSGL account works. The CGSL is a sort of a demat account that holds government securities and facilitates trade on Negotiated Dealing System- order matching system (NDS-OM). “Conversion to CSGL format from demat format takes around 10 days”.

Another big problem is the lot size required to trade in g-secs. Typically, g-sec market sees trades worth Rs 5 crore and above. There’s little liquidity if you wish to buy and sell g-secs worth an amount less than Rs 5 crore. Such trades, if they happen, do not take place at fair price. In most cases, you are forced to hold the bond till maturity.

A few banks attempted to offer investors opportunities to invest in government securities. However, it did not generate volumes. NSE-Go Bid platform allowed the investors to participate in the auction of government securities on non-competitive basis. In June 2019, RBI also allowed non-competitive bidding in state development loans.

Hence, mutual funds have so far remained the best way for retail investors to invest in g-secs.

Will Retail Direct for g-secs be smooth?

While detailed guidelines are awaited, the RBI has opened up an instrument that has traditionally been the bastion of large institutional investors only. “It may just be the beginning of a viable substitute for small savings schemes at market rates. However, much like sovereign gold bonds, the likely pick-up pace will be at a slow rate,”.

Existing NSE-GoBID facility allows individual investors to buy government securities by participating through non-competitive bidding wherein the investors are issued bonds at cut-off price arrived at by the other institutional participants in auction. “Investor on NSE-GoBID cannot specify the price at which he want to buy. He is a price taker. The new (direct) system should allow individual investors to quote the yield at which they want to buy the government bonds,”.

Modality of the operational guidelines about the ‘account’ in which the individual investor will hold the securities will also be watched. The difference between demat and CSGL is already a dampener. In the new system, since the investor is opening an ‘account with RBI’, the arrangement should allow him to trade in government securities on NDS-OM.

“To ensure liquidity in secondary trades, the RBI may consider appointment of market makers to offer two way quotes. RBI may choose to offer market making facility through some institution such as primary dealers to only retail investors or to the trades of certain size –say from Rs 10, 000 to Rs 10 lakh,”.

“RBI can also encourage retail participation by allowing retail investors to sell government bonds held by them to RBI in the open market operations conducted by RBI,”.


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Money and emotions often go hand in hand. Many times, investors may find it difficult to have a practical view towards their mutual fund investments because after all, their life savings are at stake. Having said that, emotional decisions regarding  investments can be irrational and can result in loss. The volatility risk associated with the stock markets may make an investor restless, but the important thing to remember here is that if you feel compelled to make a decision each time the market fluctuates, then you are not giving your capital an opportunity to grow.


Glee and Greed may go hand in hand when the markets are performing exceptionally well. We can  see that the value of your investments is at an all-time high and out of sheer excitement, may end up investing in mutual funds when the Net Asset Value is high, thus resulting in the purchase of a much lower number of units with a given amount of investment. However, it ideally should be the other way around, i.e. one can  buy more when the markets are low.

It is ironic that an emotion like fear which is on the opposite spectrum as compared to glee, may also result in you buying or selling mutual fund units, being overcome by emotions.

For example, if you have invested Rs 1,00,000 in an equity mutual fund; now, when you see the markets going down, you may get scared looking at the virtual value of the loss you are making. However, this loss will remain virtual till the time you actually sell and book this loss. And this is what many investors may end up doing, owing to the fear of the market falling further. What you need to remind yourself is that the market is cyclical in nature, and the ups and downs are inevitable.

If you have invested in a mutual fund scheme that has seen returns below the category benchmark for a long continuous period of time, many investors can be in denial that it may have been a loss-making decision after all. You may have earned better returns in the beginning, but it is not advisable to be in denial and stick to that performance memory while making further losses.


The above mentioned are only a few of the many emotions that may drive your investment decisions. If you identify with these emotional investing trends, then it is time for a hard stop. Below are some tips to help you wean the emotions off from your investing journey-


Investing via the systematic investment plan in a mutual fund scheme may help in spreading your costs and risks, over a period of time. Since it requires you to invest a fixed sum of amount at periodic intervals, you end up buying more units when the markets are down and vice versa, thereby averaging out your purchase NAV. This principle is called rupee cost averaging (RCA ). For example, if you have Rs 5,00,000 to invest, then rather than timing the market to see when to invest this lump sum money; you can invest it in 10 chunks of Rs 50,000 every month. If the market is low in a particular month, then you buy a higher number of units and vice versa. Hence, your emotions are at bay.


Your portfolio’s value may go through many ups and downs until you decide to redeem the investments. Checking the performances of the schemes you are invested in every single day, may cause anxiety and fear of the unknown. Having said that, you also need to monitor the portfolio performance in order to ensure that you are on the right course to achieve your life goals. Hence, its advisable to fix a time period, ideally quarterly, to review the performance of the schemes you are invested in and make any changes, if required, basis the performance analysis.


As long as you are investing in the schemes that match your goals and investment horizon, you need not worry about the everyday performance of the schemes. You can instead focus on how close you are to your goal, and if you have diversified enough in order to hedge risks. Asset allocation is an important factor in diversification wherein you decide which asset type will have what kind of an allocation in your portfolio. You may get in touch with your financial advisor for further advice on asset allocation.

When we mix emotions with investments, we may end up compromising the heights to which we can take our mutual fund investments, by sheer patience and a will to stay invested. When you think long-term, it is easier to let go of the short-term fluctuations in the market for a larger objective of achieving your goals.

Happy investing!

With due credit : www.nipponindiamf. Com

Edited By : CA Alok Jain.

Shivani Khandelwal.

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Write your will, update nominees.

With or without the fear of COVID, this is among the first task you should complete in the new year. Irrespective of your age, write will. “In uncertain times like these when there is an increased risk to life, anyone above the age of 21 who has wealth and family or dependents should make should make his will at the earliest.

Anyone with a positive net worth should do as soon as he has responsibilities and financial goal in place. Even for people with no successors who may want to use their wealth for philanthropic activities, a will is important.

You can simply write the will on a piece of paper, listing all your beneficiaries, assets and how you want distributed.

“However, it should be worded without any confusion and all the clauses and information so as not to defeat the purpose of making a will”. So it is necessary either to consult a lawyer while writing it or have it checked by financial advisor after it has drafted.

Keep in mind that the will is signed by you in the presence of and attested by two witnesses other than the beneficiaries. A Doctor’s certificate testifying to your physical and mental well being, as well as video recording of the entire proceedings is advisable. Sign every page of the will and appoint and executor. Don’t forget to mention that it is the last will and supersedes all other will.

Along with the will, remember to update your nominees in all your accounts and investments. While nominee is merely a caretaker and not a legal heir to whom the assets will eventually go. It is important to appoint these for smoother transition of assets. Do so for your bank accounts fixed, recurring and post office deposits, insurance policies, Securities like Mutual funds, shares and debentures, financial instruments and lockers, immovable properties, EPF, PPF, Government saving certificates, and gratuity among others.

“Make sure to give the name, age, address and relationship of the nominees with the appointer in the nomination form. Some investments allow you to have multiple nominees where you can assign percentage of money to each.”

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Finance Minister (FM) Nirmala Sitharaman has presented the Union Budget 2021 of India on the 1st of February, 2021. Here are the key Highlights from Budget 2021:

  • Our FM starts the budget2021 announcement by mentioning the challenges during the pandemic and the vision of the Pradhan Mantri Garib Kalyan Yojana.
  • FM says that India has two COVID19 vaccines made available and two more will be made accessible soon.
  • FM reiterated that the government is fully prepared to support the economy’s reset.
  • FM says the Budget2021 is based on 6 pillars. Starting with healthcare & wellbeing:
    • Spending’s been increased
    • New scheme with an outlay of Rs.64K crore to be spread over 6 yrs
    • The above is in addition to the National Health Mission
    • Support to rural & urban health centres
  • FM announces the Jal Jeevan Mission with an outlay of 2.87 lakh crores aiming to provide full-fledged water supply to all urban local bodies with household tap connections.
  • The FM proposed Rs1.41 lakh crores over a period of 5 Years for the Urban Swacch Bharath 2.0.
  • An amount of Rs.1.47 lakh crores, over a 5-year-period, from 2021 has been assigned for initiatives such as wastewater treatment, reduction in plastic waster, reduction in pollution and the like.
  • The Scrapping Policy has been announced in the Budget2021. The voluntary vehicle scrapping policy aims to remove inefficient vehicles so as to reduce vehicular pollution and oil import bills.
  • FM proposes an amount of Rs.35000 crore to manufacture and make accessible the COVID19 vaccine.
  • 2nd Pillar of Budget2021: Focus on physical, financial capital and infrastructure
    • FM proposes an amount of Rs. 1.97 lakh crores, over 5 years, starting this FY to nurture global manufacturing champions and increase jobs for the youth
    • FM has proposed a mega-investment textile park to be launched along with 7more textile parks to be established over the next 3 years.
  • The FM proposes to set up a Development Financial Institution with an amount of Rs.5 lakh crores
  • FM states that the Budget2021 will focus on the NHAI operational toll roads, airports in tier-2 and 3 cities, and sports stadiums
  • The capital expenditure for the year 2021-22 will be 5.54 lakh crore with a 34.5% Y-o-Y growth rate.
  • Our FM announced that more than Rs.2 lakh crores will be allocated for capital expenditure in the states and other autonomous bodies.
  • FM announced that till date, a measure of 3,800 km highway-stretch has already been constructed and an additional km will be constructed under Bharat Mala project.
  • The FM proposed the following National Highway budget for the below states:
    • Tamil Nadu: 3500km @Rs. 1.03 lakh crores
    • Kerala: 1100km @Rs.65,000 crores
    • West Bengal: 675km @Rs.25,000 crores
  • Also, National highway project of around 19,000 crores is in progress in Assam. Overall, the FM proposes a total of Rs.1,18,101 lakh crore for Ministry of Road Transport and Highways.
  • An Infra-National Rail plan to prepare a future rail system in India by 2030 has been proposed to bring down logistics cost.
  • The next few phases of metro projects will be taken up in Metro cities. Also in line are the ‘Metro Lite’ & ‘Metro New’ concepts for tier 1& 2 cities.
  • The FM proposed to extend Ujjwala Scheme up to 1 crore beneficiaries from the existing 8 crore beneficiaries.
  • The FM proposes to focus on the various allied laws of the securities market to be merged to the Securities Market Code.
  • FM announced that the #SEBI will be notified to regulate the setting up and arrangement of the commodity market system.
  • FM grants Rs.1,000 crores to the Solar Energy Corporation of India for the growth of the Solar Energy Sector.
  • FM proposed to amend the Insurance Act to introduce additional FDI to insurance companies from the existing 49% to 74%.
  • FM announces that a new Asset Reconstruction Company is to be set up to provide resolution to stressed assets in PSUs.
  • The FM proposed to amend the DICGC Act, 1961 to streamline its provision where the depositors of the bank can get easy access to deposits through insurance in the case of a stressed bank.
  • The FM announced that de-criminalization under the Companies Act, 2013 is complete and now the decriminalization of LLP Act, 2008 will be in force.
  • Our FM modified the definition of small companies: companies with a paid-up capital not exceeding 2cr & a turnover not exceeding 20cr are to be considered small companies. Over 2 lakh+ companies benefit from this provision.
  • For Startups and Innovators, the FM announced that the OPC can be incorporated without a limit for turnover or paid-up capital. This also allows NRIs to incorporate OPC in India.
  • Our FM proposes a special framework for MSME.
  • The FM announced that MCA 21 V3.0 to be introduced with additional modules for e-scrutiny and e-adjudication.
  • FM stated that the IPO of the LIC will be carried out in FY 2021-22. Also, for the disinvestment strategy, two PSUs and 1 insurance company will be considered.
  • The FM informed that the 15th Finance Commission’s recommendation is to rationalize and reduce centrally sponsored schemes.
  • Pillar 3 of the Budget2021: Inclusive development for aspirational India
  • In the Agriculture sector, the MSP regime has undergone a change to provide 1.5 times the product cost across all commodities.
  • The total amount paid to wheat farmers was doubled in 2019-20 when compared to 203-14.
  • The FM announced that agricultural credit will be increased to 16.5 lac crore.
  • The FM proposed to enhance the scope of the ‘Operation Green Scheme’ to include 22 perishable crops, and 1.68 crore farmers have registered. Also, 1,000 mundis to be integrated under the said scheme.
  • The FM stated that the government will take up the development of fishing harbors and fish landing centers along the banks of rivers and waterways.
  • The FM announced that the ‘1 nation-1 ration card’ plan has been implemented by 32 States and UTs. Migrant workers benefit from this scheme as they can claim ration from anywhere in the country.
  • The total fiscal deficit is pegged at 9.5 % of GDP and it is funded through govt borrowing. An additional 80,000 crore is needed to ensure our economy is given the needed push.
  • The borrowings from the market for next year will be at 12 lakh crores.
  • FM announced that the senior citizens who get only pension and interest on income are not required to file ITR.
  • Reopening of assessment:
    • In normal cases: the time limit has been reduced to 3 years from 6 years.
    • In serious tax evasion cases: can be reopened till 10 years, only when concealment of income is more than 50 lakh.
  • FM announced that the ‘Faceless dispute resolution committee and mechanism’ is set up to reduce litigations for small taxpayers. Any taxpayer with taxable income up to 50 lakh and disputed income up to 10 lakh can approach the committee.
  • FM proposed a faceless Income Tax Appellate Tribunal (ITAT) for providing online resolution.
  • The ‘tax audit limit’ under Section 44AB has been increased from Rs.10 crores to Rs.5 crores where 95% of business transactions are done in digital mode.
  • The FM announced that the ‘advance tax liability’ on dividend income shall rise only after the declaration or payment of dividend.
  • The FM announced that the deduction under section 80EEA is to be extended to loans taken up to 31st March 2022.
  • FM announced that the affordable housing projects can avail tax holiday until 31 March 2022.
  • FM announces tax incentives for the IFSC and tax holiday for aircraft leasing and rental companies.
  • FM announces the pre-filled ITR in Budget2021: Salary, Tax Payments, TDS are already pre-filled. Capital Gains, dividend incomes, and interest income will now be pre-filled.
  • FM states that in case the PF amount was deducted but not deposited by the employer, it will not be allowed as a deduction for the employer.
  • FM announces that the deduction under section 80IAC will be extended upto 31st March 2021.
  • Under Indirect Taxation, the FM proposes to review 400 old exemptions this year through extensive consultations. After which a revised customs duty structure will be introduced.
  • The FM has rationalized customs duty on copper, textile, gold and silver.
  • The FM raised customs duty on solar inverters from 5% to 20% and solar lanterns from 5% to 15%.
  • The FM proposed to withdraw exemption on import of leather as they are domestically produced.
  • The FM proposes ‘Turant Customs’ initiative for faceless, paperless, and contactless customs measures.
  • The FM concluded the Budget2021 and the house has been adjourned after getting the consent for the Finance Bill, 2021.


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India to become 5th largest economy in 2025, 3rd largest by 2030

The UK appears to have overtaken India again during 2020 as a result of the weakness of the rupee, it said.

The CEBR(Centre for Economy and Business Research) forecasts that the Indian economy will increase by 9 percent in 2021 and by 7 percent in 2022.

India, which punch into have been pushed back to being the world’s sixth biggest economy in 2020, will again overtake the UK to become the fifth largest in 2025 and race to the third spot by 2030, a think tank said on Saturday. India had overtaken the UK in 2019 to become the fifth-largest economy in the world but has been relegated to 6th spot in 2020.

”India has been knocked off course somewhat through the impact of the pandemic. As a result, after overtaking the UK in 2019, the UK overtakes India again in this year’s forecasts and stays ahead till 2024 before India takes over again,” the Centre for Economics and Business Research (CEBR) said in an annual report published on Saturday. The UK appears to have overtaken India again during 2020 as a result of the weakness of the rupee, it said.

The CEBR forecasts that the Indian economy will expand by 9 percent in 2021 and by 7 percent in 2022. ”Growth will naturally slow as India becomes more economically developed, with the annual GDP growth expected to sink to 5.8 per cent in 2035.” ”This growth trajectory will see India become the world’s third largest economy by 2030, overtaking the UK in 2025, Germany in 2027 and Japan in 2030,” it said.

The UK-based think tank forecast that China will in 2028 overtake the US to become the world’s biggest economy, five years earlier than previously estimated due to the contrasting recoveries of the two countries from the COVID-19 pandemic. Japan would remain the world’s third-biggest economy, in dollar terms, until the early 2030s when it would be overtaken by India, pushing Germany down from fourth to fifth.

The CEBR said India’s economy had been losing momentum even ahead of the shock delivered by the COVID-19 crisis. The rate of GDP growth sank to a more than ten-year low of 4.2 per cent in 2019, down from6.1 per cent the previous year and around half the 8.3 per cent growth rate recorded in 2016.

“Slowing growth has been a consequence of a confluence of factors including fragility in the banking system, adjustment to reforms and a deceleration of global trade,” it said. The COVID-19 pandemic, the think tank said, has been a human and an economic catastrophe for India, with more than 140,000 deaths recorded as of the middle of December.

While this is the highest death toll outside of the US in absolute terms, it equates to around 10 deaths per 100,000, which is a significantly lower figure than has been seen in much of Europe and the Americas. “GDP in Q2 (April-June) 2020 was 23.9 per cent below its 2019 level, indicating that nearly a quarter of the country’s economic activity was wiped out by the drying up of global demand and the collapse of domestic demand that accompanied the series of strict national lockdowns,” it said.

As restrictions were gradually lifted, many parts of the economy were able to spring back into action, although output remains well below pre-pandemic levels. An important driver of India’s economic recovery thus far has been the agricultural sector, which has been buoyed by a bountiful harvest.

“The pace of the economic recovery will be inextricably linked to the development of the COVID-19 pandemic, both domestically and internationally,” it said. As the manufacturer of the majority of the world’s vaccines and with a 42-year-old vaccination program that targets 55 million people each year, India is better placed than many other developing countries to roll out the vaccines successfully and efficiently next year.

‘In the medium to long term, reforms such as the 2016 demonetization and more recently the controversial efforts to liberalize the agricultural sector can deliver economic benefits,” the think tank said. However, with the majority of the Indian workforce employed in the agricultural sector, the reform process requires a delicate and gradual approach that balances the need for longer-term efficiency gains with the need to support incomes in the short-term.

The government’s stimulus spending in response to the COVID-19 crisis has been significantly more restrained than most other large economies, although the debt to GDP ratio did rise to 89 percent in 2020.

“The infrastructure bottlenecks that exist in India mean that investment in this area has the potential to unlock significant productivity gains. Therefore, the outlook for the economy going forwards will be closely related to the government’s approach to infrastructure spending.”


With due credit : Moneycontrol.com.

Edited by : CA Alok jain.


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Investing in mutual funds is supposed to be one of the most preferred ways to create wealth. Thanks to the option of investment through Systematic Investment Plan (SIP), people can build up a healthy corpus even with a small investment.
The Mutual Fund Industry is witnessing phenomenal growth of SIP-based investments in the last few years which can be attributed to the sheer simplicity of investment avenue. SIP provides a mechanism of making investments systematically on a regular basis in mutual funds. The most popular way is to invest is on a monthly basis, but daily, weekly and quarterly options are also available.


The great thing about SIP is its minimal investment amount. You can start from as little as Rs 500 a month. Thus instead of making a lump-sum investment of say Rs 5000, one can opt for SIP route & pay Rs 500 in 10 periodic monthly instalments. Thanks to SIP, mutual funds are now within the reach of the common man as it enables even those with tight budgets to invest Rs 500 or Rs 1,000 on a regular basis in place of making a heavy, one-time investment.


Yet one of the biggest myth in the industry is that SIP is meant for small investments & they work for small investors only. On the contrary, SIP is also used by many high net worth individuals as a mechanism to invest in the markets. The reason for this is pretty simple. More often than not, equities exhibit great volatility and are prone to fluctuations due to several unknown and known factors. To beat the blues, smart investors opt to invest through SIP and then let it take care of their investments on an auto-pilot mode. With the benefit of Rupee Cost Averaging (Rupee Cost Averaging is an approach in which you invest a fixed amount of money at regular intervals. This in turn ensures that you buy more units of an investment when prices are low and less when they are high) and the principle of compounding (Compounding means that the returns on investments themselves become part of the investments and start generating returns) returns at work, SIP is a great way to create a corpus over the long term.


To conclude, big or small, SIP is an effective mechanism to inculcate the habit of long-term and disciplined investments among investors.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully..



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What is a Systematic Investment Plan?

SIP or systematic investment plan allows you to invest a fixed amount each month into the mutual fund schemes of your choice. While the most common form of SIPs is via monthly payments, there are also weekly, or quarterly SIP frequencies available. SIPs work by automatically investing a pre-decided amount on a fixed date every month into a certain scheme. The benefit of SIPs is that they allow investors to start small with an aim to accumulate capital over time without too much hassle.

Globally, markets may underperform for the next few months due to the wide-spread panic caused by the COVID-19 pandemic. With the ongoing pandemic, many investors may choose to cash out of their investments and shift towards non-market linked financial tools. India’s economic prospects for 2020 also appear to be challenged by the pandemic hitting the nation. However, is market volatility the ideal time to discontinue one’s SIPs?

Advantages of SIPs during Market Volatility

If you have invested via a SIP in a mutual fund scheme that is aligned with your financial goals, then you do not have much to worry about during a financial crisis. SIPs could make volatility work in your favour. Here’s how:

  • ​​ Rupee Cost Averaging:

Foremostly, they offer the adv​antage of rupee cost averaging. This means that with an unchanging amount of investment on a regular basis in a mutual fund, you can average out the cost of your purchase. The benefit of rupee cost averaging is that when markets are at a low, you have more units. Once the market performs well, you have fewer units.

SIP investments allocate a fixed amount to a scheme. Units are received against the Net Asset Value (NAV) of the scheme. The NAV of mutual funds remain​s low during such lower markets. Investors should consider remaining invested in their funds as more units could be purchased when the market is underperforming. Lower markets can also be viewed as an opportunity rather than a setback. Additionally, investors can choose to start new SIPs during the low phase as this can help them get better value . By averaging out your cost during market volatility, SIPs aim to reduce the overall cost of acquisition. Hence, SIPs could help achieve the thumb rule of markets which is to buy less when markets are high and buy more when markets are low.

  • Compounding Benefits

By remaining active over a long period of time through cycles of market volatility, SIP investments harness the power of compounding. Even an amount as small as ₹5000 per month can amass a sizeable corpus after a few years’ time. This is known as the compounding effect. For instance, if you invest ₹5000 using a SIP investment every month in a scheme with a conservative 8% annual return, you will amass ~₹30 lakhs in 20 years’ time. In case you are lucky enough to receive a more generous annual return of 11% then you will amass ~₹60 lakhs in 20 years.

Please Note: The above figures are used only as an example for illustration purposes. The Actual performance or returns may vary.

  • Hassle-Free Investments

With compounding and averaging on its side, a SIP makes for a great investment option for beginners without much knowledge on market conditions. However, there is a third advantage that SIPs offer investors. They are hassle-free. SIPs require little to no trouble to set up. By investing a fixed amount each month, investors learn the patience and discipline of time-bound investments. They do not need to initiate investments manually as SIPs are linked to one’s bank account.

By virtue of being automatic, SIPs are set up to make for convenient long-term investments that go through repetitive cycles of volatility. They are accessible to more people, including those who do not have knowledge about trading. Investors do not require a Demat account to invest in mutual funds via a SIP. Hence, an SIP is an extremely convenient investment option. Unlike traders scrambling to sell their securities during volatile conditions, mutual fund investors can sit back and relax as their investments could weather the current market conditions.

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