Savings with loyalty Programs

Recently while looking at the Loyalty Programs, I came accross

 

http://www.pantaloon.com/green_point.asp 

 

This is a Loyalty Program Card from Pantaloon Retail, one of the largest chain of Retail stores that Include prominent names like Big Bazaar & Pune Central. i am not sure if Home Town is also part of this program as its also from pentaloon retail.

 

In Pune there are several big Bazaars and 2 Pune Central stores allowing everyone in Pune to have easy access to these Shopping Malls.

 

Green Card Program is very interesting and have lot of good points. I recommend everyone to use this program to get extra savings. Some of the prominent points being

 

- Unlike other loyalty programs that ask you to collect points against each purchase and then redeem points, This scheme directly give you discounts on your purchase. Direct discount on purchases is much better then points.

 

- 5% to 10% Discounts is very good discount considering you can buy all kind of products from Pantaloon Stores. This is in addition to the discounts available already in these stores, which sometimes run upto 50%.

 

- 60 Days Exchange period if also large and very good. Often while shopping we mistakenly buy unwanted goods and are not able to return it in 7 - 15 days period and it lead to a loss. 60 days is big enough time for even lasy people and will make your shopping more profitabe. I believe that at least 5% of the purchase are losses due to wrong selection, but with 60 days exchange you can avoid such losses.

 

- There are many other benefits listed that can be valuabe. What i see in this scheme is real valuable loyalty program and not just a hogwash or polished looking program. 

India income Tax Savings & Investment Planning

I hope my earlier messages have helped you focus on Tax savings & Investment Planning.

 

You can get more information and tips from several sources like your seniors, yahoo answers, Google News search, Google Blog search etc.

 

For Tax savings you should have already done planning, else you are quite late for this financial year.

 

Some fo the tips are:

 

Medical bills: Claim upto 15000 Medical expenses
Sodexo passes: Take sodexo passes which are exempt from tax. they can be used in Big bazar outlets to buy food items.
Claim LTA allowance: Just claim any AIr ticket or Train tickets along with other transport used for local travel in India. Read online about LTA.
Life insurance: Plan your Insurance carefully, do not overspend in costly policies. Get the highest insurance at lowest price. Also take Mediclaim policy probably comnbined policy for your family. Avoid addons/riders.
ELSS investments: Invest in ELSS schemes like SBI Magnum Tax gain - Growth. Avoid other investment schemes like ULIPs, Insurance+investment schemes where the return on investment is not clear.

Note that Claiming Tax exemptions doesnot decrease your eligibility in getting higher home loan approvals. Overall if you are able to save your tax, it should increase your ability to get Home loan sanctions.

Why is ELSS investments beneficial ?

Lets say after calculating your income under tax brackets and all exemptions applied, still there is Rs.1lakh is comming under 10% tax bracket. So you will need to Pay a Rs.10000/- as Income Tax.

Now if you invest Rs.30000/- in ELSS scheme Then you will need to pay 10% income tax (Rs.7000) only on 70000/- ... so Rs.3000 will be your immediate cash benefit.

 

This means that you immediately earned Rs.3000/- (or 10%) Returns from your investment of Rs.30000/-

This is equivalent to earning 12% return on FD after 1 year. So if you can get money equivalent of 1 year interest on FD in just 1 month the why not go for it.

 

In case you salary fall in 20 to 30% bracket then i would call you careless if you do not consider such investments.

 

How to buy ELSS ?

if you have online Demat & trading account like form ICICI then you can directly buy it online in just 1 day. It will cost your about 2 to 2.5% as brokerage fees..

Else its also possible to directly find the SBI office in pune that deal with SBI Magnum ELSS scheme and visit their office and fill the forms. You will need PAN card for all such investments. its possible to get PAN card in just 7 days if you do not already have. In such case you may save 2% charges..

 

ELSS schemes also some with SIP(Systematic investment Plans) where fixed amount will be deducted from your bank account every month. Such option is suitable for next year planning. Also note that ELSS investment is locked (cannot withdraw) for 3 yrs. but its much better then Insurance liken investment which are locked for longer periods.

 

Stock markets & ELSS :

Returns on ELSS is directly linked to the performance of the Stock markets in india. In long term (5-10yrs) ELSS schemes always give higher returns compared to any other investment instruments like FD, NSC, ULIP etc.

When the stock markets have crashed , it is the best time to buy ELSS. in such case you may get the highest return in your first year.

 

At present the stock markets are quite down and it is right time to buy ELSS. You should track Nifty Index (nseindia.com) to track status of the market. Currently it is at 2800.

In case you have online Dmat trading account, it is easier for you to track the market and buy ELSS at the right time to get the lowest price. This way even if you pay 2% extra as brokerage will get covered.

Normally it is not possible to time the bottom of the market, so you should have some level below which you should buy the ELSS scheme. Some people expect that in Feb or March Nifty Index may fall below 2500 and it may be the best time. I believe that if you invest in ELSS at 2500 level then you can double your investment in 3 yrs whereas FD investment will take 7-9 yrs to double. In all cases you ahve to invest in the ETF before march end to claim benefit.

 

I also think that if someone invest in ELSS with SIP scheme regularly then he can grow his investment to huge amount after 30 years and he may not need Life insurance cover after 30 years. i.e. While buying Life Insurance do not pay high premium for getting some few lakh rupees returns after 30 years. it will be of little use

 

Rs.30000 invested today in endowment based insurance scheme will be max 2lakh after 30 years. But same invested in ELSS can be atleast 15lakh after 30 years. So why  to pay extra premium for just getting 2lakh which will be of no value after 30 yrs..

 

 

 

Non-Tax Saving Investment:

 

After having invested in ELSS, if you still have funds for investment but do not want to lock them for 3 years then you can consider investing in Index ETF.

http://www.rediff.com/money/2003/sep/09spec1.htm

http://wealth.moneycontrol.com/features/mutual-funds/best-investment-today-etfs-/11551/0

Index ETF is very much like Mutual Fund but you can buy/sell it anytime like shares using online trading account. Most famous Nifty Index based ETF is "Nifty BeeS".

Normally one should buy them when the Stock Markets have crashed and not sell them for as long as possible. They can act as most suitable Retirement planning.

 

I do not recommend anyone to directly trade in stocks, it can be very risky you should only invest in ELSS, Mutual Funds or Nifty BeeS.

It is best to invest in them when markets have crashed. Any big crash in market should be looked upon as 50% discount for you. Just like you do shopping when there is 50% discount, similarly you should shop for investment schemes when there is 50% discount in stock markets.

 

 

 

Income Tax Planning, tax Savings

As the financial year will come to end by March 2009 everyone needs to plan for the their Income Tax Planning..

 

Please read folloing useful points

 

- Income Tax savings is the easiest and the best short term savings anyone can do.

 

- Income Tax savings is also a tool for building your longterm investments like Retirement planning etc.

 

- First calculate the applicable Tax on your income as per bracket

 

- Check if you are using the maximum exemptions possible under sec 10 & 17 that include Transport Allowance, Medical Expenses, HRA (rental recepipts), Education allowance. Try best with all ways to get all these exemptions to the maximum level.. These sections are the easiest exemptions.

 

- Next If you have home loan then look for exemptions under section 8A (interest on home loan) & 8C (principal amount on home loan)

 

- If you have life Insurance then it is exempted under sec 8C and medical insurance (for you, your family and your parents) under sec. 8A

 

Further Life Insurance: I suggest that you treat Life insurance and Investment saperately. While taking Life Insurance, take the policies that five lowest  premium and no maturity value. Go for Whole Life Limited Payment policy for pure Insurance or Term Insurance.

 

Investments: For investments go for ELSS(Equity Linked Savings Scheme) with SIP (Systematic Investment Plan)  This is one of the best ways to invest and save tax. e.g. When you invest in this scheme you get immediate benefit in terms of the Tax exemption and further returns that will be always better then any endowment insurance policy or FD or PF. Even though stock markets keep flatuating the average returns over long period in Indian equity markets is more then 12%.

 

 

 

 

Airtel Digital TV Review

Airtel launched Digital TV with some great advertisements campaigns.

 

But most people are unaware of the pricing and packages clearly..

 

AIrtel offer a starter pack of Rs.2500/- that cover Settop box with Dish , installation and 6 months of subscription Mega Pack (with most required channels)..

In comparison to tata sky and big tv this is cheapest option..

 

Most people confused about prices were so mainly because they foudn it cheaper and were confused if there are any hidden charges. But there is none..

 

I bought the settop box from a shop along with Rs.2500 vouchers.. I followed the simple instructions and everything worked well..

Most dealers are not sure about how much amount vouchers to be issues.. normally u should clear it with the airtel call center.

 

Some people found it very difficult to connect to their call center.. Most people said that their 1800 number was only accessable from Airtel mobile... but i found it working form my idea mobile also.. They also had the landline number available..

 

Airtel staff was good enough but i found some problems with their automatic voucher recharge system.. often their IVR system would hang up and i need to call agian after 30 mins..

 

Installation was done professionally.. and the channel quality and features are good.

 

The feature of single remore for TV and Settop is good and useful option. ALso they have Channel preview system that allow you to see 6 channels at a time and then decide which channel to open.. this is very good feature.. instead of text program name display in tatasky..

 

 

It happened in India - Satyam Scandal

While studying the earlier bear markets behavior in India, i was surprised that this time there is no Big Scandal reported like Harshad Mehatas in 90s and Ketan parekh in 2000s.

 

But it finally Happened again and now we can say firmly that Indian markets have not really improved.

 

SEBI chief had been taking lot of credit for the regulation they have been doing and how they keep track of everything. SEBI chief has been getting due credit form various news channels as if depicting his role in SEBI as a great regulator.

 

But here is the biggest of all scandals.. that also in IT industry and the pride of India. Where would you like to hide ?

 

Satyam scandal is very different and very thought proviking, its something so difficult to achieve... But let me give you someinteresting points as what were soem regulatory issues that might have contributed.

 

- IT exporters like satyam have Income Tax Holidays, which is prime contributor to the scandal. If a company is not required ot pay tax on the profit , it will be more then happy to declare High Profit to achieve prestige in the stock markets. It is very easy to cook books to increase or decrease the profit. Actually most of the companies in India declare lower profits to save on Income tax. But for IT companies its opposite. We can now say for surety that atleast 80% of the IT companies are overstating their profits may by by 25 - 50%... so their EPS needs to be revised.

 

- IT companies also has lot of relaxation related to movement of funds, import duty , Forex currency management, overseas acquitions/listings... all these tools when combined with limited immovable assests and no fixed formula for valuation ... are basic ingrediants to cook frauds. Till now investors had been assuming that IT companies can make good profits so they will not look into fradulent practices.. but this is now cearly broken.

 

- Overseas work - i am sure Indian regulators have little control over what these companies have been doing overseas and how they have been routing and making use of their funds. (normally they should not be doing this) but as these companies are asking indian shareholders to value their foreign assets..we need to look into them. As most IT companies had great affliations for US captilist principals, its normal to assume that they must have kept large part of their funds abroad and must be reinvesting them there into instruments that are now considered risky. This means that severl IT companie smight have lost large amount of their cash in US markets. Also several companies they might have acquired in USA might be now bankrupt...  This raises serious questions on their cash positions...Earlier people has questions mainly on the viability of their indian assets... but now we shall look into viability of their foreign assets..

 

- It is common for most companies to cook books and i am sure at present several indian corporates are carrying assets that do not exist. in the boom time its common for the companies to show regular consistent profits.. and CFOs are forced to cook books to present the situation agains the claims by CEO that he will makeup for it... When suddenly the markets started crashing CEOs could not makeup anything and planned drastic steps/frauds... and when the market fell further their frauds became visible...

 

- I think that tata group has been in great fisical mess and there are lot of chances that their group companies must involved in all this.. there has be huge movements of ownerships within group companies and even TCS has been quite actively involved.. Though tatas are capable of covering things up, few mistakes can bring things out.. Satyam was also about to coverup but probably Raju did some big mistakes...

 

- I also suspect lot of scandalous dealing in financial firms like Indiabulls, ICICI bank is already in picture, Dena bank, Yes bank, ... Almost all Real Estate companies including some Infrastructure companies. Anything that was very very high in boom time has big chances of cook book. But no one in India is going to investigate that and only if some big mistakes happen it will come to light.. The business groups that become expert in managing these things live for long.. others die...