Investing 10,000 Rupees per month, what are the options ?

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raksrules

raksrules

Oracle
Can anyone suggest me what are the options available if one wants to invest approximate 10,000 Rupees per month ??
 
What is the time period for which you want to block the money? short term/long term/very long term.
How much of a risk are you willing to take with this investment?

What will you be using the investment for later? If you can answer this question properly then you can easily categorize the type of investment to be done.

Short term - Liquid funds, Bank FDs.
Long Term - SIP in a good equity fund ( no recommendations), Bank FDs, NSC, Bonds/FDs from Companies, etc.
Very Long Term - SIP in a good equity fund ( keep track to switch fund if necessary), Bank FDs, PPF, Pension Plan, etc.

Safe Investments-
Bank FDs, NSC, PPF, Pension Plan, Bonds/FDs from Companies.

Moderate Risk-
Liquid Funds, Equity Mutual Funds, Bonds/FDs from Companies.

High Risk -
Equity Mutual Funds, Individual Company stocks, etc.

Other investments not included above.
Gold(Physical/Exchange traded Fund), Property (Commercial/Residential), ULIPs and many more.

some random points regarding the investments. based on personal knowledge. will update here if anything is wrong.
Certain investments like PPF, NSC, Tax saving FDs, Tax saving Mutual Funds etc give tax benefits. If you have filed your IT returns , you know about these options.
Bank FDs interest is taxable and gets added to you income during withdrawal. Certain long term Tax saving FDs are exempt.
NSC interest is taxable. PPF interest is non taxable but there are news that it might be taxed.
Dividend declared by companies for individually held stocks is not taxable.
Long term Capital gains (from stocks and mutual funds) are taxable as per your tax bracket.
Short term capital gains attract an additional tax of 10%. not sure about exact figure.
Equity investments should not be considered as High Risk if done for a long period of time.
Insurance(Life,Medical etc) is not a form of investment. Do not mix the two together.
 
I am looking at not short term but not very long term too. Tax savings is definitely what I want but main aim is that every month after I get my salary 10k should straight away go to savings. It's not that I am a high spender or anything but just want to ensure that every month a specific amount gets saved.

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6pack said:
i read on some sites that after DTC comes into force this year, we will have to pay tax even on tax saving MF's.
ELSS Mutual Funds: Tax Saving Mutual Funds

Should you invest in Tax Saving Mutual Funds?*|*Capital Mind
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Yes ELSS wont be part of tax savings.

smnrock said:
^I guess even for PPF investments not exempted from taxing in DTC :(
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Sorry but ppf is part of 80c even in dtc regime.

Not short term not long term...hmm than ppf and NPS is out as they are for very long term.PPF for 15 years (16 to be exact) and NPS untill you touch 60 years.

You saying straight away it goes into the instrument whichever you finalized.Also tax saving it should be.

Well i guess you need to draw line somewhere.As elss is out i wont suggest now.But first ill like to know whether you have taken life insurance or not.I know its not part of investment.

But before any investment i think family comes first and for them life insurance is must.

After that MF and gold etf(physical too),shares are the only options.After a year shares and some type of MF(equity ones ) are tax free.At the same time they risky too than other debt instruments.

Hope you get more clearer now in next posts.

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Proing details is good some correction

PPF wont be taxed as if one see from the vision of a person who is good at investing its a ponzi scheme and here the ponzi runing person is government who will ultimately mint money if they are in trouble so dont worry about this ponzi scheme.

Ill give details later but if possible one should used PPF and too is fullest 70k limit.

On contrary limit will be increased to 1 lakh and interest from 8 to 8.2% if government accepts recommendation given by a commitee.

Ill cut short.PPF wont be taxedNor principal in future nor deferred accrued interest.

ANd regarding shares and mf

Mf who invest more than 65% of its corpus in equity are said to be equity oriented funds they become tax free if invested for a period above 1 year.Same about shares.Long term shares and equity oriented mf are tax free.Dividend you receive in your hand is tax free as company have already paid dividend distributed tax before giving it to you.

I had a pdf but i cant search it on comp.So copy pasting from a third party mf site.Though messy not rocket sciene and easily details can be extracted.

Taxation on Mutual Funds

Highlights

Dividends paid by Mutual Funds (Equity / Debt) are completely Taxfree in the hands of the Investors.

Profits on Mutual funds if redeemed before 12 Months is considered Short Term Capital gains

Short Term Capital Gains on Equity Funds : 10 % plus STT @ 0.20 %

Short Term Capital Gains on all other Funds :Gains added to the Income and taxed as per the Income Tax applicable

Profits on Mutual funds if redeemed after 12 Months is considered Long Term Capital gains

Long Term Capital Gains on Equity Fund : Exempt from Tax but STT @ 0.20 % is payable

Long Term Capital Gains on all Other Funds : 20 % after indexation benefit or 10% flat on gains

Dividend / Income Received is completely taxfree

Income from Mutual Fund received by Unitholders would be tax free in the hands of the Unitholders as per the provisions of section 10(35) of the Income-tax Act, 1961 (the Act).

Gains from repurchase of Mutual Fund units are subject to Capital gains tax.

Mutual fund units are treated as a long term capital asset if the same are held for more than 12 months the gain / loss arising from the sale of units is considered as long term capital gains / loss.

Mutual fund units are treated as a Short term capital asset if the same are held for less than 12 months the gain / loss arising from the sale of units is considered as short term capital gains / loss.

Long Term Capital Gains Tax on Equity Oriented Mutual Fund

As per Section 10(38) of the Act, long term capital gain arising from the sale of units of equity oriented fund is exempt from tax. However the unitholder will have to pay a securities Transaction Tax (STT) of 0.20 % on the value of sale.

Long Term Capital Gains Tax on Funds other than Equity Oriented.

Long-term capital gains arising from the sale of units on any Funds other than Equity Oriented will be chargable under Sec.112 of the act at the rate of 20 % after Indexation benefit or 10 % Flat on the Gains

Short Term Capital Gains Tax on Equity Oriented Mutual Fund.

As per sec.111A , short term capital gain arising from the sale of units of equity oriented fund wherein such transaction is chargeable to securities transaction tax (STT). The Tax on Short Term Capital gains is at the rate of 10 % Short Term Capital Gains Tax on Funds other than Equity Oriented.

Short Term Capital Gains in respect of units held for not more than 12 months is added to the total income of the assessee and taxed at the applicable slab rates specified by the Act.
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Instead of putting the entire 10k into a single investment plan, you can split 50:50 (or any ration you want) and invest one in long term, say 10yrs and the other in medium short term, say 3-5yrs. That way you will get some returns after sometime and then you can use it to extend the investment based on your needs at that time.
 
Invest in property, nothing like that. Five to eight times return in 10-15 years. My brother invested 22L on a three bedroom flat in the year 2003 here in Chandigarh, now price went up to 1Cr & 30L.
 
virus32win said:
Invest in property, nothing like that. Five to eight times return in 10-15 years. My brother invested 22L on a three bedroom flat in the year 2003 here in Chandigarh, now price went up to 1Cr & 30L.
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Agreed but would you care to read the thread title please. The OP wants to invest a sum of 10,000 INR a month. I doubt if that sum would fetch a sq. m of land somewhere in Pune. :P
 
Gannu said:
Agreed but would you care to read the thread title please. The OP wants to invest a sum of 10,000 INR a month. I doubt if that sum would fetch a sq. m of land somewhere in Pune. :P
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I replied only after reading the thread title, and thought he can take home loan of 8-10L with that 10,000 INR EMI;) Many people have done same for the investment purpose.
 
virus32win said:
I replied only after reading the thread title, and thought he can take home loan of 8-10L with that 10,000 INR EMI;) Many people have done same for the investment purpose.
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i agree .

in tier 1 and tier 2 cities there is a high chance of market appreciation. so even if he gets a loan @13% he will still be in profit.

some builders give 2-2.5% per month interest if they give the builder enough capital.

that is straight min 24% interest if he is willing to take the risk and the builder could be trusted
 
virus32win said:
I replied only after reading the thread title, and thought he can take home loan of 8-10L with that 10,000 INR EMI;) Many people have done same for the investment purpose.
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Wow now that is something tricky alright. Never knew one could do that. :P

Then again, I suppose getting a piece of land for 10L might still be hard in Pune. Assuming the land needs to be bought wherein the prices are increasing by the day.
 
I try my level best not to take any sort of loan and yes in Pune the minimum i will need to spend for buying a home (for investment purpose) will be 35 to 45L in proper areas and that too outskirts and not in main city.

OT:

IT doomed everything :| Paying through the nose even for vegetables. I literally have to wear my worst clothes to go to buy veggies and fruits since on recognizing one as IT guy (formals and company ID Card), the rates shoot up like anything. Now i make a point not to go myself and my wife does the grocery shopping.
 
raksrules said:
I try my level best not to take any sort of loan and yes in Pune the minimum i will need to spend for buying a home (for investment purpose) will be 35 to 45L in proper areas and that too outskirts and not in main city.

OT:
IT doomed everything :| Paying through the nose even for vegetables. I literally have to wear my worst clothes to go to buy veggies and fruits since on recognizing one as IT guy (formals and company ID Card), the rates shoot up like anything. Now i make a point not to go myself and my wife does the grocery shopping.
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Just Off topic, but The whole IT scene seems funny. BTW, I am also in IT
 
If you can go with small home then 10k EMI sounds better, But down payment would be an issue.

Check out Gold ETF, Should give best returns in few years.
 
Praks said:
If you can go with small home then 10k EMI sounds better, But down payment would be an issue.

.
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Well i would never vouch for home loan if you dont have big capital like 5L-10l ready in hand .If possible one should always save first and than go for loan when any shortfall arises.Also if possible go for fixed loan with rich friends in white and pay them interest in white and take undertaking that rate will remain same for this period.Reason you can always postpone month or 2 payment together without paying penalty.Also pre payment to your friend wont create trouble or will charge as banks does.

Also buying home is not that easy thing.

Chandigarh i can understand its planned and not in pure metro.

But in states like maharashtra i wont recommend with the money raks trying to put to go for loan and go for home. Situation is worst here city working crowd is moving out as they cant afford and though skyscrapers seen around.Half of the house in them are for investment purpose like NRI's like people from USA funding it at cheap loans from there ,Politican-builders nexus,etc.

Already here house registration graph shows decline.But price doesnt goes low as banks finance this nexus.Similar situation is in CHINA.Once a bubble burst anywhere people will worry and will start panic sell.Plus these days most of the deals though at initial stage is done in black when investment wants return they need in white.And with huge white goes huge white on registration,stamp duty,vat and now even service tax.

If raks you planning to buy in some tier cities like nagpur etc in this state than go for it.Also you need to keep a tab on progress of your work.Builder reputation.Rent market etc.

Also if your building is not ready within stipulated period i guess you cant claim tax benefit on EMI you pay(i have less idea but have been readying some home loan buyer queries on investment papers,I might be wrong.Need to re-verify).

You still didnot said whether you ready to go for investment where tax saving doesnt count or not.

Ill say go for equity mf,gold etf or physical as you like(etf preferred especially nsel ones).

But if possible if thinking for long term go for NPS,PPF.You will feel proud at later stage of life when financing kids higher studies,or marriage or even god forbid iin bad times when all avenue of help closes in worst situation.
 
@raks: what have you decided? Or you forgot about the whole thing? I think I will also push you in that case. :D

Offtopic:

I need you guys' help on figuring out this.

I opened an RD. Details as follows.

Amount per month: 3000

Period: 24 months

Maturity Amount: 77,459.00

Rate of interest: 7 %

According to my understanding, I should get 77040 after 24 months (3000 x 24 x 0.07 = 77040). So, I am not sure how the bank is calculating. I tried a compound interest calculator here which says the amount should be 82432.8. What am I missing here?
 
As for starters i have now told my company to start cutting my VPF every month. But yes i am also considering the option of FD or RD for sure. I too am looking forward for answers to your queries.
 
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