Reliance Mutual Fund Link to CPSE ETF Allotment Status

Units of CPSE ETF Further Fund Offer (FFO), which received a bumper response from the Anchor Investors as well as the Retail Investors and got subscriptions to the extent of Rs. 13,800 crore, have been allotted by Reliance Mutual Fund. Most investors have received intimations regarding such allotment either through SMS or email. But, there are a few investors who have received no intimation regarding the same. If you are one of them and you applied for these units directly from Reliance Mutual Fund website, then you must have received a “Transaction Reference Number” through a mail at the time of subscription. Below is the text of the mail I received when I subscribed for this ETF on January 20.


Greetings from Reliance Mutual Fund!

Thank you for choosing to invest in the Further Fund Offer (FFO) of CPSE ETF, managed by Reliance Nippon Life Asset Management Limited.

We confirm having received your request for Purchase of units. Once your transaction is processed, you shall receive a confirmation on allotment through e-mail / SMS.

Following are the details of transaction request made by you:

Transaction reference number COGPAXXXXXXXXX
Request date and time 20/01/201711:53PM
Transaction type PURCHASE
Amount (Rs.) XXXXXX.XX

For any assistance, please get in touch with your Financial Advisor / nearest Investor Service Centre or contact us on 1800 300 11111 (Monday to Saturday, 8 am to 9 pm) or write to us at

Thank you for choosing to invest in Reliance Mutual Fund.

Reliance Nippon Life Asset Management Limited
(Formerly Reliance Capital Asset Management Limited)
(Asset Manager of Reliance Mutual Fund)

Now, as the units have been allotted, you can check the allotment status using your transaction reference number on the Reliance Mutual Fund website. Here is the link to the allotment status:

Reliance Mutual Fund CPSE ETF Allotment Status Link

However, if you applied for it through any other channel, then you need to contact the Registrar of Reliance Mutual Fund, Karvy Computershare on 1800 3454 001 or Reliance Mutual Fund itself on 1800 300 11111. Allotment status link on Karvy Computershare is not showing CPSE ETF under the company’s name, but once Karvy lists it there, you would be able to check it with your PAN number or application number or DP ID – Client ID.

I will update the post here as soon as it gets added under the company’s name.

Best Price to Buy iPhone 7 or 7 Plus in India

Apple launched iPhone 7 in the US on September 7 for a starting price of $649 and iPhone 7 Plus for $749. Despite being an expensive phone, it got an unprecedented response and went missing from the stores very quickly. Apple share price also soared from $107.70 on September 6 to $115.57 on September 15.

For India, Apple has fixed Rs. 60,000 as its base price for iPhone 7 and Rs. 70,000 for iPhone 7 Plus. These prices for iPhone 7 & 7 Plus are substantially higher in India as compared to the US prices. If you convert a US dollar to Indian Rupee based on tuesday’s closing price of Rs. 66.46, iPhone 7 32 GB should cost you Rs. 43,132 plus taxes, if you are buying it in the US.

Similarly, iPhone 7 Plus worth Rs. 70,000 is costing $749 plus taxes there in the US i.e. Rs. 49,779 plus taxes based on Rs. 66.46 to a dollar exchange rate. I would call it a considerable mark-up over the prices it is being offered there in the US.

To cash in on the festive mood here in India, Apple is launching its iPhone 7 on 7th of October and to make it a success here as well, it has already tied up with all big online retailers to attract interested buyers to pre-book this latest iPhone with some big cash back offers.

Here are some of these offers which you cannot ignore if you have decided to buy this phone for yourself or your loved ones this Diwali season:

Amazon Offers – Rs. 11,000 cashback + Rs. 1,500 additional cashback with HDFC Bank credit & debit cards + Rs. 500 worth of HDFC Bank points with HDFC debit cards – Amazon was the first to launch its big bang online sale this festive season from October 1. Calling it a “Great Indian Festival”, Amazon is offering dual cashbacks if you place your pre-launch order for iPhone 7 or 7 Plus on Amazon before its sale ends today midnight at 12. You can avail a cashback of Rs. 11,000, plus an additional cashback of Rs. 1,500, plus Rs. 500 worth of HDFC Bank points if you use HDFC Bank debit card while placing your order for its latest iPhones.

However, if you use your HDFC Bank credit card instead of debit card for making the payment, then you won’t get HDFC Bank points worth Rs. 500.

Amazon Link to understand its terms & conditions – Amazon Link

Flipkart Offers – Rs. 10,000 cashback with Citibank cards – Flipkart was the next to launch its festive season sale – Big Billion Days from October 2 onwards. This sale started on October 2 and will last till October 6. Though Flipkart has tied up with SBI Cards to offer up to Rs. 5,250 cashback on its products during this sale period, it is offering a cashback of Rs. 10,000 on booking iPhone 7 in a tie up with Citibank. Unlike Amazon, you cannot avail both these cashbacks simultaneously while placing a pre-launch order with Flipkart.

Flipkart’s terms & conditions – Flipkart Link

Paytm Offers – Rs. 5,000-7,000 cashbacks from Paytm + Rs. 10,000 additional cashback with Yes Bank – Though Paytm is yet to launch its big bang sale this festive season, still it is offering Rs. 5,000 cashback in a pre-booking of iPhone 7 worth Rs. 60,000, Rs. 6,000 cashback on Rs. 70,000 or Rs. 72,000 iPhone 7 or 7 Plus and Rs. 7,000 cashback on Rs. 80,000 or Rs. 82,000 or Rs. 92,000 iPhones 7 or 7 Plus.

Apart from these Rs. 5,000-7,000 cashbacks, Paytm has further tied up with Yes Bank to provide an additional cashback worth Rs. 10,000 for using the latter’s credit card or debit card to buy Apple’s iPhone 7 or 7 Plus. Here you have the link of Paytm to read and understand its terms & conditions for availing Rs. 15,000-17,000 cashback – Paytm Link

Here is the link having all the models of iPhone 7 & 7 Plus, 32 GB, 128 GB and 256 GB – Paytm Link

With such attractive cashback offers, iPhone 7 would cost a minimum of Rs. 45,000 for its base version of 32 GB and iPhone 7 Plus would cost a minimum of Rs. 53,000 for its base version of 32 GB. With these cashback offers, online retailers, like Paytm, Amazon and Flipkart have successfully bridged the price differential of iPhone 7 and iPhone 7 Plus between the two countries.

If you come across any such great offer on iPhone 7 or iPhone 7 Plus, please share it here. I’ll keep on incorporating the relevant info here in this post.

Indiabulls Housing Finance Limited (IHFL) 9.15% NCDs – Basis of Allotment & Allotment Status

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at

Indiabulls Housing Finance Limited (IHFL) has announced the basis of allotment for its non-convertible debentures (NCDs), which opened on September 15th and closed on the second day itself on September 16th.

Here is the Basis of Allotment among all categories of investors:


Category IV (Retail Individual Investors Portion) – In the case of allotment in Category IV, 12,569 valid applications for 51,18,857 NCDs received on September 15, 2016 and September 16, 2016 have been allotted 51,18,857 NCDs (100%), against the allocated bucket of 2.10 crore NCDs as per the prospectus. The unsubscribed portion of 1,58,81,143 NCDs spilled over to Category I.

Category III (High Net Worth Individual Investors Portion) – In the case of allotment in Category III, 78 valid applications for 2,08,08,700 NCDs received on September 15, 2016 and September 16, 2016 have been allotted 2,08,08,700 NCDs (100%), against the allocated bucket of 2.10 crore NCDs as per the prospectus. The unsubscribed portion of 1,91,300 NCDs spilled over to Category I.

Category II (Corporates Portion) – In the case of allotment in Category II, 16 valid applications for 47,800 NCDs received on September 15, 2016 and September 16, 2016 have been allotted 47,800 NCDs (100%), against the allocated bucket of 1.40 crore NCDs as per the prospectus. The unsubscribed portion of 1,39,52,200 NCDs spilled over to Category I.

Category I (Qualified Institutional Investors Portion) – In the case of allotment in Category I, 14 valid applications for 4,56,50,000 NCDs received on September 15, 2016 have been allotted 4,40,24,643 NCDs (96.44%), against the allocated bucket of 1.40 crore NCDs as per the prospectus. Excess demand for 3,00,24,643 NCDs has been satisfied with unsubscribed portions from Category II, III and IV.

If you want to check the allotment status, here is the link of Link Intime –

Link Intime is the Registrar for this issue and if you have any query related to your application, allotment process or refund of application money, you can contact them at 022 – 2594 6970 or write a mail at

DHFL NCDs Tranche II – Basis of Allotment & Allotment Status

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at

DHFL has announced the basis of allotment for the second tranche of its non-convertible debentures (NCDs), which opened on August 29 and closed on the second day itself on August 30.

Here you have the Basis of Allotment among all categories of investors:


Category IV (Retail Individual Investors Portion) – In the case of allotment in Category IV, 48,588 valid applications for 2,03,65,989 NCDs received on August 29, 2016 and August 30, 2016 have been allotted 2,03,65,989 NCDs (100%), against the allocated bucket of 3 crore NCDs as per the prospectus. The unsubscribed portion of 96,34,011 NCDs spilled over to Category III and Category I, as per the prospectus.

Category III (High Net Worth Individual Investors Portion) – In the case of allotment in Category III, 189 valid applications for 3,39,56,790 NCDs received on August 29, 2016 and August 30, 2016 have been allotted 3,39,56,790 NCDs (100%), against the allocated bucket of 3 crore NCDs as per the prospectus. Excess demand for 39,56,790 NCDs has been satisfied with unsubscribed portions from Category IV and Category II, as per the prospectus.

Category II (Corporates Portion) – In the case of allotment in Category II, 69 valid applications for 99,57,240 NCDs received on August 29, 2016 and August 30, 2016 have been allotted 99,57,240 NCDs (100%), against the allocated bucket of 1 crore NCDs as per the prospectus. The unsubscribed portion of 42,760 NCDs spilled over to Category III and Category I, as per the prospectus.

Category I (Qualified Institutional Investors Portion) – In the case of allotment in Category I, 28 valid applications for 3,39,56,790 NCDs received on August 29, 2016 and August 30, 2016 have been allotted 3,39,56,790 NCDs (100%), against the allocated bucket of 3 crore NCDs as per the prospectus. Excess demand for 39,56,790 NCDs has been satisfied with unsubscribed portions from Category IV and Category II, as per the prospectus.

Allotment Status – If you want to check the allotment status, here is the link of Karvy Computershare –

Karvy Computershare is the Registrar for the issue and if you have any query related to your application, allotment process or refund of application money, you can contact Karvy at its toll free number 1800 3454 001 or write a mail at

Reliance Jio 4G Data @ Rs. 50/GB – Comparison with Airtel, Vodafone, Idea Plans

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at

Reliance Jio has generated a lot of curiosity among the telecom users here in India. Almost everybody wants to have at least one Reliance Jio connection for its free calling and data services as soon as it launches its commercial operations. Reliance Jio is launching its nationwide telecom services from the coming Monday – September 5th. Rs. 50 per GB of 4G data with free voice calling, free unlimited SMS, free night data usage and free Jio App subscription is what Mukesh Ambani has promised to offer Jio subscribers.

I think this is the biggest gamble Reliance has played in recent times. Entering an already established, already struggling industry and challenging its biggest and experienced players is not an easy task. But, Reliance Industries, with its deep pockets, long-term vision and disruptive strategy in place, is ready to take a plunge in this already crowded market. But, will it able to succeed in its strategy to give a jolt to the incumbent players like Airtel, Vodafone & Idea by offering free calling and low cost data services? Let’s first check what their tariff plans are and then we would analyse them further.

Postpaid Tariff Plans


Prepaid Tariff Plans


Reliance Jio Terms & Conditions

  1. Voice calls are truly free – you need not pay any charges for voice calls or the data used to make 4G voice calls. However, video calls will be charged.
  2. “Unlimited Free Night Data” will be available between 2 a.m. and 5 a.m.
  3. Free Wi-Fi data will be available at Jio’s Wi-Fi hotspots only.
  4. All Jio services are free till December 31, 2016, including voice calls and 4G data usage. The plans above are applicable w.e.f. January 1, 2017.
  5. Unutilized free benefits will be forfeited at the end of validity period and not be carried forward to the next billing cycle for postpaid customers.
  6. Prepaid packs of Rs. 19, 129 and 299 cannot be availed as a first recharge.
  7. Students will be provided 25% additional 4G Wi-Fi data on providing valid identity card.
  8. Prepaid tariffs are inclusive of all applicable taxes.
  9. Applicable taxes will be extra for postpaid tariffs. 15% discount will be given to subscribers opting for e-bill and auto-debit option for their monthly bill payments.
  10. These plans can only be availed by customers possessing a LTE compatible handset.

Reliance Jio Store Locator – Here is the link to locate and visit a Reliance Jio store to get a new Jio connection – Link.

You can search your nearest Reliance Jio store by entering your pincode, area or location.

Is Reliance Jio 4G data @ Rs. 50/GB for real?

While Reliance is claiming that it is going to offer 4G Wi-Fi data at Rs. 50 per GB, it doesn’t seem to be the case even with its costliest plan of Rs. 4,999 per month. With Rs. 4,999 per month plan, it is costing Rs. 66.65 per GB of 4G data, which is the cheapest of all the plans on offer. However, with its other reasonable plans, it is costing around Rs. 125 per GB of 4G data (Rs. 499 plan), Rs. 100 per GB of 4G data (Rs. 999 plan) and Rs. 75 per GB of 4G data (Rs. 1,499 plan).

Best Plan for Voice Calls – It seems Rs. 149 p.m. plan is the best plan if you want to make unlimited free calls from Jio and your 4G data usage is limited up to 300 MB. In this plan, you’ll get unlimited free voice calls, 100 free SMS and Jio Apps subscription worth Rs. 1,250 for free. But, you won’t get any free unlimited night data or any JioNet HotSpot 4G data. In this plan, 4G data will effectively cost you Rs. 509 per GB as against Rs. 50 per GB claimed by Reliance. If you want more 4G data, you’ll have to opt for other plans with higher rentals or higher commitment of Rs. 499 or above.

Comparison between Reliance Jio, Airtel, Vodafone and Idea 4G Data Plans


If you check the table above, it is costing Rs. 499 for 4 GB of Jio’s 4G data. 4 GB 4G data from Airtel and Vodafone costs Rs. 559, while 5 GB 4G data from Idea costs Rs. 655, which shows it is not amazingly cheap with Jio. It is just 5-10% cheaper with Jio as far as data charges are concerned. Moreover, when it comes to 10 GB data, there is no difference at all between what Jio will offer and what Airtel, Vodafone and Idea already have on table.

However, it makes material difference with Jio’s plan of Rs. 1,499. While it costs Rs. 1,499 for 20 GB of Jio’s 4G data, the same data costs Rs. 1,999 with Airtel, Vodafone and Idea. This is 25% cheaper with Jio. Airtel, Vodafone and Idea are yet to offer mobile prepaid data of more than 20 GB, so we cannot make a comparison for those data plans here.

Voice Calls Truly Free – This is something what has been making people call Reliance Jio’s entry to be disruptive for the telecom industry and its existing players. India is a country where telecom players make more than 70% of their revenues through voice calling services. By making voice calling absolutely free and promising to keep it free forever, Jio has made the incumbent players rethink their future strategy. Jio’s data plans are cheaper than Airtel, Vodafone and Idea without even considering that its voice calls are absolutely free. With free voice calling and free unlimited SMS, Jio is going to hit these existing players where it hurts the most.

However, we will still have to wait & watch several things before taking our guns out and start shooting in air. There is no doubt that Reliance is offering very cheap 4G data and absolutely free voice calls, but I think we need to first test Reliance services and its LYF smartphones before dumping our existing connections. Consumers who are already using Jio services are fairly satisfied with its 4G data speed, but as far as voice calls are concerned, there are issues, probably due to interconnection issues.

LYF Smartphones – I have also been told that LYF smartphones, though cheaper, are not up to the mark and I think these days it is really important for a high end customer that his/her sim works in all the best selling smartphones, especially that phone which he/she currently carries or wants to purchase. At present, Jio sim works only with 4G LTE compatible smartphones and not even 10% of Indian consumers have such smartphones. With an ambitious target to have 90% of Indian consumers use Jio services by March 2017, Reliance is required to do everything to make its sims work in all kind of 4G compatible smartphones and also make LYF smartphones the best and the cheapest of the lot.

These are testing times, for Reliance it is testing time for its services and for incumbent players, these are testing times w.r.t. to the competition they are facing from Jio. One thing is certain that the next 6-12 months would be the most interesting period for the Indian telecom industry. How Reliance and other players act or react would set the future course for this industry. Keep your seat belts tight, this plane is surely going to give a lot of blows during this journey.

EPF, PPF, NPS Withdrawal Tax – Government Clarifications

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at

Budget 2016 has created a 360º chaos as far as EPF, PPF and NPS withdrawal tax proposals are concerned. We had a series of clarifications from various concerned departments of the finance ministry today before we officially had one from Mr. Jayant Sinha, the Minister of State for Finance.

So, here is the eleven point clarification regarding the changes made in the tax treatment of EPF, PPF and NPS:

1. Thought behind this Proposal – The purpose of this reform of making the change in tax regime is to encourage more number of private sector employees to go for pension security after retirement instead of withdrawing the entire money from the Provident Fund Account.

2. 40% Withdrawal will be Tax Exempt – Towards this objective, the Government has announced that 40 per cent of the total corpus withdrawn at the time of retirement will be tax exempt both under recognised Provident Fund and NPS.

3. Entire Corpus is Tax Exempt if 60% or more Corpus is invested for Buying Annuity – It is expected that the employees of private companies will place the remaining 60 per cent of the Corpus in Annuity, out of which they can get regular pension. When this 60 per cent of the remaining corpus is invested in annuity, no tax is chargeable. So what it means is that the entire corpus will be tax free, if invested in annuity.

4. Corpus is Tax Exempt in the Legal Heir’s Hands – The government in this Budget has also made another change which says that when the person investing in annuity dies and when the original corpus goes in the hands of his heirs, then again there will be no tax.

5. Idea behind this Mechanism – The idea behind this mechanism is to encourage people to invest in pension products rather than withdraw and use the entire Corpus after retirement.

6. A Large No. of Subscribers Remain Unaffected – The main category of people for whom EPF scheme was created are the members of EPFO who are within the statutory wage limit of Rs.15,000 per month. Out of around 3.7 crores contributing members of EPFO as on today, around 3 crore subscribers are in this category. For this category of people, there is not going to be any change in the new dispensation.

7. Applicable only to Highly-Paid Employees in the Private Sector – However, in EPFO, there are about 60 lakh contributing members who have accepted EPF voluntarily and they are highly-paid employees of private sector companies. For this category of people, amount at present can be withdrawn without any tax liability. We are changing this. What we are saying is that such employee can withdraw without tax liability provided he contributes 60 per cent in annuity product so that pension security can be created for him according to his earning level. However, if he chooses not to put any amount in Annuity product the tax would not be charged on 40 per cent.

8. PPF remains Unaffected – There is no change in the existing tax treatment of Public Provident Fund (PPF).

9. No Monetary Ceiling At Present – Currently there is no monetary ceilings on the employer contribution under EPF with only ceiling being that it would be 12 per cent of the salary of the employee member. Similarly, there is no monetary ceiling on the employer contribution under NPS, except that it would be 10 per cent of salary.

10. Monetary Ceilings Introduced – Now the Finance Bill 2016 provides that there would be monetary ceiling of Rs. 1.5 lakh on employer contribution considered with the ceiling of the 12 per cent rate of employer contribution, whichever is less.

11. Government Considering Suggestions – We have received representations today from various sections suggesting that if the amount of 60 per cent of corpus is not invested in the annuity products, the tax should be levied only on accumulated returns on the corpus and not on the contributed amount. We have also received representations asking for not having any monetary limit on the employer contribution under EPF, because such a limit is not there in NPS. The Finance Minister would be considering all these suggestions and taking a view on it in due course.

Please share you thoughts about any of these points or if you have any query regarding any of the proposals.

Budget 2016 Announcements

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at

Budget 2016 has got presented in the Parliament today and I would like to highlight the key announcements here on this forum for a further discussion and deep understanding:

* Global Slowdown – Global growth has slowed down from 3.4% in 2014 to 3.1% in 2015.

* Indian Growth Strong – India is a ‘bright spot’ amidst a slowing global economy. The World Economic Forum has said that India’s growth is ‘extraordinarily high’. The growth of GDP has now accelerated to 7.6%.

* Inflation in Control – CPI inflation has come down to 5.4%, providing big relief to the public.

* Drastic Fall in Current Account Deficit – The Current Account deficit has declined from $18.4 billion in the first half of last year to $14.4 billion this year. It is projected to be 1.4% of GDP at the end of this year.

* New Health Insurance Scheme – A health insurance scheme which protects one-third of India’s population against hospitalisation expenditure is also being announced.

* Tax-Free Infrastructure Bonds – To augment infrastructure spending further, Government will permit mobilisation of additional finances to the extent of Rs. 31,300 crore by NHAI, PFC, REC, IREDA, NABARD and Inland Water Authority through raising of Bonds during 2016-17.

* Retail Investment in G-Secs – To improve greater retail participation in Government securities, RBI will facilitate their participation in the primary and secondary markets through stock exchanges and access to NDS-OM trading platform.

* Boost to Commodities Market – New derivative products will be developed by SEBI in the Commodity Derivatives market.

* Bank Recapitalisation – To support the Banks in these efforts as well as to support credit growth, I have proposed an allocation of Rs. 25,000 crore in BE 2016-17 towards recapitalisation of Public Sector Banks.

* PSU Bank Transformation – The process of transformation of IDBI Bank has already started. Government will take it forward and also consider the option of reducing its stake to below 50%.

* Listing of General Insurance CPSEs – Public shareholding in Government-owned companies is a means of ensuring higher levels of transparency and accountability. To promote this objective, the general insurance companies owned by the Government will be listed in the stock exchanges.

* Fiscal Deficit Targets – The fiscal deficit in RE 2015-16 and BE 2016-17 have been retained at 3.9% and 3.5% of GDP respectively. While doing so, I have ensured that the development agenda has not been compromised.

Relief to small tax payers:

Rebate u/s 87A Raised from Rs. 2,000 to Rs. 5,000 – In order to lessen tax burden on individuals with income not exceeding Rs. 5 lakhs, I propose to raise the ceiling of tax rebate under section 87A from Rs. 2,000 to Rs. 5,000. There are 2 crore tax payers in this category who will get a relief of Rs. 3,000 in their tax liability.

Deduction u/s 80GG Raised from Rs. 24,000 to Rs. 60,000 – The people who do not have any house of their own and also do not get any house rent allowance (HRA) from any employer today get a deduction of Rs. 24,000 per annum from their income to compensate them for the rent they pay. I propose to increase the limit of deduction in respect of rent paid under section 80GG from Rs. 24,000 per annum to Rs. 60,000 per annum, which should provide relief to those who live in rented houses.

Measures to boost growth and employment generation:

Cut in tax rates for new manufacturing companies – The new manufacturing companies which are incorporated on or after 1.3.2016 are proposed to be given an option to be taxed at 25% + surcharge and cess provided they do not claim profit linked or investment linked deductions and do not avail of investment allowance and accelerated depreciation.

Cut in corporate tax rates for small enterprises with up to Rs. 5 crore turnover – I also propose to lower the corporate income tax rate for the next financial year of relatively small enterprises i.e companies with turnover not exceeding Rs. 5 crore (in the financial year ending March 2015), to 29% plus surcharge and cess.

Measures for moving towards a pensioned society:

NPS Withdrawal Partially Tax Exempt Now – I propose to make withdrawal up to 40% of the corpus at the time of retirement tax exempt in the case of National Pension Scheme (NPS).

EPF Withdrawal Partially Taxable Now – In case of superannuation funds and recognized provident funds, including EPF, the same norm of 40% of corpus to be tax free will apply in respect of corpus created out of contributions made after 1.4.2016.

Annuity to Legal Heir Tax Exempt – Further, the annuity fund which goes to the legal heir after the death of pensioner will not be taxable in all three cases. Also, we are proposing a monetary limit for contribution of employer in recognized Provident and Superannuation Fund of Rs. 1.5 lakh per annum for taking tax benefit.

NPS/EPF Annuity Service Tax Exempt – I propose to exempt from service tax the Annuity services provided by the National Pension System (NPS) and Services provided by EPFO to employees.

Service Tax on Annuity Policies Reduced – I also propose to reduce service tax on Single premium Annuity (Insurance) Policies from 3.5% to 1.4% of the premium paid in certain cases.

Measures for promoting affordable housing:

Tax Incentives to First Time Home Buyers – For the ‘first – home buyers’, I propose to give deduction for additional interest of Rs. 50,000 per annum for loans up to Rs. 35 lakh sanctioned during the next financial year, provided the value of the house does not exceed Rs. 50 lakh.

Boost to REITs – I propose that any distribution made out of income of SPV to the REITs and INVITs having specified shareholding will not be subjected to Dividend Distribution Tax (DDT).

Additional resource mobilization for agriculture, rural economy and clean environment:

10% DDT on Rs. 10 Lakh Dividend Income – I propose that in addition to DDT paid by the companies, tax at the rate of 10% of gross amount of dividend will be payable by the recipients, that is, individuals, HUFs and firms receiving dividend in excess of Rs. 10 lakh per annum.

Hike in Surcharge from 12% to 15% – I also propose to raise the surcharge from 12% to 15% on persons, other than companies, firms and cooperative societies having income above Rs. 1 crore.

TCS of 1% on Cars & Luxury Goods – I also propose to collect tax at source at the rate of 1% on purchase of luxury cars exceeding value of Rs. 10 lakh and purchase of goods and services in cash exceeding Rs. 2 lakh.

Hike in STT on ‘Options’ – Rate of Securities Transaction tax (STT) in case of ‘Options’ is proposed to be increased from 0.017% to 0.05%.

Hike in Service Tax from 14.5% to 15% – I propose to impose a Cess, called the Krishi Kalyan Cess, @ 0.5% on all taxable services, proceeds of which would be exclusively used for financing initiatives relating to improvement of agriculture and welfare of farmers. The Cess will come into force with effect from 1st June 2016.

1% Infastructure Cess on Small Cars, 2.5% on Diesel Cars & 4% on Big Cars & SUVs – The pollution and traffic situation in Indian cities is a matter of concern. I propose to levy an infrastructure cess, of 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity and 4% on other higher engine capacity vehicles and SUVs.

Hike in Excise Duty on Jewellery – I also propose to impose an excise duty of ‘1% without input tax credit or 12.5% with input tax credit’ on articles of jewellery.

There has been no change in the tax slab rates and tax deductions u/s 80C, 80D etc. So, no material change would be there as far as individual taxation is concerned. Some people would be disappointed about the EPF withdrawal getting taxable, but I think it was required to have a uniformity between EPF and NPS. So, I think it is a good move.

Moreover, as feared earlier, I think the budget did not have any major negatives in the form of long term capital gain (LTCG) tax on equity transactions or increasing the LTCG holding period to 3 years or a 2% hike in Service Tax. Finance Minister Mr. Arun Jaitley has tried to make a balance between the government’s financial constraints and the task of improving the growth momentum. Going forward, much will depend on the global economic conditions and how fast the government is able to push economic reforms.

Are you satisfied with Budget 2016? What could have been done to make it a good budget for you? Please share your thoughts about it here. If you need any clarification regarding any of the proposals, please let me know and I’ll try my best to answer it as soon as possible.

Tax-Free Bonds Notification – FY 2015-16

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at

After a gap of one year, tax free bonds would be making a comeback this year. Central Board of Direct Taxes (CBDT) on July 6 issued a notification in this regards and allowed seven CPSEs to mop up Rs. 40,000 in the remaining nine months of the current financial year.

These CPSEs include NHAI, IRFC, HUDCO, IREDA, REC, PFC and NTPC. Out of total Rs. 40,000, NHAI alone would be mopping up 60% chunk of the total allowed amount to be raised i.e. Rs. 24,000 crore worth of bonds. IRFC would raise Rs. 6,000 crore, HUDCO Rs. 5,000 crore, IREDA Rs. 2,000 crore and REC, PFC & NTPC Rs. 1,000 crore each.


Here is the link to the Notification No. 59/2015 – Tax-Free Bonds Notification – FY 2015-16

Before we check the advantages of tax-free bonds vis-a-vis fixed deposits, let us first focus on the main points of the notification:

Tenure of Bonds – These bonds will be issued for a period of 10, 15 or 20 years.

Interest Rate Ceiling – Interest rates offered by these companies will be subject to a ceiling on the coupon rates based on the reference Government Security (G-Sec) rate. The ceiling coupon rates would be as under:

AAA Rated Issuer – Reference G-Sec Rate minus 55 Basis Points (or 0.55%) for RIIs

AAA Rated Issuer – Reference G-Sec Rate minus 80 Basis Points (or 0.80%) for Other Investors

AA+ Rated Issuer – Reference G-Sec Rate minus 45 basis Points (or 0.45%) for RIIs

AA+ Rated Issuer – Reference G-Sec Rate minus 70 basis Points (or 0.70%) for Other Investors

AA or AA- Rated Issuer – Reference G-Sec Rate minus 35 basis Points (or 0.35%) for RIIs

AA or AA- Rated Issuer – Reference G-Sec Rate minus 60 basis Points (or 0.60%) for Other Investors


Here, the reference G-Sec rate will be the average of the base yield of G-Sec for equivalent maturity period, reported by FIMMDA on a daily basis prevailing for two weeks ending on the Friday immediately preceding the filing of the final prospectus with the Exchange or Registrar of Companies (RoC).

These ceiling rates will be applicable for annual payment of interest. In case the payment of interest is made on a semi-annual basis, the interest rates will have to be reduced by 15 basis points (or 0.15% per annum). Moreover, in case the bonds are sold or transferred by a retail individual investor (RII) to a non-retail individual investor, the interest rate applicable will be reduced accordingly by 0.25%.

Eligibility – As per the notification, the following investors will be eligible to subscribe to the bonds:

(i) Retail Individual Investors (RIIs)

(ii) Qualified Institutional Investors (QIBs)

(iii) Corporates (including statutory corporations), trusts, partnership firms, limited liability partnerships (LLPs), co-operative banks and other legal entities, subject to compliance with their respective Acts

(iv) High Networth Individuals (HNIs)

Retail Investment Limit – Individual investors, including HUFs through Karta, investing upto Rs. 10 lakhs in a single issue will be considered Retail Individual Investors (RIIs). Above Rs. 10 lakhs of investment, these individual investors will be categorised as high networth individuals (HNIs) and will earn a lower rate of interest.

NRI Investment – Non-Resident Indians (NRIs) will be allowed to invest in these bonds, on repatriation basis as well as non-repatriation basis.

Public Issues – At least 70% of the money to be raised by each individual company will be raised through public issues and rest of the money they can raise through private placements.

Credit Rating – These issues will be rated by a credit rating agency which is approved by the Securities and Exchange Board of India (SEBI) as well as the Reserve Bank of India. In case the issuer is rated by more than one rating agency, the lower of the two ratings will be considered.

Expected Rate of Interest – Power Finance Corporation (PFC) on July 14 raised Rs. 300 crore through a private placement at 7.16% for a 10-year maturity period. The Company had also fixed 7.39% coupon for 15-year bonds and 7.45% coupon for 20-year bonds. Had it been a public issue, the retail individual investor would have got these bonds offered at 7.41% for 10 years, 7.64% for 15 years and 7.70% for 20 years.

What makes Tax-Free Bonds Popular?

Tax-Free Interest – Unlike fixed deposits (FDs), interest earned on these bonds is exempt from income tax for the investors. This is what makes these bonds highly popular among the tax paying retail investors and high net worth individuals (HNIs).

Scope of Capital Appreciation – There is no scope of capital appreciation with bank fixed deposits or company deposits as such investments are not directly linked to interest rate movement in the bond markets. Unlike bank/company deposits, tax free bonds get listed on the stock exchanges and their market value goes up when there is a fall in the interest rates.

Tax Free Bonds issued during FY 2013-14 with coupon rate of 8.75% to 9% have been trading at a premium of 15-25% apart from their regular interest payments.

Easy Liquidity – With tax-free bonds, you can sell your bond holdings whenever you want to. These bonds get listed on the stock exchanges and due to big issue sizes, these bonds can easily be sold whenever required.

Highest Credit Rating – These bonds get issued by the public sector enterprises most of which are AAA rated. So, from the safety point of view, these bonds are highly secured and attract a big number of risk-averse investors. To me, it makes perfect sense to invest in these bonds as against riskier company deposits.

Tax-Free Bonds to be issued this year would not carry as attractive interest rate as they did in 2013-14. The 10-year G-Sec yield has come down by more than 100 basis points or 1% since then. I do not expect these bonds to carry coupon rates above 7.75-8%.

With crude prices coming down once again, Monsoon rains being above expectations and inflation remaining under control, I think the interest rates would remain under pressure going forward as well. So, it is in the interest of the investors and these companies also if these bond issues get launched as soon as possible. Are these companies already working on that?

Application Form for Tax Free Bonds

Note: As per SEBI guidelines, ‘Bidding’ is mandatory before banking the application form, else the application is liable to get rejected. For bidding of your application, any further info or to invest in tax-free bonds, you can contact me at +919811797407

Site restored to normal

A quick note to let you know that as far as we can tell, the site has been restored to normal and you won’t see any more spammy posts.

What happened was a person, script or machine had somehow gotten access to one of the passwords that is associated to an account here that has publishing rights. Posts were getting published through that account, and it took a while to narrow down the problem to that account.

I wouldn’t be surprised if the person or system had just guessed the password to that account because I had kept it ridiculously simple.

The lesson is to make all your passwords complicated, and the way to do that is to use pass-phrases instead of passwords because they are easily remembered and harder to guess or crack. For example: “$DinosaurBirdBrain457#” I believe is easily remembered and harder to crack.

Apologies for the inconvenience and thanks for your patience.

Thank you for the support

We announced our services on the blog about a month ago, and I wanted to write a quick post to thank you for all the support, inquiries and conversations since that time.

The most rewarding aspect of this has been the fact that the people who contacted us have been reading the blog for several years now, and already understand our philosophy and nature of our services.

Shiv and I are grateful to your support and have our hands full right now, so we have decided not to take on any further consultations till the time we finish off with our ongoing ones. The exception is if you have already started talking to us but not finalized the agreement yet, then that’s fine, we will still continue working with you.

We also got a few inquiries from people who weren’t sure if they need an advisor or not, and were sitting on the fence and sought our direction on that.

I thought it would be a good idea to share some of my views on the subject here.

I think this is like hiring a trainer in a gym or going to a gym class as opposed to just going to the gym. Not everyone needs to hire a trainer and not everyone needs a class, but everyone can benefit from going to the gym.

If you have good money habits, are comfortable with your finances in life, and are generally in control then I don’t think there is any need for you to hire someone to look at your finances, except when you are mistaken about these things, but I feel that there aren’t many people who are mistaken about such things because it would show up in their day to day lives as well.

I think the most benefit comes when you have a question that you haven’t been able to successfully answer, or are generally unaware if your investments are optimal or not, and if you have enough money saved to meet all your goals, or in some cases don’t even know where to begin with.

A little introspection easily answers those questions, and that’s all you need to know whether you need someone looking at your finances or not.

Please don’t construe this to mean that you can’t write to us and ask us about specifics to seek direction, but in most cases, we won’t be able to give you an answer. It is really you who needs to answer this question.

Once again, Shiv and I thank you for all your support, and I’ll post an update in a month or so when our current engagements end to let people know we are ready to start with new engagements.