MBA 3AggressionInnovationIntegrity

Prashant Sawant 9820408795 Mumbai.

Inflation

•What is inflation ?•A continuous increase in the price of

goods & services in the country.•Inflation up, Purchasing power ?•Sugar Rs 100/- 1 kg (TO) Sugar Rs 200/- 1

kg.•Real rate of return •WPI (5.43%) & CPI ( 7.31%) < June

2014>

Why Inflation happens ?

•Demand Supply equation•Cost of production increases ?•Wages, raw material, power,fuel etc

Inflation can be controlled by

•Monetary policy•Fiscal policy

Monetary policy

•RBI•Earlier annual , now ?•RBI controls the flow of money , how ?•Interest rate adjustments•CRR•SLR•Repo rate•Reverse repo rate

CRR

•Cash Reserve Ratio•Money : banks have to keep with RBI.•IF CRR is increased , effects ?•CRR drains out excess funds from the

market.•CRR 4% •4% of what ?•Net Demand & Time Liabilities ( NDTL)

SLR

•Statutory Liquidity Ratio•Amount banks are required to maintain in

the form of gold or govt approved securities before providing loans to the customers.

•22.5%

Repo rate

•Rate at which RBI lends money to banks•Today’s repo rate 8%•Lower repo rate effect on inflation ?

Reverse repo rate

•Rate at which RBI borrows money from banks

•Higher reverse repo rate effect on inflation ?

•Today’s rev repo rate ? •Lesser than RR ?•7.75%

Fiscal Policy

•Who ?•Government of India•Tax collection, Expenditure & borrowings•How expenditure will affect inflation ?•How borrowing affects the interest rates ?

Lock-in-period

•Time period within which an investor cannot sell either part or all of the investment.

•Eg ?•5 Yr tax saving FD•Can we pledge this FD to get loan ?•Can we get OD facility against this FD ?

Maturity date

•Date on which the investment becomes due.

•Investor gets ?•Principal & interest

NAV

•Net Asset Value•Price of each MF unit•Performance indicator of MF scheme•Total value of assets / No of units•Quiz : MF has Rs 500 Lakh worth assets &

Rs 20 Lakh units. NAV ?•25•Asset value goes to Rs 550 Lakh , NAV ?•Asset value decreases to Rs 450 Lakh,

NAV ?

NSE

•National Stock Exchange•Facility for brokers & traders to trade

stocks.

NIFTY

•Similar to Sensex (30) < SENSitive indEX>

•50 companies•NIFTY moves based on the performance

of these 50 companies.

Overdraft

•A facility offered by a bank to an individual to withdraw amounts greater than what is available in his account.

•Person issues a chq of Rs 2 L. Amt in ac is Rs 1L. Bank will clear the chq if the OD limit is more than 1L.

Portfolio

•A collection of all investments owned by an individual.

•Stocks, MFs, Real estate, Gold , Insurance , FMP etc

Premium

•Additional cost you pay over the normal cost of any item.

•Share face value Rs 10, Market value Rs 200, Premium ?

•Face value Rs 10/-, market value Rs 8/-, share is available at a discount to the face value.

80C

•EPF, PPF•LI premiums•ELSS•NSC, SCSS•Home loan ?•Tuition fees for kids •5 yr bank FDs

Tax deductions

•80C•80D : Health insurance 15k self & 15k

parents. Preventive health checkups Rs 5k.

•80DD: Medical treatment of handicapped dependent. 50k normal & 1 L extreme.

•80DDB : Specific disease (AIDS, Cancer etc) for self/dependent. 40k & 60k for sr citizen.

Tax deductions…..cntd

•24(b) : HL interest 2L ( after 1/4/99 & 3 yrs or 30k). Given on rent ? / Repairs 30k

•80E :Interest paid on higher education loan taken for self, spouse or children.

Tax exemptions for

•Rent/revenue from agriculture•PPF •MF dividends•Leave encashment •Voluntary retirement ( Max 5 L)•Sale of shares after ___ months

TDS

•Tax deducted at source•Form 16 (TDS certificate).•Investment projections by employee•Bank interest if more than _____.Form

16A.•Insurance commissions, professional

services, rental income, prize money, lottery, horse racing, betting.

TDS….. cntd• For salary, TDS as per IT slabs.• For bank FD, TDS 10% on interest above Rs 10k.• Lottery, horse races etc 30% • TDS certificate is generated by deductor.• 26AS : Govt provides consolidated TDS statement.• View 26AS : Register with NSDL (National securities

depository limited www.nsdl.co.in) or by logging in at “incometaxindiaefiling.gov.in” or view it on your net banking ac on the link provided by your bank.

• Calculate all income, calculate tax due. If TDS already paid is less, pay the balance or else claim the refund.

•Thank you.

•Prashant Sawant•9820408795•Global training group