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Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. , its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.
The best time to start investing is today You are different and so are your needs Why your returns are not the same as the market’s return? Understanding Taxation in Mutual Fund Investments
You will spend a lot of time at home in the coming days through lockdown and extended Work-From-Home (WFH) while the virus battle rages. Use this opportunity to invest in life-changing skills to forever accelerate growth. Here are eight skills to invest in —two each from learning, execution, communication and mental leverage.

Learning speed
Learning to learn is the foremost skill. It accelerates growth in your career, wealth, health, personality and time efficiency. To learn fast, leverage the working of your brain. Use chunking or breaking down information into small pieces, which can be retained by your short-term memory. To chunk, organise information into subjects, modules and sub-topics. Spend no more than 30 minutes in focused, undisturbed learning at a time. This makes it manageable and gives your mind rest thereafter, thus improving retention. Finally, shift learning from short-term memory to long-term recall by summarising what you learnt, asking yourself questions on the topic and practising problem solving

Speed reading
A reading novice has a reading speed of about 200 words per minute while a master averages 2,000 words. Speed-reading is a skill you can learn and dramatically reduce the time you spend on reading emails, work material and learning topics. The three main concepts are pointing, jumping and chunking. Firstly, sweep your finger across a line as you read by focusing on the tip of your finger.Increase speed over pages even though comprehension may be low initially. Pointing focuses attention and prevents back tracking. Secondly, move your eyes from one 4 to 8-word block to another, training your eyes to read in jumps. Finally, move your finger down the centre of a page slowly, capturing each line as one chunk of information, increasing your peripheral vision. You can use a speed-reading app.

Action skill
While the first two skills dealt with absorbing information, they are useless unless you apply your learning. To overcome procrastination, put down an execution plan with deadlines in your calendar. Planning and goal setting increase mental engagement with the learning. Noting and executing as per your calendar ensures action without having to remember commitments.

Behaviour change
To make all round progress, act on multiple skills simultaneously. This will be exhausting when you expend some willpower to execute each task in a day. To avoid taxing your willpower, incorporate these activities as habits into your daily routine. So, if you go for a jog everyday at the same time, it is no more a decision to be taken. Now to convert an activity into a routine, use the motivation from the power of accountability. Thus, involve another person for going jogging together. Since you are accountable, you will soon slip into the routine of a daily run.

Speaking
WFH is the best time to improve a key professional skill—verbal communication. With online meetings becoming the default mode, most of your on-to-one discussions are now being done in the presence of the entire team either on call or video. Recognise it as a public speaking opportunity and target how you can improve this skill. First, pre-plan your communication—what you want to convey, in how much time and how you will say it for quick acceptance.Second, watch your tone, the reactions you get and experiment with words for greater impact.

Writing
The other equally important professionalskill is written communication. WFH has also increased the flow of emails. To improve writing and the art of written storytelling, start by publishing 250-500 words per day in a blog or a forum. You will struggle initially to find a subject or topic.As you continue for 3-4 weeks you will discover new structures, language and a style of your own. Thereafter with feedback from readers, you will develop a strong story-telling technique which will serve you well.

Meditation or focus power
Don’t dismiss meditation as a spiritual gimmick. It is a powerful mental tool that increases your focus and output in tasks, enhances quality of decision making and increases productivity through efficient task switching. Start by as low as 10 minutes a day and move up to 30 minutes but do it daily to see results in 2-3 weeks. You can use any meditation app or simply close your eyes and focus on the tip of your nose, mentally observing each breath going in and coming out. The biggest short-term impact is a drop in stress levels.

Reducing ANT
ANT or Automatic Negative Thoughts are random negative thoughts about yourself that cross your mind multiple times a day. These contribute to stress, social anxiety and even depression, thus reducing happiness and effectiveness. Avoidance and confrontation are two techniques you can practice right away. Being fully occupied in the current moment or mindfulness practice leaves no space for ANT. In the opposite technique, pause whenever you have a negative thought, question it and reframe it positively to break its flow and to reclaim your life.
The Reserve Bank of India announced measures to improve the economy in response to the COVID-19 crisis. All financial institutions are permitted to allow a moratorium of three months on payments of instalments of all term loans and credit card dues arising between 1st March 2020 and 31st May 2020.

Please note that the moratorium does not apply to interest charges. If you have Rs 1,00,000 due as on 3rd March 2020 and you take advantage of the moratorium till 31st May 2020, the dues payable on 3rd June 2020 could be as high as Rs 1,15,000 (Rs 1,00,000 (due amount) + Rs 15,000 (interest amount and other charges)).

It is Recommended that you continue paying your total due amount (or as much as possible) within the due date to avoid interest charges @ 36 - 42% compounding annual interest rate, if you can.

Please read the FAQs below to understand the moratorium well and its implications.

1.What is the 3-month RBI moratorium period for Credit Card dues?
Given the circumstances of the global pandemic, RBI has allowed banks to push the 'Billed Credit Card dues' falling between 1st March 2020 to 31st May 2020. This is not an exemption from repaying the amount. The payment can only be "deferred" by 3 months as per RBI notification and subsequent clarifications dated 27th March 2020. If you take advantage of the moratorium, your credit score may not be impacted by non-payment of credit card dues for 3 months till 31st May 2020, but interest fees will continue to be charged at current rates or as specified by your credit card issuing bank. For term loans, all EMIs will be shifted by 3 months i.e March 2020 EMIs will be due in June 2020 and May 2020 EMIs will be due in August 2020. For credit card dues, billing will be restored on 31st May 2020. To avoid late fees and interest charges from 31st May 2020, you will have to pay your total due amount. If you pay your minimum due, you will avoid late fees but will be levied interest charges on the outstanding amount.

2.Does this moratorium apply to all consumers including me?
The RBI has permitted banks to offer the moratorium at their discretion. Banks can define parameters of eligibility, if any. Bank-specific processes will be published next week on how consumers can avail this option.

3.If I take this option, will interest charges be levied for the deferred period of payment?
The RBI notification has clearly specified that interest will continue to be charged on the outstanding amount during the 3-month deferment period.

4.What do I have to pay after 3 months?
Opting for 3 months 'deferment' option allows you to delay the payment of your credit card dues till 31st May 2020. As per our understanding of the circular, you will be expected to pay your outstanding amounts and the interest charges on the due date after 31st May 2020 to avoid late fees and impact on credit score.

5.Will taking this option impact my credit score?
Exercising this option may not impact your credit score since the banks may not report it as a "default" to RBI recognized credit bureaus. More clarifications are expected from the RBI and banking institutions.

6.If I want to avail this option, how can I do it?
Your credit card issuing bank will release guidelines around the RBI notification by next week. These will include details on which customers are eligible and how they can avail the option. As of now, we recommend that you continue paying your total dues on the due dates to avoid any fees and charges, if you can.

Millions of Indians will earn less from their small savings schemes in the April-June quarter, with the government on Tuesday slashing interest rates on these popular schemes in a falling rate cycle.
Interest rate on Public Provident Fund (PPF), Kisan Vikas Patra (KVP) and National Savings Certificate (NSC) will earn 70 to 140 basis points less during the June quarter. One basis point is one-hundredth of a percentage point. Since April 2016, interest rates of all small saving schemes have been linked to government bond yields, and are readjusted every quarter.
Investments in PPF schemes will earn 7.1% against 7.9% in the March quarter, the five-year National Savings Certificate will return 6.8% against 7.9% earlier, KVP 6.9% against 7.6% earlier, Sukanya Samriddhi Account 7.4% against 8.4% earlier, five-year Senior Citizens Savings Scheme 7.6% against 8.6% earlier, five-year Monthly Income Scheme 6.6% against 7.6% earlier, term deposits of 1-5 years 5.5-6.7% and a five-year recurring deposit will earn 5.8%.
A cut in small savings schemes was expected after the Reserve Bank of India last week cut the repo rate (at which RBI lends money to banks) by a steep 75bps in an attempt to soften the blow from the covid-19 outbreak. Still, Tuesday’s cut was sharper than expected. Those who depend primarily on income from these schemes may now need to revisit their portfolio.



You should be careful in choosing what you invest in as this can not only be a dud investment but also increase your tax liability in future.

Not many would be aware but there are certain tax-saving products whose tax benefits can be nullified/reversed in the future if the rules are violated. This post is to make you aware of such hidden traps.

Life Insurance Policy:

Life insurance products like ULIPs, Endowment plans or money back plans are the most mis-sold product in the name of tax saving investments. These investments in most cases yield very low returns and there can be a reversal of tax benefits claimed in previous financial years.

As per income tax rules, the previous year tax benefits get revoked if you

  • Haven’t paid at least 2 years premium in case of traditional policies like endowment & money back
  • At least 5 years premium in case of ULIPs (unit-linked insurance plan)
So be careful if you are investing in these to save taxes.
Pension Plans:

As per tax laws, the tax benefit claimed on payment of pension plan premium is reversed if the premium is not paid for at least 2 years.

Home Loan:

You get tax exemption for payment of principal component of home loan u/s 80C. This tax benefit on home loan principal gets reversed if the house is sold within 5 years of purchase/possession. However, there is no such reversal provision for interest component of a home loan – the benefit stays even if the house is sold within 5 years.
Tax Benefit Reversal – How it Impacts you?

We take an example to show how the tax benefit reversal increases your tax outgo.

Let’s assume you bought (or were miss-sold) a pension plan with the premium of Rs 1.5 lakhs. In the first year, you paid the premium and took benefit u/s 80C for tax exemption of Rs 1.5 lakh. After few months you realize it’s a dud product and wants to move over. So, you would want to surrender it or not pay the further premium. But as per tax rules, the last year tax benefit would be nullified in case you do not pay the premium for at least 2 years.

If you were fortunate and had other investments like EPF which are eligible for 80C benefit last year, then the calculation would be: Additional income to be added = Rs 1.5 Lakh – EPF in that financial year

So even though benefits u/s 80C weren’t claimed in the return filed, you can still reduce the tax benefit reversal only to the extent of the gap between the other 80C investments and the premium amount claimed.

You should, therefore, keep investment proofs with you until the tax reversal period expires.
Please mark all your queries / responses to
Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. , its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.