*This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information

4 MARKETS MAY NOT BE FAVOURABLE DUE TO ELECTIONS

Financial markets move in cycles. It is a fi fty-fi fty chance that you may buy at low prices in March. If you are forced to make that `1.5 Lakh investment in March, you may also end up buying when prices peak.

HERE’S A FEBRUARY TIPRupee cost-averaging through a systematic investment plan is the best way to deal with the market volatility.

2 YOU MAY NOT GET ENOUGH TIME TO RESEARCHYou might have heard that ‘haste is waste’.

In March, you might not have enough time to research various investment

options. In the last-minute rush to save Taxes, you might just invest in the funds you already know about. Thus, you might just miss out on attractive investment options.

HERE’S A FEBRUARY TIPDo your Tax-investment research now. Study various ELSS funds. Find the ideal investment that suits your risk-return profi le.

Scrambling to meet the Tax-saving objective for the year around March is a common practice among the salaried. Many often

make the mistake of pushing Tax planning until the last moment. Now, we all know the downside of taking hasty decisions. Last

minute Tax planning can lead to a mismatch between investment choices and your risk-return profile.

Here are a few reasons why Tax planners should beware of March!

TAX PLANNING: BEWARE OF MARCH

3 YOU MIGHT FAIL TO ALIGN IT WITH OTHER GOALS

You might end-up investing just to save Tax. This is

like locking-in your hard-earned money without any specifi c goal in place. You might fall short of funds to reach

your goals.

HERE’S A FEBRUARY TIPYou can align your Tax-saving goal with your other fi nancial goals. For example, you can fulfi l your world travel goal just by saving your Taxes for 6 years, with ELSS. Therefore, why settle for one, when you can fulfi l two goals simultaneously.

1 YOU MAY HAVE TO ARRANGE A LUMPSUM `1.5 LAKH

You know that you can save up to`1.5 Lakh by investing in Tax-saving

instruments. However, you might not necessarily be able to arrange this amount at the last moment. For the young, not having money to invest at the last minute is just one

challenge. The other one is to lose a signifi cant portion of the March salary.

HERE’S A FEBRUARY TIPIf you cannot arrange for the necessary funds to save Tax, start investing a small portion of your monthly pay into an Equity-linked Savings Scheme (ELSS) starting in April.

SWATANTRA KUMAR EXPLAINS: STATUS QUO BIAS

Many people order the same menu items whenever they visit their favourite restaurant. They see new items being added to the menu, but they still prefer ordering what they have been eating. This is due to the fear of the unknown. This explains the status quo bias.

How does Status Quo Bias affect our fi nances?

● You remain where you are, even when there are enough investment opportunities to grow your corpus.

● You fail to update your portfolio to make it diversifi ed.

● You hold on to a portfolio that does not match your risk-return profi le.

Here are a few investment tips to avoid Status Quo Bias:

● Review your investments from time-to-time.

● Take appropriate steps to re-balance your portfolio, in case you fi nd an under-performing asset.

● Look for new investment opportunities.

● Seek fi nancial advice.*This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information

Steps to download and scan a QR code: 1) Download QR code app on your phone. 2) Run app and scan the QR code. 3) Your smartphone reads the code & navigates to the destination.

Scan this QR code to know how a simple decision of investing in an SIP can make a huge difference to your life.

WHAT NEXT? Why settle for one goal, when you can fulfi l two! In the next section, read how you can fulfi l multiple goals by simultaneously saving Taxes!

*This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information

SMART INVESTORS NOT ONLY SAVE TAX BUT MOREDid you know that you can plan for your retirement and save Taxes at the same time? By making smart and timely investments, you can not only save Tax but also invest in your long-term financial goals.

Here’s the story of Suresh!Suresh was investing in Equity-Linked Savings Scheme (ELSS). He started his monthly Systematic Investment Plan (SIP) of `12,500 when he was 25. He was investing this amount to save Tax. At the age of 50, Suresh can have a corpus worth `4 crore1 or more. He’s now planning to retire at the age of 50 and fulfi l his passion goals. By just doing a Monthly SIP in ELSS to save Taxes, you can build a strong retirement corpus.

It only happens with ELSS!There are many more benefi ts of investing in Tax-saving Mutual Funds. These benefi ts are not available in other Tax-saving instruments. Here’s a comparison of ELSS with otherTax-saving instruments:

PPF NSC FD ELSSInvestment to save Tax every year (since 2008)

`1 Lakh `1 Lakh `1 Lakh `1 Lakh

Current interest rates/return rates

8%2 7.60%3 6.85%4 15-18%1

Avg. Returns in last10 years

8.16%5 8.30%6 7.74%7 20.30%8

Returns in 2018 `15,40,427.45 `15,50,269.92 `15,02,575.25 `32,02,381.07Features

Lock-in 15 years 5 years 5 years 3 yearsCovers infl ation No No No YesCost-averaging N/A N/A N/A YesCan divide into small investments

Yes No No Yes, through SIP

1) Source: https://cleartax.in/s/elss Calculations: Calculated with the help of compounding calculator. Years=25, Percent yield=15 and 18, Initial Balance=`1,000, Monthly Contribution= `12,500/-. Result for 15%= `4,05,85,664.3. Result for 18%= `7,18,02,725.15 2) Source: https://www.policybazaar.com/income-tax/ppf-interest-rate/ 3) http://www.postoffi cesavingsscheme.in/national-savings-certifi cate-nsc-scheme-details/ 4) https://www.rbi.org.in/SCRIPTs/PublicationsView.aspx?id=`18,532 5) Years= 10, Percentage yield=8.16, Initial balance= `1,000, Monthly contribution= `8,333 (`1 lakh divided by 12). 6) Years=10, Percentage yield=8.30, initial bal= `0, Monthly contri= `8,333. 7) Years=10, Percentage yield=7.74, Initial balance= `0, Monthly contri= `8,333. 8) Years=10, Percentage yield=20.30%, Initial balance= `1,000, Monthly contri= `8,333.

Therefore, making smart investments through ELSS can help you save

Taxes and plan for other goals at the same time. However, you can do this

with ease only by not keeping Tax planning for the last moment.

It’s never too late to achieve multiple goals with one investment tool; start today!

SIP

SIP can help you get closer to your dreams

along with saving Taxes!

For more details, follow us on Twitter @utimutualfund; Email queries or suggestions: utiswatantra2@swatantra.co.in Please mention ‘Swatantra in TT’ in subject line.

For more such fi nancial advice, head to our website: http://www.utiswatantra.com

For more on women's fi nancial independence, tune in to UTI Swatantra Facebook Live on 8th March, 2019 from 5:00 pm onwards, and catch the live show on 'Dear women, make your fi nancial status as strong as you'.Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

In the next edition: Dear women, you are a symbol of strength in every sense. In the next edition, we will look at how Mutual Funds can help you add to your fi nancial strength.

Scan this QR code to look for last minute options to save Taxes.

Scan this QR code to calculate your Tax liability and how much you need to invest to save Tax.

Until now, reaching a fi nancial goal was considered by investors without factoring in the Tax element. However, now that a Long Term Capital Gains Tax of 10% has been introduced in equity-oriented Mutual Fund schemes, when investors sell

these SIPs to meet their goals, they could fall short of their targeted receipts. From April 1, 2018 any Long-term Capital Gains Tax (LTCG) made on transfer of equity MFs will have to pay a 10% Tax on Long-term Gains above `1 lakh per annum. DDT shall be 25% on Debt Funds for individuals plus applicable surcharge & cess, while DDT shall be 10% on equity oriented funds for individuals plus applicable surcharge & cess.

HERE’S WHAT THE EXPERT SAID

A reader asked us: How are SIPs Taxed?EXPERT SPEAK

Ramesh Kumar Sharda

IFA

What is Dividend Distribution Tax (DDT)?

Dividend Distribution Tax (DDT) is a

Tax paid by companies when they pay

dividends to shareholders. It is also paid

by Mutual Funds when they declare

dividends to unit holders. In both cases,

DDT is deducted at source and only

the net dividend (after deducting tax) is paid to investors.

Dividends paid by Equity Mutual Funds are subject to DDT

at 10%. This amount is also deducted by the fund at source

and only the net amount is paid to you. Hence dividends

are Tax-free in the hands of investors, because the Tax has

already been deducted by the fund.

GURU SPEAK

Surojit Biswas IFA, Biswas Consultancy