BIRDS AND THEIR YOUNG: You must have often seen a nest in the corner of an attic below the stairs of your house, or on the pot hanging in your balcony or on a tree in your backyard. You must have also noticed a bird or two fluttering around that nest, a cat on the lookout for food, the small eggs and the next generation of baby birds crawling and eventually flying out into the world. But have you ever thought of how the parent birds look for a safe place, make the nest, breed and hatch the eggs, protect them from wind, rain, storm and against the evil cats and raise their baby to the point when they can fly independently. It is because of their fostering, protection and the care that they offer to their young ones, are the latter able to carry on their legacy. The entire process is a challenge, and the birds invest huge efforts in winning the challenge. This story is an illustration for the readers to understand the importance of protection and care. It is very important to create wealth by investing your money wisely, yet it is all the more important to protect your wealth from evils. The assets that you have built can be blown up in a moment if you do not provide adequate protection. Changes and uncertainties are constant, and by protection we mean you should be prepared for and be able to shield your wealth from these uncertainties.

We have brought certain rules & strategies that you may follow in order to protect your assets:

Diversification: The Golden rule to protect your assets is “Don't put all your eggs in one basket” because if the basket falls, you'll be left with nothing. Having a heterogeneous portfolio doesn't mean you will achieve humongous returns. But is has the potential to improve returns at a given level of risk. The idea is to mitigate the negative impact of one asset with the positive ones. A well diversified portfolio is the one which will survive the jolts of the downturn. Let's say A has 60% assets spread across health care, technology, manufacturing, infrastructure and FMCG sectors and 40% spread across Bonds, debt funds and FD's. While his friend B has put all his money in health care and infrastructure sectors only. Let's say both these sectors were growing, but suddenly there is a sharp fall in the infrastructure stocks. A's portfolio of 10 different sectors and classes will cover the risk posed by infrastructure, but B's health care alone will not be able to make up for infra losses.

Beat Inflation: If you need R 50,000 a month to fund your household expenses today, you will probably be needing R 1 lakh ten years later to meet the same expenses. So, if you have put your money into Bank FD' s assuming that this money will fund your life expenses post retirement, then beware!, because the post tax returns that Bank FD provides will barely cover he inflation expenses, forget about increasing your wealth. So, you must invest in options where your savings increase at a faster pace than inflation. So if you are here for the long haul, you must allocate a certain percentage of your portfolio to equities, since equities have historically delivered good returns and has overpowered inflation.

Get Adequate Insurance: Mr ABC invested some money in a mutual fund scheme for the purpose of funding his daughter's wedding, which is expected to happen in the next 3-5 years, and suddenly his wife is detected with a tumor and she needs immediate surgery, and he is left with no choice but to meet the hospital expenses with the daughter's wedding fund. His plans of a grand wedding are shattered and he has no clue of how will he now finance the wedding expenses. Don't let this happen to you. Don't be Mr ABC, you need to protect the wealth that you saved for a particular purpose by not letting emergencies overpower your goals. If Mr ABC would have got himself and his family members insured with health insurance, the emergency medical expenses would have been taken care of by his insurance, leaving his wealth untouched. You must protect your family with an adequate term life insurance also, so in case of the unexpected, your family is able to survive and fulfill the goals that you dream of.

Save & Invest More: Never stop saving and investing. Make it a habit, it will build your wealth. Even if you have allocated money for all your goals or have accomplished majority of your goals, you should never stop investing. You can blow that money up in luxury, or you can build your wealth for your better future. The latter is a better choice, since all days are not the same. Save for a rainy day. When you don't work, your savings will work for you.

Don't be Emotional in Money matters: Emotions are an integral part of human beings. You are a big fan of Akshay Kumar, you would never miss his movie even if it deserves an Oscar for insanity. Nevertheless, it is sane enough to invest R500 on a weekend to spend some quality time with your loved ones. But when it comes to investments, do not go by your emotions. Rather seek professional advice. Do not respond to slumps or surges, you can never make money by reacting to market fluctuations.

Follow a Personal Financial Plan: An investor must always have and follow a plan. Your financial advisor will guide you and devise a pathway according to your requirements and goals. There are various hindrances which will come in our way, some expected while others unexpected, and these will try to deviate you from your plan. But you have to be prepared and provide for these events while moving on your path unbroken. We get up in the morning, and after our morning ablutions, we pray to God, it is a daily practice. Likewise, you must make it a routine to follow your financial plan.

The above rules are like illusionary walls
around your wealth and you have to keep
these walls strong and intact to ensure that
there is no leakage at any point of time.”

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With just two days to go for the income tax returns filing deadline, amidst the last minute hustle, chances of mistakes are high. Either the website won't work because there are many who have joined in the last minute rush, or you don't remember your passwords, or you end up filing the wrong return, etc., because of the commotion. So here are some quick tips to help you avoid the errors.

1. Gather your documents: First thing, get all the required documents together, like your Form 16 or business income details, your Form 26 AS (You'll get this from the e-filing website), Section 80C investment proofs, interest statements from your banks, statements of interest and principal paid on home loans, education loans, etc., statements of house rent paid where HRA isn't received, medical insurance premiums paid, documents detailing various expenditure that can be claimed like medical bills, etc.

2. Pay Self Assessment Tax, if any: Before filing the ITR, check if you haven't underpaid your taxes. Calculate the total tax amount that you ought to pay, the possible sources of omission are rental incomes, interest incomes, etc. A common case of underpayment of taxes is interest paid on savings or fixed deposits. The banks deduct a TDS @ 10% for any interest income paid above Rs 10,000. Now the possible disparities are:

• You fall under a higher tax bracket, but TDS is deducted @ 10%.
• You have more than one bank accounts and your total interest income exceeds Rs 10,000, but one or more banks haven't deducted TDS because interest paid by them was less than Rs 10,000.

Assess your total tax liability and deduct the total taxes paid by you (Refer Form 26AS for total taxes paid) and pay the difference as Self Assessment Tax, either through net banking or your bank branch. Add the challan number to the set of documents you gathered in Step 1.

3. Start Filing: Once all the groundwork is done, the next step is to get into action. Follow the following tips to avoid errors.

1. Select the correct ITR Form.

2. Check the general information section, make sure all your personal details like mobile number, address, employer category etc. are correct. If not, make the required changes.

3. Enter all your incomes, including interest income, rental income, business income, etc. and fill in the corresponding schedules.

4. Fill in all the deductions, your investments, health insurance premiums, interest paid on loans, donations paid, etc. One section that people often omit is Section 80TTA. As per this section, interest income of up-to Rs 10,000 from savings account is exempt from tax. So, if your interest income is up to Rs 10,000 enter that amount or if it is greater than Rs 10,000 then too you can claim Rs 10,000 as deduction under this section.

5. Fill in the details of the self assessment tax, from step 2

4. Review: Before submitting, review the ITR thoroughly, so that you can fix mistakes, if any.

5. Submit before 31st July: Finally, click the submit button, and remember to do it before the deadline.

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Since August last year when the resolution to implement GST was passed, the common man is preparing himself for the regime and is eager to learn the implications of GST on his lifestyle, what products will be cheaper and the things for which, he will have to shell out more money.

The implementation of GST is the biggest ever tax reform in the country, which will ease doing business in India by removing operational hindrances caused due to multiple levies under the current tax structure. With the introduction of the one tax - one country system, goods can move freely from one state to another. No more long waiting hours at state borders, or filling numerous forms, the central and state sales taxes and duties will all be replaced by GST, resulting in operational efficiency and reduced logistics' costs.

GST has been propagated as a reform to simplify the tax structure while protecting the common man's interests. Therefore, taxes on most essentials will be cut significantly, there will be zero taxes also on some items whereas luxury goods are targeted and will be taxed on the higher side. There are five tax slabs under the GST arrangement 0%, 5%, 12%, 18% and 28%, and all products and services will fall under either of the five brackets (excepting a few, like gold)

The time has finally come, and GST will be implemented in a week's time. So, at this point we have brought for you a snapshot of the impact of GST on your pocket.

Daily consumption Products: table Various consumer goods that we buy on a daily basis, hold the lion's share in our monthly budget. A snapshot of GST rates on various daily consumption products:

On the whole, essentials among the daily consumption items will attract lower tax, and hence will become cheaper whereas processed food items will inflate the cost.

Mobiles & Computers: Mobile phones will attract a 12% tax, plus a 10% basic customs duty may be levied on imported mobiles, so overall the device will be expensive than before. Mobile phone bills and data packs will also contribute to the misery, as until now a 15% Service tax was applicable on these services which will now increase to 18% under GST. Cost of Laptops and Desktops will also increase as they will attract an 18% GST from July 1 as against the current 15%.

Travel: As the government is following a progressive taxation approach, hotels with a tariff of less than Rs 1,000 fall under the 0% slab, AC hotels, under the 18% slab and luxury hotels in the 28% slab. Similarly, economy travel by trains (all classes) or by Air will bear 5% tax, while for business class air tickets, you will have to pay a 12% GST.

Restaurant bills: For the connoisseurs, who love eating at fine dines, there is good news. Food in all air-conditioned and five star restaurants will attract an 18% tax as against the current 20-24%. For Non AC Restaurant food bills, you have to pay a 12% GST.

Movies: On movie tickets priced above Rs 100, you will have to pay 28% tax. In some states, the service tax on movie tickets is skyrocketing, the 28% tax slab will be a sigh of relief for cinema lovers. Whereas in other states, where the service tax was lower, movie watching will become dearer.

Gold Jewelery: There is no difference in the tax incidence on gold, as gold will attract a 3% GST and previously VAT and excise duty on gold summed to 3%. The difference lies in making charges, which would attract an 18% GST as against NIL earlier. So, if you are planning to buy Gold jewelery, do it now.

A favourable incidence of GST implementation for the common man is pre-GST clearance Sale. Online shopping websites as well as retail outlets are offering huge discounts on apparels, footwear, electronics, appliances, etc., with a view to clear their stocks before the implementation of GST. Carmakers are also offering delectable discounts to clear their inventory. So, if you are planning to buy any of these products in the future, you can encash the discount opportunity and buy now.

Another favourable by-product of GST is job creation. Companies need to get their accounts in place, so there is a greater demand for professionals versed with GST laws. Lawyers, CA's, accountants, IT guys for synching the tech platform of companies with new laws, are in huge demand these days. The tax base is also expected to broaden, with an increased number of small businessmen falling under GST regime, again leading to an increase in the demand for accountants.

To sum up, it is expected that as an immediate impact of GST, there may be a rise in the inflationary pressure, however in the long run, the adverse impact on various sectors will be neutralized. Until now goods and services were taxed separately, so a businessman who was paying VAT as well as service tax, could not set off his service tax cost against the VAT paid, and vice-versa, thus increasing the cost of his offering. And this amplified cost was then passed on to his ultimate customer. However GST envelopes the entire universe of goods and services, excepting a few sectors, so this businessman can now avail input tax credit for the GST paid on services against GST paid on goods, or otherwise. Due to this flexibility, the cascading effect of taxes will be wiped out, the cost would decrease, and the benefit of which, will be transmitted to the consumer. So, eventually the cost of all products and services will alleviate for the end customer in times to come.

There are changes happening in every aspect in our lives. One change that has affected our lives is the growth in financial needs and products available. The result is that today there is a large number of advisors / distributors or consultants that we are associated with. Though this may not be necessarily a bad development, questions do arise on practicality and need to deal with so many different people. In this article, we try to look from the investors perspective and answer upon some unspoken questions.

Choosing advisors:
The first question that arises is now many advisors should we deal with. Historically, the onus has really been on the client to make the holistic decisions on his/her overall financial well being, and then engaging with traditional advisors for specific products or services. Typically, it would not be surprising to know that most of us would be dealing with at least 3 to 5 traditional advisors, from the following list, at the same time...

Assessing our financial advisory needs:
The right approach would be to not directly hunt for product advisors/distributors but to first look at our needs holistically. By looking at the needs with this purview, we bring greater simplicity and purpose. It is likely that following 4 broad needs would be identified

1. Taxation / Accounting services
2. Risk protection / insurance
3. Wealth creation / investment
4. Banking services

We now attempt to take a closer look at the traditional advisors within the framework of our identified needs...

• Taxation / Accounting services: The CA, as an expert for accounting services, is indispensable. However, if inexperienced or not engaged in financial advisory, he/she may not be in the right position to offer pure investment, portfolio or insurance related advice
• Risk protection / insurance: The next need of insurance and the choice of the advisor would be subjective upon you. You may engage with a life insurance agent and a general insurance agent or preferably with someone who does both. The limitation is that a pure insurance advisor/distributor will not be an investments expert and would instead recommend insurance products for pure investment needs too
• Wealth creation / investment: Ideally a wealth advisor should be approached for investment related needs. Typically he would have products for long term wealth creation in his basket. The products of mutual funds, fixed income products and PMS offer acceptable risk-return trade-off and can be looked positively by small & retail investors. The limitation is that he may not be experienced in insurance to provide advice on same.
• Banking services: The bank relationship, should ideally be best treated as a continuous, service related relationship. The Bank RM, armed with bank info, may offer investment products. However, for small / retail investors it is likely that any product advice is made without proper portfolio / financial planning and is transactional in nature there is inadequate attention & service facilities provided

Financial Advisors / Planners:
With the existence of a plethora of financial needs & products, there is a growing need felt for single window approach to financial decisions. Thus, many traditional advisors are now offering multiple products and comprehensive advice. You may ask your advisor and it is likely that he/she would have multiple products/ services in the advisory basket. Such comprehensive Financial Advisors / Planners offering single window advisory on multiple products are at the top of ladder.

Engaging with Advisors
By principle, it is recommended to deal with advisors that have requisite skills in multiple domains. Clients should engage with advisors offering comprehensive financial planning services. There may be a possibility that your CA also offers Investments / Insurance advisory or your Investments advisor may also have Insurance advisory services and vice versa. The benefits of engaging with single financial advisor / planner for multiple needs / financial planning is as follows:

• Comprehensive view of your entire financial situation & goals
• Optimum utilisation of our resources / capital for right reasons
• Unbiased / product neutral advice
• Best of different worlds available

Exception to the principle can possible in cases where you are not confident about the advisor's knowledge, skills, quality or limitations on product / service offering.

The following matrix summarises the advisors we would be likely to deal with and the services and products expected from them.

To start with, you may approach all your existing advisors and seek information about the different products and services advised and offered. You should specially ask for financial planning services, if any offered.

In brief:
In would be better that we deal with a minimum number of good advisors who are in position to offer the optimal combination of important services and products. Taking the financial planning approach is the best way to deal with a large majority of financial decisions in a holistic manner. This is much better than choosing products first ourselves and then approaching distributors. Also, a person who has knowledge and access to multiple products is likely to be more unbiased and would provide advice which is product neutral, presenting you with the options / products across the board.

Taking about the relationship with your financial advisor, it is indeed a special one. A good relationship is something that has to be treasured by us and at the same time we should also be fair and open regarding our needs & expectations. We should also be ready to share information and pay for quality, unbiased services expected from the financial advisor. The relationship is that where mutual trust, respect and understanding is paramount and so is the ability and intend of the financial advisor to work in your interest.

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