Author: hirannya

How to write a Will in India
Writing a Will is very important. Below are 12 important points to take care of while writing a Will:
1. A Will can be made by anyone above 21 years of age in India. You can make the Will on plain paper in India. It’s not legally necessary to make the will on stamp paper.
1. If you die without preparing a WILL in India, your wealth will then be distributed as per Hindu Succession Act, 1956 (for Hindus, Jain, Sikhs and Buddhists) or through Indian Succession Act, 1925 (Indians Christians and other religions).
1. When you are dead, there is someone called an “Executor” who will be responsible for dividing your wealth amongst the beneficiaries and he will make sure the whole process is smooth.
1. You can change your Will any time you want to. However, make sure that when you make a new Will, you mention that this Will is the latest and supersedes all earlier Wills.
1. A “Codicil” is a document that amends, rather than replaces, a previously executed Will. Amendments made by a codicil may add or revoke small provisions (e.g., changing executors), or may completely change the majority, or all, of the gifts under the Will.
1. Although registration of Will is not compulsory, it Is highly advisable to do so! Registration of any indenture creates a presumption in its favour. After the death of the person who made the Will, the beneficiaries don't get the property automatically. They have to go to the court and get a “Probate”. Only after the court grants you probate can you become the owners of the property.
1. A “Probate” is nothing but a copy of Will, certified under the seal of court. The executor (someone who is responsible to execute the Will) has to file a probate petition in the court of law and if all goes well, the probate takes six months to a year. No right as executor or legatee can be established unless a court has granted the probate of the Will. Probate can be granted only to the executor appointed by the Will. The cost of getting a probate includes legal fees as well as stamp duty on the value of the property being willed. The stamp duty varies from state to state. Probate is very important in case of Real Estate.
1. If possible, have the two witnesses be a doctor and a lawyer. A doctor signing a Will, won’t raise any question of you, being of unsound mind. The lawyer, will vet the will and make sure you don’t make stupid mistakes at the time of writing and signing it.
1. The attesting witness and his or her spouse should not be a beneficiary under the terms of your Will. This might create vested interests and sometimes make your Will invalid. Also, make sure the witnesses are younger than you and not very old as your will might be in effect for several years.
1. In case of Hindus, it should be clearly stated if the property is inherited or not, because it makes a huge difference, as no ancestral property can be assigned to any person through a Will. All rights on inherited property are acquired by birth. So if you inherited a property from your Father, you cannot say in a Will, that you want to assign it to person X only! It will go to all your legal heirs as it is “Inherited”.
1. A Will must always be dated and if more than one Will is made, the one with the latest date will nullify all the previous ones. In fact, there should be a statement in your Will, nullifying all other previous Wills. The pages should be numbered to avoid fraud.
1. The value of assets often fluctuates, so it is better to mention how much each beneficiary will receive, in percentage terms rather than absolute numbers. Unless it is pure cash.
How should a Sample Will Template look like? Below are two images, which you can follow:
April 13, 2015
NPS – 10 Point Guide

Off late, lot of inquiries are coming in relation to NPS (National Pension System). We would be happy to answer them individually. But here is a quick 10 point guide in regards to the same. This may answer few of your doubts. But if the below guide does not answer your query, please mention the same using comment section below this article. We will surely get back. Here you go –

1) NPS Contribution can be made by all of us voluntarily or can be made as part of your salary structure i.e. by restructuring your CTC (Cost to Company) involving your employer. Please note that NPS contribution is mandatory for govt. employees joining service on or after 1st January 2004.

2) Contribution, when part of salary structure, is capped till 10% of your (Basic +DA).

3) Voluntary contribution or employee’s contribution of amount up to Rs. 1.50 lakhs is available for tax deduction U/S 80CCD(1), which is part of overall 80C limit of Rs. 1.50 lakhs.

4) From 1st April, 2015, an additional amount of Rs. 50,000 investment in NPS can be claimed for tax deduction U/S 80CCD(1B). This is over and above 80C limit of Rs. 1.50 lakhs.

5) The employer’s contribution (this is basically part of your CTC only. After restructuring your CTC gets reduced by the same amount.) falls U/S 80CCD(2) and this amount can also be claimed beyond 80C limit.

6) Under NPS two investment choices are available – Active choice and Auto choice. Under Active choice, three options are there – E, C and G. Under asset class E, investments are predominantly in equities (maximum up to 50%). Under asset class C, investments are into fixed income instruments other than GOI securities. Under asset class G, investments are in GOI securities. Under Auto choice, investments will be made in a life cycle fund in a pre-defined portfolio based on your age.

7) Maturity amount is taxable – not only gain, but the entire maturity amount.

8) Maturity of Tier-I a/c of NPS will happen at the age of 60 only. At least 40% of the maturity amount has to be used to buy annuity. If amount are withdrawn before age 60, then 80% of the maturity amount is to be compulsorily used to buy annuity only.

9) E, C and G asset class portfolios are now being manged by ICICI, Reliance, Kotak, HDFC, UTI, LIC and SBI Pension Funds. Switch between scheme and fund manager is possible.

10) NPS is administered and regulated by PFRDA (Pension Fund Regulatory and Development Authority)

March 10, 2015
Risk – What is Important?

In its “Investment Advisers Regulation” SEBI has mentioned the following –

Investment Adviser shall ensure that, it obtains from the client, such information as is necessary for the purpose of giving advice, including Risk Appetite / Tolerance.

We are following the above guideline strictly.

But at the same time we strongly believe that there are more to it. As far as Risk Appetite / Tolerance is concerned investors are mostly classified in three broad groups – Conservative – Moderate – Aggressive. But such ‘One size fits all’ strategy rarely works. Let us consider a few case studies –

(1) When ‘Risk Profiling Questionnaire’ is given to Mr. Sumit, aged 35, employed in an IT MNC, his answers revealed that he is a conservative risk taker. He wants to avoid equity, direct or indirect, as an asset class from his portfolio. His preferred assets are fixed return products. Now when his retirement goal is being planned it is found out that to achieve the goal following scenarios are there –

Current Age – 35; Retirement Age – 60; Life Expectancy – 85; Household & Lifestyle Expenses – Rs. 30,000; Inflation – 7%;

(a) Monthly savings or SIP required is Rs. 11,023 when expected return from investments is 15%.

(b) Monthly savings or SIP required is Rs. 19,030 when expected return from investments is 12%.

(c) Monthly savings or SIP required is Rs. 26,947 when expected return from investments is 10%.

(d) Monthly savings or SIP required is Rs. 37,596 when expected return from investments is 8%.

(e) Monthly savings or SIP required is Rs. 51,594 when expected return from investments is 6%.

Now, current monthly investible surplus in Mr. Sumit’s case is Rs. 20,000. The goal is also 25 years away from now. Should we recommend him to invest only in fixed return products?

(2) When ‘Risk Profiling Questionnaire’ is given to Mr. Amit, aged 35, employed in an IT MNC, his answers revealed that he is an aggressive risk taker. He prefers to invest in equities mostly. Now when his vacation goal, which is due in next 2 years, is being planned – should we recommend him to invest in his preferred asset class i.e. equity?

The logical as well as right answer, according to us, would be a ‘No’ in both the above cases.

So in practice, recommended asset allocation does not (only) depend on someone’s Risk Tolerance Level but mostly on the following two factors –

(1) Time Horizon along with cash-flow situation – When a financial goal is long term i.e. more than 10 years away from now, and cash-flow situation does not allow investments in low yield generating instruments – one has to go for equities. If invested with caution, and review is done at regular interval – equity as an asset class is capable of beating inflation rate with a good margin.

But when a financial goal is due in short term i.e. within 5 years, recommending investment in equities is not right, though investor’s risk profile may be aggressive.

(2) Knowledge – When you spend time in understanding an investment product i.e. how it works, what could be the best and worst case scenario etc. – risk reduces considerably. There is hardly any risk when a car is driven by an experienced driver, but there is a HUGE risk when that same car is driven by a 6 year old kid who does not know anything about driving. That is why over a period of time, when your knowledge increases of a particular product – your comfort level increases, risk reduces.

What do you think? Let us know your opinion in the comment section.

March 7, 2015
Budget – How does it matter?

Just for a moment think that you have been always a prudent investor and you understood very well the power of compounding and impact of inflation on return. Now suppose you always schedule your yearly vacation during budget time. So this means you go to some place far away may be in North-East India or in Galapagos or in Timbuktu island just few days before the budget day. You do not get any internet there, no newspaper, no TV channel. And you come back almost after 7 days since annual budget is presented every year. Do you really think that your overall portfolio would get seriously suffered due this untimely(!) holiday of yours? Time proves – it would not. Chances are it would instead benefit you! As long as you save and invest regularly and your portfolio is designed to beat inflation over long term – you are safe and destined to succeed.

Budget is of utmost importance for country’s economy and for functioning of government. Yes it mentions changes in tax slabs sometime and sometime also changes in product basket that qualifies for tax exemption. It increases or reduces your post tax income. Budget also mentions that some items will get dearer and some will get cheaper. This also may increase or reduce your expenses. So the changes in tax slab alone cannot decide your cash-flow situation. So many other factors are also there. Hence it can be safely said that your overall family budgeting and discipline will finally matter. Nothing else actually.

Some of the indirect tax rules may also see changes in this budget. Some industry may get tax sops, some may have to face more tax burden. Changes in excise or customs duty may adversely or favorably impact some industries. There will be surely some knee-jerk reaction for sure and effect can be seen in stock prices of such companies in short run. But again in long run, a company’s stock price is most likely to reflect only how well a company’s management manages cash-flow, generates return on equities, creates value for shareholders. Hence if in your portfolio there is a stock which is well bought i.e. you bought an above average company at a below average price, you are safe and did a commendable job. Stay assured that such buys will always create lot of real wealth for you in long run.

So the basics remain unchanged. You can skip this budget if you are already on right path. And how the ‘right path’ looks like? See below:

1) Focus on your family budget. Along with your household and lifestyle expenses also allocate fund for leisure, entertainment, travel but stay within limit. Do not overspend.

2) Write down your financial goals. Set your targets. Look at the possible scenarios. Check your surplus. Start investing accordingly, and remain rock steady.

3) Keep emergency fund ready in liquid instruments.

4) Calculate and then take right amount of life cover.

5) Depending on the city you live, likely expenses in nearby hospitals – take right amount of health cover (popularly known as medi-claim).

6) Saving tax is definitely a good idea but not by compromising on life goals’ strategy. If some tax saving investments get fit into your recommended portfolio to achieve financial goals in time, then fine, go for it (early in the financial year) and save tax.

7) Monitor your investments and review your financial plan at regular interval.

Phew! You are almost done! So pack your bag and go for a vacation. Will see you post budget. Happy journey! 🙂

February 26, 2015
Children’s Education & Marriage Planning

handyhulle mit portemonnaie

Most of us have the goal of accumulating enough corpus to meet the funding need for our children’s higher education and marriage expenses and rightly so..

February 10, 2015
Retirement Planning

find more information use this link where to buy super clone watches

The goal to plan for retirement is common to all of us. We all are looking forward to a happy, secured and satisfying retired life. This goal is unique in many ways.

February 10, 2015
Financial Planning

phone case store hop over to this website

Financial Planning is often rightly termed as blueprint or roadmap of your financial journey. This roadmap is essentially lifelong. At Hirannya FinPlan we understand and acknowledge this.

February 9, 2015
Wealth Management

burga coque telephone easton-consult.com how long does a pod coil last

When you set out in the journey of creating wealth, managing portfolio of different investment products takes the centre stage. During creation of the portfolio three things that we consider..

February 9, 2015
Estate Planning

You work hard to build your assets—your investments, home, personal property—and to provide a level of financial security for loved ones. Then, doesn’t it make sense to work just as hard .

February 9, 2015
Tax Planning

Tax Planning is not meant to be a year-end affair and investing your hard earned money in any tax saving product that come on your way.Tax Planning can be defined as an arrangement of one’s financial.

personnalisation coque telephone womens replica watch check that

February 9, 2015