Investment Lesson

Rate Action

Rate Action

National Savings Certificate (NSC) is one of the investment options the Government of India offers. NSC investments are received and serviced by the National Small Savings Fund, managed by the government through the interface of post offices.

TDS stands for Tax Deducted at Source. As the name suggests, this tax is deducted by the income payer (deductor) while making a payment to the deductee. Such taxes are taken from the total amount payable by the payer and deposited with the Income Tax Department. The person paying the income and deducting the TDS is called the deductor, while the person receiving the income and on whose behalf the tax has been deducted is called the deductee.

As per income tax laws, all taxpayers must file their Income Tax Return (ITR) for the previous year, within the prescribed due dates, during the assessment year. The due date for filing tax returns for salaried taxpayers & non-audit businesspersons and professionals is usually July 31. Sometimes this date may be extended by the Finance Ministry.

Since the terms  'financial year', 'previous year' and 'assessment year' are often used in income tax laws, it’s helpful for all taxpayers to know their basic meaning. Read on to know the meaning and importance of these terms.

It is advisable to maintain a contingency fund for any future emergencies. The quantum of such a contingency fund is relative to different individuals depending on their committed payments, lifestyle expenses, etc.

However, as a generic measure, one should maintain a contingency fund equivalent to cover expenses for the current lifestyle for at least six months to have a sufficient financial cushion. Most people park their emergency funds in savings accounts because of liquidity and nil market-linked risks, however, they may offer interest as low as less than 3%.

One may invest in mutual funds in two modes – lumpsum or staggered manner, i.e., through Systematic Investment Plans (SIPs)/Systematic Transfer Plans (STPs). When one invests in lumpsum, the investment is done in one go, while through SIP/ STP, one makes investments in instalments in a designated scheme.

The MPC voted 5-1 to raise the policy repo rate by 50bps to 5.90% while maintaining its stance as “withdrawal of accommodation” which was broadly in line with expectations. The MPC statement noted that the “Emerging market economies (EMEs) are facing intensified pressures from retrenchment of portfolio flows, currency depreciations, reserve losses, and financial stability risks, besides the global inflation shock. As external demand deteriorates, their macroeconomic outlook is becoming increasingly adverse.”

In today's world, investors may often feel spoilt for choice amongst the many options available for investing. With a wide variety of mutual funds to choose from, they may struggle to find a suitable scheme for themselves.