During the current financial year, tax free bonds have received overwhelming response from investors. Even the Bollywood could not resist investing due to the attractive benefits. Film stars like Akshay Kumar, Aamir Khan and Kareena Kapoor Khan invested in IRFC Bonds, while Ranbir Kapoor and Aishwarya Rai Bachchan parked their money in NHAI Bonds. If you have not yet invested and wondering what makes this investment avenue such an attractive option, let me introduce you with these government bonds.

As the name suggests, Tax-free Bonds are financial instruments which offer Tax relief to the investors by way of exemptions in Income Tax. These bonds have emerged as a popular choice among investors due to the taxation benefit it offers. Tax-free bonds are generally issued by government enterprises and have a fixed interest rate. As the proceeds from the bonds are invested in infrastructure projects, they have a long-term maturity of typically 10, 15 or 20 years. Being liquid, these bonds are tradable in the secondary market and are listed on exchanges. They carry credit ratings from one of the rating agencies approved by SEBI as well as Reserve Bank of India (RBI).

For the financial year 2015-16, government of India authorized state owned entities to raise Rs. 40,000 Crore through tax free bonds. Most of the bonds got over subscribed on the very first day of issue opening. While a major portion of authorized amount has been reached by these entities but to complete their allocation limit, some of them are coming up with second round of issue. This is definitely a golden opportunity for investors who missed it during the first phase.

In the month of February and March these issues are expected to arrive:

Note: Issue dates have not yet been disclosed by the entities. The above mentioned dates are tentative and may or may not change.

These bonds are completely tax free but capital gains made on selling of tax-free bonds on stock exchanges are taxed. If the holding period is less than 12 months, capital gains on sale of tax-free bonds on stock exchanges are taxed as per the tax slab of the investor. If bonds are held for more than 12 months, the gains are taxed at 10 per cent.

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When you listen to agents, you naturally become too intimidated by all the figures, financial laws, and theories that they rattle off. So, you are not sure how to invest in mutual funds in India, or whether you should simply stick with a bank Fixed Deposit (FD).

Don’t get confused with all the data flying around. Simplify, and you’ll find that there are certain basic points that easily cut through all the financial jargon, so that you get the information that you really want. What you really want to know about a mutual fund is:

● What is the return on it

Higher the risk, greater the returns. Usually, the risk diminishes from Equity to Hybrid to Debt type of mutual funds. Consider the historical performance of a fund, and the returns that the fund manager has generated for other mutual funds he has managed.

● What is the tax status

You must also check what are the tax exemptions available or, what are the tax liabilities arising from investing in your chosen mutual fund.

● What are the fees & charges

Entry loads, exit loads, switching charges and other sundry deductions by the mutual fund could completely gobble up your gains, if you’re not watchful.

With that, you know how to assess your chosen mutual fund. Use the same criteria to compare mutual fund performance before deciding where to invest your hard-earned money.

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Two investment dilemmas bother every enlightened investor: How much to allocate for the future in the best case scenario, and in the worst-case one. To be blunt, the question is: “How to make sure that my family lives happily -- with me and after me?”

In the worst case scenario, you are looking for insurance. And that means you need the guidance of a Human Life Value Calculator. It’s a simple online tool. Just enter these details:

● Annual household expenses

● Annual income

● The number of years your family should get an income

● Expected rate of inflation

● Expected returns

● Outstanding liabilities

● Current investments and assets

● Current value of insurance

The Human Life Value Calculator then calculates your net worth, how much income your dependents will need and consequently, how much insurance you have to take on.

But let’s look at the brighter side now. What are the regular instalments that you need to pay to invest in mutual funds? Systematic Investment Planning or SIP is proven to give great returns that will one day bring your dreams to fruition.

Utilise the helpful SIP Return Calculator India mutual funds offer. Enter these details:

● Your regular investment amount

● The frequency of investment

● The number of years of investment

● The expected annualised returns

Press the ‘Calculate’ button to find out how much you have invested, and how much will you get on maturity.

Your dreams and your family are under a safety net now. Congratulations!

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Incomes typically grow till your retirement. Your monthly income might support your groceries and other bills but it is inadequate for large expenses. This is what necessitates investments for your future.

One big and certain investment needed is retirement planning. To know how much pension you would require, you should look up an online retirement fund calculator. This simple tool asks for a few details and gives you a solution to your pension problems. It will ask you for:

● Current Age
● Age when you will retire
● How long you’d want a pension
● Current monthly expenses
● Expected Inflation
● Saving done for Retirement till date

Once you answer these, the online retirement fund calculator lets you know the total sum you require as well as the monthly expenses on retirement. It also tells you how much monthly savings are required to reach there.

But apart from pension, what if you simply want to know the maturity amount of any of your investments? That can be easily found by using the Maturity Amount Calculator.

Feed in the following:

● Principal invested
● Rate of interest
● Period of investment
● Compounding frequency

With the click of a button, it calculates the maturity amount for you.

It’s always good to know the figures that you’re working for, and the figures that your investments will lead to. It works as a great motivation to know all that you can do with that money.

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The best military strategies win because they were pre-planned. No General can maintain a winning record by impulsively taking decisions that could have a long-term impact. The same analogy applies to any sport you practice, and any human achievement that you admire. Planning is necessary for long-term success. And you can define the success of your life with Financial Planning.

But before you plan, you must have a good idea of the current scenario as well as your long-term objectives. Therefore, the first step to attaining your life’s goals is Financial Assessment, which is, How much of your income needs to go into fixed expenditures as well as variable ones, resulting in how much money you can actually save. Once you have these figures, you move on to Financial Planning.

Briefly, there are a lot of financial products that you can invest in. But you must choose only those that deliver your long-term financial goals, such as a vehicle, a home, old-age security and so on. Approach a financial services company, who have experienced professionals to assist you in selecting the right plan for your life.

Once you have figured out the plan --- how much of your savings go into insurance, mutual funds, pension plans and so on --  you can be worry-free for the rest of your life. Not only is your present covered, your future is secure too. Whatever happens next won’t bother you, because it’s all covered under your plan. Get ready to savour your successes, one after another!

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