All About FATCA.

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UNDERSTANDING ALL ABOUT FATCA

Dear Investor,

​​Are you an existing mutual fund investor? If answer is YES, then you must have got an email from the fund houses where you have invested to provide some additional information about yourself and about your tax residency related questions in the name of FATCA declaration.

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What is FATCA Compliance?

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Foreign Account Tax Compliance Act or FATCA was passed in US in the year 2010 to make sure that the financial institutions across the world share some basic information of their US based clients.

A lot of investors from US (US citizen and NRI’s residing in US) were supposed to disclose their investments outside the US, but it didn’t happen the way US govt was expecting.

So finally, US govt passed this FATCA law and signed treaties with various countries across the world. India is one of them. So now various financial institutions based in India are asking all their customers to give a declaration about their tax residency, place of birth and if they are paying taxes in any other countries.

The main purpose of this article is just to help you understand, how you can update these FATCA details quickly in 2 min online.

All mutual funds investors are supposed to update their information with AMC’s by the end of Dec 2015.

If an investor fails to update their FATCA declaration, then their additional investments will not be processed in future and any SIP which is currently running will also get stopped.  So it’s suggested that you complete the declaration as soon as possible. Note that your existing investments will remain intact and there is no impact on that.

How to update your FATCA related information online?

It’s very simple. All you need to do is visit the following links and update your information.

Investments With CAMS As registrar (For E.g HDFC,Birla,DSP BR,Tata​,ICICI Pru,HSBC,IDFC,Kotak Etc)

 https://www.camsonline.com/FATCA/COL_FATCAMainPage.aspx

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​​​​Investments With  KARVY  As registrar (For E.g ​AXIS MF,Mirae Asset MF, Reliance,IDBI Etc.)

https://www.karvymfs.com/karvy/fatca-kyc.aspx

​​Investments With  Sundram  As registrar (For E.g ​AXIS MF,Mirae Asset MF, Reliance,IDBI Etc.)

https://www.sundarambnpparibasfs.in/web/service/fatca/

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Investments With  Franklin Templeton Mutual Fund 

https://online.franklintempletonindia.com/aspx_app/Investors/fatca/Inv_FatcaDetails.aspx

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When you update your information online, an OTP will be generated which will be send to your email/phone which is registered in their records. If you are invested in mutual funds which are services by CAMS (like Birla, ICICI, HDFC etc) , you just need to update the first link (cams one). If you are invested in mutual funds which are serviced by Karvy like Reliance, UTI or Canara Robeco,Mirae Aseet Etc)  then you will have to update the karvy link as well.

Feel free to contact us for Further any Information.

Mehul Bheda

Certified Financial Planner                        

M- +91 9819592326      

E-mebheda@gmail.com

                      

       

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Where Will You Park Your Idle Cash ? ?

Where Will You Park Your Idle Cash ? ?

Have you ever thought of an option where your money lying absolutely idle in your current account with 0 % interest or your savings a/c with 4-6 % interest could fetch you a return of anything between 7.00 % - 9% with liquidity absolutely your beck & call ?

Well, the answer lies in investing in Liquid / Liquid Plus Funds.

Let’s first define what are we talking about? Liquid funds come in the category of Debt Mutual Funds and as the name suggests invest in short term paper, typically of less than one year term like short term commercial papers, certificates of deposit and floating rate bonds.

There is a very low credit risk attached to these instruments. They are open ended schemes i.e. the entry & exit into these funds is always at the call of the investor and that too without paying any additional load (expense).  Liquid funds /Ultra Short Term fund therefore are considered to be safest due to the low credit risk and the feature of high liquidity.

But which should you choose—a liquid fund or an ultra ST fund (Earlier Liquid Plus Fund)?

While liquid funds invest in securities with residual maturity up to 90 days, ultra ST funds can invest in securities with maturity higher than 90 days. At present, the average maturities for liquid funds are around 45-60 days; for ultra ST funds, they are about 150 days or lower.

Corporates or individuals can easily identify the excess and unutilized amounts lying in their respective current or savings accounts at a given point of time and can consider certain exposure to Liquid funds for better returns.

Now, the big question: Why do you keep liquid cash?

The answer is simple – “At least in the case of most of people., we must set aside some money for any emergency like loss of job, sudden Death in family, Medical Emergency and so on.

Evey Individual Should Keep at least 3 to 6 times of their Monthly Net outflow  as Contingency Fund   Either by parking in Cash , Saving /current  Bank A/c or through Mutual Fund Liquid Fund

Better post-tax returns make liquid funds attractive despite savings rate deregulation:

The interest on savings bank account is, however, added to an individual's income ( If Saving  Bank  Interest Earned over and Above Rs 10,000, (Bank Interest up to  Rs 10,000/- is Tax Free as per Finance Bill 2012-13)  and taxed at the rate applicable to the individual. This means if you are in the higher tax bracket, you will pay a tax of 30.9% on your interest from savings bank account.

"The favorable tax treatment means the post-tax returns on liquid and liquid plus funds are likely to be higher than the interest earned on savings bank account,"

 Create Your 

"Emergency Fund "  Today..!! 

Contact Your Financial Planner For Setting up Your Emergency Fund.

Mehul Bheda ( B.Com, RFC, CFP)

(M) +91 9819592326