Comparing Tax Saving Instruments u/s 80C – ELSS (Equity Linked Saving Schemes) Vs PPF (Public Provident Fund).

The Public Provident Fund (PPF) and equity-linked saving schemes (ELSS) are popular investment options that both qualify for income tax deductions. A deduction reduces your overall tax liability. Contributions up to Rs. 1.5 lakh a year qualify for tax deduction under Section 80C. Financial planners say that when it comes to investments in the PPF and ELSS mutual funds, investors should look at these investments not just from a tax-saving perspective but one that will help achieve their financial goals. ELSS mutual funds invest in equity shares of companies across sectors and market capitalization and have a three-year lock-in. 

An ELSS mutual fund is quite the same as a diversified equity fund, other than tax deduction benefits and the three-year lock-in. ELSS investments come with a lock-in period of three years, which is lowest among Section 80C investments. Investors should understand ELSS mutual funds are equity market-linked products.

Comparing Tax Saving Instruments
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1) The PPF is a 15-year government-backed savings option offered through banks and post offices. Thereafter, it can extended further in batches of five years. 

2) The interest rate on the PPF is revised every quarter and is benchmarked to yields on government securities. Currently, the PPF fetches an interest rate of 8%. Whereas in case of ELSS return is on an average 14 – 15%. 

3) In the PPF, you can maximize your returns by investing early in the financial year so that your deposits can earn interest for the entire year. 

4) The minimum amount that must be deposited in a PPF account in a financial year is Rs. 500 and the maximum allowed is Rs. 1.5 lakh. 

5) Premature closure of a PPF account is allowed only under specific conditions such as expenditure towards medical treatment. For this, a PPF account must have completed at least five financial years. 

6) Apart from income tax benefits, the ELSS is suitable for conservative investors who are looking at long-term financial goals like a child’s education or retirement, say financial planners. 

7) ELSS or tax-saving mutual schemes have a three-year lock-in period. You can partially or fully redeem your ELSS or tax saving mutual fund investments after three years. 

8) Financial planners suggest investors to opt for systematic investment plans (SIPs) in tax saving mutual funds to help spread their spread their investments throughout the year. 

9) The lock-in of three years also applies to SIPs. In other words, every SIP installment in a ELSS fund is subject to a three-year lock-in. 

10) Long term capital gains from equity mutual funds, including ELSS funds, above Rs. 1 lakh will be taxed at 10%. ELSS funds come with both growth and dividend options. It is suggested that investors should go for the growth option and not for the dividend option.

Comparing Tax Saving Instruments u/s 80C – ELSS

Comparing Tax Saving Instruments

We suggest the following funds for the ELSS investments:

Comparing Tax Saving Instruments

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Mutual Funds Can Form the Backbone of Your Retirement Plan

Role of mutual funds in your retirement planning

If you are a Central Government employee, most of the financial aspects of your retirement are already sorted by the government. But for those of you who are working in the private sector or are self-employed, retirement planning is essential. A mutual fund is one of the few investment avenues that can beat inflation it is imperative that you make mutual funds the centerpiece of your retirement planning.

In simple terms, a mutual fund pools money from different investors and then invests that money in various equity stocks, debt and money market instruments.  In the long run, mutual funds offer excellent returns and help build a corpus for your post-retirement needs.

If you have an investment horizon of at least 20 to 30 years and want to make mutual funds the start of your retirement plan, then systematic investment plan (SIP) will help you accumulate and compound wealth in an affordable manner.

Mutual Funds Can Form the Backbone of Your Retirement Plan
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Systematic Investment Plan (SIP) for Retirement

Systematic Investment Planning, better known as SIP, is a systematic approach to invest money in mutual funds. Under SIP, you invest a fixed amount in the fund of your choice every month. There is no upper limit to investing via SIP, but it is desirable to fix an amount which you can afford easily every month. In addition to instilling financial discipline, SIP helps you learn money management skills, which help further with the planning your retirement.

Let us elaborate with an example. Suppose you are 30 years old and you start a monthly SIP of Rs. 5,000/-. Assuming that the returns on your investment are 15% p.a. (which is a standard rate for most mutual funds) and you continue the SIP for 30 years. By the time you are 60 years old, you will have a corpus of Rs. 3.46 crores approximately. Very few other investment avenues offer you such returns with moderate risk.

Using the SIP route to plan your retirement fund is an excellent approach as it offers you several benefits like:  

  • You can invest as much amount that you are comfortable with as there is no minimum requirement for investment in SIP.
  • You can switch between equity and debt instruments with the help of a systematic transfer plan. This helps you reduce your risk exposure as you gradually age.
  • Through the ELSS route, you can save on your income tax liabilities every year as the contribution to ELSS is tax deductible under Sec 80C of the Income Tax Act.
Mutual Funds Can Form the Backbone of Your Retirement Plan
Mutual Funds Can Form the Backbone of Your Retirement Plan

Also read: Overview of MF Industry & Growth Prospects

About Nidhi Broking Services:

Nidhi Broking Services is one of Leading Mutual Fund Consultants Thane, Mumbai. We offer services like NRI Investments, Equity Trading, IPO, Debentures, Mutual Funds, etc. 

Talk to us On 022 – 2530 3690 / 022 – 2530 1134 Or Whatsapp us on +91 70391 78941 Or Email us at 

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Overview of MF Industry & Growth Prospects

Phase One: 1964-1987 (Establishment of UTI)

The mutual fund industry witnessed its launch with the formation of UTI in 1963. It reported Asset under Management (AUM) of 6700 crores at the end 1988.

Phase Two: 1987-1993 (Entry of Public Sector Funds)

SBI Mutual Fund was the first ‘non-UTI’ mutual fund established (June 1987) & other public sector banks followed with their own fund houses. 

At the end of 1993, AUM of the sector was Rs47, 004 crores. 

This phase holds immense importance in the history of mutual funds as it also brought the industry under a formal regulatory framework through The Securities and Exchange Board of India (SEBI).

Overview of MF Industry & Growth Prospects
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Phase Three: 1993-January 2003 (Entry of Private Sector Funds)

The impact of economic liberalization initiatives introduced in 1991 to expand trade and offer customers more choices cascaded to the mutual fund industry as well. The year 1993 marked the entry of private sector funds to bring transparency in the operations, introduce innovative products and provide superior customer services. 

The erstwhile Kothari Pioneer (now merged with Franklin Templeton MF) was the first private sector mutual fund registered in July 1993. About 11 private companies, along with many foreign sponsors set up their shops by the end of 1994-95. 

In 1995, Association of Mutual Funds in India (AMFI) was incorporated with an aim to act as a chief governing body of all Asset Management Companies (AMC), and promote ethical and professional code of conduct in the mutual fund sector. 

As at the end of January 2003, there were 33 MFs with total AUM of Rs 1, 21,805 crores, out of which UTI alone had AUM of Rs 44,541 crores.

Phase Four: February 2003-till date

2003 to 2008 saw a phase of consolidation of Mutual Fund industry with numerous mergers and acquisitions.

Toward the end of 2008, the securities market of India, much like the rest of the world, tumbled. Owing to the global economic crisis in 2009 the growth of the industry remained dismissal between 2010-2013.

In 2012, in order to bring a fresh breath of air in the industry, increase investor confidence and help it recover, SEBI announced a series of’re-energising’ measures. The positive impact of these measures was also seen when industry’s AUM crossed Rs. 10 trillion for the first time in May 2014 and registered a fivefold jump in AUM in 2016 since 2007.

The Present

Mutual fund investment still accounts for only 7% of total investments by individual investors in India and AUM: GDP ratio is a mere 11%, (In contrast the size of MF industry in USA is $20 trillion and growing which is same as it’s GDP (i.e. 100% of GDP), indicating MF industry in India still has the potential to grow 5-7 fold), an indication of the tremendous untapped potential.

Technology is enhancing the growth of mutual funds in the form of paperless transactions (for eg. e-KYC, BSE Star MF, NSE NMFII, digital wallets).

The Association of Mutual Funds in India (AMFI) is dedicated to developing the Indian Mutual Fund Industry on professional, healthy and ethical lines and to enhance and maintain standards in all areas with a view to protecting and promoting the interests of mutual funds and their unit holders.

AMFI was incorporated in 1995, as a non-profit organisation. AMFI is the association of SEBI registered mutual funds in India which are managed by registered Asset Management Companies. As of now, all the 44 Asset Management Companies that are registered with SEBI are its members. Assets under Management (AUM) as on May 31, 2019 has crossed a landmark of 25 Lakh crore and almost touched a new high of 26 Lakh crore. AUM as on 31-May-2019 stood at Rs. 25, 93,560 crore.

Also read: Systematic Withdrawal Plan (SWP) in Mutual Fund

About Nidhi Broking Services:

Nidhi Broking Services is one of Mutual Fund Consultant in Thane. We offer services like NRI Investments, Equity Trading, IPO, Debentures, Mutual Funds, etc. 

Talk to us On 022 – 2530 3690 / 022 – 2530 1134 Or Whatsapp us on +91 70391 78941 Or Email us at 

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Sovereign Bond Announcement in Budget 2019 a Boon or Bane?

These bonds are fixed debt instruments issued by the government — either in domestic or foreign currencies — and it’s as good as raising a loan in the international market. 

One of the most debated topics of the 2019 Union Budget presented by Finance Minister Nirmala Sitharaman was India’s proposal to issue Sovereign Bonds in the global market in external currencies. 

As these bonds are fixed debt instruments issued by the government — either in domestic or foreign currencies — which is like raising a loan in the international market. Sovereign Bonds have an interest outlay in the form of coupon payments where the principle amount is paid at maturity. 

Although the step would integrate the Indian economy in global markets, it is debated that there is high risk involved. The coupon interest is decided by three factors, India’s credit profile’– which at present is Baa2 stable as per Moody’s — the country’s internal and external risk factors like sudden shooting up of fiscal deficit, and volatility of exchange rates between rupees and the foreign currency.

Sovereign Bond Announcement in Budget 2019 a Boon or Bane?
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National wealth or national debt

The world’s overall debt is estimated at $63 trillion as of 2017. This is because; more countries are borrowing to raise funds by issuing similar bonds. 

In 1921, one of America’s greatest inventors, Thomas Edison, had written in a New York Times article, “Any time we wish to add to the national wealth, we are compelled to add to the national debt.”

Sovereign Bond Announcement in Budget 2019 a Boon or Bane?

Coming back to India’s move, the rational for the decision presented in the budget speech is India’s lowest sovereign external debt-to-GDP ratio. 

“India’s sovereign external debt to GDP is 5 percent. The Government would start raising a part of its gross borrowing programme in external markets in external currencies. This will also have beneficial impact on demand situation for the government securities in domestic market.”


Investors who subscribe to these bonds include large banks, and several countries have been part of this “original sin”. Meaning, a country cannot raise funds in its own currency in a foreign market, but has to borrow in dollars or Euros. Hence, smaller developing countries lack the capacity to issue these bonds on their own and seek aid from institutions like the World Bank which would have its own set of rules for borrowing. Moreover, as the US dollar is the resolve currency, it affects the market with greater implications.

What Experts Say

Other points of disagreement include uncertainty of sovereign rating, rupee depreciation, expansion of current account deficit etc. On the other hand, India could wait a little longer to issue domestic bonds instead of borrowing via sovereign bonds.

C Rangarajan, Former RBI governor raised concerns on the rationality of sovereign debt in foreign currency. He said that by-and-large, it is not a welcome move and must be based on a country’s ability to repay the borrowed amount. He added that borrowing in foreign currencies may expose the economy to risks as the rupee’s depreciation or current account deficit cannot be contained in the long run. 

On the other hand, this method will not be able to help the country meet its obligations by simply printing more domestic currency.

Rate of interest is low outsideRupee depreciation pose additional risk
Foreign market will discipline the governmentMajor economies were unable to meet its obligations in the past
India will be included in the global bond market attracting more funds and easing domestic markets for private playersSovereign Rating is uncertain in the long term
FRBM in place : macro atmosphere healthy for foreign scrutinyWhy go overseas when we can raise via rupee denominate bonds
Debt to GDP ratio is low : long term foreign borrowing will benefit when attached to investmentsStill current ac deficit country ; high future vulnerability if it shoots up; roll over becomes difficult
Dollar will be small part of total borrowingTemptation of cheap money attached to revenue

Rising fiscal costs

According to a recently article, “The bureaucrats pushing the idea right now to make up for tax revenue shortfalls would have retired by then, leaving it to the rest of the economy, especially future generations of taxpayers, to cope with the rising fiscal costs.” The intention of a long term borrowing is associated with growth led by investment and not short term needs. Therefore, a long time horizon cannot ensure or hedge against exchange rate risks, which increase the burden in repayment at the time of maturity.

It could further reduce the efficiency of various monetary policies. Moreover, low inflation rate will have to be maintained consistently as per experts.

The impact of Foreign Exchange

Borrowing in international markets can reduce interest rates, but any change in foreign exchange (forex) can turn expensive. Countries like Mexico, Indonesia, Brazil and Russia have experienced massive pressure from international investors to repay debt. In one instance, Elliott Capital went on to seize Argentina’s naval vessel to recover its dues.

Bank of America Merrill Lynch’s Jayesh Mehta said, “Sovereign bond issuances (overseas) need to be done in a planned manner… The government should do it consistently for the next five years because then it will help create secondary market liquidity around the world.” Supporters who second the proposal are of the view that foreign markets will discipline the government with integration in the global bonds market when Fiscal Responsibility and Budget Management (FRBM) rules are in place. With an advantage of lower interest rates abroad, the domestic market can be left for the private issuers.

Assistant professor at IIM Ranchi, Amarendu Nandy said, “In such a scenario, India’s benchmark yield at around 7 percent and a relatively stable currency should help attract a sizeable amount of inflow into the domestic debt market from a diverse set of investors, and aid Indian sovereign bonds to get into global bond indices. The sovereign foreign currency borrowing rate could serve as a useful benchmark for external commercial borrowings as well.”

Low Risk Debt

There are some who consider that sovereign bonds have evolved over the years. Bank for International Settlements mentioned in a research paper that the risk gaps of these bonds have narrowed. “We document that sovereign risk tends to be less when bonds are issued in local rather than foreign currency, but that the gap has narrowed considerably over time. We find that the gap narrows when foreign exchange reserves are higher, foreign borrowing is lower, banks hold more government debt, and global volatility is less. At the same time, we find no support for the view that debt in local currency is safer because of sovereigns’ willingness to inflate away their local debt.” Nonetheless, Ananth Narayan, Associate Professor of Finance at SP Jain Institute of Management and Research said, “India is among the few major countries globally to have never issued a sovereign bond. These sovereign issuances should be useful. They draw in foreign savings at a good rate for the country. They free up domestic savings to be channeled into productive private investments. They establish a benchmark that helps price discovery for other corporate tapping overseas credit markets.”

On the other hand, Chief Economic Adviser Krishnamurthy Subramanian believes it’s a “once in a generation opportunity” to issue sovereign bonds to help boost national wealth.

While the move is expected to ease the burden on Indian institutions, there are economies that have seen a bitter past in the global bond market.  It remains to be seen whether history will be created or repeated in future.

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Also read: India becomes investment darling for sovereign wealth and pension funds

About Nidhi Broking Services:

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7 reasons why you should Invest in Mutual Funds

02 July, 2019

Still on the fence on whether Mutual Funds are the best choice for you? Here are 7 reasons that may help you decide. 

Earn. Save. Spend. This is the cycle of money that we live by every month, if not every day, of our lives. By now, we’re sure you know the importance of saving. Perhaps, you’ve even realized the significance of investing. If not, here’s a quick primer – when you save, your money sits idle. When you invest, your money multiplies. 

Your investment choice can, obviously, significantly impact the rate at which your money compounds. While there are enough opinions on what you should be doing with your money, here are 7 reasons why mutual funds should definitely be a part of your wealth building portfolio.

7 reasons why you should Invest in Mutual Funds
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1. Higher returns:

Isn’t this what all of us seek from our investments? Mutual funds provide the right avenue for investing in a variety of market-linked instruments, which have time and again delivered superior returns compared to other traditional investment options. Debt funds have consistently beaten Fixed Deposit (FD) returns, and with bank interest rates going south, they present a good investment choice for investors with lower risk appetites. For the more adventurous investors, equities (shares) present a great investment avenue, for higher, inflation-beating returns. And investing in equities through mutual funds is an excellent way to enjoy the higher returns, but with much lesser risk, thanks to rupee-cost averaging, portfolio diversification and many other factors. Data reveals that equity funds have delivered around 11-15% returns over the last 10 years. With inflation averaging at 4-6%, you could get a head start on your savings, by identifying and investing in the right mutual funds today.

2. Professionally managed:

Mutual funds are professionally managed by fund managers, whose every day job is to track the markets and manage investments. Fund managers identify the winning stocks to buy, when to buy them, and more importantly, when to sell them. They spend hours analyzing the performance of companies, and if they fit the fund they manage. What’s more, all mutual funds are governed by SEBI, the industry body, and are highly secure and transparent. So, while earning is your job, investing it wisely and delivering high returns is the fund manager’s job.

3. Disciplined investing:

Habits are hard to break. Which is why we are advised to inculcate good habits? And what better habit could there be, than investing for your secure future? When you start a Systematic Investment Plan (SIP) in a mutual fund, you are committing to invest a certain amount on the same day of the month, consistently for a certain number of months/ years. Such a commitment instills in you the discipline to take a productive action towards your future. It becomes a fixed component of your monthly spend, around which all other expenses have to be factored. Your disposable income will be that which is left, after your mandatory expenses and investments are done.

4. Less/ No lock-in:

Almost all your traditional investing instruments come with long lock-in periods, which make it hard for you to get your money out, in times of emergencies. Mutual funds, on the other hand, broadly come with less, if not no, lock-in periods. Most funds do not have a lock-in period and give you the flexibility to redeem your money when you need it. Even tax-saving Equity Linked Savings Schemes (ELSS) come with a short lock-in of only 3 years. So you are saved the hassle of fixed, long lock-in periods, as seen in other investment options. Having said that, experts recommend that a fund should not be redeemed until the goal for which it was started is fulfilled, as the longer you stay invested, better are your chances for higher returns. 

5. Fund as per your profile and goal:

Within the world of mutual funds there is a wide variety of investment choices to pick from – equity funds, debt funds, liquid funds, tax-saving funds etc. So, depending upon your profile, goal and preference, there are various funds that are ideal for you. Unlike a PPF or an NSC, where the rules are already laid down for you, here you can choose what type of fund you want, how long you want to stay invested, how much you want to invest, and much more. Just like how a tailor-made outfit is often a better fit for you than a ready-made garment, a personalized mutual fund portfolio with the right advisor is the best fit for your goals.

6. Diversification:

We’ve all heard the adage “Don’t put all your eggs in one basket”. This is the premise of diversification. It means spreading your investments across asset classes and stocks, to reduce your risk. With mutual funds, you get the advantage of default diversification, as your fund manager invests across a variety of stocks. Sudden changes in one stock, are likely to be balanced out by the performance of other stocks in the fund. It is an ideal way to get a taste of the equity markets with lesser risk. Of course, it is important to not invest all your money in one mutual fund, and further lessen your risk by diversifying across different types of mutual funds. Consult your financial advisor on how to balance your portfolio by selecting the right mutual funds.

7. Convenience;

And finally, investing in mutual funds is now a piece of cake. The whole process is offered online by many players in the industry. Starting a SIP or making an investment can be done in a matter of few clicks. Even tracking the performance of your investments can be done easily online. You can set up a bank mandate for monthly investments and set your SIPs on auto-pilot mode, so that you are even saved the hassle of manually investing every month. The SIP amount is automatically debited every month from your account. In short, mutual funds today, provide the right ground for investing with the least effort, and with the potential for maximum returns.

Also read: About Systematic Investment Plan {SIP}

For Complete Information About Leading Mutual Fund Advisor Thane, Contact Nidhi Broking Services Pvt. Ltd. On 022 – 2530 3690 / 022 – 2530 1134 Or Email Us At –


India becomes investment darling for sovereign wealth and pension funds

26 June, 2019

Wealth and state pension funds are expanding their horizons to private markets, to complement an existing focus on stocks and bonds. 

Sovereign wealth funds are piling into India, buying stakes in everything from airports to renewable energy, attracted by political stability, a growing middle class and reforms making it more enticing for foreigners to invest. Wealth and state pension funds are expanding their horizons to private markets, to complement an existing focus on stocks and bonds. Almost every jurisdiction in the western world is raising the bar for entry for foreign investors but in India it’s the other way round. There’s also the attraction of the demographics and a lot of assets that sovereign funds like, such as infrastructure, where there’s a huge appetite for foreign funding. 

India becomes investment darling for sovereign wealth and pension funds

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Indian Prime Minister Narendra Modi’s election win last month consolidated his Hindu nationalist party’s power base and is expected to stimulate further foreign investment. Foreign institutional investor flows into Indian equities are $11 billion year-to-date, surpassing the total annual tally in each of the four previous years and setting 2019 on course for the highest annual inflows since 2012. India’s benchmark BSE Sensex has soared nearly 10% year-to-date.  


The attention sovereign funds are giving India is like that they have paid to China. Private equity deal activity in India surged to $19 billion in 2018, the highest level in at least a decade, according to PitchBook data. Sovereign wealth funds and pension funds participated in about two-thirds of that amount. Among recent deal, Singapore’s GIC sovereign wealth fund and the Abu Dhabi Investment Authority (ADIA) this month agreed to make a further investment of $495 million in renewable energy firm Greenko Energy Holdings, which has wind, solar and hydro projects. India is widening its use of solar and wind energy to help reduce its reliance on fossil fuels. 

In April, ADIA and India’s National Investment & Infrastructure Fund (NIIF) agreed to buy a 49% stake in the airport unit of Indian conglomerate GVK Power & Infrastructure. Another wealth fund is in talks on an infrastructure investment, while Canadian pension funds are seeking similar deals. Canada Pension Plan Investment Board and GIC earlier this year participated in a $145.8 million buyout of Oakridge International School, an operator of schools in India.

ADIA, the world’s third-biggest sovereign wealth fund, which has been investing in Indian equities and fixed income for years, has broadened its focus to include asset classes such as infrastructure, real estate and private equities. Its increased interest in India is driven by the country’s strong growth potential, positive demographics and continued economic development. More than half of India’s 1.3 billion population is aged under 25.The push comes as India and the United Arab Emirates seek to strengthen economic and trade ties.


Regulatory reforms are also bolstering sentiment and drawing in wealth funds. Indian-based fund managers were from this year licensed to manage foreigners’ portfolio holdings in the country, where previously such assets had to be managed outside India.

Bankruptcy resolution rules introduced in 2016 helped pave the way for ADIA’s $500 million investment earlier this year in a distressed debt fund. The investment was seen as an effort to launch a secondary market in India’s mountain of distressed debt and help ease the burden on local banks.

Omprakash Shahi,
Managing Director, 
Nidhi Broking Services Pvt. Ltd.

For Complete Information About Investment Planner in Thane, Contact Nidhi Broking Services Pvt. Ltd. On 022 – 2530 3690 / 022 – 2530 1134 Or Email Us At –