financial Planning for armed forces Officers Archives

20 Apr 2017

Blog Sanjeev Govila 0 comment

Are you ready for ITR Filing?

We’re ready to file your Income Tax Returns (ITR) for the Financial Year (FY) 2016-17 [that is, Assessment Year (AY) 2017-18]. You may not have received your Form 16 so far from your employer, but you can send us all the other details – we’ll get everything ready for you since the Govt has introduced a few new check items for filing ITRs; as soon as you get your Form 16s, please send them to us at the earliest.

This year we’re starting a new tax service for which there has been a persistent demand – Advance Tax service along with regular Income Tax filing. Hence, you have the option of:-

Filing only the ITR for the FY 2016-17, ie, for the period 1^st April 2016 – 31^st March 2017, as regularly done by you.
Combination of getting your Advance Tax for the Financial Year 2017-18 (ie the current financial year which has started from 1^st April 2017) along with the ITR for FY 2016-17 at a small extra nominal charge. Please note that Advance Tax service for FY 2017-18 is not available if you do not file your ITR for FY 2016-17 through us.
If you haven’t filed your ITR for FY 2015-16 (for the period 1^st April 2015 – 31^st March 2016), that can also be done right now.

Please let us know what service would you like to go ahead with us, and either give us a mail on incometax@humfauji.in or whatsapp/SMS the requirement on Phone number 09999 053 522. We would revert back to you with a detailed mail on how to go ahead with the service you’ve chosen.

Our charges for the Advance Tax and ITR filing are as below. Do not miss out details of the concession given by us to our existing Investment Clients given later in this mail. Please remember that we are referring to Advance Tax service for the FY 2017-18 (01 Apr 2017-31 Mar 2018, the current financial year) while ITR filing is for the FY 2016-17 (01 Apr 2016-31 Mar 2017, which has just got over):-

Category of IT Return	ITR Charges	Advance Tax charges
Individuals with income from Salary/Pension only, normal HRA calculations and rentals from a maximum of one property [ITR-1]	Rs 1000/-	Rs 250/-. For all our existing Mutual Fund Investment Clients, these are waived off if they get their ITRs filed by us.
Armed Forces JCOs/OR (Personnel Below Officer Rank, PBOR) with income from Salary/Pension only and rentals from maximum one property [ITR-1]	Rs 500/-
For Individuals having house property income from more than one house and/or capital gains computation from stocks, mutual funds, property sale etc. (We assume moderate calculations of Capital Gains. If calculations are very time-consuming, charges may be higher) [ITR-2]	Rs 1500/-
Professional Income (With Income Expenditure statement)	Rs 2500/-
Professional Income (With Income Expenditure statement, Capital account statement and Balance Sheet)	Rs 5000/-
For NRIs (for Indian Income, simple tax return)	Rs 2500/-

For the clients who have reposed a huge faith in us and entrusted us with their large savings, we are grateful to them for it and wish to give the following complementary services to them:-

Current Mutual Fund Investments with us (As on 30^th April 2017)	No ITR Filing Fee or Advance Tax fee [The complementary ITRs need to be only of ITR-1 or ITR-2 categories. Difference chargeable for other categories]
Above Rs 1.5 Crores	Complementary ITR filing for Self, Spouse and 2 more persons (unmarried Children / parents only)
1.0 – 1.5 Crores	Complementary ITR filing for Self and Spouse
75 Lakhs – 1.0 Crores	Complementary ITR filing for Self.

A large number of people are not very clear about what is Advance Tax. A write-up on the same is given below.

What is Advance Tax?

Contrary to common perception, your Income Tax due for a financial year is required to be calculated in advance and is to be paid throughout the year in instalments as laid down by the Govt. To explain this, say your income for the financial year 2017-18 (ie, income earned from all sources from 01 Apr 2017 – 31 Mar 2018) is Rs 12,00,000 (12 Lakhs). Total Income Tax on this comes out to be Rs 1,72,500. Without considering any complications like tax savings, education cess etc, let’s see how the Govt expects you to pay this tax:-

Due Date for Advance Tax Instalment	Percentage Advance Tax Payable	Amount Payable in our Example
On or before 15 June 2017	Not less than 15% of total tax	Rs 25,875
On or before 15 Sep 2017	Not less than 45% of total tax	Total Rs 1,03,500 including amount paid earlier, if any
On or before 15 Dec 2017	Not less than 75% of total tax	Total Rs 1,29,375 including amount paid earlier, if any
On or before 15 Mar 2018	100% of total tax liability	Total Rs 1,72,500 including amount paid earlier, if any

That’s the reason, your employers, whether fauji or corporate, deduct your tax every month from your salary so as to keep it very simple and not to cause undue sudden financial burden on you. Thus, if your tax is being deducted as above and you have no other income, there’s no additional advance tax to be paid by you.

However, while calculating advance tax, people generally forget the income generated from rent, interests received from FDs (bank FDs, company FDs), regular pay outs from PO MIS (Post Office Monthly Income Scheme) or SCSS (Senior Citizen Savings Scheme), interest received from builders or money lent out etc. Thus insufficient tax gets paid which results in an interest penalty later.

Who has to pay Advance Tax?

Following categories of people have to pay advance tax or additional advance tax:-

Salaried people whose employer does not deduct full quantum of advance tax as due.
Salaried people whose employer deducts correct advance tax every month but they have income other than salary, like House Rent, interest from FDs, HRA, etc where proper advance tax deduction is their own responsibility.
Those receiving pension but their bank deducts only 10% advance tax (TDS) on pension while they themselves may be in a higher tax bracket.
People working as consultants to companies and no/less advance tax is being deducted by the company.

What is the penalty if Advance Tax is not paid, if due?

Advance tax has to be paid by people whose total tax liability for a year exceeds Rs 10,000. If advance tax due, as per the table above, is not paid in time, simple interest of 1% per month (or part thereof) is payable under various sub-sections of Income Tax Section 234. Thus, if no advance tax is paid, at the time of filing the ITR (Income Tax Return), not only a large amount of tax due has to be paid but also the interest that would’ve built up due to non-payment of advance tax. If advance tax is paid in due time, the penalty interest is avoided as also the tax due is comfortably spaced out over the year, avoiding the sudden burden of paying a large amount of Income Tax.

Please remember that the First advance tax instalment of 15% of total tax for FY 2017-18 is due on 15^th June 2017.

For more information, feel free to reach us on, contactus@humfauji.in or call + 011 – 4240 2032, 40545977, 49036836 or

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27 Jul 2016

Decomplicate your life

There’s too much of financial ‘wisdom’ being branded about. Too many words telling you too less. Don’t get overwhelmed with it – here’s the gist of it.

Financial planning is simple. One sincere Sunday sitting with your wife and you can pretty much simplify and sort a lot of your financial issues.

Generally you can’t help or control how much you earn. However what you do with the money after it is earned, is fully in your control. Most of us worry more about what they have no control on, and neglect what they have full control on, in financial matters.

You’re paying a lot of tax on your salary. Agreed. But there’s nothing much you can do about it. Stop worrying about it, therefore.

There’s a lot of tax you can save on the investments that you do after you get your salary. Worry about that. It is in your control!

If you want to save yourself future financial hassles, save for specific requirements (‘financial goals’) like children education, their marriage, a house etc, rather than saving in general. You’re more likely to stick to the savings plan if you know what is coming up in future.

Insure yourself, your house, your car, your business, your health against things that shouldn’t happen but can happen. It doesn’t cost much.

Don’t be proud of a big balance in your savings bank account or in FDs. Your banker is celebrating it more than you.

Don’t be proud of so many insurance policies you have. They’re creating a lot of wealth – for your insurance agent and the insurance company.

The big balance in your credit card statement is not your gain but what you owe. Settle it in full – always and every time.

Pay slip is not as complicated as you think. Understand it as also your taxation and the concept of inflation. There’s no bravado in not knowing about them.

Start healthy SIPs in a good bouquet of mutual funds. Great if you can do it yourself. Otherwise, don’t have an ego issue in going to a financial planner to manage your financial worries.

Build an emergency fund equal to about 3 – 6 months’ expenses. Put it away in a bank FD or better still, in a liquid fund.

You’ve never thought about WILL. It’s not that only others die prematurely. Get that protection umbrella over your family – you owe that much to your loved ones.

For more information, feel free to reach us on, contactus@humfauji.in or call + 011 – 4240 2032, 40545977, 49036836

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16 Jul 2014

Blog, Financial Planning for Defence Personnel Sanjeev Govila 0 comment

Financial planning for people in their 70s and 80s

Financial Planning in the 70s and 80s is much more than merely managing your money, though money supply does remain a major requirement for most of the Indians. Issues like estate planning, withdrawal strategy from the accumulated corpus, medical management, getting the asset allocation right and catering for emergencies may become more important now than in any other stage of life. Also, anticipating future income and lifestyle needs is essential to make these years truly the golden years of one’s life. In fact, these later retirement years can pose sophisticated challenges to retirement planning and saving.

As per the Census of India organisation, current life expectancy of an average Indian is approximately 70 years at birth which, by the age of 60 years, increases to 80 years and by 70 years of age, it is 82 years. This data is for an average Indian. For an urban and more health-conscious Indian, it could be much more. Thus, purely from funding point of view, a bigger question that may stare large number of Indians at this age, especially those who do not have a good pension scheme for an adequate regular income, is whether they will outlive their corpus money? Nuclear families and shrinking habitats have also seen more and more elders living separately and catering to their equally elderly spouse on their own – support system afforded by the younger generation is evaporating fast. How can such elder investors anticipate and manage their family’s changing financial needs? The answer lies in a proper planning customised to each such couple.

It is very important to realise that the basic retirement problem has changed. Due to the longevity of life, there is a very active need to counteract inflation, thus needing a much higher return on investments than a pure fixed income portfolio can give. While fixed deposits, Government and post office schemes, and conservative pension schemes may have their own share in the portfolio, over the long haul, just these will not do. A certain amount of equity percentage in the investments is necessary at this age too if the purchasing power of one’s money is to be maintained against the eroding effects of inflation. Robert J Lovejoy, a US based Certified Financial Planner advices his clients that, “if you think you may live for more than five years, you don’t necessarily want to move all your retirement money out of stocks”.

Apart from the money question, nurturing own estate and ensuring that it passes to the intended beneficiaries in a manner as actually desired by the elderly couple, is also an important question. A carefully crafted Will preferably registered in a court, periodically passing on the assets to your loved ones through suitable gift deeds if the estate is surplus to one’s needs, catering for finances for medical needs which may become almost a weekly requirement, creation of Trusts through suitably worded Trust Deeds in case a relative or charity needs to be supported later, etc are all part of a sound estate plan. Help of suitable lawyers and financial planners needs to taken to ensure that whatever is planned and desired, does get executed when one is no longer around.

Thus, financial planning for the people in their 70s and 80s primarily boils down to the following:-

Simplify your life by a clear financial asset allocation strategy and simple plans. While diversification is good to an extent, entangling oneself in managing too many properties, deposits, stocks, bonds, and other asset options may take sheen off an otherwise peaceful and stress-free retirement required at this age.
Reconcile your cash flows and budget by realistically catering to the life you can actually live from now on. While lofty travel and entertainment plans will not work out, over-looking medical requirements and social commitments may cause financial and mental distress.
Prepare realistic withdrawal plans. Act as if you’ll live forever! Make sure your monthly withdrawals from the retirement corpus and pension, if any, cater to the lifestyle and other requirements like home maintenance for a long time, at least another 20 years. This can become a balancing act between drawing down your savings too quickly and being left with little to live on in your 80s or 90s, or the opposite scenario of spending your income too slowly and needlessly crimping your standard of living.
Leverage your house if the need be. Reverse mortgage is a very good option if you find that you are falling short of your requirements. Continually lowering your lifestyle just because you wish to leave the house for your children may not be the best strategy for you and your spouse. For all you know, they may not even need it!
Design a sound estate plan that can protect you, your spouse, and your heirs no matter what life brings. Such a plan ensures that your assets go to the people you choose when you pass away or are permanently disabled. It may involve preparation of Will and keeping it updated, Gift Deeds, Trust Deeds, Power of Attorneys and nominations in investments. Ensure that there is a list of emergency information like medication, persons to contact, location of important documents etc available at hand and is known to all concerned.

Every investor’s situation is different. They may consider meeting with a financial advisor when doing their future retirement and estate planning so that the 70s to 90s become the most carefree period of one’s life.

Col (retd) Sanjeev Govila, SEBI Registered Investment Advisor,

CEO, Hum Fauji Initiatives

You can either call us on 9999 022 033 or write to us at contactus@humfauji.in to schedule a tele meeting with our financial planner and investment advisor.

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