A Boutique Tax & Wealth

Advisory Company

INTRODUCTION
VFN has over a decade experience in tax planning and wealth
advisory, portfolio and risk management services, real estate advisory,
retail chain development and financial markets
The Group manages more than 6000 clients over 40 MNC across the
globe offering them bespoke investment solutions
We serve clients in all Indian metro cities providing online and onsite
services on taxation, financial planning and wealth management
solutions
We have over 90% client retention for over 12 years
We have a team of full time tax experts/CA and professionals/MBA
who provide end to end solutions

OBJECTIVES AND
BELIEFS
Partner with our clients with a long term vision for their financial
protection and wealth creation opportunities
Work with clients to develop innovative investment and financial plans
which are tailor-made to their needs whilst having a thorough
knowledge of the market, proficiency in risk management and research
based solutions
VFN believes in Trust over Gain, Quality over Quantity
VFN is a firm believer in the tenets of Value Investing, money
management is a Profession and not a Business

APPROACH
Acquire a deeper understanding of clients financial needs to customize
solutions
Solution centric approach, not just to promote few company specific
products
work with a long term investment horizon after considering all potential
risks
Select first-rate investment solutions aligned with individual/family profile
giving our client the best possible choice
Continuously monitor portfolio performance, new market trends and
benchmark comparisons and, regular review with clients to assess the
goal alignment and investment objectives
Build the portfolio to always protect the long term interest and family
income

OUR MAJOR CLIENTS

TAX EDUCATION AND AWARENESS AY 201617

Applicable Tax Rates
Income Range

Individual (nonsenior citizens)

Category

Senior Citizens (Men and

Women above 60 years of
age), but below 80 years

SuperSenior Citizens
(Men and Women above
80 years of age)

Upto Rs.
2,50,000

Nil

Nil

Nil

2,50,0013,00,000

10% *

Nil

Nil

3,00,0015,00,000

10% *

10% *

Nil

5,00,00110,00,000

20%

20%

20%

Above
Rs.10,00,000

30% **

30% **

30%**

A tax rebate of Rs 2,000 from tax calculated will be available for people having an annual income up to Rs 5 Lac.
This benefit of Rs2,000 tax credit will not be available if you cross the income range of Rs 5 lakh.
Thus we can say that tax payable in 10% slab will be maximum Rs28,000 (taking into account Rs 2000 tax credit), but for
people who fall in income range of Rs5 lakh and above, the tax will be Rs25,000 + 20% tax on income above Rs 5 lakh;

** Surcharge of 12% will be payable, if income is above Rs 1 crore

Exemptions and Rebate

Leave Travel Concession
economy class airfare or 1st AC train fare by the shortest route to the place of
destination is exempt for self, spouse and two children, dependent parents, applicable only for
domestic travel.
claimable for 2 journeys in a block of 4 calendar yrs, The current block is 1-Jan-14 to 31-Dec-17
House Rent Allowance - the least of the following is exempt from tax
actual HRA, rent paid - 10% of Basic, 50% of Basic in metro city (40% for non metro city)
If annual rent paid exceeds 1 Lac, it is mandatory to report PAN of landlord. In case the landlord does not have a
PAN, a declaration to this effect from the landlord along with name and address of the landlord should be furnished.

Transport Allowance 1600/- Per Month.

Medical Expense - reimbursements up to 15,000/- for doctor consultancy/tests/medicine is exempt.
Interest on Home Loan - possession or registration of the property is must
Self Occupied - exempted up to a max of 2 Lac
Let Out - exempted up to a maximum of actual Interest paid after adjusting the 70% rent income
Any pre-construction interest is also allowed for deduction only if your project gets completed within 3 years of
starting of the construction. You can claim the deduction within 5 years from possession in equal installments within
the limit of 2 Lac.

Finance Bill 2013 inclusion/Sec 80EE for first time buyers additional benefit on home loan interest

property value within 40 Lac, loan sanctioned during 1-Apr-14 to 31-Mar-14 and is <= 25 Lac

Max interest deduction is 1 Lac, can be claimed in 2 assessment yrs, AY14-15 and AY15-16.

This deduction is in addition to the deduction of 1.5/2 Lac for self occupied property U/s 24(b).

TDS of 1% for any Real Estate transaction of Rs. 50 Lac or more

Chapter VI A specified savings u/s 80C within overall ceiling of 1.5 Lac are highlighted below

Contributions made to PF

Life Insurance Premium, Unit Linked insurance Plan (ULIP) for self, spouse & children.

NSS, NSC (along with accrued interest which is deemed as reinvested) for self only.

15 year PPF with Banks/Post Office for self, spouse & any child.

Contribution to notified pension fund set up by Mutual Funds for self Or deduction u/s 80CCC and 80CCG in
respect of contribution to specified Pension Funds

Tuition fees to any University / educational institution in India for full time education of any 2 child

FD of not less than 5 years with a Post office/ scheduled bank

The payment for purchase or construction of residential property under any self-financing of development
authority / co-operative society; Repayment of loan; stamp duty, registration fees & other expenses for the
transfer of house property.

If the house for which deduction has been allowed in earlier year(s) is transferred before the expiry of 5 years from the
year of possession, the aggregate amount of the deductions of income-tax so allowed in earlier years shall be deemed
to be tax payable by the assessee and added to the tax on the total income of year of transfer.

Lesser known tax saving tips

Renting and home loan in two different locations - person living in a rented place in the city he is working while
repaying the loan for a home bought in any other city. In such a scenario, the rent paid is eligible for HRA exemption.
Further, a deduction can be claimed on the home loan interest paid to purchase the property at the other city.

Paying rent to your parents - This is possible only if the property is registered in the name of your parent. The owner
will be taxed for the rental income after a 30% deduction. So, if you pay your father a rent of 3 Lac a year, he will be
taxed for only 2.1 Lac.

Joint home loan - Where the property is jointly owned, with the share of each owner being definite, the net taxable annual
value of the property is apportioned to each of the joint owners in the ratio of their share in the property. And, as the
shares are definite, each holder is eligible to claim a separate deduction.

Repairs and maintenance of house property - any interest paid on home loan for reconstruction or repair of the
house property qualifies for deduction of up to 30,000, subject to the overall limit of 2 Lac.

Health insurance (80D) - A deduction up to 25,000 can be claimed for the health insurance premium for covering self
and or the wife and dependent children. Addition exemption of 25,000 can be claimed on premium made for parents
(30,000 if one of your parents is a senior citizen). Above payment limits also include cost of any preventive health-check
up of self, spouse, dependent children or parent(s) during the year not exceeding 5,000.

Educational loan interest (80E) - The educational loan for any course pursued by the self or spouse or children or
relative provided the individual is his/her legal guardian post the senior secondary course. It is allowed for a maximum of
8 years starting from the year in which the interest is first repaid.

Charity to noble causes count (80G) - Charitable contributions are deductible up to 10% of your income. It can be
either 100% or 50% of the amount donated. You must obtain a receipt specifying PAN and exemption limit.

Contributions to a political party (80GGC) - If you have contributed any amount to a recognized political party, you
are eligible to claim a tax deduction ranging from 50 % - 100 % of the amount

Interest From saving bank (80TTA) - SB Interest is exempted up to 10000 including overall interest of all SB a/cs.
Foreign taxes - Income earned both in India and abroad. In the event they face taxation in both countries, they may avail
credit of taxes paid overseas while filing their tax returns in India.

Exemption from capital gains - any capital gains on the sale of residential property is exempt from tax, provided you
purchase a new house 1 year before or within 2 years after or incur expenditure on construction of house within 3 years
from the transfer date. Alternatively, you may also invest the gains in REC / NHAI bonds, subject to specified conditions.

Set off of Capital Loss Against Capital Gain - if you have made a LTCG of 15 Lac by selling off your property and
LT capital loss of 3 Lac by selling stocks, the total taxable amount would 12 Lac.
Capital Gain on Sale of Shares sold through Stock Exchange can not be set off against other capital gain
Short term losses can be balanced off against both ST as well as LTCG. However, LT capital losses can only be balanced
off against LTCG.

Medical disability deductions

Deduction for medical expenses incurred on disability of Special dependants (80DD)
in case any of your dependants suffer from a physical or mental disability, a deduction of 50,000 or 1 Lac (if the
disability is 80% or more) is claimable.
dependants can include spouse, children, parents, brothers and sisters, or any of them.
deductions are permissible for the costs incurred on medical treatment, training or rehabilitation including amount
spent for nursing or insurance paid for the maintenance of the disable dependent in case of your untimely
death.
disability means a person suffering from 40% or more or a severe disability condition is 80% or more due to a)
Blindness and Vision problems; b) Leprosy-cured; c) Hearing impairment; d) Locomotor disability; e) Mental
retardation or illness

Deduction for medical expenses incurred on disability of Special dependants (80DDB)

a deduction of 40,000 (60,000, 80,000 if the dependent is a senior citizen or super senior citizen) is claimable
this is available for specific diseases, which include many neurological diseases like Parkinsons disease, motor
neuron disease, hematological disorders, Thalassaemia, chronic kidney failure, AIDS, cancer, etc.

Individual disability (80U) deduction of 50,000 to an individual who suffers from not less than 40% of any disability.
With severe disability, deduction of 1 Lac shall be available.
Please Note a) the patient should be dependant on the taxpayer, and should not have filed for such a deduction separately
b) Individuals would need to produce a copy of the disability certificate as issued by the central or state government medical
board to claim deduction.
c) Insurance policy obtained must be in your name and should be a policy for life. It could pay either an annuity or a lump
sum amount for the benefit of the dependent on your death.
d) If the disabled dependent predeceases you, the policy amount is returned to you,and treated as income for the year in
which you receive it, thus fully taxable in your hands.

TAX RATE ON EQUITY AND PROPERTY

Listed/Gain-Type

Short Term Capital Gain

(Less than 1 yr)

Long Term Capital Gain (More

than 1 yr)

Stocks Listed on Indian

Stock Exchange

15% Tax on gain

No Tax if Security Transaction

Tax (STT) is paid on the sale.
STT is currently between .017%
to .125% of total amount
received on sales..

Stocks NOT Listed on

Indian Stock Exchange

Gain will be treated as your

Income and taxed as per
applicable Income tax slab

20% Tax on gain

Short Term Capital Gain

(Less than 3 yr)

Long Term Capital Gain (More

than 3 yr)

Gain will be treated as your

Income and taxed as per
applicable Income tax slab

20% Tax on gain after

considering the indexation

Property

FINANCIAL BUDGET 2015

-Corporate Tax Rate reduced to 25% for over next four years
-Exemptions For Individual Tax Players To Continue
-Yoga to be included as Charitable Purpose
-Concealment of income will attract 10 yrs of rigorous imprisonment
-Benami property transaction bill to tackle black money transaction in real estate soon
-To Have Benami Transaction Prohibition Bill For Domestic Black Money
-Quoting PAN a must for all purchases above One Lakh
-100% deduction allowed for all contributions in Swachh Bharat Abhiyan [except contribution in
CSR]
-Proposes to rationalise capital gains tax regime for real estate investment trusts
-Propose To Rationalise Capital Gains Regime For REITs/InvITs
-Income Tax On Royalty Fees For Technical Reduced To 10%

FINANCIAL BUDGET 2015 few more

points..
2% Addl. Surcharge on Super Rich.
-Reduced taxes on Technical Services to 10% from 25%
-Tax reduce for foot wear above 1k per pair
-Service Tax increased to 14%
-80D Health insurance 15000 to 25000
For senior citizens 30000
-80DDB increased to 80000
-Wealth Tax abolished
-Tax on royalty income decrease from 25% to 10%
-Transport Allowance exemption increased to 1600 pm
-Domestic Transfer Pricing limit increased from 5crores to 20 crores

VFN Customer Satisfaction Survey

2014

An important step to create a reliable experience for our clients is to periodically reflect and collect
feedback

Institutionalization of VFN Annual Customer Satisfaction Survey is one such step in this direction

Survey focus was broadly into 3 areas viz.

Responsiveness,
Competence with Conduct
Problem Solving.

Conducted across all VFN served company clients working at various locations in Oct-Nov 2014

Survey findings are appended, all numbers may not add up to 100% due to few blank responses

87% responded positive on overall experience

Responsiveness is the major area of improvement making
27% responded incredulous about our services
Feedback on responsiveness was mainly collected around
customer care and email contacts
While we need to work on our response time, 89% responded
are positive with VFN team competence/conduct and response on
our ability to resolve issues is at 81%

Survey 2014 Top 10 company responses

Survey 2014 responses across locations

Survey 2014 what customer says..

Never had this kind of experience in past. The team is really professional with good experience.

This was the first time I took the services of VFN and it turned out to be a really good experience in terms of quality and
timeliness / Service is good, so I will suggest others for VFN in future

Quick response, efficiently solved the errors./ Very prompt service and conversation is always meaningful and satisfactory/
Very responsive & responsible behaviour and a pleasure to engage with/ Quite energetic group / It's an excellent service.
Staff is really great. Good job guys. Keep it up. Really satisfied with the service.

Customer relationship management is very strong, Appreciate your service.

I am a long-time client of VFN and have seen it grow into a bigger organization. VFN's strength lies in giving personalized
and rapid service to it's clients. So far, the VFN group have always been active and helpful. Thanks for all the help!

Good and prompt service. Would like to avail more such professional services from your group. Bunch of highly motivated
and enthusiastic group. keep up the good work.

I am very much satisfied with a quick turnaround time and timely addressing the issue.

I would like to thank you for answering all my queries in the most amicable way. Thanks.

suggestions to improve

You have to improve your services to meet your SLA/ More timely response required/ Turn around time could be improved.

Felt the response was good at VF outlet, than the help from Call Centre. It would be great if the reach of Call centre
executives is made simple. This will help to resolve customer query faster/ Need better response in Customer service

Tracking of incoming mails need improvement

More often than not, have to reach the senior leaders. The ground team should be more responsive especially during the
peak time.

Suggest you to keep in touch via mail or sending sms alerts for updating the client how the process is going.

PERSONAL FINANCE READINESS (1/5)

likelihood of one meeting all his goals in life
How efficiently the cash flows are being tracked
How well the investments are being planned
How comfortable the retirement phase is going to be
How efficiently one can handle any unforeseen/unfortunate events in life
Trends - A survey conducted by
Credit Suisse on monthly spending
by India corporate employees under
various categories indicates 70-75%
of their income goes in fulfilling
various household needs.
During the career span one has to
look after different financial goals
including buying a car, build a dream
home, children education/ marriage,
plan vacation and plan for
retirement.
Trend reflects that all these have to
be managed with less than 30% of
the income earned.

PERSONAL FINANCE READINESS (2/5)

Irony - everyone wants to retire early

and enjoy a peaceful retirement life while
regular income and retirement like plans
have even lesser pie of 15-17% of
savings month on month.
Challenge - how to maintain a parity
between our expenses and savings to
ensure investments grow at a level
wherein our current standard of living is
maintained even after retirement ?
Reality - with average rate of inflation
our expenses would be 2.5 times of
current level after 15 years

inflation graph projected for next 30

years

Pause and Think !

How well are the taxes being planned?
Are you choosing the right tax saving investment?
Do you have enough savings to counter any emergencies?
Are you preparing yourself for retirement?
How frequently do you keep a track of your expenses?
Who is advising you in making your financial decisions?

PERSONAL FINANCE READINESS - research findings

(3/5)
A study was conducted amongst 2000 salaried professionals across various work experiences at entry level
(< 5yrs), mid (5-12 yrs) and senior (> 12 yrs) levels. Summary of the findings is highlighted below
Based on the personal finance habits of the people, 91 % cannot afford to retire at the age of 60

The young investors score low on retirement readiness with 3% score whilst degree of readiness is 7% and 12% at
mid and senior level respectively.

The probability of extending the retirement age is higher for such professionals owing to lack of enough retirement
corpuses

Tax savings is the key to financial planning but many bad decisions are being made in the process

At least 8% at entry level are over doing the tax benefits under 80C, 37% at mid level are under utilize whilst 53% at
senior level are over investing.

For 77% of the sample size, Insurance is their primary choice as 80C but only 7% invest in Equity Linked Schemes.

PPF, NSC and FD are the primary choices of tax saving investment for 16%.

Among such professionals, majority receive their financial advice from their family or colleagues.

Traditional life insurance policies are an all-time favourite investment choice. It's common for people to buy an
endowment or money-back policy for their child as a gift. They pay the premium for the initial years. After the child
starts earning, the onus of paying the premium shifts to him.

The tax saving investment patterns recorded depicts the equity aversion of many of the Professionals.

Almost 2/3 sample population generally do not keep track of where and how much they spend

Only 26% of the professionals are maintaining a healthy track of all their expenses, nearly one tenth of them review
their expenses frequently and majority of the professionals (43%) review their expenses only occasionally

PERSONAL FINANCE READINESS - research findings

(4/5)

The practice of keeping away money dedicated only for emergencies does not exist for the majority
An emergency fund should account for 3-6 months of expenses. 58% at entry level, 42% mid and 38% at senior level
do not have a fund for emergencies where as significant sample size holds savings for 1-2 months.

This state would force them to liquidate their existing investments or assets in order to fund their emergencies

Many young people are not able to save enough because they don't have anything left after their
expenses
Their financial equation is: Income - Expenses = Savings.
Legendary investment guru Warren Buffett has a simple solution to this problem
Just change the equation to Income - Savings = Expenses and see the difference it makes to your finances.

PERSONAL FINANCE READINESS - research findings

(5/5)
The financial decisions made by the people can be attributed to the kind of financial advice they get
96% receive financial advice from family or friends. Friends and colleagues act as financial advisors for 35%, family
members advisory contributes 31%, 13% make financial decisions based on their self research and our friendly
neighborhood agents advise 16% of the professionals.
Examples
A manager based in Delhi pays almost Rs 1 Lac a year for seven life insurance policies that give him a combined life cover of
14 Lac. Two of these policies were bought for him by his father. Such traditional insurance plans neither offered good returns nor
adequate life cover. He realised this a few years ago and bought a pure protection term plan of 50 Lac for himself. But he still
feels shackled by the premium that flows into the other seven policies. Parents might think they are giving their child a great gift.
What they don't realise is that they are saddling him with a suboptimal investment for the next 15-20 years
A young man wish to do a SIP in an equity fund, while the father insists that the Public Provident Fund is a better and safer
option. Parents often take upon themselves the investment decisions of the earning children even though the risk profiles of the
modern youth and that of the parents could be vastly different

To be fair, one can't blame the older generation for forcing poor investment choices.
They have lived in an era which was very different from the present. Back in the 1970s and 80s, the stock market was an
opaque establishment, mutual funds were unknown, insurance companies were trusted entities and real estate prices
were at rock bottom levels. Traditional Life insurance policies, bank deposits and small savings schemes were the best
way to save money. The older generation is not quite aware of the intricacies of the tax rules. For them, debt funds, nonconvertible debentures and FMPs are too complicated. So, parents can't be faulted for advising their children to invest in
instruments that helped them create wealth in the past.

Current 80C trends

The below chart indicates clients 80C over utilization as per the Income Tax Rule, over and above
the permissible limit of Rs.150000/-.

80C
utilization

over

Distribution of 80C on PPF/FD within

over utilization sample

As salary increases over utilization is mainly due to increased PF amount, which is normal. However, worrisome part
is when we looked into 2nd chart (above) showing where this additional money is allocated. A significant % of cash
flow is going into instruments like PPF and FD while there are better financial instrument available for similar needs.
This reflects that there is a definite scope to improve portfolio.

FEW COMPARISONS
conventional vis-a-vis research based
investments
Recurring Deposit with Mutual Funds
The below graph shows the final sum you would have earned by investing Rs.5000/- a month for 36 months in a
Recurring Deposit (RD) vis-a-vis five Rs.1000/- SIP in 5 different Mutual Funds (MF)

Above numbers are arrived after adjusting income tax at various slabs. Mutual fund numbers are computed on both debt and
equity based funds in a tax efficient manner. RD is considered at 9% while MF is on 12% -15% annualized return.

LIFE INSURANCE AND PPF

PPF and Insurance both are important financial instruments and as investments grow one should
diverse portfolio comprising various such solutions for near and long term financial goals. However,
saving and investment decisions should be driven by your own financial needs and responsibilities and
not as per the trends of the market or advices based on others needs and wants
Feature

Life Insurance

PPF

Tax Benefit (entry and exit both)

Yes

Yes

Minimum Lock in Period

5 Yrs

15 Yrs

Minimum Pay Term

5 years

15 years

Life Risk Coverage

Yes

No

Death benefit

All future premium waiver with full

policy benefits

Withdraw without any future benefit

Loan against instrument

Yes

Yes

Payment Flexibility

No

Yes

Partial Withdraw

Few options

Yes

Liquidity

Yes

No

for further assistance, reach us at www.vfn.in

Customer Care : 8010800800