Dilzer Consultants - Investments and Financial Planning

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Dilshad Billimoria on #ETNow #TheMoneyShow

Watch me on ET Now, #themoneyshow answering queries from investors. #DilzerConsultants. Many thanks to #ETNow for the opportunity, looking forward to more such stimulating sessions!



Savings account vs liquid mutual fund: which is better?

Most savings bank account holders leave excess amounts in their bank accounts. Should they park their excess money in liquid funds instead?

(L-R) Surinder Chawla, Lovaii Navlakhi, Virat Diwanji, Dilshad Billimoria
(L-R) Surinder Chawla, Lovaii Navlakhi, Virat Diwanji, Dilshad Billimoria

Surinder Chawla, head–branch and business banking, RBL Bank

You should leave as much in your savings account as you are comfortable with. This amount will depend on many things like daily cash requirements and your own cash flows. Typically, we have noticed that for an individual’s savings account, the balance is usually just slightly higher than the monthly salary credit. Very often, individuals also transfer further money into their primary savings accounts, since that account is usually linked to their monthly recurring expenses and/or investments. Savings accounts offer liquidity and also a reasonable interest rate to the customers. Therefore, many customers park as much money as they can in their savings accounts; from which they meet their regular expenses and investments, and which also serve as their emergency buffer fund. Some of the other financial instruments, which offer higher returns, may not be as liquid as money in a savings account. In many cases, such instruments come with certain risk factors, which the individuals have to understand clearly. The primary reason of putting money in a savings account is liquidity and ease. In a deregulated savings interest rate environment, several banks are offering attractive interest rates (on savings accounts). Therefore, there is scope to get attractive interest rates while maintaining liquidity at all times.

Lovaii Navlakhi, managing director and CEO, International Money Matters

A savings account is just what the name suggests, and is not an investment account. Customers may see some amount of comfort in seeing a certain amount of money in their bank account, especially when they know that the money can be accessed or used as per their free will, at a time of their choosing. The reason why the money accumulates in bank accounts is that there is no known alternative. Wouldn’t it be wonderful to have the liquidity that one requires, and also make some returns? I recommend that one should keep 1 month’s expenses in the savings bank account, and 3-6 months’ regular expenses in a liquid mutual fund. You can also add the known immediate expenses to this figure. Earnings would be by way of dividends, which are tax free in the hands of the investor; and even after dividend distribution tax, post-tax returns are better than from a savings bank. The liquid funds can be exited overnight, with no exit loads. Their greater benefit is that they create the discipline of not keeping excess or unproductive money; and consciously looking at one’s long-term goals to invest for the future. If you haven’t tried such products earlier, take help; invest a part of the excess—and withdraw it—to validate the process; and sleep peacefully knowing that while you are idling, your money isn’t.

Virat Diwanji, senior EVP, head-branch bank-ing, business assets and NR, Kotak Mahindra Bank

Usually the rule of thumb that we tell customer to follow is to leave 2-3 months’ expenses in the savings bank—the amount for which you need absolute liquidity. Hence, that is the amount you should have in your savings account. Most people usually do that. Interest rates do not play a significant role in an individual’s decision to leave the money in a savings account but it does play a role. People do start comparing with the alternative options. Hence, the evolved customers would look at something where they can get more than what they earn in a savings account. But the bulk of customers are not so evolved. In that sense, the absolute interest rate in a savings account would make a difference. Hence, customers will tend to consolidate their idle balances in savings accounts, to one where the interest rate is higher. They would not say that since the interest rate is higher, I may keep 5 months’ expenses instead of 3 months’ expenses. They will not do that. But the tendency is to consolidate where the interest rates are higher. You can take the example of sweep facility, where there is a threshold on the amount. For instance, I have Rs300 and the threshold is Rs150 for savings account. The remaining Rs150 would be moved to a time deposit, which gives higher interest rate than a normal savings account.

Dilshad Billimoria, director, Dilzer Consultants

The rule or advice we give clients about keeping money in the savings bank account is to keep 4-8 months’ fixed expenses and the important commitments like equated monthly instalments, to protect the primary income earner and her family against unforeseen circumstances such as job loss, medical emergencies and financial emergencies. If both the spouses are working, we recommend 4-6 months of expenses and if there is only one breadwinner, we recommend 8-9 months. Anything more in the savings bank is an opportunity cost, loss of interest income, and negative returns; if inflation-adjusted returns are considered. The effect of interest rate changes on savings accounts and flexi-fixed deposits are neutral. A small change in the bank rate will not change the interest rates on savings account and short-term fixed deposits. Investing in a liquid fund will make sense only when the investable surplus is large. If investors seek to park funds for 1-8 months and want access to these funds in the short run, it is better they stick to short-term fixed deposits, since the post-tax implication on fixed deposits and liquid or ultra short-term funds for this tenure is the same. Hence, there is no benefit in a liquid fund over a short-term fixed deposit, if the amount is small and the period of parking is short.

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Building Blocks of a Financial Planning Practise

Practitioners often want to know how they can build an enduring and profitable Financial Planning practice. How to make an impression on clients and build a lasting relationship with them, what are the processes, systems and procedures required to set up a thriving Financial Planning practice, are some of the questions to which they seek answers. Based on my experiences I am happy to share some behavioural traits and decision-making tools that can help to start, maintain and grow a robust Financial Planning practice.

More Available Here

Dilshad Billimoria  CFP

Dilzer Consultants Pvt Ltd

SEBI Registered Investment Advisor



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Incentive Structures provided to corporates

ESOPs or Employee Stock Option Scheme is an incentive linked compensation structure that are offered by some companies, where employees have the right to participate in the growth of the company for which they have contributed towards for many years.

In this age of great talent, there is an impending need to show the carrot to well deserving employees as part of their compensation package and reward them judiciously over the years, based on their experience, hierarchy in the organisation and contribution to the overall growth and profitability of the company.

Is it worth it? Of course it is!

Normally ESOPs are given only after completion of certain years of service of an employee, if the company is a big and well known player in the market. However, some start ups also issue ESOPs due to lack of funding or cash shortage in the initial years as salaries to employees who are willing to share the future profits and growth of the company.

 ESOPs can be given by Indian companies or by foreign companies having Indian subsidiaries.

Under this scheme the employee will be given shares of a company, at a predetermined fixed price that is usually much lower than the prevailing market price.

The Company normally grants options to the employee and it is at the discretion of the employee to accept or “exercise” these options after a lock in period which starts with a minimum of 1 year.

When the shares are bought by the employee, the difference between the price at which the shares are allotted and the market price is treated as a perquisite and taxed in the hands of the individual and the employer deducts tax at source for this amount.

It is important to note whether the shares are listed or unlisted, since it would impact the taxation at the time of purchase and at the time of sale.

If the shares are listed, then the cost of acquisition at the time of purchase is based on the average of highest and lowest price on the date when the options are exercised.

If the shares are not listed, then the market value is determined as per a valuation certificate given by a merchant banker.

When the employee decides to sell the shares, the tax applicable is capital gains tax (short term or long term) and the amount would depend on when the sale has happened.

If the shares are of listed Indian companies, then the holding period to be considered for short term and long term is one year. Less than one year is short term capital gains and the tax applicable is 15% plus surcharge and more than one year is long term capital gains and the tax is NIL.

In case of unlisted companies, the shares would become long term after three years. The tax applicable would be based on indexation benefit that can be availed at a flat rate of 20% plus surcharge.

When ESOPs are granted by a foreign company to an Indian subsidiary, there would be a tax implication at the time of purchase of shares by the employee. Also benefits of long term capital gains tax applicable to Indian listed shares cannot be availed. Here the Double Taxation Avoidance Agreement between the two countries would have to be looked into before arriving at the tax implications.


RSUs or Restricted Stop Option Units is compensation received from employer to employee after a certain period of time based on a structure or plan, usually linked to performance milestones or the length of stay by an employee in an organisation. RSUs are taxed at the time of vesting ( that is application made by the employee) and is taxable as a perquisite. Therefore, some shares are with-held by the company and utilised to pay advance tax. The difference between the vesting price and the market price is the perquisite amount.

This feature has been used as a carrot to entice employees to stay with the company for the long haul. For example, if John receives an offer from Google and the company considers John a great value addition to their growth over the years, Google will device an RSU option to give John (in addition to salary benefits) 100 shares of Google per year over 5 years, making it a total of 500 shares over 5 years. If the price of Google as on date is say $740 and Google expects John’s contribution would help the price  move up to say USD 950  after 5 years, it’s a win- win deal for both. John can benefit by staying for the long term with Google- Only if he stays for 5 years he will receive 500 shares at current market price . If he leaves after 2 years, he will receive only 200 shares at a reduced market price(minus shares with -held to pay taxes, both income tax and capital gains tax) So if John left in year two, he would have lost the benefit of accumulating 300 more shares by working for another three years at, probably a higher valuation.

How to deal with RSUs- Unlike stock options, RSUs normally have an inherent value in them at the time of vesting.  However, the employee in order to benefit from the stock appreciation is usually given shares on piecemeal basis over a period of time, and cannot exercise sale unless the RSU is vested. The RSU will vest at a future date based on a certain goal achievement target set by the company. The same can also be forfeited if the employee has not meet performance targets.

This is a good mechanism by companies to retain talent, since employee’s loose ownership of unvested stocks, if they leave before the vesting date. They can however, sell stocks that are already vested.

RSUs are taxed in a similar manner as ESOPs. The fair market value of RSUs at the time of vesting is considered the cost and the Market value on the date of sale is the selling price. The difference between the two is considered capital gains.  The nature of short term and long term capital gains follow the same rule as ESOPs mentioned above.

ESPP stands for Employee Stock Purchase Program– This refers to purchase of company stock voluntarily by the employee at a discount to market price. The discount is roughly 15% of current market price. The purchase happens once in 6 months at a period determined by the company and the discount is given at the lowest traded price in the six month period.

For example, let’s divide the year between 1 Jan to 30 June and 1 July to 31 Dec.  Say an employee opts to invest 10% of her salary in ESPP. This amount will be deducted monthly from the employee’s salary and kept separately.

For example, an employee’s salary is Rs 1, 00,000 per month, 10% of this amount or Rs 10,000 will be kept aside and accumulated over six months that is Rs 60,000. The lowest trading price of the share during this period is taken. Say it is Rs 10. The employee gets a discount of 15% on this, which makes the purchase value for the employee Rs 8.50.

The accumulated amount of Rs 60,000 would be utilised to purchase shares at a discount of 8.50= 60,000/8.50= 7058.82 shares would be bought. Even if the employee chooses to sell these immediately, she can make a gain. 7058.82 *10=Rs.70588 which is a profit of Rs 10,588 over the purchased amount. The same process is repeated on 31 December.

ESPP is an assured way of earning great returns on equity through purchase and instant sale at a profit.

The taxation on ESPP is the difference between the market price and the discounted value paid which are the capital gains.

The Cost would differ in case of ESOP, RSPP and ESPP. The cost for ESOP, is the “Exercise Price” The cost for RSU is the “Vesting Price” and the cost for ESPP is the “discounted market price”

The Capital Gains would also differ for each of them. For RSU the sale price is the difference between the market price on the date of sale and the vesting price (cost of acquisition of RSU is NIL). For ESOPs the difference between market price at the time of purchase (not exercise price) and the sale price is the capital gains. For ESPP the difference between the discounted market price at the time of purchase and the sale price is the capital gains.

Capital Gains Structure in case of listed and unlisted ESOPs, RSUs and ESPPs

Types of Shares Period of attracting long term capital gains Tax on Short term Capital Gains Tax on Long Term Capital Gains
Listed Shares  1 Year 15% Tax free
Unlisted Shares(Indian Companies) 3 years Added on taxable income 20%  with indexation
Unlisted Shares(Foreign Companies) 3 years Added on taxable income 20%  with indexation

In conclusion- While companies are providing these benefits to employees to incentivise them, careful deliberation on circumstances of death, disability, early retirement, termination and resignation must be understood. Also, whether such shares are vested or not, their value, ownership, taxation, and performance are factors to be considered by the employer and employees on exit from the company.


Dilshad Billimoria

SEBI Registered Investment Advisor

Dilzer Consultants Pvt Ltd


Originally written for www.fpgindia.org – The aim of this association is to create awareness about Financial Planning among the public, promote professional excellence and ensure high quality practice standards.http://www.fpgindia.org/wp-includes/js/tinymce/plugins/wordpress/img/trans.gif


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Make it easy for your legal heirs

The passing away of a loved one always creates an emotional and financial trauma, especially if they have suffered a
lot. It may be difficult to draft a will when someone has a serious illness like last stage of cancer, or if there is a sudden accidental death and the only survivors are the children who are minors, or if a patient becomes brain dead and is incapacitated. Sometimes, even in old age, grandparents and parents consider writing a will as taboo, since it is considered a bad omen if one were to write about distribution of assets.

For more read here Dilshad__WILL_June_2016

Dilshad Billimoria

Director Dilzer Consultants Pvt Ltd

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5 Questions To Ask Your Life Insurance Advisor Before You Buy (BusinessWorld)

Has your Advisor evaluated the need for this particular policy in light of your existing policies? Be sure to check that your Advisor isn’t just ‘selling’ you a policy blindly.

If only we had a rupee for every time someone bought a Life Insurance policy without fully understanding its features, we’d surely be millionaires by now! The next time you decide to add to your Life Insurance portfolio, make sure you ask your Advisor these 5 questions before you sign above the dotted line.

Do I really need this insurance policy?
Has your Advisor evaluated the need for this particular policy in light of your existing policies? You might already be sufficiently covered – in which case you may be better off investing this money elsewhere. The best approach is to arrive at a “Human Life Value” for yourself, and build yourself up to that level of life cover. Be sure to check that your Advisor isn’t just ‘selling’ you a policy blindly.

Dilshad Billimoria CFP, Director at Bengaluru based Dilzer Consultants believes that the role of an Insurance Advisor extends well beyond just ‘selling’ policies. “A true financial advisor, who works in the fiduciary capacity of the client, will do an analysis of the existing policies that a client brings as baggage and provide advice on how to proceed, by doing calculations of the cost benefit analysis of keeping, making the policy paid up or withdrawing the policy”, she said.
In another scenario, you might just be part of the minority group of people who don’t need Life Insurance at all. Say, in case you are a non-earning person whose dependents will not be impacted financially due to an unfortunate loss of life, you really don’t need an insurance policy. Divert the money to higher yielding instruments instead.

What kind of policy is this – traditional, unit linked, or pure term?
Although no two policies look quite alike when you compare their brochures, they essentially will fall into one of the above categories once you look closely enough. You’d be surprised to know that most people buy life insurance without even knowing what kind of policy they are buying! Knowing might just influence your decision to buy the policy or not, so please ask your Advisor this question. Traditional policies tend to be safer, with a lower return. Unit linked policies tend to be higher risk (depending upon the fund mix chosen) and have lots of associated charges. Term plans give you nothing back in the end, but offer you the best bang for your buck when it comes to upping your life cover. All three solve fundamentally different needs.

Billimoria is of the opinion that many clients end up buying policies for the wrong reasons, and hence do not take out the requisite time and efforts to understand them fully. “For example, ‘my father’s boss is an LIC agent and I’m obliged’, or ‘my father thinks insurance is the best investment for me for the future’. Or ‘I did this insurance for tax savings under Sec 80 C or the LIC agent showed by a ULIP policy and told me my money will double in 3 years!’ All these are baseless promises and the brunt of mis-selling falls on the client. He/ she has no clue as to how to proceed and so simply keeps paying the premiums”, observes Billimoria.

What is the ‘death benefit’ associated with this policy?
This might sound like a no brainer, but remember that you’re buying the policy primarily so that your family doesn’t suffer financially in the event of your unfortunate death. Most Advisors will tend to avoid talking about the death benefit (when they’re selling you a traditional plan or ULIP), as it’s not exactly the brightest feature of that kind of policy! But if it’s not solving the problem that it’s meant to, why opt for it?

Billimoria agrees that the Death Benefit is the single most important criterion to be considered when considering the purchase of a Life Insurance policy. She says, “Death Benefit is the most important part of life insurance. It is the very purpose or objective of taking life insurance and the best way to cover oneself is through term plans where the cost to life cover benefit is the most economical and beneficial to the client.”

How many premiums do I need to pay, and what happens if I stop paying my premiums?
Some policies require you to pay a single premium, some require you to pay 5, and some require you to pay 15. Some policies can be re-instated easily when they lapse after you stop paying, and some cannot. Just ensure you know the nuts and bolts of the one you’re about to buy.

What is the likely “claim settlement ratio” for this insurer?
An important question if there ever was one! This essentially means – in case of your unfortunate death, what are the chances that the insurance company will actually pay up? 98%? Great! 67%? Reconsider your decision.

Billimoria is of the opinion that the ‘percentage way’ of calculation does not portray actually how many claims were rejected in absolute number terms. “For example, if the number of claims rejected in a year, are more; and the Claim Settlement ratio is high, it does not mean the company has a good claim settlement ratio, because the number of claims rejected are also high, with the base of more clients having joined”, she says. Therefore, one should aim to look at the holistic picture, when evaluating the claim settlement ratio of a particular Life Insurance company.


Article is published here http://goo.gl/jnePqU





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Bitcoins- the future of Money

Dilshad writes for Wealth-Forum ezine on How Internet enabled disintermediation is causing disruptions in many established business and economic models around the world – and has now reached the very foundations of modern financial markets – money. Imagine a world where no Governments print currency, no banks enable transfer of money, no currency wars between nations – where there’s just one universal currency, which is created electronically and transacted electronically between any two people anywhere in the world – instantly. Dilshad, a leading RIA from Bangalore, takes you into the fascinating world of bitcoins, which has the potential to cause huge disruptions in financial markets across the globe. Read on to find out more on this whole new thing from one of the experts.


In this piece, we will journey into the very beginnings of this medium of exchange, how it evolved and its current workings and institutions that are associated with it; banks. But we know all this stuff since this is our bread and butter! So i’m going to up the ante, and try and predict the future of money, too! Hop on! It’s going to be an exciting ride of discovery!

The Past

As man started settling down from his wanderings around the vast plains and regions of the earth, he started agriculture and invented the barter system of trade. All was well, until he realized a few things about his barter system:

  1. The problem of a common medium of exchange: What he had to offer others by way of barter was not necessarily what they wanted in exchange of what they had to offer.

  2. The problem of Portability: Portability(specially in the case of livestock used for barter) were a huge problem. He couldn’t quickly move his livestock to another place and it often took days to reach a market.

  3. The problem of durability: Livestock were prone to disease and would eventually die, leading to an “erosion” of assets.

  4. The problem of divisibility: The least count for a livestock was 1. It was very difficult to divide livestock into half and expect it to have the same value as a full (read: alive) one.

These problems got him thinking and eventually after going through a myriad of trinkets and cowrie shells, he settled on gold as the medium of exchange.

Gold, he found, countered the above problems. But now a new problem arose. He had to keep track of the number of gold pieces he had set as a value for the items he wanted to exchange. Keeping track of this was difficult and this gave birth to banks. Banks started keeping and maintaining ledgers.

Over time, banks would have more work on their shoulders. They started issuing promissory notes on behalf of him to others, informing them of the fact that the note itself was akin to a transfer of the actual gold.

Money, as we know it today, was born.

The Present

A typical financial transaction between two parties is between 1-3 days. Certain high value transactions get affected within a day through RTGS, NEFT and IMPS.

The Future: Enter Bitcoin

Bitcoins are generally defined as a type of virtual currency, brought to life by the Internet, very powerful computers and the willingness of lot of people looking to embrace new forms of monetary exchange.It is a decentralised currency.

Bitcoin uses peer-to-peer technology to operate with no central authority. Transaction management and money issuance are carried out collectively by the “Bitcoin network”.

So, let’s just break down that definition and understand it’s implications.

“Decentralized Digital Currency”: There is no one government, person, region, or association that can control and/or regulate this currency. So, If there is a war in region A, typically the aftermath of the war has a negative impact on the fiat currency of that region. There is usually localized hyperinflation. Not so with Bitcoin. Since the latter is decentralized and not tied to a particular region, it’s inherent value remains relatively unchanged.

“Instant Payments”: The mean time between transactions initiation and transaction completion is about 10.5 minutes. Considering the highly complex mathematical computations that have to be done for each individual transaction, this is quasi instantaneous. Compare this to 2-3 Calendar days in the traditional system involving fiat money!

“To anyone who has access to the internet”: This method does not route the financial transactions to a centralized clearing house (a.k.a. bank). The money goes directly from A to B (assuming that is the direction it was intended to). Banks are out of the equation.

“Peer-to-peer technology”: as mentioned above. From person to person direct.

When was Bitcoin started? The first recorded public transaction of Bitcoin that got the ball rolling, so to speak, was around the year 2001.

Who invented Bitcoin? Bitcoin was invented by Satoshi Nakamoto. While he has put a lot of thought into the creation of bitcoin with a lot of inbuilt gating and throttling mechanism to ensure free and fair transactions automatically, he has chosen to remain anonymous and away from public spotlight.

Is bitcoin currently in use? Absolutely! Bitcoin is being traded actively on many exchanges around the world, just like trading in stocks and shares and precious metals. Not only this, but Bitcoin is a reality in many establishments in Europe and U.S. Many coffee shops, eateries, and other classes of business accept both Bitcoins and their local currency.

Even Governments are opening up to Bitcoins. Recently, the Swiss city of Zug, which is a financial hub has started allowing local citizens to pay for usage of public utilities using Bitcoins. This service is scheduled to go live in Zug on the 1st of July 2016. This will be a pilot project and the very first of its kind.

How can I get Bitcoins? Firstly, you need to set up a secure Bitcoin “wallet”. It’s free and straightforward. It is nothing more than the representation of your physical wallet that you use to transact with fiat money (cash). But unlike your physical wallet, a Bitcoin wallet has high encryption, and you can have as many wallets as you wish! Did i mention it’s free?

There isn’t a central computer hub running all of the bitcoin-related processes. Instead, each Bitcoin user’s computer is part of the network, collectively sharing the computing burden of generating bitcoins and logging their transactions. It’s this decentralized nature that makes Bitcoin impervious (so far) to government meddling, free of regulation and monitoring.


So, Bitcoins can be had in 3 ways:

  1. You can accept payments in Bitcoin as compensation for (or remuneration) of goods and services rendered by you.

  2. You can buy bitcoins with your fiat money. That is, just like you buy gold, stocks, shares, you can pay a person money who will provide you an equivalent amount of bitcoins. (Note: Current exchange rate in INR is about 30200 for 1 Bitcoin). You can buy fractions of bitcoins too. But you need to check with the seller, as sometimes, they stipulate a minimum amount of payment against which they will provide you bitcoins.

  3. You can “mine” bitcoins, just as you mine for gold:) This requires specialized hardware. More often than not, you need to do a full financial calculation of the cost in order to see if you are in the red or black at the end of your bitcoin mining time frame.

Where does the value of Bitcoin stem from? Bitcoin’s value stems from the fact that unlike fiat money whose volume of circulation can be altered by Centralized authority, Bitcoins are scarce and only limited in number.


They are, however, not backed by any commodity (like gold). When we say that a currency is backed by gold, we mean that every country in the world will need to hold gold equivalent to the currency in circulation in their country, because without gold what does guareentee the value of money. Bitcoins, like dollars and euros, are not backed by anything except the variety of merchants that accept them. As we all know, US took away the Government backing of the dollar with actual gold supply (known as leaving the gold standard in the year 1971 and every major international currency followed suit.

Because there are no national regulations for bitcoins, you can transfer them into or out of any country and dodge the steep fees that other such services charge. And because the system has no governing authority, your account has no limits and can never be frozen.

It’s at this point that many people wonder about the legitimacy of bitcoins. How can a currency just appear overnight on the Internet and have actual value? Economists might offer a long, philosophical explanation about the history of money, but the short answer is this: All currencies have value only because people believe that they have value.

Bitcoin is no different in that regard. It’s been embraced by libertarian-minded activists, financial speculators and people who simply no longer trust government-backed banking systems. These people trust the mathematics and encryption of the Bitcoin system, and their trust has been contagious, lending even more legitimacy to this virtual currency.


Dilshad Billimoria CFP

Director- Dilzer Consultants Pvt Ltd- ISO 9001 (2008) Certified Company

SEBI Registered Investment Advisor

The author acknowledges the information to be attributed to various References taken from various search engines as well as the Bitcoin Wiki.

“Bitcoin is one of many cryptocurrencies that are around. Ethereum is another one.

Please make efforts to educate yourself before investing in this and any other forms of financial investments.”

The author is in no way trying to suggest the use of bitcoins over fiat money.

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12 Point Agenda to be on top of your finances.

Outlook Money Women Empower Issue- March 2016Simple rules on personal finance – Dilshad featured in Outlook Money – Special Women’s Issue- EMPOWER

Outlook Money- Women's special Empower- March 2016

Outlook Money – EMPOWER March 2016

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Economic Times- Featured as one of the best wealth managers in the country.

Dilshad Billimoria has featured as one of the best wealth managers in the country on managing her clients finances. 8 March 2016

In the tech city of Bengalaru, Billimoria is known for her processes and diligence. In an industry where many just follow investor orders or push high-margin products, her firm is even ISO certified. Her record over the past few years has given affluent investors the confidence that their money is in safe hands. Her peers respect her for her strong process-oriented approach and success in a highly competitive field. In a city which is full of technology professionals with little understanding of ..

Dilshad in economic times- 8 march 2016- Women's Day

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Budget 2016 Expectations

29th February and many are looking forward to what the finance minister has to present, especially in a time when the markets are in a downturn, there is so much uncertainty in global markets and change seems to be the only constant. Prime Minister Narendra Modi was open to opinions from the ordinary citizens in respect to Union Budget 2016 and said it should not be restricted to round table discussions with industry specialists. The wish list for any investor is for growth, economic development and appreciation in value of their savings and assets. This can only happen with proper governance, implementation of policy initiatives, a healthy balance sheet, helping the common man, and this is what the Modi Government started off with on being elected to the Lok Sabha.

Economic development and health and sanitation Infrastructure is the backbone to economic growth

For any economy to grow and GDP numbers to reach 8-10% in the future, basic roads, railways and infrastructure should be given priority and proper plans for short, medium and long term projects laid out and enacted on time. Lack of funding, high level of debt and slow regulatory clearances are some of the major hindrances the infrastructure space has been facing for decades.

Road projects from NHAI has to meet stiff targets of road building, but are already in huge legal disputes with infrastructure companies and are facing disputes between contractors and land owners. If these disputes are addressed, debt burden comes down, focus on moving resources back into the system for development can happen. This would create more employment opportunities and increase basic development needed in our country.

India is a diverse country, with people from diverse socio economic backgrounds. Basic health, sanitation, better toilet facilities at all villages and highways should be built and a clear budget should be provided by state governments to improve basic cleanliness and sanitation. We have heard and seen many initiatives in this regard from the government in advertisements, trying to create awareness on health, and basic sanitation. Economic development starts with proper education among the masses.

Many of us are aware at the rate at which expenses on healthcare, health costs, hospitalisation and costs towards basic surgeries are moving up. In the light of this, social security measures especially for the elderly, whose budgets on health care far exceed the savings planned in their retirement years, should be provided.

Since the cost for healthcare has risen abnormally, to combat rising costs of healthcare, many financial planners, including us, are recommending increasing health cover for our clients, independent of health cover provided by the company. It would be good if Rs 25000 deduction under Sec 80D could be increased, considering galloping rate of medical inflation.

Since senior citizens are anyway grappling with high inflation, increased costs of medical expenses. It would be good, if the standard deduction limit could be increased to Rs 5 lakh for senior citizens and reduction in tax rate by 5% is also extended to them. This would enable them to manage their cash flows better. Mass financial savings sector- Increase in PPF allocation limit to Rs 1.90 lakh from Rs 1.5 lakh, will fuel more savings towards retirement and long term savings and encourage participation in this excellent tax free savings tool, that provides for Sec 80C tax benefit at the time of investment and tax free returns of 8.70% on maturity. This would enable prudent savings for the long term, and fuel more savings among the masses due to its reach.

Salaried individuals hands are tied for options to reduce tax. Increased Sec 80C tax benefit from Rs 2 lakh to Rs 3 lakh will increase the savings base and reduce tax evasion. The salaried class is looking at increased exemption limits that have been the same for many years now, towards medical expense reimbursement, and transport allowance. These figures should be revised with due respect to Inflation.

Sec 24 (1) provides tax deduction on interest paid towards home loan repayment. Considering the high cost of living in cities like Mumbai, Delhi, Bangalore, such low exemption limits need to be revisited to encourage investment in real estate sector and create more development in housing and create employment opportunities.

Salaried individuals can claim HRA deduction to reduce their tax liability. There should be an extension given to self employed people also, where the exemption limit is only Rs 2000 per month as of now under Sec 80GG. The budget should address this anomaly, since many of the self employed individuals would also stand to benefit.

Primary reason for REITs not taking off is Dividend Distribution Tax (DDT) problem. While the builders are struggling with return on investment, they need to make payment of DDT on income earned through rentals. This reduces net return to the investor, after covering costs of builders. In order to encourage savings in different asset classes and provide a wider range of diversification to our clients, it would be good to look at the tax exemptions on REITs.

Focus on start ups to help in innovative ideas, should be given. Tax benefits should be rationalised for such firms whose income and growth is uncertain in the initial years. Last year growth in technology start ups was over 40%. To encourage start up participation, Government is planning to give exemption on capital gains tax for start ups and create a corpus of Rs 10,000 crore to fund innovation.

For investments and savings avenues, the investment community along with Association of Mutual funds for India (AMFI) has a plea to include savings instruments on par with NPS which is given additional tax benefit under Sec 80CCD. Specific retirement saving mutual fund schemes should be given the same tax benefit as NPS to widen the pool of savings.

Sec 54EC benefit given for capital gains exemption, should be extended in specific infrastructure based MFs also. Looking forward to a good budget with incentives extended to the investing community and other cross sections of our society to promote infrastructure, growth and economic development.

Dilshad is a member of The Financial Planners’ Guild , India ( FPGI ). FPGI is an association of Practicing Certified Financial Planners to create awareness about Financial Planning among the public, promote professional excellence and ensure high quality practice standards.

Read more at: http://www.moneycontrol.com/news/tax/budget-2016-more-tax-exemptions-can-achieve-inclusive-economic-development_5605861.html?utm_source=ref_article

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Dilshad answers queries in Hindu Business Line.

Are Debt funds right for you? Why are they called fixed income products when they don’t provide a fixed return?

HinduBizLine_28Jan16_2016-01-30 08.46.19

Hindu Business Line 28 January 2016



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