Dilzer Consultants - Investments and Financial Planning

An ISO 9001 (2008) Certified Company



Financial Planners in Bangalore

Your World of Finance Matters made Easy

Tax planning and tax saving options

A financial plan is the blue print of your financial life- Dilshad Billimoria in Mint

A Financial Plan is a blue print one's financial life- http://www.livemint.com/Money/JZt5p2f9o1g66gYdvLkBOL/A-financial-plan-is-the-blue-print-of-your-financial-life.html

Dilshad Billimoria in Mint - 20 July 2015

Bullet proof your health - COFP Article

My article on Importance of Health Insurance and Cover benefits http://dilzer.net/2015/06/20/bullet-proof-your-health-cofp-fp-pulse-article-by-dilshad-billimoria/

Claim Ratio- Dallal Times- by Dilshad Billimoria 6th June 2015

My article in Dalal Times on Claim Ratio and its intricacies- http://www.dalaltimes.com/article/investing/did-you-consider-these-things-while-buying-insurance-105937.aspx

Interview of Dilshad Billimoria in Fundoo.com

My Interview here

Dilshad Billimoria

Dilzer Consultants Pvt Ltd Promotional Video

Dilzer Consultants Pvt Ltd Promotional Videohttps://youtu.be/PbH31KUCbhI

Dilshad Billimoria writes in Dalal Times 15 April 2015

Dilshad Billimoria writes in Dalal Times 

Best Ways to Manage with Single Income

Best ways to manage with single income

Dilshad Billimoria
Dilzer Consultants

The Truth Behind Number Tricks- Mint 10 March 2015

Budget 2015: Expectation from the Salaried Class. Dilshad writes in Dalal Times.

Budget 2015:
Expectation from the Salaried Class. 

Dilshad writes in Dalal Times. 

Dilshad Billimoria writes in Mint on teaching the value of money to your children.

Dilshad Billimoria writes in Mint

Teaching Value of Money to your children

Dilshad Billimoria
Director Dilzer Consultants Pvt Ltd.

Market Valuation- March 2015

Markets are Still Under Valued-  March 2015

Dilshad Billimoria- Dilzer Consultants Pvt Ltd

Budget 2015- Snapshot

Budget 2015 Presented by Mr Arun Jaitley - Finance Minister.

On 28th February 2015, Budget 2015 was presented by our honourable Finance Minister.
The underlying objective throughout his 1.5 hours speech has been accelerating growth, enhancing investment, and creating employment benefits for the poor in the country.

He emphasised, this is what they practise and  preach.

Below is the highlights of some of key factors relating to finance:

1. Fiscal deficit to meet target of 4.1% of GDP in 2014-15. in 2015-16, it will meet 3.90%, 16-17 3.50% and 17-18, 3% of GDP
2. Public and infrastructure spending to be increased to 70,000 crore.
3. Defence- RS 246000 crore outlay  for Defence.
4. Tax free bonds to be introduced in Road, Rail and Irrigation.
5. Universal Social Security Benefit Scheme(Atal Pension Yojna) to provide for social security benefits to the non employed workforce of our country.
6. Senior Citizens Welfare Benefit Scheme to benefit Senior Citizens with pension benefits from the huge unclaimed amount lying in EPF and PPF pool.
7. Everlasting Fame- A corpus of 3700 crore set up to showcase / exhibit Parsee culture and heritage in India. Global Heritage fund in Hampi, Goa, Wlephanta Caves, Rajisthan, Leh and Hyderabad promoting tourism and culture in our country.
8. IT Support fund for start ups in IT.
9. The Power Sector gets a major boom- Over 4000 MW projects to be set up.
10. Financial Redressel Cell to be set up protecting interest of investors against financial service providers.
11. Gold Monetisation scheme to help the common man, earn interest on their gold, and enable banks to provide loan against the same. Also a Sovereign Gold bond with a fix interest rate to be introduced. This will check black money inflow through import of gold in our country.
12. Woman Social Security and benefit fund with 50,000 toilets to be set up and 1000 crore towards Nirbhanya fund.(Hope something is actually utilised from this fund.)
13. In Indirect taxation- GST to be introduced by next year (2016) to benefit uniform pricing of goods and services in our country.
14. High checks on black money circulation and imprisonment with penalties  of upto 10 years and  fine of upto 300% of tax on concealment of income and assets overseas
15. Wealth Tax to be Abolished.
16. Corporate Tax Rate reduced to 25% from 30%, however exemptions and deductions allowed will be phased away slowly.
17. Service tax net increased from 12% to 14% and the negative list of Service tax payees to be trimmed further.
18. Under Direct Taxes- Income tax, no change in slabs, however surcharge of 2% on taxable income over 1 crore  to be charged.
19. Health deduction benefit to increase from Rs 15000- RS 25000 deduction under Section 80D for individuals. Very Senior Citizens to benefit upto Rs 60,000 deduction.
20. Under Section 80CCD - Pension scheme investment benefit allowed upto Rs 50,000  per annum over and above Rs 1,50,000 allowed under Sec 80C.
21. Salaried Class benefit- Transport Allowance deduction, increased from Rs 800 to RS 1600 per month

With the overall macro situation now benign and inflation coming under control, Jaitley realizes this was his best chance to lay the broad reform framework in place, and execute the various elements over time.
 However, what will be keenly watched is how the Budget initiatives play out in the days and months ahead and whether Jaitley’s gamble on growth actually pays off.
While the ultimate test for Jaitley will be in how the various Budget proposals are implemented, the finance minister does deserve full marks this time round for putting forward a Budget which aims to address multiple challenges. As a statement of intent, it gets full marks. And that is a pretty good beginning.

Thank you
Dilshad Billimoria

Dilzer Consultants Financial Planning Division attains ISO Certification: The how! November 2012

Dilzer Consultants Financial Planning Division attains ISO Certification: The how!
November 2012

On the last day of the Comprehensive Financial Plan workshop, Sadique laid out almost 77 marketing tips & strategies on how to improve our business, acquire clients and build better relationship with clients. One of the 77 struck me hard and I said, I need to get this done for my practice. It was getting an ISO certification for my firm "DIlzer Consultants".
So, I started googling and stumbled upon OSS certification company, which had a accredtion given by Australia and New Zealand! I asked for a brief on the company profile and background of the organization and the process needed for certification.
After the initial interaction, I was told to keep the following documents ready;
  • Registration Certificate and Organization route map.
  • Organisation chart and process flow chart.
  • Responsibility and authority of concerned departments.
  • Legal requirements as applicable.
  • Establishment and Incorporation certificate (we had almost misplaced the original!)

The fees was divided as stage 1 audit (basically to check if your firm can be audited) and stage 2 (which involves review and evaluation of management systems documents and would comprise of onsite audit. There would be two annual follow ups 12 and 24 months from the date of certification and renewal would be based on procedures and practices laid down and followed! Therefore, the ISO Certification would be valid for 3 years, subject to annual review every year for 2 years.
The date was fixed and I was very excited. (Apparently, the date we got the certification  26 July 2012 marked the 11th anniversary of commencing my financial advisory division of business. It was a pleasant and god given coincidence)
On the arrival of the auditor, we were asked for the above documents and to my surprise a host of other documents which we were not told of earlier and had to start gathering as, he asked for the same.
Luckily for us, we follow a very detailed process driven Action plan for our clients. Right from the Initial Welcome letter to ongoing service details, we have outlined the process and follow the same for every client. This ensures standardization of delivery and process, which is the basis of an ISO certified company.
The following additional documents were requested from the ISO person for the onsite audit.
  • List of client names
  • Process followed on initial client acquisition with the details of mails communicated and follow up.
  • Sample Financial Plan.
  • Sample Account statement.
  • Financial Plan construction process
  • Categories / Types of clients.
  • Services provided to our clients.
  • Service Execution process and delivery for AUM clients.
  • Services execution and delivery for NRI clients.
  • Financial Plan review and coverage and why review is so important.
  • Investment execution process
  • Newsletters
  • Asset Allocation
  • Feedbacks and Feedback Form
  • HR and in house development
  • Job Responsibilities and Duties
  • Staff questionnaire, performance review and monitoring the same.

This method has helped our organization streamline the requirements to meet client expectations and show them we follow a well defined process in their interest.

What is your Asset Allocation.

Are Arbitrage funds really useful.

How Three year FMPs Still score over FDs: Economic Times

How Three year FMPs Still score over FDs. Please read this from Economic Times here

Thank you

Goal Calculations.

You can calculate your goal amounts very basically here: Pl note these are not considered the final calculations, since there are other parameters that form part of the calculation,like evaluating existing resources etc, which vary from person to person


Dilshad Billimoria
Certfied Financial Planner

New Pension Scheme: Livemint

Check List for Home loan Buyers: Dilshad Billimoria.

Checklist for home loan buyers.

These are some of the questions a client must ask the bank before signing on the dotted line.

Checklist for Home loan buyers:

  1. What is the rate of interest for various tenures, which will help you decide which tenure is best suitable depending on your cash flows and interest outflow.
  2. What is the interest option: floating or fixed. If interest rate regime is low, and expected to reduce further, floating option is best. If interest rate regime is high, and expected to increase, then fixed rate option is best.(Pl check terms and conditions on fixed rates. Sometimes, even though interest option choosen by borrower is fixed, when interest rate  changes are announced by RBI, like, bank rate and CRR rate changes, banks have said to increase the fixed rate also. Sometimes there is a ladder rate applied, which is a combination of fixed and floating for specific periods. Best to check with your financial planner on the option with flexibilities to change the option, depending on the economic environment in which you are investing.
  3. What is the processing charge and can it be reduced.(Should not exceed 0.50%) Flat fee better.
  4. What is the documentation? Too much probing hassles?
  5. What are pre payment rules? Some banks have a charge if more than 25% of the home loan is pre paid in one year. This should not happen.
  6. What is the frequency at which interest rate is reset? Daily, fortnightly, monthly, annual rest. Daily reducing balance is best, based on EMIs paid.
  7. Is their a sweep-in account, which acts as a current bank account and also sweeps any balance from this account towards interest repayment as and when a balance is available.
  8. When EMI can be increased from current EMI by the borrower, is higher pre payment possible: If yes, what reduces? Interest/ principal/ tenure. Principal must reduce and therefore interest, which automatically reduces tenure.
  9. Is loan portability possible with other banks easily. If so, what are foreclosure charges with current bank. Is portability within the same bank at new interest rates possible, if so, find out what the charges are? Sometimes, cost involved in foreclosing loan from one bank and transferring to another bank is higher, than the balance amount to be paid. Hence a calculation is to be done by your financial planner before the switch is made.
  10. If pre EMI is an option(where only simple interest payment is made proportionate to level of construction) in under construction projects, one can switch to EMI option(where principal and interest payment is made) and claim tax exemptions in later years.
  11. Pre EMI interest ca be written off at 1/5 every year after possession of property us taken.
  12. Can an add-on loan be taken at the same terms for interiors at a later date?
  13. Are registration costs included in loan sanction?

Dilshad Billimroia
Founder and Certified Financial Planner

Dilzer Consultants (An ISO 9001 (2008) certified company.

Power of Subconscious Mind in Investor’s Risk Tolerance & Risk Taking Capacity: Dilshad Billimoria

Power of Subconscious Mind in Investor’s Risk Tolerance & Risk Taking Capacity

Risk tolerance is the amount of risk that an investor is comfortable taking, or the degree of uncertainty that an investor is able to handle. Risk tolerance often varies with age, income and financial goals. It can be determined by many methods, including questionnaires designed to reveal the level at which an investor can invest, but still be able to sleep at night.
Risk capacity, unlike tolerance, is the amount of risk that the investor "must" take in order to reach financial goals. The rate of return necessary to reach these goals can be estimated by examining time frames and income requirements. Then, rate of return information can be used to help the investor decide upon the types of investments to engage in and, the level of risk to take on. 
There are many questionnaires and software’s available in the market today to measure risk tolerance; but the human mind feasts on irrationality and sometimes, the logic of a well laid out set of questions, graphs, and plans falls in the flush.
After a Financial Planner has spent hours on a client and his family, listening, understanding, educating, probing and twisting questions on their financial needs, goals, risk, attitude towards money, how they have grown up with the values of money and its scarcity or abundance, all this becomes obsolete on the face of changing events, situations.
If you recognize and accept the Power of the Subconscious mind, believe that it is the law of life and belief, of your internalized truths, and when there is a blend between the conscious and the sub conscious mind, then the outcome is harmony in being. The harmony of acceptance and truth that prevails.
Mind you, the power of the sub conscious can be good or bad, but what is important, is that decision is “entirely yours”. The other advantage of the subconscious mind, is that it never takes decisions on the spur of the moment unlike the conscious mind. The feelings and thoughts are internalized and beliefs grown into your system before it overtakes the conscious mind. Therefore, the control, again, is “You”.
Some of the factors which I have encountered that have changed the perception of client’s ability to take on risk are:
1. Wants dominate needs
Very often, man, being the greedy mammal that he is, is led into temptation made available from various materialistic offerings available around us. Today, there is no dearth of eating the best food, choosing the best vacations, buying top end cars, living in the luxury of multiple condominiums, (like one can live in more than one home at a time!). In all this, logic does not prevail. It is the power of our subconscious overcoming the conscious that ultimately leads to the action of suddenly pulling out one’s investments or digressing from the risk level or goal planned for the future.
2) External factors beyond our control affect decision making
Do we have control, if Narendra Modi, becomes our next Prime Minister? Do we have control over the falling rupee? Do we have control on the gold imports in India, Do we have control if Portugal and Spain are facing economic slowdowns? None, of the above factors, you will agree, is in our control. What is in our control, however, is how we react to such situations. To educate, empower and communicate to clients, about the happenings of the market, the acceptance, that these events are not in our control and that they are presumably temporary. What needs to be communicated, is, what can be done to keep the portfolio in place and ensure the final goals laid out are met.
3. Circumstantial / Situational Conditioning
With nature and life changing eventslike a divorce, or a marriage, or a mid-life crisis, or a pregnancy, or menopause or a widowed situation, (luckily I have faced all with clients, friends and/or family), people become suddenly more cautious and react completely different from what they have agreed earlier, and signed on the dotted line for!  The hormonal imbalances during such situations drive such irrational behavior, and many people turn defensive, angry, lack self worth, sometimes, even denying what they have mutually agreed upon earlier in terms of their risk appetite, goals or plan and this leads to a change in the whole plan carefully created for them.

4. Daily distractions
Sometimes, it is the daily distractions of say a fight with someone that matters, or a dislike for someone, or lack of feeling of self worth, procrastination or plain boredom, that creates imbalances in our actions and makes our take hasty decisions against what we ourselves have agreed and planned for before.
5. Uncanny truth about retiring
Have you heard some investors telling you, they want to retire tomorrow or yesterday? Well, such clients are probably the one’s not certain about their financial well being and are more likely to take irrational decisions on wealth and health, while deciding on when to retire. Such clients are also prepared to take on any amount of risk to meet the short and impractical deadline. For such clients, risk tolerance is subconsciously very low, but consciously high and this leads to a mismatch between the known and the unknown in decision making process.
While some others who have created their nest egg, or are close to it, the likes of Bill Gates and Warren Buffet, really do not want to retire, or retire only at 80! Some others who depend on other sources of retirement corpus creation, like social security, pension, feel, that saving would suffice for their retiring years, inflation and tax adjusted! They fall weak on the third leg, which is personal savings for creation of corpus.
Some feel, it is not important to save for retirement, until it is imminent, which is far from the truth. The situation gets graver, if the individual is older and still lies in the comfort of not awakening to the reality of their nest egg. This is when generally panic strikes and risk tolerance is thrown out the window in creation of a pool of savings.
6. Emotional ability to handle financial loss
Sometimes, the high risk takers, are also the herd mentality people and want to follow the latest trend in meeting their goals. What happens in such “too good to be true situations” They never last! Along with the mayhem on seeing his portfolio slide, his emotional decision of taking on high risk is demoralized and he resorts to panic selling, without having a clear thought process to his decision making.
7. Changing time horizon of life goals
Haven’t you come across clients, who agree, in principle, that they need to buy a car or a house in 5 years,  and you have designed their risk and portfolio accordingly, but suddenly, they fancy a latest car of the road or a  real estate opportunity, too good to sound true and bam they knock on your door and all the analysis and work on portfolio selections, asset allocation, is stamped with one redemption, irrespective of losses made, exit loads lost, capital gains tax paid or most important at the cost of his other non negotiable financial goals.
Is this all correct? NO… But the human mind loves irrationality!

Dilshad Billimoria CFP
Founder and Chief Financial Planner
Dilzer Consultants (An ISO 9001(2008) Certified Company.

Tax planning and tax saving options FY2012_13

Dilshad Billimoria
Since the full amount invested upto Rs 1,00,000 is eligible for 100% tax deduction benefit. This investment is reduced from your Gross Income and therefore, can reduce your tax slab and therefore tax liability. The benefit is a deduction and not a rebate, so, in effect, the entire amount saved is tax deductible.

Snapshot of Tax rates specific to Mutual FundsThese rates are subject to enactment of the Finance Bill 2011. The rates are for the Financial Year 2012-13.
1.Income Tax RatesFor Individuals, Hindu Undivided Families, Association of Persons and Body of Individuals

For general tax payers

 Income tax slab (in Rs.)Tax 
 0 to 2,00,000  No tax
 2,00,001 to 5,00,000  10%
 5,00,001 to 10,00,000    20%
 Above 10,00,000   30%

For female tax payers

 Income tax slab (in Rs.) Tax
 0 to 2,00,000  No tax
 2,00,001 to 5,00,000  10%
 5,00,001 to 10,00,000 20%
 Above 10,00,000  30%

For senior citizens (Aged 60 years but less than 80 years

 Income tax slab (in Rs.)    Tax
 0 to 2,50,000  No tax
 2,50,001 to 5,00,000 10%
 5,00,001 to 10,00,000 20%
 Above 10,00,000    30%

For very senior citizens (Aged 80 and above)

 Income tax slab (in Rs.)Tax 
 0 to 5,00,000    No tax
 5,00,001 to 10,00,000     20%
 Above 10,00,000      30%

Note : Surcharge is nil and 3% cess will be charged on above tax.(a) In the case of a resident woman below the age of sixty years, the basic exemption limit is Rs 2,50,000

b) In the case of a resident individual of the age of sixty years or above but less than eighty years, the basic exemption limit is Rs 2,50,000

(c) In the case of a resident individual of the age of eighty years or above, the basic  exemption limit is Rs 500,000

(d) Surcharge is not applicable, education cess of 3% on income-tax is levied

(e) Marginal relief may be available

Capital Gains

 Particulars Short-term capital gains tax rates (a) Long-term capital gains tax rates (a)
Sale transactions of equity shares / unit of an equity oriented fund which attract STT 15% Nil
Sale transaction other than mentioned above:
Individuals (resident and non-residents)Progressive slab rates 20% with indexation; 10% without indexation(for units/ zero coupon bonds)
 Firms including LLP (resident and non-resident) 30% 20% with indexation; 10% without indexation(for units/ zero coupon bonds)
Resident Companies 30% 20% with indexation; 10% without indexation(for units/ zero coupon bonds)
 Overseas financial organizations specified in section 115AB 40% (corporate) 30% (non-corporate) 10%
 FIIs 30% 10%
 Other Foreign companies 40% 20% / 10%
 Local authority 30% 10% without indexation(for units/ zero coupon bonds) / 20% (for others)
 Co-operative societyProgressive slab rates 10% without indexation(for units/ zero coupon bonds) / 20% (for others)

(a) These rates will further increase by applicable surcharge & education cess.

Eligible Investments for deduction under Sec 80C>Public Provident fund PPF upto Rs 100000 p.a -It is recommended investments are made in this avenue, before the 3rd of any month, to ensure, compounding is available for the full month, since calculations are made for interest on the balance lying in the account within the 3rd day of any month for the full month. This option provides for safe and guaranteed returns and a small allocation of savings for tax must be made in this, especially for retirement benefits.
>Equity Linked Savings Scheme (ELSS) in mutual funds. This option provides for market linked returns with a 3 yr lock in period. This is a liquid option and provides for high return with a corresponding higher risk proposition.

>Post Office investments- These investments have lost their attractiveness since the returns have reduced and the same is taxable. The lock in periods in these schemes also are high.

>Principal component of Home loan. The principal component of EMI in the home loan is eligible for deduction upto Rs 100,000 under Sec 80C.

>Tuition fees for child education. This is allowed as an exemption upto a maximum of 2 children.

>Five year fixed deposit in a scheduled commercial bank.

>Other eligible investments under Sec 80C.

>Senior Citizen Savings Scheme 2004- This option has recently been introduced as a savings option . The interest is taxable.

>Employee Provident Fund (EPF) This is the employee contribution made to the provident fund of 12% of Basic and DA. The rate of interest is 8.60% p.a. Only the employees contribution is eligible for tax deduction benefit. Although the employer contributes a similar amount to the EPF fund.

>Voluntary Provident fund: This option is available to salaried individuals who can invest upto the balance  88%(100-12% EPF) of their salary towards VPF. With the new DTC coming in, the amount on withdrawal maybe subject to TDS.

>Life Insurance and ULIP plans-This is an option for persons who would like to save in insurance.

>Pension plans- This is a must for planning for the long term. The younger you are, the lower would be your outflow for a retirement plan. Also, since retirement planning is the longest plan to be planned for which considers pre and post retirement interest rate and inflation rate, this goal must be planned for everyone. Therefore, any contribution made to these plans, is eligible for tax deduction under Sec 80C upto Rs 100000.

>Please note for Salaried Individuals, additional tax benefit can be sought through the following components of the Salary Structure:

1.HRA Deduction.
2.Conveyance Deduction.
3.Medical Benefit Deduction.
4.Leave Travel Allowance Deduction.
Therefore, the above deductions, can help reduce taxable income of an individual to a large extent.
In addition to the above, it is important to plan for your goals, and structure your savings accordingly. A Certified Financial Planners in Bangalore can help you on the same.

For more details visit: www.dilzer.net

Teaching Money Skills to Children and Learning from them!

Sheroy does not have a specific plan for the Sheroy Corpus Fund. He has learnt the discipline not to waste or overspend from his family. “I want the security that come from having sufficient savings to continue,” he said. Just as he inculcated good habits from his family, he also learnt money lessons from their experiences. His grandparents did not buy a house early in their career and he now sees them dealing with the issues of renting a home. He sagely talks about maybe using the Sheroy Corpus Fund to buy a house early!

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Radio Ishq 104.8FM

What is the mindset of Millennial’s and their attitude to investments and savings.


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Can setting up a Trust suffice the necessity of Estate Planning

One of the most integral part of financial planning is Estate Planning.  It ensures that in the event of estate owner’s death, the survivors get access to his/her assets without any disputes and legal issues, in the proportion decided by the estate owner. Wills and Trusts are important vehicles for effective estate planning.

Will –

A will is a written document of the desired way of distribution of wealth among loved ones after one’s death. A few pointers about a will:

  • It can be made only by individuals and has no legal validity until one’s demise.
  • Will does not help manage individual’s assets when he/she is incapacitated, owing to old age, illness or injury.
  • Will can be modified or revoked during the life time of an individual any number of times.

Trust –

A trust is a three-party financial arrangement where one party (the author) gives a second party (the trustee) the ability to hold assets or property for a third party (the beneficiary). A few pointers about trust:

  • It has rights and obligations assigned to each of the parties.
  • Trusts can be created anytime and provides different structures.
  • It lives alongside an individual.
  • A trust can be formed for various purposes.

Difference between a Will and a Trust? 

Need for setting up trust in Estate Planning:


  1. a) Aids to avoid any disputes within or outside the family
  2. b) Helps to Avoid any transmission loss
  3. c) Provides protection to personal assets against avoid claims / litigation’s in the future
  4. d) Ensure smooth distribution of wealth as per the estate owner’s desires rather than any statutory disposition
  5. e) Helps to Safeguard interests of dependents
  6. f) Gives an opportunity to assign guardians for minors and incapacitated beneficiaries
  7. g) Aids Inheritance tax planning
  8. h) Aids Philanthropy.
  9. i) Helps to minimise the expenses of transferring property to the beneficiaries and enable them to get more benefit.
  10. j) Helps to plan for medical and physical incapacity and decides in advance who should take care of the estate owner and his/her minor children in such a situation.
  11. k) Helps protect estate from the heirs’ creditors or from beneficiaries who may not be adept at money management
  12. l) May allow assets to pass outside of probate and remain private, in addition to possibly reducing the amount lost to court fees and taxes in the process.


Who can form a Trust ? / Parties to a Trust

Any competent individual person over 18 years of age and mentally sound can create a trust for any legal purpose(s). A trust can be created by or on behalf of a minor with the permission of a principal civil court of original jurisdiction. Apart from an individual, a company, firm, society or association of persons is also capable of creating a trust.


What are the different types of trust?

Generally, there are two types of trusts in India, private trusts and public trusts. While private trusts are governed by the Indian Trusts Act, 1882, public trusts are divided into charitable and religious trusts.

A private trust is one in which beneficiaries may be definite and ascertained individuals and a public trust is one in which beneficiaries are unascertained individuals.

A Private Trust can be divided into two, i.e.:

(i) Revocable Trust: When the settlor establishes a trust and retains the right to amend, modify or revoke the trust at any time, however if the author is deceased before the expiry of tenure of the trust – the status of the trust automatically changes to irrevocable.
(ii) Irrevocable Trust: When the settlor establishes a trust and the settlor effectively gives up his control over the assets – the trust is irrevocable in nature.


Without a will who gets all the assets?

In absence of estate planning, if one dies intestate (in absence of will), assets are than distributed amongst the family members (legal heirs) as per succession laws of the religion that the person belongs to (the intestacy laws of the state where the person reside). Assets include any bank accounts, securities, real estate and other assets owned at the time of death. A few examples of succession laws applicable as per religion are Hindu Succession Act, Parsi Succession Act, Muslim Shariat Laws etc.

How living trusts avoid Probate?

When setting up a living trust, a person transfer assets from his/her name to the name of the trust, which is under his/her control — such as from “Mr Rajesh and Bina Sinha, husband and wife” to “Rajesh and Bina Sinha, trustees for Rajesh and Bina Sinha trust dated (month/day/year).”

Legally the estate owner no longer owns anything; everything now belongs to the trust. So, there is nothing for the courts to control when the owner dies or become incapacitated. The concept is simple, but this is what keeps the estate owner and the family out of the courts.

“Living Trusts,” are an effective estate-planning tool for avoiding the costs and hassles of probate, preserving privacy and preparing the estate for ease of transition after one dies.


Debalina Roy Chowdhury

Dilzer Consultants









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Householders Insurance Policy Analysis



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Research Desk- Education Cost funding for Graduation and Post Graduation- India and Overseas

From the Research Desk of Dilzer Consultants Pvt Ltd

All Course fees are approximate average fees per year unless specified.

The costs mentioned are taking into account the current costs in Metros like
– New Delhi, Mumbai,Chennai, Kolkota, Bangalore and Hyderabad.
In private institutions at Non-metros, the cost may decrease by 5-10%.

The costs were derived comparing various courses offered across Indian and Overseas.

Costs for Graduation- India.

Sl. No. Education Category Duration Govt / Public  Private Colleges  Exam fees and other Miscellaneous costs
        Min Max Min Max  
1 BBA/BBM Management 3 Rs. 50,000 Rs. 1,00,000 Rs. 75,000 Rs. 5,00,000 Rs. 10,000
2 Bachelor in Engineering Engineering 4 Rs. 1,00,000 Rs. 9,00,000 Rs. 1,00,000 Rs. 15,00,000 10,000-25,000
3 B. Science , B . Commerce ,B. Arts  [Full Time] Bachelor 3 Rs. 10,000 Rs. 8,00,000 Rs. 50,000 Rs. 10,00,000 10,000-25,000
4 Bachelors Hospitality and Travel Hospitality 3 Rs. 70,000 Rs. 4,00,000 Rs. 2,00,000 Rs. 7,00,000 10,000-30,000
6 Bachelor in Law Law 5 Rs. 20,000 Rs. 11,00,000 Rs. 50,000 Rs. 13,00,000 Rs. 20,000
8 Medicine – MBBS Health 6 Rs. 5,00,000 Rs. 90,00,000 Rs. 12,00,000 Rs. 1,50,00,000 50,000 – 1,00,000
9 BDS – Dental Sciences Health 4 Rs. 10,000 Rs. 1,00,000 Rs. 2,00,000 Rs. 40,00,000 50,000-1,50,000
10 Bachelors in Pharmacy Health 3 Rs. 40,000 Rs. 2,50,000 Rs. 1,50,000 Rs. 11,50,000 20,000-75,000
11 Bachelors in Physiotherapy Health 3 Rs. 40,000 Rs. 2,50,000 Rs. 1,50,000 Rs. 8,00,000 20,000-50,000
12 Graphics and Animation technology [Full Time] Design/Visual Arts 6 mts – 2 yrs Rs. 25,000 Rs. 1,00,000 Rs. 1,00,000 Rs. 3,00,000 50,000-75,000
13 Mass Communication , Media ,Journalism Communication 3 Rs. 20,000 Rs. 75,000 Rs. 40,000 Rs. 7,00,000 10,000-15,000
14 Marine Studies Engineering 4 Rs. 75,000 Rs. 12,00,000 Rs. 2,00,000 Rs. 15,00,000  
15 CA/ICWA Finance NA     Rs. 50,000 Rs. 4,00,000  
16 Fashion Design Arts 3 Rs. 35,000 Rs. 10,00,000 Rs. 5,00,000 Rs. 12,00,000  
17 Nursing Health 3 Rs. 25,000   Rs. 1,50,000 Rs. 7,50,000  
18 Teaching [full time] Science 1-2 yrs   Rs. 75,000 Rs. 20,000 Rs. 1,50,000  
19 Aviation (BBA) Science 3 NA NA Rs. 2,50,000 Rs. 8,00,000  
20 Humanities and Social Sciences (BA/ BSW) Science 3 Rs. 15,000 Rs. 60,000 Rs. 1,00,000 Rs. 4,00,000  

Costs for Post Graduation – India

Sl. No. Education Category Duration Government/Aided Private Colleges  Exam fees and other costs
1 MBA/PGDBA Management 2 50,000-22,00,000 1,00,000-25,00,000 20,000-1,00,000
3 Executive MBA Full time Management 1 5,00,000-27,00,000 60,000-36,00,000 20,000-1,00,000
4 Online MBA Management 1-2 yrs 20,000-3,00,000 15,000-5,00,000 20,000-1,00,000
5 M.E/M.Tech Engineering 2 25,000-6,00,000 35,000-9,00,000 10,000-30,000
6 M.Sc(CS/IT), MCA IT 2 30,000-4,00,000 2,00,000-3,00,000 15,000-30,000
7 M.D Health 3 NA NA NA

Costs for Under Graduation and Graduation Overseas

Sl No. Country Course Duration Avg Cost per year Living Cost Visa Fee
1 US Under Graduate(B Tech, etc)   Rs. 21,20,000 Rs. 8,00,000 11,000
1 US MS 2 Rs. 19,00,000 Rs. 8,00,000 11,000
1 US MBA 2 Rs. 22,00,000 Rs. 8,00,000 11,000
2 UK Under Graduate – BE / B Tech 3 15,35,000 Rs. 4,81,000 30,000
2 UK M.Sc 1.5-2 16,20,000 Rs. 4,81,000 30,000
2 UK MBA 2 17,50,000 Rs. 4,81,000 30,000
3 Australia Under Graduate 2.5-3 15,00,000 Rs. 6,00,000 30,000
3 Australia MS 1.5-2 18,50,000 Rs. 6,00,000 30,000
3 Australia MBA 1.5-2 17,50,000 Rs. 6,00,000 30,000
4 Singapore MBA 2-2.5 22,00,000 Rs. 2,90,000 2000
4 Singapore Under Graduate 2.5-3 13,00,000 Rs. 2,90,000 2000
4 Singapore MS 1.5-2 18,00,000 Rs. 2,90,000 2000
5 Canada MBA 1.5-2 14,50,000 Rs. 5,00,000 8500
5 Canada Under Graduate 2.5-3 12,50,000 Rs. 5,00,000 8500
5 Canada MS 1.5-2 6,50,000 Rs. 5,00,000 8500
6 Germany MBA 1.5-2 13,50,000 Rs. 3,50,000 6000
6 Germany Under Graduate 2.5-3 2,50,000 Rs. 3,50,000 6000
6 Germany MS 1.5-2 2,50,000 Rs. 3,50,000 6,000
7 France MBA 2 20,00,000 Rs. 3,50,000 13,000
7 France MS  2 12,00,000 Rs. 3,50,000 13,000
7 France Under Graduate 3 3,50,000 Rs. 3,50,000 13,000
8 Sweden MS 2 12,00,000 Rs. 2,50,000 8500
8 Sweden Under Graduate 3 10,00,000 Rs. 2,50,000 8500



Sneha Ramamurthy



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Importance of making a Will

Do you want to leave your wealth and let your loved one’s fight with each other to get their shares?

We guess not! If you nominated someone in all the financial products you bought and thought that it will be passed to them legally without any issues, you are having a misconception. You need to create a Will to distribute your wealth in the manner you want to.

What is a Will?

A Will can be made by anyone above 21 years of age in India. You can make the Will on plain paper in India. It’s not legally necessary to make the Will on stamp paper. It is advisable to write your Will in your own hand writing, as the same can be verified later in case of any doubts raised by relatives.

It might happen that according to your family structure and your preferences, you want to divide your wealth unequally or make a provision for a close friend or a faithful servant. This isn’t possible if you die without a Will.

A lot of us feel that talking about “Making a Will” is pretty morbid, and hence, we don’t look at it with right attitude.

Why you should make a Will?

We usually ignore estate planning and do not add it to our priority to-do list. We also fail to understand that life is packaged with risks, which can catch us unawares. Changing time and technology have facilitated wealth creation and there has been an interesting shift from inheritors to entrepreneurs and professionals in the past two decades, which has implications on planned succession. This implies the importance of a Will. The following are the 10 reasons why every person should have a will of their own.

  • The most important thing about a Will is that it leaves comprehensible and explicit instructions about the deceased’s property and estate.
  • If a person dies intestate then laws of inheritance and succession apply. Such laws are extremely complicated and difficult to interpret. They are vague like any other personal laws and people interpret it according to their own interests. This results in a lot of family feuds with respect to the deceased’s property. To add to it all, these laws vary among people of different religion.
  • A Will specifies the inheritor of each share of the property and lessens the scope of any confusion that might arise in future. It therefore helps in mitigating family disputes.
  • A Will lets one choose those people whom one would like to inherit their property after their death. In case one dies intestate, the property devolves by intestate succession under the Hindu Succession Act and those people whom one might not like may also inherit the property.
  • A person making a Will creates a safety garb for his minor children. He can appoint a guardian of his choice and also make any financial arrangements for them.
  • A Will can be instrumental in protecting one’s business. One can pass on their company and power of attorney to one’s preferred heirs thereby reducing friction in business ventures.
  • In case of remarriage, a Will helps one to ensure that the children from the first marriage are not left out from inheritance in any manner.
  • Wills may not only specify the inheritance in favour of friends and family members but may also include a charity or any other organisation.
  • The best thing about a Will is that it is not an irrevocable instrument. A Will can be revoked during the lifetime of the testator. A Will can also be modified. If circumstances change and the testator become dissatisfied with the behaviour of any of his relatives, he can exclude his name from his Will.
  • Another advantage of Will is that one can make one’s own Will. There is no legal requirement to get a Will made by a lawyer. Thus the pain of visiting the lawyer everyday can be done away with.

How do you make a Will in India?

Step 1: Declaration in the beginning:

In the first paragraph, you have to declare that you are making this Will in your full senses and free from any kind of pressure. You have to mention your name, address, age, etc at the time of writing the Will so that it confirms that you really are, in your senses

Step 2: Details of Property and Documents:

The next step is to provide list of items and their current values, like house, land, bank fixed deposits, postal investments, mutual funds, share certificates owned by you. You must also indicate, where all these documents are stored by you. In all probability, these are in your bank safe deposit box.

Even the Will should be stored in there! Make sure, you take the details from the bank manager, about the procedure and rules of releasing your will from the safe deposit after your death. Make sure you communicate it to the executor of the Will or your family members.

Step 3: Details of ownership:

At the end of the Will, you should mention who should own your assets items and in what proportion, after you have gone.  If you are giving your assets to a minor, make sure you appoint a custodian of your assets till the individual you have selected, reaches an adult age. This custodian obviously, has to be a trustworthy person.

Step 4: Signing the Will:

At the end, once you complete writing your Will, you must sign the Will very carefully in presence of at least two independent witnesses, who have to sign after your signature, certifying that you have signed the Will in their presence. The date and place, also must be indicated clearly at the bottom of the will.

Make sure you and the witnesses sign all the pages of the Will. One important point while choosing witness, is that they should be your friends, neighbours, or your colleagues and not the direct beneficiaries in the Will. They only certify, that you yourself have signed the Will in their presence and are not a party in making the Will in India.

The envelope has to be sealed after completing all the formalities and the seal must bear your signature and the date of sealing. The witnesses need not sign on the seal of the envelope.

Advisable points while making a Will

If possible, have the two witnesses be a doctor and a lawyer. A doctor signing a Will, won’t raise any question of you, being of unsound mind. The lawyer, will vet the Will and make sure you don’t make silly mistakes at the time of writing and signing it.

The attesting witness and his or her spouse should not be a beneficiary under the terms of your Will. This might create vested interests and sometimes make your Will invalid. Also, make sure the witnesses are younger than you and not very old as your will might be in effect for several years! And you want them to be present in this world

Write your Will on good quality thick white paper so it doesn’t get spoiled over a period of time. It should be stored in a plastic envelope in full size, without folds.

Note that you should keep just one more copy of will and stored separately from the original will. The Will must be stored very safely in your bank, in safe deposit box. You must also inform your next of kin, as to where you have stored your will. Do not make many copies of your Will.

In case of Hindus, it should be clearly stated if the property is inherited or not, because it makes a huge difference, as no ancestral property can be assigned to any person through a Will. All rights on inherited property are acquired by birth. So if you inherited a property from your Father, you cannot say in a Will, that you want to assign it to person X only! It will go to all your legal heirs as it is “Inherited”

A Will must always be dated and if more than one Will is made, the one with the latest date will nullify all the previous ones. In fact, there should be a statement in your Will, nullifying all other previous Wills. The pages should be numbered to avoid fraud.

The value of assets often fluctuates, so it is better to mention how much each beneficiary will receive, in percentage terms rather than absolute numbers. Unless it is pure cash.


A will is so important that it should be the first step taken towards financial matters. It should be clearly written so that the intention of the testator is brought out unequivocally. One should not shy away from writing a will in fear of complisancy. Also, timely modifications to the Will are necessary whenever you have purchased or sold a property, if there is any new inclusion of family members (spouse or children) and so on.



Dilzer Consultants Pvt Ltd



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Comparison between Stock Market Real estate and Other Investment products


In today’s world of soaring prices and rising inflation, some find it hard to make ends meet while some others struggle to maintain a good lifestyle with their limited source of income. This has made people keen to look for other alternative sources of earnings. While investment seems a lucrative option for an extra income, most people remain clueless about the various options available. Every investor has his or her own appetite for risk and any rash and untimely decision can prove to be costly. We need to choose from several asset classes having varying degrees of volatility and risk-return potential.

But again, looking at too many available options on the market, it is really a tough job to choose the best among them. Though most of the people tend to earn money out of different investment avenues, each of these has its own pros and cons which one must analyse before venturing into it. While at times, due to negligence, people tend to lose their money or end up with meagre returns.

Thus, simply investing does not help, rather, a thorough research and analysis before making the investment is a must for getting good yields. Therefore, one has to weigh the pros and cons before zeroing in on the asset class to invest in. We have multiple options in terms of investing such as Stocks, Mutual funds, Real Estate, Gold etc.


There are different types of investment products available in the market. But, most of the investors want to make investments in such a way that they get sky-high returns as fast as possible without the risk of losing the principal amount. And this is the reason why many investors are always on the lookout for top investment plans where they can double their money in few months or years with little or no risk.

However, it is a fact that investment products that give high returns with low risk do not exist. In reality, risk and returns are inversely related, i.e., higher the returns, higher is the risk, and vice versa. So, let’s look at the most commonly used arenas of investment available in the market.

Stock Market Investing

When you buy shares of stock of a company, you are buying a piece of the company, thus becoming one of the owner of the company. This type of investment is also called as owner’s equity, where you share a little part of ownership of that company. When the company makes profits and increases its market capitalisation, the value of your share increases. Whenever the company make excess profit, then that will be shared among the shareholder as dividends. So, when the share value increases you can sell your shares for a higher price and make profit out of it, vice-versa is in the case of loss. There are possibilities that you may even lose the capital as you are the owner of the company.

Mutual Fund investing

A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities and share the profit arising from it. In other words, a mutual fund is a mixture of different securities which is pooled together by professional fund managers so as to reduce the investor’s risk while giving higher return than the market it operates. There are three type of mutual fund Equity funds, Debt funds and Hybrid funds depending on the type of securities used for investment.

Real Estate Investing

When you are investing in real estate, you are typically buying physical land or property. You are becoming the part or sole owner of that property. With the increase of market demand and other factors, if the price of the property increases, then you can sell the property and make profit out of the investment. The real estate investment also gives interim returns in the form of rent or lease of the property.  The Real Estate Investment Trust (REIT) also comes under this investment.

Gold Investment

This is one of the oldest and the most commonly used investment option in India. In this type, people buy gold ornaments or coins/bars and sell them in a future period. The investors use the price fluctuations of gold in the market to make the profits out of this investment. Recent reforms have given rise to a different ways of investing in gold than the conventional method of holding it in physical form. This comprises of Gold ETF and Sovereign Bonds which are more transparent and fetch high returns as there will not be any loss at the sale of this investment.

Bank deposits

The process of depositing your savings in the bank for a fixed period of time, so that the investment will give a return as interest is commonly known as Bank deposits. The period is pre-determined at the time of investment and the interest rate will depend on the time of investment. In this type of investment, the bank takes the liability of paying out the Fixed Deposit on the date of maturity or as per the investor requested.

Comparison of investments

Each of these investments is different to one another and has its own pros and cons. So, there are different factors that have to be considered before selecting and investment option. Following are the top five factors that the investors will analyse frequently before selecting an investment option.

Return on investment (ROI)

ROI measures the profit made on an investment as a fraction of the cost of investment. Before making any investment, it is extremely critical for an individual to look at the ROI on that investment. Different indices in stock market allow us to scientifically measure the rate of the return of stocks and mutual funds. In the case of gold and other investments, there are certain past performance data which will help us to evaluate the returns, for e.g. the Gold Index in case of gold and past interest rates in case of Bank fixed deposits.

 But, when it comes to real estate, the job is a lot harder. Specific cases in certain locations have generated far higher returns that others across land, residential, retail and commercial spaces across the country. At the outset, it must be mentioned that ROI calculation for real estate investment has more variables than stocks hence, not as straightforward. With real estate, a number of variables including repair/maintenance expenses, and methods of figuring leverage, the amount of money borrowed (with interest) to make the initial investment comes into play, which can affect ROI numbers.

Investment cost

For any option, there is a cost involved in making the initial investment which has to be factored and deducted from the return. The Bank Fixed deposit is the most affordable investment with literally no cost of investment. In the case of direct equity investment, it bares the costs of brokerage which tends to be around 0.5% of the transaction value. In an equity mutual fund, it’s the fund management fees which can be a maximum of 2.5%. In the case of Gold, there will be making charges which will vary from 2.5% to 15% depending up on the make. But, in the case of real estate, you need to factor in stamp duty, registration, society charges & maintenance & brokerage. These costs vary from state to state and from transaction to transaction.  

Diversification of Portfolio

The diversification of the portfolio help us to reduce the market risk by putting the investments in different industries. This is very much possible with the investments in Stocks and Mutual funds by investment in different types of securities. But in the case of real estate, gold and other investment the possibility of diversification is not there, as the total investment goes to a particular investment.


Liquidity means the time taken for an investment to be converted to liquid cash. Gold is the most liquid asset which can be converted into cash instantly. The next is Fixed Deposit.  Stocks are less liquid that the previous two investments, but it is much more liquid than real estate which means that you have easier access to your funds. You can exit your equity investments online instantly and have access to the funds in two days after the transaction. Exiting a property investment could take upwards of 6 months. Besides this, if you have Rs.1 lakh invested in equity, you could, if necessary, liquidate Rs 30,000 at a time, while the rest continues to remain active. It is an option unavailable to real estate.


All equity investments held for over a year in India are tax free till a gain of Rs.1,00,000 on that financial year, more that this will attract a tax of 10% whereas less than one year investment attract an 15% tax and there are no restrictions on reinvestment. Real estate investments attract short-term capital gains tax as per the income slab if held for less than 3 years and long-term capital gains tax of 20% with indexation if held for longer than 3 years. The only way to avoid this tax is to reinvest the money in residential property or in specific bonds.


There are other factors like Stability, Control, Involvement, Tangibility, Initial investment etc.  Which have to be checked before selecting an investment option. While all the asset classes have their own merits and demerits, selecting the right investment should depending up on your risk appetite then only the investor can make the maximum risk adjusted return in  long term.



Dilzer Consultants Pvt Ltd











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Is Real Estate a good investment for realizing your financial goals?

Raman, a 40 year old software professional wants to build a retirement corpus and build funds for his only daughter’s education and marriage. For this purpose, he has invested in some fixed deposits and post office schemes and also wants to buy a second property worth Rs 60 lakhs as an investment. He wants to use his accumulated savings for the down payment of the second house. Based on his income and expenditure patterns, he could easily get a loan of Rs 48 lakhs from any financial institution.

Raman will retire in 20 years and opts for a 15-year loan on the new property. But once he pays off the down payment Rs 12 lakhs and starts paying the EMI he is left with no investable surplus.

He decides the last five years prior to retirement will be sufficient time enough for him to generate retirement savings. He also assumes the property will grow in value by the time he retires and, the rental income would be sufficient to take care of household expenses post-retirement.

Disadvantages of Raman’s existing financial plan

  • His asset allocation is heavily dependent on real estate and because of that his asset allocation is less diverse.
  • The potential appreciation of the property’s value as per his estimation is based on his past experience and not dependant on facts or figures of the real estate market .
  • Real estate assets can be illiquid and unless one is able to sell-off assets, it will not fetch much returns, when needed .
  • Unless the property was bought much below the current market value, rent yields hardly match the interest earned on the savings bank account.
  • He has ignored the maintenance and depreciation factors of the property.
  • While rent may support his existing budget, he did not factor in the impact of inflation on his subsequent monthly budgets.
  • Investment in real estate is not risk-free.

Actions to be taken to correct the situation

  1. He should focus on a personalised asset allocation plan as per his risk appetite and diversify his portfolio across various asset classes such as fixed income, equity, gold etc. His primary home, where he lives must not be considered for this purpose.
  2. He should reconsider buying a second house availing a home loan.
  3. He lacks a corresponding exposure to equities and has not invested in growth assets to meet long-term goals.
  4. Though his financial goals are focussed enough he should plan for both short-term and long-term goals.
  5. He is also advised to review it and rebalance his portfolio periodically, preferably every year.


Pitfalls of linking financial goals with real estate assets


In recent years there have been many instances of investors having increasing allocations to real estate as an asset class. It is important to understand how this over exposure might have pitfalls for them. The drawbacks are stated below:

Illiquid Nature – Considering liquidity as an important parameter in investment decisions, the fact that real estate investments are high value and big ticket in fact leads to illiquid assets. This actually means not being able to use funds even though the investor may have a high net worth, mainly due to illiquid nature of this asset class. Thus, it would be difficult to sell property immediately when there is a need for cash for a financial goal. Moreover, regulatory and transparency issues in the sector also pose risks to liquidity and jeopardise the investment .

Too much affinity towards physical assets Indian Investors have a bigger emotional connect with physical assets such as real estate and gold as compared to financial assets. However there are two kinds of corrections that assets can undergo – price correction and time correction. The real estate markets are at present experiencing a time correction, where values have remained same over a long period of time, giving investors an impression that the valuations of their holdings are intact. This comes in the way of investors making rationale decisions to exit investments in real estate.

High absolute values Many a time we hear stories as to how property bought a couple or more years back has grown and multiplied to worth crores of rupees. If one calculates the growth rate for this investment made in terms of today, the rate of return would be in the range of 10-12% per year. Assuming a long term horizon say 30 years in the Indian stock markets, one could have got much better results.

Easy availability of leverage  With the lowering of interest rates and attractive financing schemes, Indian investors are finding it easier to fund real estate purchases. As buyers usually have to put down only 20% of the cost, the balance 80% being funded by lenders, property purchase has become easier for investors. 

However, investors need to be aware that since this is an unregulated market currently, they should not fall for any false promises and /or funding schemes which they do not understand. This may lead investors to get into a negative cash flow situation especially if the EMIs that they have committed to are high. As under construction projects may not be completed in time, there may not be any rental inflows and hence the burden of EMIs may not be comfortable for investors.

Too much real estate investments just because of taxation impact – The tax rules currently make it mandatory that the capital gains made from sale of property to be reinvested in real estate and/or capital gain bonds. To avoid taxation, gains from sale of property thus flow back into buying more of this illiquid asset class , thereby creating an overexposure of investor portfolios into this asset class. The other option of capital gains bonds offers a 6% rate of return which is less attractive to investors, thus making them go back to real estate, yet again.

Real estate purchase does not allow portfolio re balancing – Real estate purchase does not allow portfolio re balancing to happen from one asset class to another. For investors that are planning re balancing from real estate to debt or equity may find that they may be in a fix after exiting from real estate as they either need to go back to real estate or to debt in the form of capital gain bonds.


Debalina Roy Chowdhury

Dilzer Consultants






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NRIs Buying Real Estate In India

If you are a non-resident Indian (NRI) planning to buy a property in India, time could not have been better for you to do so. While India’s real estate sector has seen a price correction in the recent past, buying property in Indian has also become more lucrative with favourable currency rates.

 India has emerged as a lucrative spot for international capital. Overseas investments have surged 137 per cent, from USD 3.2 billion during 2011-13 to USD 7.6 billion during 2014-16. According to a survey, almost 30 per cent of the total global real estate transactions in India, will be cross-border.

NRIs have a variety of investment options in India. But real estate still remains to be one of their favourite options, not just because of high returns but also because of nostalgic attachment and the dream to come back to a safe and world-class retired life in their homeland.

In addition, many NRIs are also interested in several Indian metros considering high growth prospective of the real estate segment in the country having attractive options including apartments, villas, plots and pent houses with world-class facilities.

As per RBI an NRI is “ A ‘Non­ Resident Indian’ (NRI) is a person resident outside India who is a citizen of India.”

And POI  is – A ‘Person of Indian Origin (PIO)’ is a person resident outside India who is a citizen of any country other than Bangladesh or Pakistan or such other country as may be specified by the Central Government, A PIO will include an ‘Overseas Citizen of India’ cardholder.

What can be bought :

Though RBI has given general permission to the NRIs to purchase immovable properties in India, the permission does not grant power to acquire any and every property in India. The NRIs are allowed to purchase only residential or commercial property. So NRIs cannot purchase any agricultural land or plantation property. Since it is fashionable to own a farmhouse, be clear that under the existing dispensations, NRIs cannot purchase a farmhouse in India.

This way as long as the investment being made by NRIs in India is either in residential property or commercial property, they are not even required to intimate RBI about such purchases, even post conclusion of the transaction. Moreover there is no restriction as to the number of residential or commercial property an NRI can acquire.

How to fund it:

 The payment can’t be made in foreign currency. NRIs can make the purchase using Indian currency, the Rupee, through funds received in the country by means of normal banking channels. These funds have to be maintained in a non-resident account under the foreign Exchange management Act (FEMA) and the Reserve Bank of India (RBI) regulations. 

The payment for purchase of permitted property by an NRI can be made by way of remittance through banking channels from abroad or from money lying in their NRE/NRO or FCNR account. NRIs are even allowed to finance the purchase with home loan in Indian Rupees. The home loan can be granted by the Indian employer of the NRI employee for the purpose of financing of the property.

As far as payments of EMI for the home loan taken in Indian Currency in India is concerned, the same can be done either by direct remittance from abroad or from the money lying to the credit in NRE/NRO/FCNR account of the NRI.  In addition to the above sources, the home loan can even be serviced out of the rents received from such property or money transferred to borrowers account from the account of relatives of such borrower.

In case the NRI is buying the property for the purpose of his own residence, the NRI can even take loan against deposits lying in their FCNR or NRE account upto an amount of Rs. 100 lacs for the purpose of servicing the home loan.

Legal Ownership

  1. The property to be purchased by an NRI can either be purchased in single name or jointly with any other NRI. It may be noted that that a resident Indian or a person who is otherwise not allowed to invest in the property in India cannot even be made a joint owner in such property though the second named person might not even be contributing any money towards the property
  2. A person who owns a property when he becomes an NRI can continue to hold the property in his name. It is interesting to note here that such resident Indian becoming an NRI is even allowed to continue to own agricultural land, plantation property or farm house which he is otherwise not allowed to purchase after becoming NRI
  3. An NRI is even allowed to get the money sent back outside India after appropriate taxes have been paid in India from rent so received.
  4. As they live outside, NRIs have an option to give PoA to their friends or relatives to complete the property purchase process in India. The PoA can be general or specific about the rights your representative can exercise.
  5. Documents required at the time of registration:
    1. Pan card (Permanent account number) if any
    2. OCI/PIO card (Overseas Citizenship of India/ Persons of Indian Origin)
    3. Passport
    4. Passport size photographs
    5. Address proof
    6. Registered power of attorney (if you are not physically present at the register office)
    7. Title Deed (in the name of the seller)
    8. Prior Title Deeds (of last 15 years)
    9. Latest Tax Receipts (land and building if any)
    10. Updated Encumbrance Certificate (covering last 15 years)
    11. Approved Plan
    12. Building permit / Notice Of Commencement (from corporation, municipality or panchayat, if you are purchasing a house / apartment

Taxation woes?

Not really !

When an NRI sells a property in India, TDS (tax deducted at source) calculation is done at the rate of 20.6 per cent on long-term capital gains and 30.9 per cent on short-term capital gains. However, the final taxation rate is similar for NRIs and resident Indians. If an NRI has a lower tax slab applicable to him, he can apply for a refund of the TDS by filing their income tax return.

Repatriation of funds back to the foreign country

There are certain guidelines for repatriation of funds. An NRI or Person of Indian origin (PIO) may repatriate the proceeds from the sale of immovable property in India on the conditions mentioned below:

  1. The property must have been purchased in accordance with the FEMA directives, applicable at the time of purchase. 
  2. The amount repatriated cannot exceed the original amount paid for the property, if the property was acquired in foreign exchange remitted through normal banking channels or out of funds held in an FCNR (B) account.
  3. However, in the following circumstances, the NRI/PIO may repatriate a maximum of $ 1 million per financial year:
  4. Out of the balance held in the NRO account, if the property was purchased out of rupee source of funds. 
  5. If the property was acquired by way of gift, sale proceeds must be credited to an NRO account and may be repatriated thereafter. 
  6. If the property was inherited from a resident Indian, funds may be repatriated on producing a documentary evidence proving inheritance, an undertaking by the NRI/PIO, and a certificate of an authorised chartered accountant in the formats prescribed by the Central Board of Direct Taxes (CBDT).
  7. In the case of a residential property, repatriation of sale proceeds is restricted to less than or equal to two properties.
  8. A foreign national may repatriate sale proceeds even if the property was inherited from a person outside India. However, prior approval of the RBI must be obtained. 

A citizen of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan and Iran must seek specific approval from the RBI for repatriation of sale proceeds.

Apart from the above-mentioned points, an NRI is given the same treatment as applicable to any other Indian resident.

Some general tips –

NRI investors should avoid projects by unknown developers. Numerous buyers have fallen into difficulty, by putting their funds in projects that lacked mandatory clearances and fell short of even the minimum standards of quality.

Plan your  visit to India and evaluate projects, opt only for reputed developers. In all cases, NRIs should strictly verify points, such as the track record and brand visibility of the developer, the social and civic infrastructure available in the location, the amenities in the project and the timelines for possession, in the case of under-construction projects.

A project that is targeted towards NRIs, is no different from other offerings in the market. A property should be evaluated, purely on the basis of its location and amenities on offer, the legal validity of its title and the developer’s brand image.

 Besides exercising necessary due diligence, NRIs also need to adhere to certain specific laws and regulations, while buying, selling, or renting out real estate in India


Sneha Ramamurthy

Dilzer Consultants Pvt Ltd.


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Types of tax benefits available for home loan purchase

A home is a ‘once-in-a-lifetime’ investment for many of us. It is natural that we want to make it as big and better as practically possible. But the shooting cost of property nowadays makes it difficult to acquire your desired property. No doubt, having the possibility of availing a home loan has improved affordability. It is difficult to buy a dream house entirely with our savings.  Availing a home loan not only increases our affordability but also give us a huge savings in our tax liability too.  The home loan is one of the most efficient tax saving instrument, which not only helps us to acquire an asset, but also gives the tax benefit on the principal as well as the interest amount we re-pay to the loan. There is no other loan like home loan which gives this much of tax befit to an individual, especially to the salaried class.

So, let’s look at what are the tax benefits an individual can enjoy by availing the home loan.

Tax Benefit on home loan

Our government has always shown a great inclination to encourage citizens to invest in house. Many schemes like Pradhan Mantri Awas Yojana are flashing green light on the Indian housing sector by striving to bring down the issues of affordability and accessibility. And when you buy a house on a home loan, it comes with multiple tax benefits too that significantly reduce your tax outgo since home loan is eligible for tax deduction under different sections of Income Tax Act (IT ACT). The tax benefit from a home loan can be availed in two ways:

  • Tax benefit on the registration fee and principal repayment
  • Tax benefit on the interest paid

Tax benefit on registration and principal repayment. Under Sec (U/S) 80C

On the registration of the property: – Whenever you buy a property, it has to be registered in your name to transfer the rights of the property from the builder/seller to you. For registering a property in India, you have to pay a certain percentage of the value of the property to the government as the stamp duty and certain expenses in respect of the registration. Stamp duty & registration charges and other expenses which are directly related to the transfer are allowed as a deduction under Section 80C. The maximum deduction amount allowed under this section is capped at Rs.1,50,000. This deduction can only be claimed in the year the actual payment is made towards these expenses. If you buy the property on 15th Dec 2017, then you can claim this deduction U/S 80c only in the FY 2017-18.

The principal Repayment:-  As a home loan buyer, Sec 80C can bring you relief as you are required to pay hefty Equated Monthly Instalments (EMI). The EMI paid by you every month has two components – principal and interest. The principal portion of the EMI paid for the year can be claimed as a deduction from gross total income under section 80C before calculating the net taxable income. The maximum amount that can be claimed is up to Rs 1.5 lakh. One can get a loan certificate from the lending bank’s branch or go online. The certificate will show how much of the total EMI paid in a year was repayment of the principal amount borrowed.

But Sec 80C (5) also states that in case the assesse transfers the house property, on which he has claimed tax deduction under Section 80C, before the expiry of 5 years from the end of the Financial Year in which the possession has been obtained by him, then no deduction and tax benefit on Home Loan shall be allowed under Section 80C.

Tax benefit on interest paid U/S 24 of IT Act

The interest payment towards the home loan usually arises in two situations

Pre-construction:- When you pay the interest only on the home loan when the property is under construction.

Post-construction:- When you pay the interest along with the regular EMI after the completion of the property.

Pre-construction (Under construction):- This is the time when your property is under construction and you pay only the interest for the portion of loan you have availed. This is otherwise called as Moratorium period in the loan terms.  The interest paid during this period cannot be claimed for tax deduction on that Financial Year (FY). But, your eligibility to claim interest on the home loan as a deduction begins only upon completion of construction or immediately if you buy a fully constructed property. The income tax law provides deduction for such interest in five equal instalments starting from the year in which the property is acquired or construction is completed. The maximum eligibility remains capped at Rs.2 lakh per FY.

Post-construction: The income tax act provides tax deduction on the interest portion of your EMI which you pay towards your home loan. The interest portion of the EMI paid for the year can be claimed as a deduction from your total income up to a maximum of Rs.2 lakh under Section 24. For Assessment Year 2018-19, maximum deduction for interest paid on Self Occupied house property is Rs.2 Lakh. In case of a let out property, there is no upper limit for claiming interest. For claiming this benefit, the loan must be taken for the purchase/construction of a house and the construction of the house must be completed within 5 years from the end of financial year in which loan was taken. You can claim this deduction for interest repayment on loans taken from anyone provided the purpose of the loan is purchase or construction of a property. You can also claim deduction for money borrowed from individuals for reconstruction and repairs of property. It does not have to be from a bank. “For tax purposes, the loan is not relevant, the usage is”. This Deduction can be claimed from the year in which construction of the house is completed.

Other Deductions

Further deduction on Home loan interest on Sec 80EE

The Section 8EE of the income tax provides the first time home buyers a further deduction of Rs.50000 in a FY over and above Sec 24 towards the interest payment on home loan EMI. The section also says that the deduction will be available only if the individual met the following conditions.

  • This is the 1st house you have purchased
  • Value of this house is Rs 50 lakhs or less
  • Loan taken for this house is Rs 35 lakhs or less
  • Loan has been sanctioned by a Financial Institution or a Housing Finance Company
  • Loan has been sanctioned between 01.04.2016 to 31.03.2017
  • As on the date of sanction of loan no other house is owned by you

Tax deduction on the home loan processing fee

As per the income tax law, the processing charges paid for the home loan are considered as interest and therefore deduction on the same can be claimed. “Under the Income Tax Act, Section 2(28a) defines the term interest as ‘interest payable in any manner in respect of any money borrowed or debt incurred (including a deposit, claim or other similar right or obligation)’. This includes any service fee or other charge in respect of the loan amount. 

All deduction at a glance

Tax benefit on Home loan for joint owners

If you have purchased the property jointly, the co-owners can claim these expenses in their respective income tax returns based on their share in the property. Each of the loan holders can claim a deduction for home loan interest up to Rs.2 lakh each under sec24 and principal repayment under sec 80C up to Rs 1.5 lakh each in their individual tax returns. To claim this deduction, they should also be co-owners of the property taken on loan. So, loan taken jointly with your family can help you claim larger tax benefit.

For Eg:-Mr. Sharan Shetty have taken a home loan of Rs. 35,70,000 along with his wife Gauri. When they generate the home loan statement for the FY2017-18, the total principal payment towards home loan amounted Rs.71051 and the interest amounted Rs.300724. For this financial year along with above they have a pre-construction interest of Rs. 55565 also. The property is owned jointly with 50% ownership each.

The following are the deductions available while computing the income tax.

The total deduction availed by both of them jointly is Rs. 427340. In the same case if Sharan was the only owner then the maximum deduction they can avail will be limited to Rs. 271051. So, it will be better if you can avail the home loan jointly and if the co-owner is a women you will get interest reduction also.


Once the loan is fully paid and the borrower gets the complete ownership, it becomes an asset that can help to guard from future troubles. So, now a days investors started seeing home loan not only as a loan but also as a great tool to create asset and save tax on his hard earned money.





Tax Benefit on Home Loan: Section 24, 80EE & 80C















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