FLAME Newsletter - March 19, 2014


“In our country, rich wants everything free and it is the poor who pays for it. Poor borrows at 40% but a rich borrows at 2%" — Dr KC Chakrabarty, RBI Deputy Governor


Tax provisions for investment in mutual funds

Debt MFs have a differential tax treatment compared to equity. While dividends are tax free for equity schemes, they are taxed in debt funds through DDT (dividend distribution tax). Similarly, there is no tax on long term capital gains in equity while same is taxed in debt MFs.

Our investment decisions are guided not only by the benefits which a particular financial product offers, but also by the current tax provisions that the instrument is subject to. Like any other financial product, there are tax implications of investing in mutual fund schemes too. Various types of mutual fund schemes are subject to different tax provisions. The tenure of investment is also an important factor when deciding upon one’s tax liability. Therefore, we must have a proper understanding of the relevant tax provisions, to help us plan our investments in a better manner... Read more

Investment covered u/s 80C Income Tax

With every new year comes new joys, new wishes and new dreams coupled with new liabilities and responsibilities including the old ones. One such responsibility is financial planning for ourselves and our family for each financial year. The tax plan has always been a concern of the last minute, be it for the service or business class.

Even in today’s tech-savvy generation, there are many people who are not aware of the basic tax planning requirements. Let us understand the various avenues for investment where tax can be saved under Section 80C. Under Section 80C of the Income Tax Act, 1961, there is a total investment limit of Rs. 1 lakh to avail tax benefit... Read more


What is IRR & how to calculate it?

You invest a certain amount every year in some financial instruments like mutual funds, ULIPs, etc. After five, 10 years or 15 years, you may want to redeem your investments. At that time, we usually calculate the money which we originally invested with the maturity amount that we received to understand how much did we gain. But do you think this is the right method to check how much did we gain?

We need to know how much return we got on our investments. This requires some basic calculations. Let’s try to understand the concept of IRR or internal rate of return... Read more



Arbitrage is the process of buying a commodity (which may include currency or securities) and simultaneously selling it in another market in order to profit from price differentials.


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FLAME (Financial Literacy Agenda for Mass Empowerment) is an IIFL initiative to promote financial literacy amongst the masses in order to make them an integral part of India’s spectacular growth story.

In an era of accelerating GDP and rising per capita growth, financial literacy has become more critical than ever before such that we all reap the tangible benefits of the nation’s economic prosperity. Financial inclusion has been quite high on the governmental agenda, given its emphasis on widening the Banking & Financial services network across the country. IIFL’s FLAME initiative stands committed to complement this effort by helping common people gain financial growth and security though better awareness and education on the variety of financial products while avoiding the lure of and loss from unrealistic claims made by unscrupulous agents and ponzi schemes.

Our objective is to light a FLAME, as the name suggests, which will set ablaze a chain of FLAMEs across the country. The new-found light of knowledge will undoubtedly dispel the dark clouds of financial illiteracy and ensure the bright sunshine of financial growth and prosperity.

This portal is but one of the various IIFL initiatives that would be part of FLAME.

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