FLAME Newsletter – May 21, 2014


“Financial literacy is a base requirement like spelling or reading or something of the sort that everybody should acquire at any early age. The financial habits you develop when you are young are going to go with you into your adulthood.” - Warren Buffett, Chairman & CEO, Berkshire Hathaway


Avail tax deductions & exemptions on stock investments

Investing in equity not only helps you diversify your portfolio but also fetches high returns in the long term. Investing in equity also offers various tax exemptions and deductions which you can avail of on your stock market investments.

Long-term capital gains (investments held for up to 12 months) on equities are tax-free, while short-term capital gains (investments held for less than 12 months) are taxed at 15% + 3% cess.

Listed below is a comprehensive picture of the deductions and exemptions that you are entitled to in various stock instruments, whether you invest directly or indirectly... Read more

Good debt v/s bad debt = make v/s break

Sudipto Dasgupta is confused. He borrowed money from the bank for a home loan and also some more money as a personal loan to buy a home theatre system to enjoy the music that he loves. His financial advisor tells him that while a home loan is “good debt”, acquiring a home theatre system worth Rs 1 lac is bad debt.

Certain types of debt can be used as financial tools to provide opportunities, such as a home loan or a student loan.  To make smart decisions about if, when and how much to borrow, you need to understand how to manage debt and make it work for you... Read more


RGESS: Who is a new investor?

The Finance Act, 2012 had introduced a special scheme to provide for tax deduction in respect of investments in equities. The below article provides a comprehensive picture of Rajiv Gandhi Equity Savings Scheme-2012.

The Scheme is open for all new retail investors who have gross total income of up to Rs. 12 lakh. A new retail investor is one:

  • Who is a resident individual (the benefit cannot be availed by HUF, corporate entities / trusts etc)

  • Who has opened a demat account and not done any transactions in equity or in the derivative segment till the account opening date.

  • Who has not opened a demat account and has also not done any trading in the derivative segment till RGESS account opening date... Read more


Animal Spirits: A term used by John Maynard Keynes used in one of his economics books. In his 1936 publication, "The General Theory of Employment, Interest and Money," the term "animal spirits" is used to describe human emotion that drives consumer confidence. According to Keynes, animal spirits also generate human trust.


Competition in the Banking Sector: Opportunities and Challenges

Build structure to provide efficient customer service: RBI to banks

Advise customers not to remit money to fraud schemes: RBI to banks


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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