A financial advisoryis a professional who renders financial services to individuals, businesses and governments.

This can involve investment advice, which may include pension planning, or advice on life insurance,on mortgages and other insurances such as income protection insurance, critical illness insurance etc.[1] the financial advisor helps the client maintain the desired balance of investment income, capital gains, and acceptable level of risk by using proper asset allocation. Financial advisors use stock, bonds, mutual funds, real estate investment trusts (REITs), options, futures, notes, and insurance products to meet the needs of their clients. Many financial advisers receive a commission payment for the various financial products that they broker, although "fee-based" planning is becoming increasingly popular in the financial services industry. A further distinction should be made between "fee-based" and "fee-only" advisers. Fee-based advisers often charge asset based fees but may also collect commissions. Fee-only advisers do not collect commissions or referral fees paid by other product or service providers.[citation needed] Some investment advisors only charge a fee based on the assets managed for the client. Typically they charge about 1.0 to 1.5% per year to make the investment decisions for the client. They do not collect commissions. Financial Adviser is also the name of a weekly trade newspaper for independent financial advisers in the UK. Owned by The Financial Times, its editorial offices are in London.[2]
ROLE..The main purpose of a financial adviser is to assist clients in the planning and arrangement of their financial affairs, such as savings, retirement provisions, tax treatment and wills. To ensure ethical practices, financial advisers must understand a client's financial situation as well as their need for financial stability. Finance can be complicated and any adviser has responsibilities ethically to see that a client's risk is minimized, and monetarily, that money is maximized within the established risk boundaries

Retirement planning
One of the major services that financial advisers offer is retirement planning. A financial adviser should have knowledge of budgeting, forecasting, taxation, asset allocation, and financial tools and products to establish realistic goals and the strategy by which to reach them. In theUnited States401(k)Individual Retirement AccountsRoth IRAsmutual fundsstocksbondsCDs The financial adviser determines what percentage of the available income is necessary²taking into account tax liabilities, expected inflation, and projected return on investment²to meet a minimum balance by the client's target age of retirement and to avoid risk.

[edit] Investing
Financial advisers may help their clients invest for both long and short term goals. It is the financial adviser's duty to determine the clients' goals and risk tolerance and then to recommend

The objective behind levying service tax is to reduce the degree of intensity of taxation on manufacturing and trade without forcing the government to compromise on the revenue needs. If the client has shorter term goals. All service providers in India. The intention of the government is to gradually increase the list of taxable services until most services fall within the scope of service tax. In the Union Budget of India for the year 2006-2007. Over the past few years. except those in the state of Jammu and Kashmir.e. SERVICE TAX : Service Tax is a form of indirect tax imposed on specified services called "taxable services". Initially only three services were brought under the net of service tax and the tax rate was 5%... are required to pay a Service Tax in India. the adviser should recommend less volatile investments with shorter time spans. 2009 in order to give relief to the industry reeling under the impact of economic recession. While these types of investment generally have lower returns there is less volatility and there is less likelihood of losing principal capital. Besides this 2% education cess on the amount of Service Tax was also introduced. Wealth tax is derived from the property owned by the proprietor..f 14 May 2003. On February 24. Such investments could include cash deposits. For the purpose of levying service tax. Wealth Tax In India Wealth tax came into existence on 1st April 1957. Gradually more services came under the ambit of Service Tax. The proprietor needs to pay tax every year on property owned by them. the value of any taxable service should be the gross amount charged by the service provider for the service rendered by him. Service Tax was first brought into force with effect from 1 July 1994. Some of the major services that come under the ambit of Service Tax are: Telephone Stockbroker General Insurance Advertising agencies Courier agencies ETC. The rate of Service Tax was reduced from 12 per cent to 10 per cent.Wealth tax is termed as most significant direct tax. The rate of tax was increased from 5% to 8% w. service tax been expanded to cover new services. wealth tax is applicable to the following: y y An individual person A group of people who own a property . service tax was increased from 10% to 12%. Service tax cannot be levied on any service which is not included in the list of taxable services. From 10 September 2004 the rate of Service Tax was enhanced to 10% from 8%. certificates of deposit. The residential property that does not yield any income to its owner is also subjected to wealth tax. As per the wealth tax act.appropriate investments. and short term bonds. Such investments include direct investment in stocks or through collective investment products such as mutual funds and unit investment trusts/unit trusts.

farm-house.[1][2] A person may also semi-retire by reducing work hours. Many people choose to retire when they are eligible for private or public pension benefits. 5. Retirement is the point where a person stops employment completely. Assets belonging to the Indian repatriate for 7 years on fulfillment of the conditions prescribed. There are few assets that are termed as deemed assets: 1. Assets transferred from one spouse to another Assets held by a minor child. 4. 2. silver. Any cash that is not recorded on the account log book is subjected to the wealth tax. The annual salary of the employee is less than Rs 500. The belongings such as residential building and palace belongs to rulers are considered as national heritage and wealth tax is exempted for it. 2. 5. The following assets are subjected to wealth tax: 1. 7. There are few exceptional assets that are exempted by the government: 1. Any land donated for the religious purpose or to charitable trust is not subjected to wealth tax.000. 3. As per the government is termed as national asset. Assets transfer to the grandchildren. although some are forced to retire when physical conditions don't allow the person to work any more (by illness or accident) or as a result of legislation concerning their position. Former Ruler's jewellery is also excluded from the wealth tax. Assets that are exempted from the list of wealth tax are: y y y y Air craft or boat used for business purpose provided by the company. 3. shopping mall and residential complex are subjected to the wealth tax. apparels and electronic items that is for personal use. 3. for individual and Hindu undivided families. platinum or any other precious metals. commercial complex. Valuable items like jewelry and any items made up of precious metals like gold. Assets transferred to a person or Association of Persons for the benefit of son's wife. As per the income tax act such wealth is taxed individually and will not be termed as the net asset of the main owner/parents/guardian. Accommodation provided by the company or organization to its employee. Aircrafts. Guesthouse.[3] In most .000. yachts. 4. boats that is used for non-commercial purpose Cash in hand that is more than 50. Any urban land situated in the jurisdiction where there is a total population of ten thousand as per last census is subjected to the wealth tax. Assets transferred to the son s wife. Furniture. Motor car that is owned by an individual. 6.y y y y y A company or organization A Hindu undivided family (HUF) Person belongs to 1-by -6 categories A representative or heir of a dead person Non corporative tax payer All assets and debts outside India are out of the scope of Wealth Tax Act. 2.

the idea of retirement is of recent origin. If your working life is shorter than retired life. Remember. But if you wish to retire at 58 then you need to save monthly a sum of Rs 16. then you obviously need to save more. which may impact your standard of living at retirement. Gone are the days when individuals retired only at 58 or 60. Step 3: Arrive at how much you may need . This is why you need to arrive at your tolerance for losses.000 per month and it should earn a return of 12 per cent. do remember that women outlive men. time horizon and risk appetite. most of the safer or guaranteed investment options fail the inflation test. social. In many western countries this right is mentioned in national constitutions. Previously. Germany was the first country to introduce retirement in the 1880s. low life expectancy and the absence of pension arrangements meant that most workers continued to work until death. individuals should construct a portfolio based on their life-style. While constructing a retirement plan. Nowadays most developed countries have systems to provide pensions on retirement in old age. with a corpus of Rs 4.5 crore you ought to save a sum of Rs 90. Many of us cherish the dream of retiring in our forties! So next step in arriving at your retirement corpus is deciding how long you may continue to work.475. hence plan your corpus based on your wife's life expectancy rather than your own. beating inflation often involves taking on higher risks. retirement with a pension is considered a right of the worker in many societies. essential to invest in risky assets such as equities. So. Today. which may be sponsored by employers and/or the state. In many poorer countries. Five steps to retirement planning Step 1: Customise your retirement plan Bonds. and hard ideological. rather than following stereotypes to reach a retirement corpus. Step 2: Evaluate your ability to save The starting point in planning for retirement is evaluating how much you need to save every month. For instance if you decide at 30 to retire at 45.countries. being introduced during the 19th and 20th centuries. cultural and political battles have been fought over whether this is a right. You will also need to save more if you want to reach your retirement corpus mainly by investing in debt or safe investment options. fixed deposits and traditional insurance all generate regular income but fail the inflation test. support for the old is still mainly provided through the family. On the other hand. and volatility causing risk-averse investors to abandon their investment plan midway.

To accumulate Rs 4. earning inflation adjusted returns of 2 per cent (if the inflation is at 7 per cent you should try to earn 9 per cent). If you have travel plans after retirement. these can be reduced from your living expenses to compute your requirements. However. earning a return of 12 per cent.1 lakh.1 lakh. with current monthly household expenses of Rs 30. equity. that too will add to the targeted retirement corpus. At least four years before retirement. . This portfolio should be able to generate the desired return.How big a retirement corpus you need will depend on several factors: your current living expenses. Medical expense is another major factor that needs to be accounted into your retirement calculations.5 crore in the next 28 years you should save monthly a sum of Rs 16. in the last ten years. Take living expenses first. inflation. based on your targeted return and risk appetite. Assuming his life expectancy is 80 years. At a 7 per cent inflation rate every year. 28 years hence. 20 per cent in debt and real estate and the balance in gold. one needs to have Rs 4. Let us consider an individual in his 30s who wishes to achieve 12 per cent return on his portfolio. it is then easier to identify the mix of investments that can deliver the return. If you have adequate health covers for major diseases. the retirement corpus will jump by more than 50 per cent to Rs 7 crore! If you will receive regular pension from your employer or have rental property that can generate regular income. He also wants to improve his standard of living post retirement. If you wish to increase your standard of living by increasing living expenses by just two per cent.458. he invests 50 per cent of his surplus in equity. an individual who is 30 years old. real estate and other assets such as gold.5 crore as corpus (we have not factored the tax on investment return). Say.000 will be Rs 2. with cover for any pre-existing ailments. Over the long term. Due to a long accumulation period. gold too has performed in sync with equity to deliver a compounded annual return of 18 per cent. Assuming you construct a portfolio with an expected return of 15 per cent in equity. wishes to accumulate a corpus for his retirement by 58. equities have proved to be the best asset class to beat inflation. This portfolio would deliver a 12. his current monthly expenses of Rs 30. Step 4: Decide on allocations Asset allocation is deciding how to invest your surplus across debt. to have a monthly pension of Rs 2. do ensure you have adequate health insurance. your need to improve your standard of living and likely expenses after retirement.3 per cent return.Once the return target is fixed. with an additional sum towards out-patient treatment that may protect your savings to some extent.000. 12 per cent in real estate and 8 per cent in debt and gold respectively.

if she outlives you. Step 5: Meeting any shortfall in the corpus There is no guarantee that your portfolio will indeed earn the rate of return you assumed in your original calculations. the gifts received by any individual or Hindu Undivided Family (HUF) in excess of ` 50. Do take term insurance to ensure your spouse has sufficient income for rest of her life. As per the Gift Act 1958. those who own property can explore the reverse mortgage option (a loan available to senior citizens against mortgage of property) to meet their monthly requirements. irrespective of the gift value. in the form of cash. It is. According to it.In contrast. . with effect from October 1. check or others. therefore.000 in a year would be taxable. if the equity proportions were to be reduced to 30 per cent and the rest in debt and gold increased accordingly. This highlights the need for proper asset allocation to achieve the desired results. gift tax got demolished and all the gifts made on or after the date were free from tax. however the current clubbing provisions in the Income Tax Act 1961 would be applicable to gifts of movable properties in the said state as well. draft. However. A new provision was introduced in the Income Tax Act 1961 under section 56 (2). the return would only be 10. very important to re-evaluate your portfolio on a regular basis to see if you are on track.1 per cent. But in 2004. individuals can receive gifts from the following sources: y y y y Relatives or Blood Relatives At the time of Marriage As inheritance In contemplation of death Though Gift Act 1958 was not initially applicable to Jammu & Kashmir. Gifts Exempted from Tax Gifts are exempted from India gift tax in the following cases: y The gift was given by a blood relative. It came into effect in all parts of the country except Jammu and Kashmir. received from one who doesn't have blood relations with the recipient. According to the law. the act was again revived partially. when there is a jump in your pay. all gifts in excess of ` 25. 1998. were taxable. The first step to make sure there is no shortfall is to enhance the contribution to your retirement kitty.000. If you still have a shortfall by retirement. 1958. Gift tax : Gift tax in India is regulated by the Gift Tax Act which was constituted on April 1.

it will be defined as a short-term capital gain. The Registrars of Companies in different states chiefly manage Short-term Capital Gains Tax. Relief Bonds gifts by an original subscriber. However. Capital Investment Bonds up to ` 10. which are subscribed in foreign currency (specified by the Central Government). Gift to children for educational purpose (Reasonable amount). Foreign exchange asset gifted by NRI to his/her relatives. churches. depending on the total taxable amount.000 per year. Gifts of Certain bonds from the NRI to his/her relatives. paintings. If you sell an investment after three years from the date of its purchase. gurudwaras and other places of worship. mosques. refers essentially to the difference between the price originally paid for the investment and money received upon selling it. 1991. In case of a long-term capital gain related to sale of property. gratuity or pension. The 'gain' here. The seller of the property needs to pay a tax not just on the real capital gain. the allowed time duration is one year. a capital gain tax is a voluntary tax payable on the sale of assets. selling mutual funds and company shares after one year will also constitute a long-term capital gain. capital accumulation. investments. Gift to government or any local authority. factors such as inflation are usually taken into consideration. Gifts to any charitable institutions. If you sell an investment within three years from the date of its purchase. Treatment of Long-term Capital Gains Tax by the Income Tax Laws in India . A capital gains tax (CGT) As per Indian Income Tax laws. A Capital Gain can be defined as income generated by selling a capital investment. Gifts by an employer to its employees in the form of bonus. Foreign currency gift of convertible foreign exchange. In case of a short-term capital gain related to sale of property. who is originally a resident of India. and houses to family businesses and farmhouses. A capital investment can range from business stocks. and productivity. Special Bearer Bonds. remitted from overseas by an NRI to a resident relative. Gifts to notified temples. Then you'll be needed to pay capital gain tax. A capital gain can be categorized under the following heads. But if the investment is in the form of mutual funds/company shares. depending on how long the investment has been under your possession: Short-term and Long-term Capital Gains Tax. Saving certificates issued by the Central Government (notified as exempted). Movable properties outside the country.00. but also on the projected gain as a result of inflation. Gifts under will. it will be defined as a long-term capital gain. the gained amount needs to be added to your total annual income. Gifts in contemplation of death. unless the donor y y y y y y y y y y y y y y y y y Individual:is an Indian citizen.y Immovable properties located outside the country. or No-individualis resident of India during the year of gift Out of balance gift by NRI (Non-Resident Indian) in his Non-resident account.

or you can choose not to opt for indexing. You need to pay a capital gain tax on all your capital gains. But if the transaction was levied with STT. though the government will allow you only a partial tax deduction in case you suffer a loss as a result of selling your investment. In case of long term capital gains. 9Infrastructure Bonds issued by Institutions/ Banks such as IDBI. This has come as a surprise for many foreign investors who are now weary of making investments in India. 11Fixed Deposit with Banks having a lock-in period of 5 Years . For long term capital gains. you will be taxed 20%.. you need not pay any tax on your gain.??? Eligible Schemes Under Section 80C for 2010-2011 Life Insurance Premiums 2 Contributions to Employees Provident Fund 3 Public Provident Fund 4 NSC (National Savings Certificates) 5 Unit Linked Insurance Plan (ULIP) 6 Repayment of Housing Loan (Principal) 7 Equity Linked Savings Scheme (ELSS) of Mutual Funds 8 Tuition Fees including admission fees or college fees paid for full-time education of any two children of the tax payer. you can either calculate your capital gain using an indexed acquisition cost. The Income Tax department is recording an upsurge in the tax figures due to the success of the realtors in Hyderabad. This can be done by increasing the price of purchase of the asset. ICICI. Recent tax saving scheme .According to laws laid down by the Income Tax Department you can reduce your tax burden on long-term capital gains. Capital gain taxes in India in 2010 Telecom giants Vodafone Essar which has been operating successfully in India 1994 has been charged with an amount of $11 billion as capital gains tax by the Indian income tax department. you will be taxed depending on the tax slab relevant to you after you have added the capital gain to your annual income. This brings down the net taxable income thereby paving the way for you to pay lesser capital gains tax. The theory behind this is adjustments against inflation since inflation decreases the value of an asset over a specific time period. Capital gain tax rates For short-term capital gains. 10Pension scheme of LIC of India or any other insurance company. etc. REC. PFC. Anyone who sells property in the city has to pay capital gains tax and this can already be seen in the advance tax payment figures for the period September 2010. your gain will be taxed at a rate of 10%. But if the transaction was levied with Securities Transaction Tax (STT).

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