The following instruments give you tax benefit under section 80c - EPF, PPF, NSC, children’s tution fees. Principal payments on your home loan are also eligible for deduction under Section 80C

To get a better return on investment in the present scenario, equity oriented instruments like Unit Linked Insurance Plan (ULIP) and Equity Linked Saving Schemes (ELSS), could be given a higher priority. ELSS products give investors a choice to invest in shares of companies with a lock-in period.

Premium paid for your mediclam is eligible for tax benefits.

Components of your salary like LTA, medical reimbursement, car allowance, telephone allowances, food coupons and HRA are exempt from tax, provided you have submitted the bills.

Compute your taxable income under all heads like salary, property, business, capital gains and income from other sources.

• Calculate tax payable on gross taxable income for the whole financial year using current tax rate table.
• Calculate your existing annual contribution to fixed income instruments, contributions like EPF, PPF, and life insurance.
• Invest the balance amount in other instruments that suit your risk profile.

Before you plan your new year party, may be you should plan your tax saving investments.

It’s now that time of the new year when companies expect employees to submit proof of investment in order to calculate tax deductions.

Our first advice here is, do not fall prey to unscrupulous insurance agents who normally target salaried professionals around this time with high premium products. Think through your investments to get the best returns.

Franklin Templeton Investments (India), one of the largest fund houses* in the country, is launching a new open end equity fund called Franklin Asian Equity Fund (FAEF). The fund invests in companies in the Asian region (except Japan) and Asia-related companies across market capitalization ranges. The New Fund Offer period will be from November 19, 2007 to December 18, 2007 during which, units will be available at Rs.10 per unit (plus applicable load).
On the rationale for launching the new fund, Mr. Vivek Kudva, President, Franklin Templeton India said, “Leading Asian economies have been exhibiting strong growth, helped by strong exports and growing domestic consumption. The positive macroeconomic landscape has helped Asian companies to grow in stature over the past few years, some of which have transformed themselves into global players. The strong economic and corporate fundamentals have resulted in global investors increasing their allocation to Asian markets, including India. While Indian equity markets have turned in a good performance in recent years, there are quite a few Asian markets which have done better. In that sense, this fund will not only help Indian investors in improving the diversification of their portfolio but will also have a long term return potential similar to that of Indian markets.
Elaborating further, he said “This product will help us take advantage of the recently enhanced overseas investment limits for MFs and investor’s can benefit from Franklin Templeton’s 60 years experience in global investing. The portfolio construction will be bolstered by our local investment teams in India, Korea and China, which have accumulated several years of experience in investing in companies in Asia and built an extensive research database. The fund is ideal as a core holding for all investors.”
Speaking about the fund’s strategy, Sukumar Rajah, CIO – Franklin Equity and Principal Portfolio Manager for the fund, added, “Asia’s growth drivers include a skilled and growing labour force, increased domestic spending and strong foreign investments. Increasing domestic consumption, redeployment of savings and global integration could boost growth further. On the whole, low gearing and interest expenses along with relatively high ROEs augur well for the expansion of market capitalization in many Asian countries. Such expansion in capitalization would then reflect the region’s true economic potential. While there are a few near-term risks such as high energy costs, export dependence and ongoing geopolitical tensions, we expect Asia’s strong fundamentals to assert themselves over the medium to long term.
We will be following a growth investment style focused on companies with relatively better growth prospects (could be high PE), return-on-equity, and/or return-on-capital employed ratios and also focus on mis-priced companies. We believe that a cross-border fund such as this one needs to have a flexible approach to investing, not just across sectors and market cap ranges, but also in terms of process. Unlike many of other funds investing in Asia, we will follow a blended bottom-up and top-down approach that we believe is ideal for tapping into Asian ‘growth’ opportunities. Independent and vigorous in-house research focused on stock picking will be fine tuned by analysis of the macro characteristics of individual countries.”

International
Rate cuts and liquidity infusion by central banks failed
to alleviate concerns about economic growth and
markets across the globe witnessed declines. This along
with uncertainty about the problems in the financial
sector pushed the MSCI AC World Index down by
3.12%.The fall in future rate cut expectations weighed on
the bond markets, as treasury yields firmed up amidst
signs of rising inflation. However, credit markets were
bolstered by the concerted effort by central banks in US,
Europe, UK, Canada and Switzerland to infuse liquidity
and LIBOR rates eased. The US dollar gained against
major currencies on reduced rate expectations. Oil prices
firmed up as IEA revised upwards its oil demand
estimates for next year indicating that strong
consumption in Asia and Middle East will offset the
impact of the possible slowdown in US.
• Asia: Regional markets moved down on skepticism
about the impact of rate cuts and liquidity infusion.
Japanese markets were also impacted by a weak quarterly
Tankan survey, which indicated that business sentiment
amongst large companies has declined. Monetary
tightening in China continued with the tenth hike in
reserve requirements (100 bps) to 14.5%, impacting the
stock markets. Economic data such as industrial
production and trade surplus remained strong.
• Europe: Equity markets in the region rallied earlier in
the week on optimism about the central banks’ moves,
which gave way to doubts about the effectiveness.
UBS announced additional write-down of $10 billion
and a capital injection from sovereign wealth funds. In
other corporate news, Société Générale provided a
bail-out to its structured investment vehicle (SIV) and
Lafarge agreed to buy Egypt’s Orascom. Inflation in
the Euro area for November was revised upwards and
ECB comments indicated continued focus on
inflation.
• Americas: Persistent worries about credit markets
and scaling down of rate cut expectations pulled
down US equity markets. The 25 bps rate cut
announced by the Federal Reserve led to declines,

but markets recovered on the plans to introduce a
new term auction facility and foreign exchange swap
lines. However, an increase in consumer and producer
prices cast a shadow over further rate cuts, dampening
investor sentiment. Citigroup joined other financial
firms in taking the assets of its SIVs onto its balance
sheet ($49 billion in assets).

Equity Markets - India
Domestic markets rallied to life-time highs before weak
global sentiment pared weekly gains, even as FII flows
remained positive. The movement in mid & small cap
stocks continued as the respective indices outperformed
the main indices. Sectoral indices such as realty, healthcare
and consumer durables registered strong gains, while
technology and power underperformed. FII inflows were
at $528.6 million for the first four trading days.

• Technology: In 2007, the technology sector has come
under pressure due to the strong rise in the rupee and
worries about a slowdown in the US. Leading companies
have been improving their geographical diversification in
terms of clientele and one could argue that any sharp
economic slowdown could result in increased
outsourcing by western firms to protect margins. We
believe well-managed Indian companies will do well
over the medium to long term, though there could be
some margin pressures and earnings disappointments
over the near term.

Economy: Industrial production bounced back sharply
in October and the IIP registered a 11.8% growth,
compared to an upwardly revised 6.8% growth in
September.The sharp rise could be partly attributed to

last year’s low base and was led primarily by a 13.3% rise
in manufacturing. Other sectors– mining and electricity,
witnessed modest growth rates of 3.7% and 4.2%
respectively.The festival demand appears to have boosted
consumer goods growth (up 12.5%), with consumer
durables growing by 9.3%. Industrial growth continues
to be investment led, with capital goods growing at a
strong pace – 20.5%.
The monetary tightening witnessed over recent years
and the impact of a stronger rupee & economic
uncertainty in developed markets on export growth, are
likely to moderate industrial activity.On the other hand,
rising capital expenditure and infrastructure spending
could prove to be strong drivers.

Debt Markets - India
Tightening liquidity due to advance tax flows and
outflows for auctions weighed on investor sentiment.The
mood was also impacted by the rise in inflation and strong
growth in industrial production. The US rate cut and
liquidity infusion by central banks did not have much
impact.
• Market movements: Yields on the 10 year
benchmark gilt moved up by 2 bps and 5 year gilt
yields also firmed up. The yield on corporate bonds of
a similar tenor added 9 bps and spreads over 5-year gilts
expanded to 147 bps.Yields on the 30 year paper were
unchanged, while 1-year gilt yields moved up by 10
bps. As a result, the yield curve flattened with spreads

between short & long dated gilts (1 and 30 year papers)
contracting to 63 bps.
• Liquidity/borrowings: Tight liquidity conditions
resulted in call rates touching a high of 8% before closing
in the 7.5-7.7% range compared to 4.25-4.5% levels last
week. The average reverse repos were at Rs.8 crores
compared to last week’s Rs.1403 crores, and RBI
injected liquidity through repo auctions. The twin
auctions (7.99% GOI 2017 and 8.33% GOI 2036)
received bids of around Rs.18,000 crores against the
notified amount of Rs.7000 crores.
• Forex: Despite the strength in the US dollar, continued
capital flows resulted in the rupee strengthening and the
domestic currency closed at 39.34/35, compared to last
week’s close of 39.395/405. Forex reserves moved up
marginally and remained at the $273 billion mark. The
latest monthly bulletin indicated that RBI had purchased
$12.5 billion dollar in October, pushing the YTD
number to $64.326 billion.
• Macro: The headline inflation as represented by
wholesale price index moved higher to 3.75% (as of
Dec 1), due to a rise in the prices of all items,
especially energy prices. The threat of imported
inflation remains alive due to the high oil and
commodity prices. Given the benign macro economic
conditions, we expect yields at the long end of the
curve to stabilise. Attractive accruals at the short end
of the corporate yield curve would continue to make
the 1-2 year segment attractive.

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Franklin Templeton Investments (India), one of the largest fund houses* in the country, is launching a new open end income fund called Templeton India Ultra-short Bond Fund (TIUBF). The fund invests in fixed income instruments of shorter maturity and money market instruments. The New Fund Offer period will be open for a day - December 18, 2007 during which, units will be available at Rs.10 per unit.
On the rationale for launching the new fund, Mr. Vivek Kudva, President, Franklin Templeton India said, “Global interest rate direction has been southward as central banks try to alleviate credit market concerns and the impact of sub prime on the wider economic system. In India, while the interest rate direction has been steady, RBI has been announcing various monetary measures to manage systemic liquidity.
In such a situation, fixed income investors are looking for investment avenues that can provide the relative stability and liquidity of a liquid fund, but with a superior return potential. TIUBF caters to this need and strengthens our fixed income product range. It is positioned between a liquid fund and short term fund on the risk-return scale.”
Speaking about the fund’s strategy, Mr. Santosh Kamath – CIO, Fixed Income said, “The fund will be managed in line with our overall investment philosophy - we attempt to optimize the trade-off between safety, liquidity and returns and we actively manage our maturities as well as the portfolio without taking an extremely aggressive stance. TIUBF provides investors with an additional option at the short end of curve and will look to generate higher returns than liquid funds over the medium term, while focusing on providing stability of investments.
We will try to take advantage of the sweet spots at the short end of the yield curve, while retaining high liquidity. The short end of the curve has moved up in recent months providing the additional yield pick up for investments made now. The fund will have a higher maturity than a liquid fund.
About Franklin Templeton
Franklin Templeton is one of the largest* private sector fund houses in the country with over Rs.30,773 crores of assets under management for over 24 lakh investor accounts (as of November, 2007). It manages one of the most comprehensive ranges of mutual funds (48) catering to varied investor requirements and offering different investment styles to choose from. It has Offices in 33 cities and Collection Centres in another 46 locations across the country.
Franklin Templeton Investments is one of the largest financial services groups in the world based at San Mateo, California USA. The group has US$ 647 billion in assets under management globally (as of November 30, 2007). Franklin Templeton has 60 years of experience in investment management and with offices in over 29 countries, provides investment management and advisory services to a client base of over 17.7 million unitholder accounts.
*Source: AMFI Website (as on November 30, 2007)