Investment Banking serves corporations (raising capital), while Wealth Management serves individuals (managing and growing assets).

Strategic allocation is a passive strategy focusing on long-term goals. Tactical allocation involves active short-term deviations to exploit market opportunities.

For listed shares, the holding period is >12 months for LTCG. For unlisted shares and real estate (immovable property), the period was reduced to >24 months. For debt mutual funds, it is >36 months.

Sharpe Ratio = (Portfolio Return - Risk Free Rate) / Standard Deviation. A higher Sharpe ratio indicates better risk-adjusted performance.

Probate is the official proof of the validity of the Will and the executor's authority to administer the estate. It is mandatory for Wills executed in certain presidential towns involving immovable property.

Gold ETFs combine the flexibility of stock investment with the simplicity of gold investment. Each unit typically represents 1 gram (or less) of gold of 99.5% purity.

Only 5-year Tax Saver Fixed Deposits are eligible under 80C. Standard RDs or FDs less than 5 years do not qualify.

Retirement planning has two phases: Accumulation (working life, saving money) and Distribution (retired life, withdrawing money/annuity).

Bond prices and interest rates have an inverse relationship. When market rates rise, new bonds offer higher coupons, making existing lower-coupon bonds less attractive, driving their price down.

Indexation adjusts the purchase price of an asset for inflation using the Cost Inflation Index (CII), effectively reducing the taxable capital gain. (Note: Recent changes removed indexation for certain debt funds, but conceptually it applies to LTCG on eligible assets).

A standard POA ceases if the principal loses mental capacity. A Durable POA contains a specific clause allowing it to continue, which is crucial for managing the affairs of elderly clients.

Systematic risk (e.g., inflation, war, recession) affects the entire market. Diversification removes unsystematic risk (specific to a company), but market risk remains.

Young investors have a longer time horizon to ride out market volatility, making Equities the best asset class for wealth creation due to high long-term returns.

Section 80D provides deduction for medical insurance premiums paid for self, family, and parents. The limit is higher for senior citizens.

Compound interest allows interest to be earned on interest, leading to exponential growth of wealth over time. It is the fundamental principle of wealth creation.

Rental Yield (Annual Rent / Property Value) measures the return generated by a property. It helps compare real estate with other income-generating assets.

The Settlor (or Author/Grantor) creates the trust. The Trustee manages it. The Beneficiary receives the benefits. This structure helps in protecting assets and managing succession.

The buyer is required to deduct TDS @ 1% of the sale consideration (or stamp duty value, whichever is higher) if the value exceeds ?50 Lakh.

Beta measures sensitivity to market movements. Beta = 1 means same volatility as market. Beta = 1.5 means if market moves 10%, the fund moves 15% (High Risk).

RMs build trust and provide personalized service, orchestrating the bank's resources to solve the client's financial problems and grow their wealth.

Gifts from "Relatives" (Spouse, Parents, Siblings, Lineal ascendants/descendants) are tax-free. Gifts from non-relatives > ?50,000 in a year are taxable.

In case of Intestacy, the law determines the heirs. For Hindus, Class I heirs (Mother, Widow, Children) have the first right to the property.

SIPs buy more units when prices fall. This reduces the average cost per unit. In a continuously rising market, lump sum investment might mathematically outperform SIP, but SIP manages volatility risk better.

REITs own rent-generating assets (offices, malls). They distribute the majority of this rental income to unit holders as dividends/interest.

The sequence is: 1. Establish relationship 2. Gather data 3. Analyze status 4. **Develop and Present Plan 5. Implement 6. Monitor.

As per Income Tax Act, if tax payable (after TDS) is ?10,000 or more, advance tax must be paid in installments (15%, 45%, 75%, 100%).

Any coparcener can demand partition of the HUF property. After the 2005 Amendment, daughters are coparceners and have the same rights as sons.

"Don't put all your eggs in one basket." Diversification lowers unsystematic risk because different assets react differently to economic events.

For a self-occupied property, the maximum deduction for interest on housing loan is ?2 Lakh per financial year. For let-out property, it is restricted to ?2 Lakh set-off against other income.

S.M.A.R.T stands for Specific, Measurable, Achievable, Relevant, and Time-bound. Option C defines the amount, purpose, and timeline clearly.

While Macaulay Duration measures the weighted average time to receive cash flows, Modified Duration measures the price sensitivity of the bond to interest rate changes.

Section 54 is for selling a house and buying a house. Section 54F applies when you sell ANY long-term asset (like Gold, Shares, Land) OTHER than a house, and invest the net consideration in a Residential House.

An Executor is named in the Will. If no executor is named, the court appoints an "Administrator". The Executor derives authority from the Will itself.

To accumulate a future sum through periodic payments, we use the Sinking Fund method (derived from FV of Annuity formula). We need to find the annuity amount (PMT).

Standard Deviation measures the dispersion of returns from the mean. It captures Total Risk (both systematic and unsystematic). Beta captures only Systematic Risk.

Under Section 64, if an individual transfers assets to their spouse for inadequate consideration, any income from such assets is clubbed with the transferor's income to prevent tax avoidance.

Real Estate is highly illiquid. Unlike stocks or gold, finding a buyer and completing the legal process takes months, making it unsuitable for emergency funding.

A Will is a testamentary document of an individual. An HUF continues to exist even after the death of the Karta. Individual coparceners can bequeath their *share* in the HUF, but the HUF itself cannot make a Will.

Since Arbitrage Funds invest more than 65% in equity (hedged using derivatives), they are classified as Equity Oriented Mutual Funds for taxation, enjoying lower capital gains tax rates.

Section 80TTA allows a deduction of up to ?10,000 on interest earned from Savings Accounts (Bank/Post Office). It does not apply to FD interest.

SWP allows an investor to withdraw a fixed amount regularly from their mutual fund investment, serving as a pension-like income stream.

A POA is an agency relationship. The authority of the Agent dies with the Principal. The legal heirs must take over.

Credit Risk Funds take on higher credit risk by investing in lower-rated papers in exchange for higher interest income (Accrual strategy).

ELSS has the shortest lock-in period (3 years) among all Section 80C tax-saving instruments. (PPF is 15 years, Tax Saver FD is 5 years).

SGBs pay interest semi-annually on the nominal value, which is a unique advantage over physical gold or gold ETFs which do not generate regular income.

Succession Certificate validates the heirs' right to collect debts/securities due to the deceased. For Immovable property, a "Letter of Administration" or Probate is usually needed, or simple mutation based on legal heirship.

Portfolios on the Efficient Frontier are optimal. Any portfolio below this line is sub-optimal because it offers less return for the same risk.

This is a special exemption. For Sec 194-IA, the buyer does not need a TAN. They can file the TDS return (Form 26QB) using their PAN.

Using borrowed money (leverage) to invest increases exposure. If the asset rises, returns are magnified. If it falls, losses are equally magnified.

Peer-to-Peer lending platforms are classified as a special category of Non-Banking Financial Companies (NBFC-P2P).

Stock-in-trade is meant for sale in the ordinary course of business. Profits from it are "Business Income", not "Capital Gains".

A Nominee is merely a trustee/custodian who receives the money from the bank to discharge the bank. The ultimate owner is the Legal Heir as per the Will or Succession Law.

Index funds simply mimic a market index (like Nifty 50) without active stock selection by a fund manager, resulting in lower costs.

The payments are essentially loan disbursements, not income. Hence, they are tax-exempt for the senior citizen.

This amendment was a landmark step for gender equality, granting daughters equal coparcenary rights in HUF property.

Since it pays no periodic interest ("Zero Coupon"), the return comes from the difference between the discounted issue price and the face value received at maturity.

The lump sum withdrawal (up to 60%) is tax-free. The remaining 40% must be used to buy an annuity (which is taxable as income when received).

If the SPV pays tax at the normal rate, dividend is tax-free for the investor. If the SPV opts for the lower tax rate (Sec 115BAA), dividend becomes taxable for the investor.

A holistic plan addresses all aspects of a client's financial life to meet short and long-term goals.

CAGR is the geometric progression ratio that provides a constant rate of return over the time period. It smoothens out volatility.

Withdrawals from EPF are tax-free if the employee has rendered continuous service for a period of 5 years or more. Otherwise, the withdrawal is taxable.

Unlike Fundamental Analysis which looks at financial health, Technical Analysis assumes that future price movements can be predicted by analyzing past market data (charts, patterns).

Donations to certain funds like PMNRF or PM CARES Fund are eligible for 100% deduction without any qualifying limit (ceiling) on the donation amount.

A fiduciary relationship implies the highest standard of care and loyalty. The trustee must manage the trust property solely for the benefit of the beneficiaries, not for personal gain.

PE involves investing directly in private companies to gain an ownership stake, often with the goal of restructuring and eventually selling for a profit (Exit).

Financial planners recommend keeping 3-6 months of living expenses in liquid assets (Savings, Liquid Funds) to handle unforeseen events like job loss or medical emergency.

Under Section 112A, LTCG on listed equity (held > 1 year) is taxed at 10% on gains exceeding ?1 Lakh, without the benefit of indexation.

Diversification works best when assets do not move in the same direction. Negative correlation means when one asset falls, the other rises, offsetting losses.

Unlike a normal Will (for property), a Living Will deals with health decisions (Right to die with dignity/Passive Euthanasia), recognized by the Supreme Court of India.

Annuity plans typically provide regular income for life. Options include Life Annuity, Joint Life Annuity, and Return of Purchase Price to nominees.

The Expense Ratio is deducted from the fund's assets. A lower ratio means less money is taken out for management fees, leaving more money invested to grow, thus increasing NAV/returns.

The third condition for HRA exemption calculation depends on the location of the accommodation: 50% of salary for Metro cities (Delhi, Mumbai, Kolkata, Chennai) and 40% for other places.

Launched by the National Housing Bank (NHB), RESIDEX is India's first official housing price index aimed at tracking property price movements.

Life events (marriage, retirement) change risk appetite. Markets change asset values. Reviews ensure the investment strategy remains relevant and effective.

A beneficiary is the person for whose benefit the trust is created. A minor, being incompetent to contract, cannot be a trustee but can certainly be a beneficiary.

The Golden Cross (e.g., 50-day MA crossing above 200-day MA) is a widely interpreted bullish breakout pattern indicating potential market rise.

STCL can be adjusted against both STCG and LTCG. However, Long Term Capital Loss (LTCL) can be adjusted ONLY against LTCG.

The limit was enhanced from ?15 Lakh to **?30 Lakh in the Union Budget 2023-24 to provide better social security to seniors.

SID details the investment objective, asset allocation, investment strategy, and risk factors to help investors make informed decisions.

MCX is India's largest commodity derivatives exchange allowing trading in metals, energy, and agricultural commodities.

Individuals/HUFs paying rent > ?50,000 per month must deduct 5% TDS, even if they are not subject to tax audit.

It breaks down performance to see if the manager added value by picking the right sectors (Allocation) or the right stocks within those sectors (Selection).

The executor acts as a fiduciary to carry out the testator's instructions, settle liabilities, and ensure beneficiaries receive their share.

Small and Mid-cap companies are in the growth phase. They can grow faster than large established companies but are more vulnerable to economic downturns.

Resident Senior Citizens without business income are not liable to pay advance tax installments; they can pay Self-Assessment Tax before filing returns.

Older borrowers and higher property values allow for higher loan amounts (and thus higher monthly payments) because the loan tenure is shorter or the asset backing is stronger.

Positive Alpha indicates that the fund manager has outperformed the market (benchmark). Negative Alpha means underperformance.

SGBs have a tenure of 8 years. However, early redemption is allowed after the 5th year from the date of issue on interest payment dates.

HUF has perpetual succession. It is not affected by the death of the Karta. Management passes to the next senior member.

A proper risk profile considers both financial ability (assets, liabilities, age) and psychological willingness to handle market volatility.

While Sharpe Ratio uses Standard Deviation (Total Risk), Treynor Ratio uses Beta (Systematic Risk). It is appropriate for well-diversified portfolios where unsystematic risk has been eliminated.

For purchase, the window is 1 year before or 2 years after sale. For construction of a new house, the time limit is 3 years after the sale date.

In a revocable trust, the transfer is not permanent. The Settlor can take back control. Consequently, income from such a trust is usually taxable in the hands of the Settlor (Clubbing provisions).

If a bond with a face value of ?1000 is selling for ?950, it is at a discount. This happens when current interest rates are higher than the bond's coupon rate.

It acts as a market timing strategy. For example, if the stock market is undervalued, a manager might temporarily increase equity exposure above the long-term target.

Under Section 64(1)(iv), income arising from assets transferred to a spouse without adequate consideration is clubbed with the income of the transferor (Mr. X). However, if Mrs. X reinvests the interest, income on that reinvestment belongs to her.

While MCX leads in metals and energy, NCDEX has a dominant market share in agricultural commodities like chana, soybean, castor seed, etc.

Under the Registration Act, any document (including POA) conferring authority to sell or create rights in immovable property requires mandatory registration.

VPF enjoys the same interest rate and tax benefits as EPF (subject to the ?2.5 Lakh cap on tax-free interest). It gives flexibility to save more for retirement.

Normally, long-term rates are higher. When short-term rates exceed long-term ones, it suggests investors expect future rates to fall due to a slowing economy/recession.

This higher limit (compared to ?10,000 for non-seniors under 80TTA) includes interest from FDs, RDs, and Savings accounts.

Art funds pool capital to buy art pieces. SEBI halted many collective investment schemes (Art funds) in the past that were unauthorized, and now they fall under the AIF regulations.

Currently, there is no inheritance tax in India. Assets received under a Will or inheritance are also exempt from Income Tax under Section 56(2).

NAV = (Assets - Liabilities) / Number of Units = (100 - 10) / 5 = 90 / 5 = ?18.

LTA exemption applies only to the "travel fare" component (not stay/food) for travel within India, restricted to 2 journeys in a 4-year block.

Hedge funds are less regulated pools of capital that seek absolute returns using risky strategies. They typically require a very high minimum investment.

In a Trust, the Legal Title (ownership on paper) lies with the Trustee, while the Beneficial Title (right to enjoyment) lies with the Beneficiary.

Risk Capacity is financial (objective). Risk Tolerance is emotional/psychological (subjective). A wealthy person may have high capacity but low tolerance (fear of loss).

For non-filers, the threshold is tighter. TDS is 2% for withdrawals > ?20 Lakh and 5% for > ?1 Crore. For filers, it applies only above ?1 Crore.

Exemption from capital gains tax is available only if the bond is held till maturity. Early redemption or sale on exchange attracts Capital Gains Tax (with indexation benefits usually).

To deepen the market, SEBI reduced the trading lot to 1 unit and application value to the range of ?10,000-15,000, making it accessible to small investors.

PFMs are the professional fund management companies appointed by PFRDA to invest the pension corpus in various asset classes (Equity, Corp Bonds, Govt Securities).

Principal repayment falls under the overall ?1.5 Lakh limit of Section 80C. Interest repayment falls under Section 24(b) (up to ?2 Lakh).

AAA is the highest rating assigned by credit rating agencies, signifying the borrower has an extremely strong capacity to meet financial commitments.

Under the Indian Succession Act, a Will must be signed by the testator in the presence of at least two witnesses, who must also sign the Will.

This ratio indicates how many months a person can survive without income using their liquid cash/assets. Ideally, it should be 3-6.

This was a major change. Debt funds are now taxed at the investor's marginal slab rate, and the indexation benefit for LTCG has been removed for funds purchased after April 1, 2023.

It is a top-down approach: First analyze the Economy (Macro), then the specific Industry (Sector), and finally the Company (Financials) to determine fair value.

Category III AIFs employ diverse or complex trading strategies (including leverage and derivatives) and include Hedge Funds.

Financial Freedom is the state where your assets generate enough cash flow to maintain your lifestyle, giving you the choice to work or not.