Mukesh Patel.in
practical tax & investment planning online
international tax expert / columnist / author / speaker

THE MAGIC OF SUSTAINED SAVING!

 The golden secret of earning from saving is not just how much you invest, but also how long you invest! 

THREE GOLDEN INVESTMENT QUOTES

  • Managing your money requires more skill than making it.
  • Savings will not make you rich, only smart investments will. 
  • Plan your play and play your plan. Let it not be a ship without a rudder, floating where the tide takes it.

While Manan Patel a conscious investor started timely savings of Rs. 10,000 per month in a Systematic Investment Plan (SIP), his friend Chintan Shah was too preoccupied with his business to find time for planning his investments. Manan’s SIP has a track record of offering a 15% annualized return and thus he has calculated that he would become a ‘Crorepati’ reaping Rs.1.1 crores after 18 years of regular savings. Chintan wakes up 4 years late and also wants to catch up with his friend. However, he is just unable to believe how much his delayed decision is going to cost him when he is told that to earn the same target amount of Rs.1.1 crores in the remaining 14 years, he would be required to invest double the savings amount i.e. Rs. 20,000 per month. 

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Roti, Kapda but No Makaan!

Analyzing Tax Gain & Pain In The New EET Regime

  • Tax Incentives for Housing Scrapped: Current deductions in respect of interest & repayment of housing loan abolished under the new Code.
  • Higher Deduction For Savings & Children’s Education: Individual & HUF entitled to an aggregate deduction of upto Rs.3 lakhs in respect of permitted savings & children’s tuition fees payment, as compared to current ceiling of Rs.1 lakh.
  • Accretions Exempt but Withdrawal Taxable: No tax on accretions to the permitted savings. However, any withdrawal from permitted savings to be taxed.
  • Tax Shelter for Old PF/PPF Accumulations: Future withdrawals out of accumulated balance of PF & PPF as on 31stMarch, 2011 to enjoy special exemption. (more…)

Not the Common Man’s Tax Code!

Small Salaried & Investors To Feel Soar!

 

Amar Bhatt, a middle class employee earning monthly salary of Rs 40,000 (annual Rs 4,80,000), currently manages to maintain a zero tax status by availing tax-free LTC & medical perks of Rs 70,000, deduction of interest on housing loan of Rs 1,50,000 and repayment of such loan of Rs 1,00,000 eligible for deduction u/s.80C.He is bound to be shocked when he gets to know that with the elimination of the exempt perks and scrapping of housing deductions as proposed under the new Direct Tax Code, his taxable income of Rs 4,80,000 will attract a straight tax of Rs 32,000. (more…)

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