Thursday, July 31, 2014

Capital Gains Tax Exemption: A classic example of word play

As you know, you can get exemption from paying tax on your long term capital gains earned from the sale of assets such as residential property, shares, family business, farm house and more. Income Tax Act provides you with two alternatives to claim this benefit.

1.  Reinvest the gains / sales proceeds in a residential property or
2.  Invest the gains / sales proceeds in NHAI / REC bonds.

A detailed explanation of the same was covered in my earlier post 'Get Exemption from paying Capital Gains Tax'.

In the recent 2014-15 budget, a couple of significant amendments have been made in the relevant sections of the Income Tax Act under which this tax benefit can be availed.

Wednesday, July 30, 2014

Many ways to rejig Debt MFs post-budget

As you may be aware, budget 2014-15 has removed the tax arbitrage enjoyed by debt mutual funds vis-à-vis fixed deposits and such other debt investments.

Earlier, debt mutual funds (or rather, more specifically, all non-equity oriented mutual funds) were
i)  classified as long term capital assets if held for more than a year and
ii) such long term capital gains were taxed at 10% (without indexation) or 20% (with indexation).

Monday, July 28, 2014

Think debt consolidation when drowning in debt

Plenty of attractive goods and services in the market
+ Smart bankers ready to finance your dreams and aspirations
= Rapidly multiplying debts and EMI obligations

And before you realize, many small bills add up to a hefty amount that threaten to take away most of your salary... every month.

If your debt problems are yet to achieve serious proportions...
If you haven't still crossed that all-important point of no return...
...  there is a remedy to solve all your debt worries.

Friday, July 25, 2014

Brilliant Tax Planning with House Property income

Income Tax Act divides your income into five different heads. One of them is ‘income from house property’. It is the rent earned on the property(s) owned by you. Good news! You don't have to pay tax on the entire rental income, but only on a part of the same.

But before we get into that... the word 'house' is a misnomer as "property" covered under ‘income from house property’ comprises any building (house, office building, godown, factory, hall, shop, auditorium, etc.) and / or any land attached to the building (e.g. compound, garage, garden, car parking space, playground, gymkhana, etc.).

Thursday, July 24, 2014

Loan against Gold is a smart idea

Loan against gold ornaments / jewellery is any day a better alternative than personal loans or credit cards. The obvious reason is the interest cost (and in the bargain you would also save on the paperwork and your precious time).

Personal loans and credit cards can cause extensive damage to your finances with interest charges being normally around 18-36% per annum. The cost of gold loans, on the other hand, would be comparatively much more palatable at around 15-20% p.a.

Tuesday, July 22, 2014

Blunders in filing Income Tax returns can invite I.T. Notice

The unpleasant and repulsive annual ritual of filing Income Tax returns is upon us. With July 31st, the last date of filing tax returns, approaching fast many of us must be experiencing elevated blood pressure levels and sleepless nights.

Howsoever obnoxious the task may be, we have to make sure that we avoid repeating the blunders commonly made by many taxpayers. I am sure you don't want to receive the Income Tax notice and go through the whole rigmarole again.

Monday, July 21, 2014

Blind faith in Fixed Deposits is destroying wealth

As per a recent newspaper report, 116 of the 526 co-operative banks in Maharashtra are in serious trouble. 22% distressed banks is no small number. Of these 106 are facing liquidation and 10 are under RBI-appointed administrators. As such, crores of rupees of fixed and savings account deposits, belonging to thousands of ordinary account holders, are facing grave threat.

Share! A candle loses nothing by lighting another candle.

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