All of us love children. Well, most of us do. But no one can contest the fact that expenses of raising children, their education and marriage are rising with each passing day. These expenses form a substantial outflow from one’s income. But are you aware that certain expenses or investments made in your child’s name can save you taxes? In the previous blog, we discussed how a newlywed couple can benefit from tax planning. Now, we go a step ahead in explaining how a couple with children, who are either minor (below 18 years of age) or adult (above 18 years of age), can benefit from tax planning. In this article, we have considered two scenarios: Couple having minor child Couple having adult child Scenario 1 Ramesh, a 38 years old engineer in Pune, has a 8 years old child. His annual income is 15 lakhs p.a. and his annual […]Read more
Marriage heralds a crucial life stage, where life enters a beautiful phase. The finances and risk profile of a family as a unit as well as their lifestyle also undergoes a rapid change and so does the tax planning. In the previous article, we explained how tax planning helps a young individual in saving tax. Going forward, let’s see how the tax planning scenario changes when the same individual takes a plunge forward in life and gets married. In this article, let’s consider two scenarios for a newly married couple When both are working When wife is not working First case A newly married couple, Mr. & Mrs. Acharya, earns Rs. 7 lakhs and Rs. 5 lakhs p.a., respectively. As they start this new phase, they plan to buy a house rather than spending huge amount of money every month on rent. Considering their current annual income, their tax liability […]Read more
Getting your first job, the credit of your first salary – all are occasions worth remembrance. Do you realize, this also marks your entry into a world, which is driven by money? Suddenly you find yourself receiving all sorts of offers ranging from pizza to credit cards at a click of a button. And then BANG!! Government too, wants its share in the form of taxes!! Well, you didn’t expect that! Did you! However, that’s a bitter truth; your entry into workforce also marks your entry into taxpayers’ list. In this first article of the series, let’s consider a recent graduate who has just entered the corporate world and earns an annual salary of Rs. 4 lakhs. The Income Tax rates applicable for the FY ending March 31, 2014 are: Considering the Income tax slab for FY 13-14, here is how, his tax would be calculated: Section 80C offers various […]Read more
In our last week’s article on new pension scheme, we told you what an NPS account is, what its key features are and how it works.
But, is it better than other retirement schemes? Does it provide better returns? What are its disadvantages? Let’s find out in this article…Read more
PPF is perceived as an investment option with the lowest possible risk. Most of us plan it as a part of our long-term investment strategy, owing to its certainty and safety – its backed by the Government after all; to add to this, the money is also exempted from tax!
But is it as good as it sounds? Though this investment is ‘Government-backed’ one needs to think about whether this investment is actually very safe and also whether it provides returns commensurate with the risk and rising inflation. In this article, we become the Devil’s advocate and question whether it is still a good investment option.