If you haven’t planned on taxes already, do it before it gets too late. Only, while doing this, decide whether you just want to save taxes or make goal-based investments Sunil DhawanTwo types of people complain about taxes: men and women. Every year, taxpayers try to save and invest so that they minimise taxes and maximise disposable income.
Tax planning, as part of your overall financial planning exercise, helps you figure out how to make full use of the breaks on offer. The ideal time to plan your taxes is in April, at the beginning of the financial year. But for those who couldn’t and are doing so now with just about four months to go for the year to end, there are still enough investment options that would substantially lighten the burden while deploying funds profitably. Investment-related tax breaks.
Finance Bill 2006-07 offers a deduction from income of up to Rs 1 lakh on specified investments, expenses or payments like notified bank deposits with a minimum period of five years, life insurance premiums, Employees’ Provident Fund (EPF), public provident fund (PPF), repayment of principal amounts on housing loans, payment of tuition fees, national savings certificate (NSC) and equity-linked savings schemes. Bank deposits.
The term deposits in a scheduled bank with a minimum period of five years under the Bank Term Deposit Scheme, 2006, in addition to giving you a fixed and assured return (around eight per cent) comes with a tax advantage.
There is a one-time investment and there is no commitment to pay in future. Since the benefit of Section 80L (interest income up to Rs 12,000 from bank deposits and NSC were exempted) has been removed, the entire interest income from any such deposits would be taxable. State Bank of India (SBI) and HDFC currently offer 7.25 per cent interest over five years, while ICICI Bank offers 7.5 per cent. EPF. This is a forced saving that happens in the life of an employee and helps him save for retirement. Twelve per cent of your salary is deducted every month and put into a kitty maintained either by the government or your company’s trust.
The contribution currently earns a tax-free return of 8.5 per cent and is fixed by the government every year in March-April. PPF. This is a self-directed investment option. It is essentially a 15-year investment that carries a tax-free interest rate of eight per cent as of now. The rate is subject to change. Investments of Rs 500-70,000 qualify for a tax rebate under Section 80C. Home in on home loans. The interest payable on home loans taken on or after 1 April 1999 is tax-deductible up to Rs 1.5 lakh a year. If you factor in the tax advantages, the effective interest rate works out to 6.3 per cent for an eight per cent loan—against which you get to build a long-term asset.
Those eligible for Section 80C benefits stand to gain even more. The total amount eligible for deduction under this section is Rs 1 lakh a year. and principal repayment of home loans up to that amount also qualifies. Children’s fees. Under Section 80C, parents can also claim a deduction for tuition fees—up to Rs 12,000 per child—for a maximum of two children. This means that parents with two children can claim a deduction of Rs 24,000. However, any payment towards any development fees or donation to the institution are excluded. National Savings Certificates. For those who are less averse to risk, there’s the National Savings Certificate. This government-backed security is available at post offices and comes with an interest rate of eight per cent, compounded half-yearly as of now.
The interest is entirely taxable and is right for those in lower tax slabs with an investment horizon of around six years. Equity-linked savings schemes (ELSS). It is eligible for a deduction under Section 80C. By investing in these schemes, those with a penchant for risk stand to gain from the benefits of equity market returns. Do note that like all tax savings options, these plans have a lock-in period of three years. ELSS does not allow moving out of the investment in case of market volatility, unit-linked insurance policies (Ulips) allow this, through their switching facility. Life insurance. The premium that you pay towards a life insurance policy is eligible for a tax deduction up to Rs 1 lakh under Section 80C. If the premium paid in any of the years during the term of the policy is more than 20 per cent of the sum assured, then deduction will be allowed only for premiums up to 20 per cent of the sum assured. This applies to all term, endowment or unit-linked plans bought from any of the 14 private life insurance companies as well as from LIC. Health insurance. Under Section 80D, medical insurance premium of up to Rs 10,000 is tax-deductible, with an additional deduction of up to Rs 5,000, where the premium is paid by a senior citizen (65 years or older). Pension plans. If you have a pension plan with a premium of more than Rs 10,000, you can now claim that under Section 80CCC. If any investment has been made under this section, then the qualifying amount under Section 80C will stand reduced to that extent. What to do: Risk and return have a close relationship with each other and is an important pillar in building wealth over a long time.
An investment under Section 80C is a step towards that. Removal of sectoral caps this year on investments for tax-planning purposes means that investors can invest in line with their risk appetites and needs. However, investments in tax instruments should never be done merely to save taxes. The choice of an instrument is as important as the amount of tax saved. Liquidity is a crucial factor in all the instruments and, hence, short- and long-term objectives should be clear before you lock your funds in them. the value derived through liquidity, returns and security over the next few years should be an integral part of your investment decision.
If your immediate need is only to save taxes and your investment horizon is not very distant, then ELSS would be suitable. Remember, the risk involved is high too. If you can commit to pay regularly for a longer duration, Ulip would be a better option. A risk-averse investor can select small savings schemes like PPF or the bank deposit with assured return on investment. Finally, having made your investments and claimed the tax breaks, don’t forget to keep the records and documents of your investments and tax deduction certificates, since you will have to attach them with your returns.
Thursday, February 7, 2008
GET THE EDGE
Five ways with which you can effectively structure your loans and investments to reduce the tax burden Kanu H. Doshi“The way of taxpayers is hard and the legislature does not go out of its way to make it any easier.”
Lord CurzonDeduction on jointly-taken home loans is available individually to both the spouses Lord SummerLord Summer’s aphorism about taxation remains true despite personal direct income tax rates having come down from the dizzy heights of 97.75 per cent in the 1970s to 30 per cent at present.
The decrease in tax rates have also been accompanied by elimination of many routes for tax planning, most notably tax rebates, such as those under Section 88 and Section 80L. However, there still exist some provisions in the Income Tax Act, 1961 (Act) that contain some possibilities of reducing the personal tax burden.
I suggest moves that may help you in the smart management of finances.
Smart MoveApply jointly with your spouse for a home loan to claim larger tax deductions. Section 24(b) grants deduction for interest up to Rs 1.5 lakh per year on a loan for acquiring a residential house.
This deduction is available individually to both the spouses.
To be eligible for the deduction, the home loan needs to be taken in joint names, property be owned and financed jointly in equal shares, with both spouses being joint owners. Needless to say, a joint loan application will also help a couple avail of a larger loan. Smart MoveGet tax deduction for home loan interest repayments.
Self-occupied residential properties can avail of another tax concession under Section 23(2) that provides that the notional income for the purpose of income tax for such properties will be deemed nil and yet the deduction for interest up to Rs 1.50 lakh will be available. In other words, there will be negative income (loss) from such property that will be available for set off against the tax payer’s any other income, including salary income.
To put it differently, interest on borrowed money becomes tax deductible. If husband and wife both were to have an annual income of Rs 15 lakh each, they could claim an annual tax deduction of Rs 3 lakh (Rs 1.5 lakh for each) and save aggregate tax of Rs 1,01,970 (33.99 per cent of Rs 1.5 lakh multiplied by 2) between them.
For convenience, they can file a declaration with their respective employers to deduct a specified amount of lesser tax at source from their salaries. Smart MoveClaim tax deduction for principal repayment for home loan.
Repayment of the principal amount of a housing loan is one of the tax concessions a taxpayer can enjoy under Section 80C. But unlike Section 24, this deduction is available only for repayment of the loan from an approved source like banks, HDFC, HUDCO or the employer company.
The repayment of principal part of the loan qualifies for a deduction under Section 80C up to a maximum of Rs 1 lakh per year. In case of joint home loan application, this results in joint tax saving of Rs 67,980 (Rs 33,990 multiplied by two).
But the biggest advantage in availing Section 80C deduction for repayment of housing loan is immunity from any adverse tax consequences of the proposed EET (Exempt, Exempt and Tax) system—where investments will get taxed on maturity, redemption, or sale.
The simple reason for this is that by the very nature of the transaction (repayment of a loan), there is no question of “withdrawal’ of funds to attract tax, unlike in the case of National Savings Certificate (NSC), Public Provident Fund (PPF) or life insurance policies with cash values.The growth option in MFs is a tax-efficient option for those trying to create wealth for kidsSmart MoveWhile investing for kids, opt for growth option in mutual funds (MFs).
The growth option in MFs is a great tax-efficient option for higher net worth individuals trying to create wealth for their kids. With the clubbing up provisions of Section 64 in the Act, by which all incomes of minor children (under the age of 18 years) are to be added to the income of that parent (father or mother) whosoever’s income is higher, the scope of tax planning here is very limited. The growth option comes in handy in such cases.
Here’s how. The father could subscribe to a MF scheme with a large cheque of Rs 25 lakh and opt for growth option till the minor child attains majority. Under this option, the scheme does not declare any income distribution but merely accumulates it. Because the scheme does not declare any income, it does not pay income distribution tax (or dividend distribution tax) of 12.5 per cent, imposed by Section 115-R.
The accumulated income of the scheme has the effect of enhancing from year to year the net asset value (NAV) of units held by the parents for the benefit of their minor children. When the child attains majority, the parents may transfer the units to the child and allow it to grow or encash the units (likely to be over Rs 1 crore) to fund future requirements such as higher education and marriage.
This can be done without paying any gift tax (abolished from 1 October 1998) or any wealth tax (since units are exempt from wealth tax) or any income tax (since there is no income declaration). Smart MoveStocks: Buy cum-bonus, sell ex-bonus. Equity shares of listed companies that announce bonus shares present excellent opportunity to book short-term capital loss without effectively losing any money.
Such loss is available for set off against any other capital gain, including long-term capital gain. The modus operandi goes like this. Let’s assume that a company’s shares are quoting at Rs 2,000 per share on 20 June 2007. On 22 June, the company announces one bonus share for every one share held and declares 10 July 2007 as the record date for allotting bonus shares. A taxpayer buys 1,000 shares (cum bonus) on 25 June 2007 at Rs 2,000 per share and pays Rs 20 lakh for the same. On 11 July 2007, the price of the company’s share drops to Rs 1,000 per share and hence the taxpayer will sell 1,000 shares for Rs 1,000 per share and get Rs 10 lakh as sale proceeds. Since he was holding 1,000 shares on the record date (10 July 2007), the company will allot him 1,000 bonus shares.
He bought 1,000 shares at Rs 2,000 per share cum-bonus and sold 1,000 shares at Rs 1,000 per share ex-bonus booking a short- term capital loss and yet in effect retaining his original holding of 1,000 shares.
The loss, as indicated earlier, can be used for setting off against any other capital gain and can’t be contested by authorities since there is no legal bar on it.;
Lord CurzonDeduction on jointly-taken home loans is available individually to both the spouses Lord SummerLord Summer’s aphorism about taxation remains true despite personal direct income tax rates having come down from the dizzy heights of 97.75 per cent in the 1970s to 30 per cent at present.
The decrease in tax rates have also been accompanied by elimination of many routes for tax planning, most notably tax rebates, such as those under Section 88 and Section 80L. However, there still exist some provisions in the Income Tax Act, 1961 (Act) that contain some possibilities of reducing the personal tax burden.
I suggest moves that may help you in the smart management of finances.
Smart MoveApply jointly with your spouse for a home loan to claim larger tax deductions. Section 24(b) grants deduction for interest up to Rs 1.5 lakh per year on a loan for acquiring a residential house.
This deduction is available individually to both the spouses.
To be eligible for the deduction, the home loan needs to be taken in joint names, property be owned and financed jointly in equal shares, with both spouses being joint owners. Needless to say, a joint loan application will also help a couple avail of a larger loan. Smart MoveGet tax deduction for home loan interest repayments.
Self-occupied residential properties can avail of another tax concession under Section 23(2) that provides that the notional income for the purpose of income tax for such properties will be deemed nil and yet the deduction for interest up to Rs 1.50 lakh will be available. In other words, there will be negative income (loss) from such property that will be available for set off against the tax payer’s any other income, including salary income.
To put it differently, interest on borrowed money becomes tax deductible. If husband and wife both were to have an annual income of Rs 15 lakh each, they could claim an annual tax deduction of Rs 3 lakh (Rs 1.5 lakh for each) and save aggregate tax of Rs 1,01,970 (33.99 per cent of Rs 1.5 lakh multiplied by 2) between them.
For convenience, they can file a declaration with their respective employers to deduct a specified amount of lesser tax at source from their salaries. Smart MoveClaim tax deduction for principal repayment for home loan.
Repayment of the principal amount of a housing loan is one of the tax concessions a taxpayer can enjoy under Section 80C. But unlike Section 24, this deduction is available only for repayment of the loan from an approved source like banks, HDFC, HUDCO or the employer company.
The repayment of principal part of the loan qualifies for a deduction under Section 80C up to a maximum of Rs 1 lakh per year. In case of joint home loan application, this results in joint tax saving of Rs 67,980 (Rs 33,990 multiplied by two).
But the biggest advantage in availing Section 80C deduction for repayment of housing loan is immunity from any adverse tax consequences of the proposed EET (Exempt, Exempt and Tax) system—where investments will get taxed on maturity, redemption, or sale.
The simple reason for this is that by the very nature of the transaction (repayment of a loan), there is no question of “withdrawal’ of funds to attract tax, unlike in the case of National Savings Certificate (NSC), Public Provident Fund (PPF) or life insurance policies with cash values.The growth option in MFs is a tax-efficient option for those trying to create wealth for kidsSmart MoveWhile investing for kids, opt for growth option in mutual funds (MFs).
The growth option in MFs is a great tax-efficient option for higher net worth individuals trying to create wealth for their kids. With the clubbing up provisions of Section 64 in the Act, by which all incomes of minor children (under the age of 18 years) are to be added to the income of that parent (father or mother) whosoever’s income is higher, the scope of tax planning here is very limited. The growth option comes in handy in such cases.
Here’s how. The father could subscribe to a MF scheme with a large cheque of Rs 25 lakh and opt for growth option till the minor child attains majority. Under this option, the scheme does not declare any income distribution but merely accumulates it. Because the scheme does not declare any income, it does not pay income distribution tax (or dividend distribution tax) of 12.5 per cent, imposed by Section 115-R.
The accumulated income of the scheme has the effect of enhancing from year to year the net asset value (NAV) of units held by the parents for the benefit of their minor children. When the child attains majority, the parents may transfer the units to the child and allow it to grow or encash the units (likely to be over Rs 1 crore) to fund future requirements such as higher education and marriage.
This can be done without paying any gift tax (abolished from 1 October 1998) or any wealth tax (since units are exempt from wealth tax) or any income tax (since there is no income declaration). Smart MoveStocks: Buy cum-bonus, sell ex-bonus. Equity shares of listed companies that announce bonus shares present excellent opportunity to book short-term capital loss without effectively losing any money.
Such loss is available for set off against any other capital gain, including long-term capital gain. The modus operandi goes like this. Let’s assume that a company’s shares are quoting at Rs 2,000 per share on 20 June 2007. On 22 June, the company announces one bonus share for every one share held and declares 10 July 2007 as the record date for allotting bonus shares. A taxpayer buys 1,000 shares (cum bonus) on 25 June 2007 at Rs 2,000 per share and pays Rs 20 lakh for the same. On 11 July 2007, the price of the company’s share drops to Rs 1,000 per share and hence the taxpayer will sell 1,000 shares for Rs 1,000 per share and get Rs 10 lakh as sale proceeds. Since he was holding 1,000 shares on the record date (10 July 2007), the company will allot him 1,000 bonus shares.
He bought 1,000 shares at Rs 2,000 per share cum-bonus and sold 1,000 shares at Rs 1,000 per share ex-bonus booking a short- term capital loss and yet in effect retaining his original holding of 1,000 shares.
The loss, as indicated earlier, can be used for setting off against any other capital gain and can’t be contested by authorities since there is no legal bar on it.;
li’l club class travellers
li’l club class travellers
Your minor child’s income would be lumped with yours. So try to create tax-free income streams for him Sunil DhawanA child can start earning from the day he is born.
Someone can open a fixed deposit account in his name.
That can be followed up with insurance policies, mutual fund schemes, real estate investments, and what have you. Now if a child is capable of owning assets, argues the taxman, there is no reason why he should not be paying taxes too.snapshot
The parent who earns more annually pays tax on behalf of a minor child—their incomes are clubbed MF dividends and PPF interest are tax-free, so if your child earns these, your tax liability doesn’t rise Inheritances are not taxed in the hands of the kidSince assets and income are actually being created on behalf of the child, taxes, too, have to be paid on his behalf. And the onus of doing so, according to the Income Tax Act, is on the parent with the higher annual income—the income of a minor child will be clubbed with his.
The implication is simple: if you are trying to create assets for your child, try to ensure that the income from them is tax-free. And, for whatever it is worth, the I-T Act allows a deduction of Rs 1,500 per child from such clubbed income of a parent.
According to Lovaii Navlakhi, managing director and chief financial planner, International Money Matters, while it does not matter from the tax point of view whether the money is invested in the name of the parent or the child, it is still a great idea to create assets in a child’s name. That’s because parents are loath to withdraw investments for short-term needs if they are in the name of their child. When the child is a minor, the interest earned on investments made in his name is taxed on accrual basis even if it is not realised.
In most cases, that would be annually. Take National Savings Certificates, for instance. While the only payout is when the certificate matures, interest accrues annually. So, every year, the interest amount will get added to your income. It is important to keep this interest payout in mind when investing for your child. So, what are the investments you can make for your child that will provide tax-free income? Equity mutual fund units are a good option. Another is a Public Provident Fund account.
Dividends in the first case and interest in the second are tax-free and, therefore, will not add to your tax liability (see Funding Your Child’s Needs, page 38). Gifts, in general, should be avoided. If you or anyone else gives your child a gift, it will be taxable in your hands because of income clubbing. But there are exceptions. Inheritances are not taxed in the hands of the recipient. Nor are gifts given by a “close relative” out of “natural love and affection”. Relatives include brothers and sisters, brothers- and sisters-in-law, maternal and paternal uncles and aunts, lineal ascendants and descendants and their spouses.
Also, make sure that there is no consideration for the gifts received. If a child’s income continues when he has ceased to be a minor, he would have to file tax returns, even if his only earning is income from sources other than business or salary. He should also get a PAN number.
Your minor child’s income would be lumped with yours. So try to create tax-free income streams for him Sunil DhawanA child can start earning from the day he is born.
Someone can open a fixed deposit account in his name.
That can be followed up with insurance policies, mutual fund schemes, real estate investments, and what have you. Now if a child is capable of owning assets, argues the taxman, there is no reason why he should not be paying taxes too.snapshot
The parent who earns more annually pays tax on behalf of a minor child—their incomes are clubbed MF dividends and PPF interest are tax-free, so if your child earns these, your tax liability doesn’t rise Inheritances are not taxed in the hands of the kidSince assets and income are actually being created on behalf of the child, taxes, too, have to be paid on his behalf. And the onus of doing so, according to the Income Tax Act, is on the parent with the higher annual income—the income of a minor child will be clubbed with his.
The implication is simple: if you are trying to create assets for your child, try to ensure that the income from them is tax-free. And, for whatever it is worth, the I-T Act allows a deduction of Rs 1,500 per child from such clubbed income of a parent.
According to Lovaii Navlakhi, managing director and chief financial planner, International Money Matters, while it does not matter from the tax point of view whether the money is invested in the name of the parent or the child, it is still a great idea to create assets in a child’s name. That’s because parents are loath to withdraw investments for short-term needs if they are in the name of their child. When the child is a minor, the interest earned on investments made in his name is taxed on accrual basis even if it is not realised.
In most cases, that would be annually. Take National Savings Certificates, for instance. While the only payout is when the certificate matures, interest accrues annually. So, every year, the interest amount will get added to your income. It is important to keep this interest payout in mind when investing for your child. So, what are the investments you can make for your child that will provide tax-free income? Equity mutual fund units are a good option. Another is a Public Provident Fund account.
Dividends in the first case and interest in the second are tax-free and, therefore, will not add to your tax liability (see Funding Your Child’s Needs, page 38). Gifts, in general, should be avoided. If you or anyone else gives your child a gift, it will be taxable in your hands because of income clubbing. But there are exceptions. Inheritances are not taxed in the hands of the recipient. Nor are gifts given by a “close relative” out of “natural love and affection”. Relatives include brothers and sisters, brothers- and sisters-in-law, maternal and paternal uncles and aunts, lineal ascendants and descendants and their spouses.
Also, make sure that there is no consideration for the gifts received. If a child’s income continues when he has ceased to be a minor, he would have to file tax returns, even if his only earning is income from sources other than business or salary. He should also get a PAN number.
MAKE LOSSES SAVE TAX
Negative income does not attract tax, but actually saves you money Praful PoladiaIncome tax is a tax on income earned by a taxpayer in a given year.
However, each and every activity of a taxpayer may not result in positive income.
It may cause losses too. It would be unfair to tax a person on his income, while ignoring the loss. In recognition of this principle, there are elaborate provisions permitting adjustment of loss, including the provisions for carrying forward unadjusted (unabsorbed) loss to future years.
Understandably, there are restrictions, which have been introduced to prevent misuse of artificial losses. Heads of income. Income of any assessee for the purpose of levy of income tax is computed under five heads—salary, house property, profits or gains of business or profession, capital gains and other sources.
There are specific rules provided for computation of income under each of these heads of income. Considering the computation rules, no loss can occur under the head ‘salaries’. Intra-head set off. Within each head of ‘income’, there could be more than one source of income.
For example, a person may have two properties in different cities let out to different lessees.
Each property is a source of income covered by the same head of income. The law requires adjustment of loss falling within the same head of income in priority of adjustment of loss against profits under any other head of income. Some Basic Rules. Adjustment or carry forward of loss is not an inherent right. One requires specific provision in the Act permitting such right.
But, once such a right is available, an assessee cannot, by choice, forego it in one year and choose to exercise it in the second year, when he expects a much higher income. House property loss. Loss under the head ‘house property’ may occur when, say, in respect of a self-occupied house or a rented house, interest expenditure is incurred on the loan borrowed for acquisition of property.
In case of a self-occupied house, income is computed as nil and interest expenditure results in loss.
Any such loss can be set off against income from any other head, including salary income. If there is no sufficient income to absorb the loss, unabsorbed loss can be carried forward for eight years to be set off against house property income, if any, in the future year. It cannot be set off, in the future year, against any other income head like salary. Business loss vs Salary income. Loss under the head ‘profits and gains from business or profession’ cannot be set off against salary income.
This restriction has been introduced very recently to plug the unhealthy practice of salaried employees claiming artificial business losses for the purpose of setting it off against salary income. Business loss—Speculative vs normal. There is a distinction drawn between loss in speculative business and loss in any other business. Speculation loss can be set off only against speculation income.
For example, loss from speculation in shares can be set off against income from speculation in commodities, but not against share brokerage income or salary income. What is more, such speculation loss can be carried forward for a period of four years only. Even in those four years, it can be set off against income from speculation business only. Business loss & unabsorbed depreciation.
Business loss is divided into depreciation loss and operating business loss. Say, a person is engaged in the business of software development and training, which requires investment in computers eligible for depreciation at a higher rate of 60 per cent.
He may become entitled to claim a large depreciation (Rs 10 lakh for example) while his profit before depreciation is low (Rs 2 lakh for instance). Such loss (Rs 8 lakh) is known as depreciation loss.
The rules for carry forward of depreciation are different from rules for carry forward of unabsorbed business loss (see: Uneven Rules). Loss under Capital Gains.
Capital loss assessed under the head ‘capital gains’ cannot be set off against income under any other head.
Capital loss can be set off against capital gains income only. Further, long-term capital loss cannot be set off against short-term capital gains. Unadjusted capital loss can be carried forward up to eight years.
Long-term capital loss cannot be set off against short-term capital gains even during this period.
Loss under Other Sources. Loss under the head ‘other sources’ can be adjusted against income under any other head in the same year.
But, there are no provisions for carry forward of unadjusted loss incurred under this head to subsequent years. Unabsorbed loss under this head will, therefore, lapse in the same year. Set-off, as a tax-saving instrument, works only under certain conditions and is not always helpful Submission of return within due date.
One of the critical conditions for availing the benefit of carry forward of loss to future years is that the return of income for the year, in which loss has been incurred, should be furnished within the due date.
This condition is applicable for carry forward of loss to next year and does not affect the right to adjust or set off loss in the same year.
As a measure of relaxation, unadjusted depreciation can be carried forward even if there has been delay in furnishing the return. Conclusion.
Tax provisions about setting off losses are, indeed, a bit complex, but so is life. One needs to file income tax returns within the due date for availing the benefit of losses to reduce future tax liability.; The author is a member of the Bombay Chartered Accountants’ Society
However, each and every activity of a taxpayer may not result in positive income.
It may cause losses too. It would be unfair to tax a person on his income, while ignoring the loss. In recognition of this principle, there are elaborate provisions permitting adjustment of loss, including the provisions for carrying forward unadjusted (unabsorbed) loss to future years.
Understandably, there are restrictions, which have been introduced to prevent misuse of artificial losses. Heads of income. Income of any assessee for the purpose of levy of income tax is computed under five heads—salary, house property, profits or gains of business or profession, capital gains and other sources.
There are specific rules provided for computation of income under each of these heads of income. Considering the computation rules, no loss can occur under the head ‘salaries’. Intra-head set off. Within each head of ‘income’, there could be more than one source of income.
For example, a person may have two properties in different cities let out to different lessees.
Each property is a source of income covered by the same head of income. The law requires adjustment of loss falling within the same head of income in priority of adjustment of loss against profits under any other head of income. Some Basic Rules. Adjustment or carry forward of loss is not an inherent right. One requires specific provision in the Act permitting such right.
But, once such a right is available, an assessee cannot, by choice, forego it in one year and choose to exercise it in the second year, when he expects a much higher income. House property loss. Loss under the head ‘house property’ may occur when, say, in respect of a self-occupied house or a rented house, interest expenditure is incurred on the loan borrowed for acquisition of property.
In case of a self-occupied house, income is computed as nil and interest expenditure results in loss.
Any such loss can be set off against income from any other head, including salary income. If there is no sufficient income to absorb the loss, unabsorbed loss can be carried forward for eight years to be set off against house property income, if any, in the future year. It cannot be set off, in the future year, against any other income head like salary. Business loss vs Salary income. Loss under the head ‘profits and gains from business or profession’ cannot be set off against salary income.
This restriction has been introduced very recently to plug the unhealthy practice of salaried employees claiming artificial business losses for the purpose of setting it off against salary income. Business loss—Speculative vs normal. There is a distinction drawn between loss in speculative business and loss in any other business. Speculation loss can be set off only against speculation income.
For example, loss from speculation in shares can be set off against income from speculation in commodities, but not against share brokerage income or salary income. What is more, such speculation loss can be carried forward for a period of four years only. Even in those four years, it can be set off against income from speculation business only. Business loss & unabsorbed depreciation.
Business loss is divided into depreciation loss and operating business loss. Say, a person is engaged in the business of software development and training, which requires investment in computers eligible for depreciation at a higher rate of 60 per cent.
He may become entitled to claim a large depreciation (Rs 10 lakh for example) while his profit before depreciation is low (Rs 2 lakh for instance). Such loss (Rs 8 lakh) is known as depreciation loss.
The rules for carry forward of depreciation are different from rules for carry forward of unabsorbed business loss (see: Uneven Rules). Loss under Capital Gains.
Capital loss assessed under the head ‘capital gains’ cannot be set off against income under any other head.
Capital loss can be set off against capital gains income only. Further, long-term capital loss cannot be set off against short-term capital gains. Unadjusted capital loss can be carried forward up to eight years.
Long-term capital loss cannot be set off against short-term capital gains even during this period.
Loss under Other Sources. Loss under the head ‘other sources’ can be adjusted against income under any other head in the same year.
But, there are no provisions for carry forward of unadjusted loss incurred under this head to subsequent years. Unabsorbed loss under this head will, therefore, lapse in the same year. Set-off, as a tax-saving instrument, works only under certain conditions and is not always helpful Submission of return within due date.
One of the critical conditions for availing the benefit of carry forward of loss to future years is that the return of income for the year, in which loss has been incurred, should be furnished within the due date.
This condition is applicable for carry forward of loss to next year and does not affect the right to adjust or set off loss in the same year.
As a measure of relaxation, unadjusted depreciation can be carried forward even if there has been delay in furnishing the return. Conclusion.
Tax provisions about setting off losses are, indeed, a bit complex, but so is life. One needs to file income tax returns within the due date for availing the benefit of losses to reduce future tax liability.; The author is a member of the Bombay Chartered Accountants’ Society
TAX PLANNING FOR THE FY 2007-08
Wondering how to plan your taxes in the new financial year? Do you want your tax-planning to generate returns as well?Want to know about short-term investments that also offer you rebate on income tax?While tax can be saved on investments like insurance, mutual fund, fixed deposit and various other debt schemes, are you confused about the ideal mix?Are unit linked insurance plans bad investment options? Are their returns not as good as other insurance products?Get Ahead tax expert Mahesh Padmanabhan answered tax and investment-related queries in a chat with Get Ahead readers on April 25.For those of you who missed the chat, here is the transcript.--------------------------------------------------------------------------------Paul asked, I want to know if LTA is allowed to teachers also. How much value is it?Mahesh Padmanabhan answers, LTA or leave travel assistance is merely a component of your salary structure and is general in nature. There is nothing restrictive in its use in a segment manner for a certain class of employees. Yes, the basic condition, however, is that there should be an employer-employee relationship. --------------------------------------------------------------------------------phanichaganti asked, Hi my age is 27. Right now division of my tax savings is (Rs 100,000= Rs 25,000 (FD 5yrs) + Rs 28,000 (EPF) + Rs 30,000 (NSC) + remaining (MF). Is my way of investing good/bad/moderate?Mahesh Padmanabhan answers, From your investment mix, you seem to be a very risk averse person as the debt component is very high as compared to the equity component. Investment in debt securities is not a bad option but you need to consider the tax implication of the interest, liquidity of such investment, pre and post tax yield (returns), etc before deciding whether this investment mix is suitable for the growth of your wealth. Historically, equities have always scored higher in the long run. --------------------------------------------------------------------------------Krishna asked, Hi Mahesh, I am working in one of the company in a European country through business VISA through their branch in delhi, and my gross salary is Rs 10 lakhs. Please suggest how much I could invest for tax saving? Already I have been paying Rs 25,000 per annum through LIC. Also take into consideration that from April �08 I may go permanently to Europe through work permit visa. Please give your suggestions on the same. Thank you very much.Mahesh Padmanabhan answers, I guess you are looking at a short-term fix for your current tax problem. In this case you can invest in ELSS (equity linked saving scheme), which has a lock-in period of about three years. You can also put your money in a five year FD. In case of life insurance, you are seriously advised to consult a financial/ insurance advisor to determine your insurance needs and accordingly go about putting your money in such insurance without taking a look at the tax perspective. --------------------------------------------------------------------------------RAGHAVENDRA asked, HI RAGHU HERE, AM EARNING RS 35K PER MONTH IN HAND, AND REQUEST YOU TO SUGGEST ME A GOOD INVESTMENT PLAN.Mahesh Padmanabhan answers, Raghu, there is no single best plan available on a common platform; it all boils down to individual financial perspectives. However, if you are averse to taking risks, then go for debt tax savings instruments such as NSC, PPF, eligible FD etc or else go for ELSS mutual funds, ULIP schemes, etc. Additionally, you would also need to consider your long-term planning for various other aspects such as home acquisition, etc. --------------------------------------------------------------------------------sandhya asked, Hi ,My take home salary is Rs 15 k per month. Please let me know the best investment opportunities. I have already invested in FDs, RDs (recurring deposit) and NSC.Mahesh Padmanabhan answers, In case your salary structure is absolutely unfriendly and the entire Rs 1.8 lakhs salary is taxable, then you need to put aside at least Rs 35,000 in certain tax saving investments to bring your tax liability to zero. Generally, RDs are not tax saving instruments and you will need to ensure that the FD that you have created is stamped by the bank for being eligible for tax savings purpose. NSC is a tax saving instrument. --------------------------------------------------------------------------------dip asked, Sir, I have invested around Rs 54,000 in 2 ULIP funds , ICICI prudential (Rs 24,000) and AVIVA life bond 5 (Rs 30,000). I know that investing a huge chunk of money in ULIPs was not a good idea but do you think I should persist with these investments.Mahesh Padmanabhan answers, If someone has told you that investing in ULIP is bad, then the person is absolutely wrong. Yes, if you have done so without proper consultation with an advisor, then probably you might get involved with the wrong insurance company or the wrong plan. Generally all insurance companies generate reasonable returns on ULIPs but the cost varies between companies, making the returns relatively up or down in comparison to peer companies. What you need to ensure is that you learn about the scheme you have invested in and see if you can leverage by moving from debt oriented fund to equity oriented fund or vice versa as per your risk profile. Also, if you are unhappy with the scheme available as such then look at the escape route to get out of the insurance plan with as minimum damage as possible. --------------------------------------------------------------------------------Ravindra asked, Hi mahesh, I want to know about the investments that are short in time and also provide income tax rebate?Mahesh Padmanabhan answers, The lowest time frame that you can probably look at is three years of lock-in. ELSS schemes, infrastructure bonds, etc, carry such time frame. But my sincere advice is do not be shortsighted in investing; the deductions that are provided are to promote retirement funding or to provide long term financial security/ means to individuals. Do not liquidate these investments unless the funds are required badly. Also, invest your money with a proper strategy in mind after consulting a financial planner. --------------------------------------------------------------------------------ARPAN asked, What is an ELSS scheme?Mahesh Padmanabhan answers, ELSS schemes are mutual fund schemes specifically aimed at tax investing with a lock in time frame of 3 years. These are essentially same as the regular mutual fund investments but are more focused and generally yield consistent returns. However, these are also subject to the vagaries of the stock market.
TAX STRUCTURE IN INDIA
1) Qus. : What are you doing?
Ans. : Business.
Tax : PAY PROFESSIONAL TAX!
2) Qus. : What are you doing in Business?
Ans. : Selling the Goods.
Tax : PAY SALES TAX!!
3) Qus. : From where are you getting Goods?
Ans. : From other State/Abroad
Tax : PAY CENTRAL SALES TAX, CUSTOM DUTY & OCTROI!
4) Qus. : What are you getting in Selling Goods?
Ans. : Profit.
Tax : PAY INCOME TAX!
5) Qus. : Where you Manufacturing the Goods?
Ans. : Factory.
Tax : PAY EXCISE DUTY!
6) Qus. : Do you have Office / Warehouse/ Factory?
Ans. : Yes
Tax : PAY MUNICIPAL & FIRE TAX!
7) Qus. : Do you have Staff?
Ans. : Yes
Tax : PAY STAFF PROFESSIONAL TAX!
8) Qus. : Doing business in Millions?
Ans. : Yes
Tax : PAY TURNOVER TAX!
9) Qus. : Are you taking out over 25,000 Cash from Bank?
Ans. : Yes, for Salary.
Tax : PAY CASH HANDLING TAX!
10) Qus.: Where are you taking your client for Lunch & Dinner?
Ans. : Hotel
Tax : PAY FOOD & ENTERTAINMENT TAX!
11) Qus.: Are you going Out of Station for Business?
Ans. : Yes
Tax : PAY FRINGE BENEFIT TAX!
12) Qus.: Have you taken or given any Service/s?
Ans. : YesTax : PAY SERVICE TAX!
13) Qus.: How come you got such a Big Amount?
Ans. : Gift on birthday.
Tax : PAY GIFT TAX!
14) Qus.: Do you have any Wealth?
Ans. : YesTax : PAY WEALTH TAX!
15) Qus.: To reduce Tension, for entertainment, where are you going?
Ans. : Cinema or Resort.
Tax : PAY ENTERTAINMENT TAX!
16) Qus.: Have you purchased House?
Ans. : Yes
Tax : PAY STAMP DUTY & REGISTRATION FEE !
17) Qus.: How you Travel?
Ans. : Bus
Tax : PAY SURCHARGE!
18) Qus.: Any Additional Tax?
Ans. : Yes
Tax : PAY EDUCATIONAL, ADDITIONAL EDUCATIONAL & SURCHARGE ON ALL THECENTRAL GOVT.'s TAX !!!
19) Qus.: Delayed any time Paying Any Tax?
Ans. : Yes
Tax : PAY INTEREST & PENALTY!
20) INDIAN :: can i die now??
Ans :: wait we are about to launch the funeral tax!!!
Ans. : Business.
Tax : PAY PROFESSIONAL TAX!
2) Qus. : What are you doing in Business?
Ans. : Selling the Goods.
Tax : PAY SALES TAX!!
3) Qus. : From where are you getting Goods?
Ans. : From other State/Abroad
Tax : PAY CENTRAL SALES TAX, CUSTOM DUTY & OCTROI!
4) Qus. : What are you getting in Selling Goods?
Ans. : Profit.
Tax : PAY INCOME TAX!
5) Qus. : Where you Manufacturing the Goods?
Ans. : Factory.
Tax : PAY EXCISE DUTY!
6) Qus. : Do you have Office / Warehouse/ Factory?
Ans. : Yes
Tax : PAY MUNICIPAL & FIRE TAX!
7) Qus. : Do you have Staff?
Ans. : Yes
Tax : PAY STAFF PROFESSIONAL TAX!
8) Qus. : Doing business in Millions?
Ans. : Yes
Tax : PAY TURNOVER TAX!
9) Qus. : Are you taking out over 25,000 Cash from Bank?
Ans. : Yes, for Salary.
Tax : PAY CASH HANDLING TAX!
10) Qus.: Where are you taking your client for Lunch & Dinner?
Ans. : Hotel
Tax : PAY FOOD & ENTERTAINMENT TAX!
11) Qus.: Are you going Out of Station for Business?
Ans. : Yes
Tax : PAY FRINGE BENEFIT TAX!
12) Qus.: Have you taken or given any Service/s?
Ans. : YesTax : PAY SERVICE TAX!
13) Qus.: How come you got such a Big Amount?
Ans. : Gift on birthday.
Tax : PAY GIFT TAX!
14) Qus.: Do you have any Wealth?
Ans. : YesTax : PAY WEALTH TAX!
15) Qus.: To reduce Tension, for entertainment, where are you going?
Ans. : Cinema or Resort.
Tax : PAY ENTERTAINMENT TAX!
16) Qus.: Have you purchased House?
Ans. : Yes
Tax : PAY STAMP DUTY & REGISTRATION FEE !
17) Qus.: How you Travel?
Ans. : Bus
Tax : PAY SURCHARGE!
18) Qus.: Any Additional Tax?
Ans. : Yes
Tax : PAY EDUCATIONAL, ADDITIONAL EDUCATIONAL & SURCHARGE ON ALL THECENTRAL GOVT.'s TAX !!!
19) Qus.: Delayed any time Paying Any Tax?
Ans. : Yes
Tax : PAY INTEREST & PENALTY!
20) INDIAN :: can i die now??
Ans :: wait we are about to launch the funeral tax!!!
Monday, February 4, 2008
Important information for investors
Start investing in stocks...with just Rs 2,000!
I constantly encounter many people who tell me how they don’t have millions to invest in the stock market. They believe that investing in stocks is only meant for the rich. Well, I share with them the success stories of icons like Warren Buffet, Rakesh Jhunjhunwala and several others, who started with less and ended up making plenty. All you need: Rs 2,000! Looking at these stock market millionaires, people assume that they would need a lot of money to start with. This is just a myth. Investing in the stock market can begin with as little as Rs 2,000! It doesn’t matter how much…
Broke? How to raise emergency funds
Unfortunate events strike without notice. A sudden job loss, a medical emergency, natural or manmade disaster can leave a dent in your pocket. Have you made any provisions to fund such a situation? Your answer may be a 'yes' or a 'no'. But, as it generally happens, very few of us have sufficient liquid money for emergencies. More often than not, our money is invested for the long-term that comes with a penalty if you had to break it before completion of the tenure. So supposing, you don’t have an emergency corpus then what alternatives can you work out? A few options…
Buying multi-function devices
Print, scan, copy, fax…using one device. Here’s the lowdown on how to choose the one that meets your needs Multi-functional devices are fast, efficient, easy to use and offer great value for your money. Separate products from different manufacturers mean you will spend three or four times as much time to install the drivers and other software. There may also be compatibility issues between devices. It is so much easier to set up and maintain just a single device. And whether you will be using it at home or in an office, you will no longer have to…
Buying multi-function devices
Print, scan, copy, fax…using one device. Here’s the lowdown on how to choose the one that meets your needs Multi-functional devices are fast, efficient, easy to use and offer great value for your money. Separate products from different manufacturers mean you will spend three or four times as much time to install the drivers and other software. There may also be compatibility issues between devices. It is so much easier to set up and maintain just a single device. And whether you will be using it at home or in an office, you will no longer have to…
How to make hay when the market crashes
Most people have entered panic mode. Retail investors are hurling abuses at FIIs, the finance minister, P Chidambaram, the Securities and Exchange Board of India (SEBI) and everyone else who has caused panvati (curse) to the markets. Those who are long on futures and holding call options, have had their wealth wiped out, instantly. But it is important to understand that we have a similar scenario every time there is a correction. I always warn people that the markets can be very lethal if you enter without proper knowledge. But powered with knowledge, market corrections and falls are a great…
Dont join in Quest net or any other Network marketing companies
Many people have approached me and given presentations and talks to invest in QuestNet. For all of you, who are into it and earning lots of money, have you ever thought where that money came from? QuestNet is totally based on a concept called ' Pyramid Marketing'. The profiters from this type of Pyramid marketing is the top and the middle people. The money moves from the base of the pyramid upwards to the top and middle. As long as the people keep joining the base of the pyramid, the more profit gained by level upwards. But remember,…
Sidin Sunny Vadukut: An amateur stock-trader's diary
May 2nd, 2003 Dear Diary, I have just returned from the office after a long and exhausting day. I had to sit through several senseless marketing meetings and one sales forecasting workshop. Honestly, I am getting a little sick of this company. I would have quit it long ago if it were not for the fact that the salary is good, the canteen is awesome and I know the combination to the petty cash safe. Mr Ramanathan next door made Rs 100,000 rupees on the stock market yesterday. He bought his wife a new saree and a new fridge.…
One Big 'Secret' You Must Know To Make Money Online!
So you want a profitable website. You do a search on Google and find 56,293,580 websites that will tell you how to go about creating your business. Everyone promises the moon. You start clicking on links and what do you find? Everyone wants to sell you something! Their special ebook that will tell you all the answers. Or, if you buy their software, you will be making money tomorrow. Join their membership website for X amount of dollars per month and you will have all the information you need. RIGHT! I know how you feel, I searched and searched…
"There are 2 places to invest your money - The Indian stock markets and gold
Having said that, let me explain why. Buying the basket of stocks that make up the BSE-30 Index in 1980 would have given you a return of 136 times your investment. If you were to average out this return over the 27 year period, that works out to 20% per year every year for these past 27 years. There will be continued economic growth in India over the next decade. This means that Indian companies will continue to grow sales and profits and - because share prices are a function of these growing profits - an investment in shares…
Make Money Online By Selling Information
The Internet has been dubbed The Information Superhighway and it certainly lives up to the name. Everyday, millions of people use the Internet and the World Wide Web to seek out information; whether it's reviews of a new dishwasher, cheapest deals on package holidays, what's on at the local theatre or tracking down old friends. Chances are, if you're looking for information, it can be found somewhere online. Whilst the Internet is undoubtedly a rich sea of data, not all of it is useful information, relevant to the consumer. This, combined with the desire for instant gratification that the…
Easier Way To Make Money Online!
There have never been more people online with the desire to earn money then today. The big questions have been the same since the start and will not change in the future. How to make money online. The answers have been as many as the starts in the sky, but the biggest problem is that most of them never work for more then a few persons. How can you make money online? Some of the ways to make money online (according to those who try to sign you up) are, • Autosurf (let your browser get lost by itself…
Your 7 biggest financial decisions
How you manage a handful of major life choices can make or break your financial future. A lot of people spend a whole lot of time worrying about the small stuff: a little extra yield on their savings, a few dollars less in mortgage payments, slightly higher returns, slightly lower commissions. They pore over Internal Revenue Service publications and fat tax guides searching for ways to save a few hundred bucks on taxes. They read personal-finance magazines, buy books and scour the Web looking for tips. Fine. It pays off. But does managing your money have to be this…
How Online Surveys Can Make You Money?
Have you heard of the websites that offer payment in lieu of taking online surveys? Yes this is true. Anyone who has recently browsed the avenues of work-at-home jobs must have seen such alluring ads. It must have made you wonder— how online surveys can make you money. I am here to explain you all that. So, keep reading. In fact, the online surveys include the whole process that claims to help people to earn money. For that, first you need to register with the website and then file out for consumer surveys. Whether you can earn money out…
Six Reasons Why You Would Want To Make Money Online
Making money online in the comforts of your own home is a dream come true for anyone with the desire to get out of the everyday 9-5 routine. Advantages You can learn what real freedom is; you will have more time to take care of your family, be your own boss in your own home business, work when, and where you want, have flexible hours and no dress code. You will have the opportunity to earn income in over from all over the world. It is much less expensive to start your business online, then through the conventional ways.…
What Does It Take To Make Money Online?
Do you harbor the dream of dreams? Working at home and making a decent living, not answering to anyone but yourself and fixing your own hours and dress code? Do you dream of a home based business opportunity that actually works, doesn't siphon off all your spare money but puts the bucks in your pocket? Is there really such a thing? The dream of making money on the Internet is not a simple fantasy. You can make it a reality if you're willing to follow some basic precepts. Here are a few principles to follow when contemplating starting up…
How Can I Really Make Money Online?
This is the age old question. Funny to think that anything about the internet could be 'age old' but here it is. Ever since there was an internet for us all to use, people have been trying to profit from it. Many people have succeed, many are still trying. There are plenty of scams out there promising you instant riches for only $137. The seller of this scam will show you proof that his method works by revealing his bank account. Of course this works for him, he's selling the scam. His bank account is not proof that his…
ICICI -The Orginal & Duplicate
Dear Friends, Today I got one mail from” ICICI”. Actually I have no account with ICICI. Please go through the screenshots . This email appears to be sent out by criminal hackers. They are fishing for infromation (Phishing) and try to make the emails appear to be authentic. When you click the links inside the email, you are taken to a site that looks real, but really they are just trying to get your personal data. Learn more about email scams and how to protect your computer from hackers. If you are unsure about an email you receive, contact…
How To Make Money With Online Surveys
If you’re got some spare time and you’d like to make some money without much work, online surveys are just the thing for you. With a computer and a little advice, you’ll be all set to make some extra cash for you and your family. Be realistic You first have to realize that when you take online surveys, you won’t be paid thousands of dollars. In fact, the people that do take online surveys regularly will usually say that the best way to make more money is to take more surveys. You’ll need to sign up for a few…
Make Extra Money By Taking Paid Surveys Online
So many households these days face a challenging economic dilemma. How can we generate some additional income yet still allow time for the kids and the general responsibilities of home management? In the days before the internet many found the solution to this with home mailing and assembly opportunities. Today, however, the net has brought us the unique part time job of taking paid surveys online. By taking paid surveys online you are providing customer experience information to companies seeking to improve their products and services. In exchange for your time you receive compensation and a chance to help…
How To Make Money Online With Blogs
You spend hours every day with your weblog. It's become a labor of love. Wouldn't it be nice to find a way to earn some extra money with your weblog? There are ways of making money online with blogs. The method you've probably seen on most blogs is to host ads, such as with Google Adsense. You let Google put their ads on your site and get paid when people click on the ads. These get mixed reviews. Some say they make a lot this way, but many people don't report much income. Since they are free to ad…
How To Make "Fast Money" Online
Do you worry about your personal expenses? Are you having difficulty financing different things? What if someone offers you an opportunity to earn money in just a snap of a finger? Everybody would love to earn money without exerting too much effort. For some people, the internet is just a bunch of technology maniacs. But this is absoluteley wrong. The internet produced more millionaires in the past decade than any other industry. Only few internet millionaires are known, most are anonymous “millionaires”. Ranging from different products and services that they offered online, these millionaires just used their willingness and…
Make Money Online Is Easy
Wouldn’t it be INCREDIBLE to be financially FREE? To be flexible enough to live at your heart’s desire? Achieve this by starting your own online business, selling informational products. Why do you want to sell Informational Products? Because it is easy and free or low in cost to transform your Idea into an informational product, for example an e-Book, like this article, a Video or Audio product, from the comfort of your own home by using a word processor. Imagine working for once on creating an ASSET that will work for you from then on, generating money constantly. How…
Phishing Filter: Help protect yourself from online scams
Help protect yourself from online scams Three ways Phishing Filter helps protect you Phishing Filter includes several patent-pending technologies designed to warn or block you from potentially harmful Web sites. 1. A built-in filter in your browser that scans the Web addresses and Web pages you visit for characteristics associated with known online Web fraud or phishing scams, and warns you if sites you visit are suspicious. 2. An online service to help block you from confirmed scams with up-to-the-hour information about reported phishing Web sites. (Phishing sites often appear and disappear in 24–48 hours, so up-to-the-hour information is…
How To Make Extra Money Online
You might have seen so many websites that offer you chances and opportunities to make money online at your own home or at work. It may seem very convenient and very easy to do. It's like a miracle enterprise that promises to give money and make you rich instantly. However, you should choose what kind of online business you want to do carefully. First you have to think of the advantages of owning an online business. In difference to real world shops your online business will be open 24 hours a day, 7 days a week. You don’t need…
8 guidelines to make money from IPOs
There are basically two ways in which you can buy shares: you can either buy them from the stock market, or you can apply for them in a public issue. The stock market is a secondary market where shares are bought and sold, whereas the primary market is one where companies issue shares for the first time. When a company raises funds by issuing new shares or debentures for sale to the public, it is called a public issue, or an IPO (initial public offering). Such new shares and debentures are called new issues. New issues of capital can…
I constantly encounter many people who tell me how they don’t have millions to invest in the stock market. They believe that investing in stocks is only meant for the rich. Well, I share with them the success stories of icons like Warren Buffet, Rakesh Jhunjhunwala and several others, who started with less and ended up making plenty. All you need: Rs 2,000! Looking at these stock market millionaires, people assume that they would need a lot of money to start with. This is just a myth. Investing in the stock market can begin with as little as Rs 2,000! It doesn’t matter how much…
Broke? How to raise emergency funds
Unfortunate events strike without notice. A sudden job loss, a medical emergency, natural or manmade disaster can leave a dent in your pocket. Have you made any provisions to fund such a situation? Your answer may be a 'yes' or a 'no'. But, as it generally happens, very few of us have sufficient liquid money for emergencies. More often than not, our money is invested for the long-term that comes with a penalty if you had to break it before completion of the tenure. So supposing, you don’t have an emergency corpus then what alternatives can you work out? A few options…
Buying multi-function devices
Print, scan, copy, fax…using one device. Here’s the lowdown on how to choose the one that meets your needs Multi-functional devices are fast, efficient, easy to use and offer great value for your money. Separate products from different manufacturers mean you will spend three or four times as much time to install the drivers and other software. There may also be compatibility issues between devices. It is so much easier to set up and maintain just a single device. And whether you will be using it at home or in an office, you will no longer have to…
Buying multi-function devices
Print, scan, copy, fax…using one device. Here’s the lowdown on how to choose the one that meets your needs Multi-functional devices are fast, efficient, easy to use and offer great value for your money. Separate products from different manufacturers mean you will spend three or four times as much time to install the drivers and other software. There may also be compatibility issues between devices. It is so much easier to set up and maintain just a single device. And whether you will be using it at home or in an office, you will no longer have to…
How to make hay when the market crashes
Most people have entered panic mode. Retail investors are hurling abuses at FIIs, the finance minister, P Chidambaram, the Securities and Exchange Board of India (SEBI) and everyone else who has caused panvati (curse) to the markets. Those who are long on futures and holding call options, have had their wealth wiped out, instantly. But it is important to understand that we have a similar scenario every time there is a correction. I always warn people that the markets can be very lethal if you enter without proper knowledge. But powered with knowledge, market corrections and falls are a great…
Dont join in Quest net or any other Network marketing companies
Many people have approached me and given presentations and talks to invest in QuestNet. For all of you, who are into it and earning lots of money, have you ever thought where that money came from? QuestNet is totally based on a concept called ' Pyramid Marketing'. The profiters from this type of Pyramid marketing is the top and the middle people. The money moves from the base of the pyramid upwards to the top and middle. As long as the people keep joining the base of the pyramid, the more profit gained by level upwards. But remember,…
Sidin Sunny Vadukut: An amateur stock-trader's diary
May 2nd, 2003 Dear Diary, I have just returned from the office after a long and exhausting day. I had to sit through several senseless marketing meetings and one sales forecasting workshop. Honestly, I am getting a little sick of this company. I would have quit it long ago if it were not for the fact that the salary is good, the canteen is awesome and I know the combination to the petty cash safe. Mr Ramanathan next door made Rs 100,000 rupees on the stock market yesterday. He bought his wife a new saree and a new fridge.…
One Big 'Secret' You Must Know To Make Money Online!
So you want a profitable website. You do a search on Google and find 56,293,580 websites that will tell you how to go about creating your business. Everyone promises the moon. You start clicking on links and what do you find? Everyone wants to sell you something! Their special ebook that will tell you all the answers. Or, if you buy their software, you will be making money tomorrow. Join their membership website for X amount of dollars per month and you will have all the information you need. RIGHT! I know how you feel, I searched and searched…
"There are 2 places to invest your money - The Indian stock markets and gold
Having said that, let me explain why. Buying the basket of stocks that make up the BSE-30 Index in 1980 would have given you a return of 136 times your investment. If you were to average out this return over the 27 year period, that works out to 20% per year every year for these past 27 years. There will be continued economic growth in India over the next decade. This means that Indian companies will continue to grow sales and profits and - because share prices are a function of these growing profits - an investment in shares…
Make Money Online By Selling Information
The Internet has been dubbed The Information Superhighway and it certainly lives up to the name. Everyday, millions of people use the Internet and the World Wide Web to seek out information; whether it's reviews of a new dishwasher, cheapest deals on package holidays, what's on at the local theatre or tracking down old friends. Chances are, if you're looking for information, it can be found somewhere online. Whilst the Internet is undoubtedly a rich sea of data, not all of it is useful information, relevant to the consumer. This, combined with the desire for instant gratification that the…
Easier Way To Make Money Online!
There have never been more people online with the desire to earn money then today. The big questions have been the same since the start and will not change in the future. How to make money online. The answers have been as many as the starts in the sky, but the biggest problem is that most of them never work for more then a few persons. How can you make money online? Some of the ways to make money online (according to those who try to sign you up) are, • Autosurf (let your browser get lost by itself…
Your 7 biggest financial decisions
How you manage a handful of major life choices can make or break your financial future. A lot of people spend a whole lot of time worrying about the small stuff: a little extra yield on their savings, a few dollars less in mortgage payments, slightly higher returns, slightly lower commissions. They pore over Internal Revenue Service publications and fat tax guides searching for ways to save a few hundred bucks on taxes. They read personal-finance magazines, buy books and scour the Web looking for tips. Fine. It pays off. But does managing your money have to be this…
How Online Surveys Can Make You Money?
Have you heard of the websites that offer payment in lieu of taking online surveys? Yes this is true. Anyone who has recently browsed the avenues of work-at-home jobs must have seen such alluring ads. It must have made you wonder— how online surveys can make you money. I am here to explain you all that. So, keep reading. In fact, the online surveys include the whole process that claims to help people to earn money. For that, first you need to register with the website and then file out for consumer surveys. Whether you can earn money out…
Six Reasons Why You Would Want To Make Money Online
Making money online in the comforts of your own home is a dream come true for anyone with the desire to get out of the everyday 9-5 routine. Advantages You can learn what real freedom is; you will have more time to take care of your family, be your own boss in your own home business, work when, and where you want, have flexible hours and no dress code. You will have the opportunity to earn income in over from all over the world. It is much less expensive to start your business online, then through the conventional ways.…
What Does It Take To Make Money Online?
Do you harbor the dream of dreams? Working at home and making a decent living, not answering to anyone but yourself and fixing your own hours and dress code? Do you dream of a home based business opportunity that actually works, doesn't siphon off all your spare money but puts the bucks in your pocket? Is there really such a thing? The dream of making money on the Internet is not a simple fantasy. You can make it a reality if you're willing to follow some basic precepts. Here are a few principles to follow when contemplating starting up…
How Can I Really Make Money Online?
This is the age old question. Funny to think that anything about the internet could be 'age old' but here it is. Ever since there was an internet for us all to use, people have been trying to profit from it. Many people have succeed, many are still trying. There are plenty of scams out there promising you instant riches for only $137. The seller of this scam will show you proof that his method works by revealing his bank account. Of course this works for him, he's selling the scam. His bank account is not proof that his…
ICICI -The Orginal & Duplicate
Dear Friends, Today I got one mail from” ICICI”. Actually I have no account with ICICI. Please go through the screenshots . This email appears to be sent out by criminal hackers. They are fishing for infromation (Phishing) and try to make the emails appear to be authentic. When you click the links inside the email, you are taken to a site that looks real, but really they are just trying to get your personal data. Learn more about email scams and how to protect your computer from hackers. If you are unsure about an email you receive, contact…
How To Make Money With Online Surveys
If you’re got some spare time and you’d like to make some money without much work, online surveys are just the thing for you. With a computer and a little advice, you’ll be all set to make some extra cash for you and your family. Be realistic You first have to realize that when you take online surveys, you won’t be paid thousands of dollars. In fact, the people that do take online surveys regularly will usually say that the best way to make more money is to take more surveys. You’ll need to sign up for a few…
Make Extra Money By Taking Paid Surveys Online
So many households these days face a challenging economic dilemma. How can we generate some additional income yet still allow time for the kids and the general responsibilities of home management? In the days before the internet many found the solution to this with home mailing and assembly opportunities. Today, however, the net has brought us the unique part time job of taking paid surveys online. By taking paid surveys online you are providing customer experience information to companies seeking to improve their products and services. In exchange for your time you receive compensation and a chance to help…
How To Make Money Online With Blogs
You spend hours every day with your weblog. It's become a labor of love. Wouldn't it be nice to find a way to earn some extra money with your weblog? There are ways of making money online with blogs. The method you've probably seen on most blogs is to host ads, such as with Google Adsense. You let Google put their ads on your site and get paid when people click on the ads. These get mixed reviews. Some say they make a lot this way, but many people don't report much income. Since they are free to ad…
How To Make "Fast Money" Online
Do you worry about your personal expenses? Are you having difficulty financing different things? What if someone offers you an opportunity to earn money in just a snap of a finger? Everybody would love to earn money without exerting too much effort. For some people, the internet is just a bunch of technology maniacs. But this is absoluteley wrong. The internet produced more millionaires in the past decade than any other industry. Only few internet millionaires are known, most are anonymous “millionaires”. Ranging from different products and services that they offered online, these millionaires just used their willingness and…
Make Money Online Is Easy
Wouldn’t it be INCREDIBLE to be financially FREE? To be flexible enough to live at your heart’s desire? Achieve this by starting your own online business, selling informational products. Why do you want to sell Informational Products? Because it is easy and free or low in cost to transform your Idea into an informational product, for example an e-Book, like this article, a Video or Audio product, from the comfort of your own home by using a word processor. Imagine working for once on creating an ASSET that will work for you from then on, generating money constantly. How…
Phishing Filter: Help protect yourself from online scams
Help protect yourself from online scams Three ways Phishing Filter helps protect you Phishing Filter includes several patent-pending technologies designed to warn or block you from potentially harmful Web sites. 1. A built-in filter in your browser that scans the Web addresses and Web pages you visit for characteristics associated with known online Web fraud or phishing scams, and warns you if sites you visit are suspicious. 2. An online service to help block you from confirmed scams with up-to-the-hour information about reported phishing Web sites. (Phishing sites often appear and disappear in 24–48 hours, so up-to-the-hour information is…
How To Make Extra Money Online
You might have seen so many websites that offer you chances and opportunities to make money online at your own home or at work. It may seem very convenient and very easy to do. It's like a miracle enterprise that promises to give money and make you rich instantly. However, you should choose what kind of online business you want to do carefully. First you have to think of the advantages of owning an online business. In difference to real world shops your online business will be open 24 hours a day, 7 days a week. You don’t need…
8 guidelines to make money from IPOs
There are basically two ways in which you can buy shares: you can either buy them from the stock market, or you can apply for them in a public issue. The stock market is a secondary market where shares are bought and sold, whereas the primary market is one where companies issue shares for the first time. When a company raises funds by issuing new shares or debentures for sale to the public, it is called a public issue, or an IPO (initial public offering). Such new shares and debentures are called new issues. New issues of capital can…
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