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It is mainly a financial blog to provide various facts,figures,news and happenings over global financial market to it's readers.
Wednesday, January 16, 2013
How to get rich quick in 2013
More is not always better while investing to save tax
Most salaried employees are running around to make last
minute investments to save income tax and provide the proof of investments to
the employer. This is because most companies ask their employees to submit the
proof of their investments in January to avoid deduction of higher taxes from
the salary. Last minute tax planning is an age old practice that forces tax
payers to make hasty, and often wrong, decisions.
Courtesy-http://economictimes.indiatimes.com/personal-finance/tax-savers/tax-news/more-is-not-always-better-while-investing-to-save-tax/articleshow/18027366.cms
Typically, some individuals invest more than the required
amount to save taxes. They also end up parking money in wrong products in the
process, which may have an adverse impact on their cash flows and return
prospects. It is not surprising that the insurance industry do most of its
business during the tax- saving season between January and March every year.
"Often we tend to buy products or make investments
without doing the due diligence on our total tax structure. Having a tax plan
in place at the start of the financial year will help you make better decisions
and even reduce the burden on financials at the end of the financial
year," says Nitin Vyakaranam, founder & chief executive officer, Artha
Yantra, a financial planning firm.
A SMALL 80 C BASKET
Tax planning is all about Section 80 C for many individuals.
They believe they are claiming all tax break if they invest Rs 1 lakh in some
of the usual investment tools like public provident fund, national savings
certificates, tax planning mutual fund scheme and so on.
But what tax payers don't account for is the employees'
contribution to provident fund, children's school tuition fees and the
principal repayment of housing loans also qualify for tax deduction under
Section 80 C, which is capped at an overall limit of Rs 1 lakh.
If you invest anything over and above Rs 1 lakh in ELSS, life insurance, PPF or NSC, it does not give you an extra tax benefit. It is just that your money gets locked in for a certain period which can range from 3 to 15 years in the above mentioned products.
If you invest anything over and above Rs 1 lakh in ELSS, life insurance, PPF or NSC, it does not give you an extra tax benefit. It is just that your money gets locked in for a certain period which can range from 3 to 15 years in the above mentioned products.
For example, EPF contribution and life insurance premiums are
covered under Section 80C apart from the principal repayment of housing loans.
That means most regular employees can invest only a few thousands extra under
Section 80C. For example, if your EPF contribution is Rs 5,000 per month, it
would exhaust more than half of Section 80 C. Add your life insurance premium
and you will know how little you can save under the section.
"Typically, your existing investments would include your
contribution to EPF, life insurance premiums, housing loan repayment, stamp
duty and registration fees paid, children tuition fees, etc.
If the sum of all these exceeds Rs 1 lakh, then you don't need to invest further as the deduction is capped at Rs 1 lakh," says Vaibhav Sankla, director, H&R Block, India.
If the sum of all these exceeds Rs 1 lakh, then you don't need to invest further as the deduction is capped at Rs 1 lakh," says Vaibhav Sankla, director, H&R Block, India.
However, if the sum of your tax-saving investments is less
than Rs 1 lakh, then you may consider investing the balance amount for
additional tax benefits.
For example, if your existing investments are to the tune of Rs 60,000 then you can still make additional tax saving investments of Rs 40,000 (Rs 100,000 minus Rs 60,000). "But the tax saving on the additional investment would be Rs 4,000 only.
In such cases, many tax payers would rather opt to pay income tax of Rs 4,000 than blocking Rs 40,000 in a tax-saving scheme," says Sankla.
For example, if your existing investments are to the tune of Rs 60,000 then you can still make additional tax saving investments of Rs 40,000 (Rs 100,000 minus Rs 60,000). "But the tax saving on the additional investment would be Rs 4,000 only.
In such cases, many tax payers would rather opt to pay income tax of Rs 4,000 than blocking Rs 40,000 in a tax-saving scheme," says Sankla.
Courtesy-http://economictimes.indiatimes.com/personal-finance/tax-savers/tax-news/more-is-not-always-better-while-investing-to-save-tax/articleshow/18027366.cms
Final letter of Ratan Tata to the employees
In a beautifully worded letter, outgoing chairman Ratan Tata
in his final letter to the employees called upon them to face the challenges
ahead with grit and determination. The humble industrialist expressed his
gratitude and asked for his employees' support for his heir Cyrus Mistry.
Dear Colleague,
As 2012 comes to an end, let me wish you and your family all
the best for the New Year. I hope that 2013 and the future years bring you good
health, peace of mind and great happiness.
This is also the last time that I write to you prior to my
retirement as the Chairman of the Tata Group and I want to convey to you how
privileged I have been to have had the opportunity of leading this great Group
over the last two decades through good times and bad
Whatever has been achieved has only been possible because of
the amazing spirit, the dedication of each one of you and the enormous support
and faith reposed in me, for which I am deeply grateful and appreciative.
I feel immensely proud of the manner in which the employees
and the companies have come together in facing crises from time to time. These
have included adverse market conditions, natural calamities like earthquakes
and tsunamis and gruesome acts of terrorism.
The memories of personal sacrifices, loyalty and individual
acts of heroism will always remain in my memory, to reinforce the great sense
of pride I have in having been a member of this team. We today are a $100
billion Group in revenues.
Over the past 20 years our revenues have grown about 20 times
and today 58% come from overseas operations. Our brand has emerged as the 45th
global and the number one Indian brand. Our products and services are present
in 85 countries.
We therefore have every reason to feel proud and feel confident
in facing the challenges ahead. The difficult economic environment that we face
in the current year will most likely continue through most of the next year.
We will probably see continued constraints in consumer
demand, over-capacity and increased competition from imports. There will
therefore be great pressure on our companies to reinvent themselves in terms of
business processes and to dramatically reduce costs, to be more aggressive in
the market place and to widen our product range to better address consumer
needs. We will also need to contain our borrowings and work hard to retain our
margins.
This environment would once again call on you for your
support, your commitment and your dedication to achieve success in these
somewhat difficult times. This seemingly gloomy picture however will be a
passing phase.
I feel confident that the robust growth that India has shown
over the past several years will be re-established and the strong fundamentals
in the country will result in India once again taking its place as one of the
economic success stories of the region.
The Tata Group will undoubtedly play an important role in the
continued development of our country, providing leadership in various
industrial segments in which they operate and living by the value systems and
ethical standards on which our Group was founded. The future growth of the
Group will be led in the coming years by Cyrus Mistry.
I am sure that he will receive from you the same support, the
same commitment and the same understanding that I have enjoyed over the years.
Tatas are a Group where I feel proud to have belonged and proud to have been
associated through the years. I wish the Group, Cyrus Mistry and each of you
great success in the years ahead. I hope the Group grows and shines in the
coming years.
Yours sincerely,
Ratan N Tata, chairman, Tata Sons
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