Income Tax Rules

Know your Tax rates

The new Tax rates for the Financial Year ENDING 31st March 2010.

• Up to 1,60,000 NIL
• 1,60,001 to 3,00,000  10%
• 3,00,001 to 5,00 000  20%
• Above 5,00,000  30%

For Women up to 1,90,000  Nil.
For Senior Citizens up to 2,40,000  Nil

No ENTRY Load – MF investments

Do you know ? ? ?

There is “no entry load”  on Mutual Fund investments from   1st August 2009.

when you invest in Mutual Funds thro’ Financial Advisor, so far, there is an entry load of 2.25% ( even for SIP investments). This is up to 31st July.

SEBI, the regulator ruled that there should not be any entry load on investments from 1st August 2009. There will be an exit load of 1% on redemption.

what the investor should do now ?

wait till the deadline and then invest(after 31st July)?

what the Advisor should do now ?

advise the client not to invest in July’09 ?

what the AMCs should do now ?

close the doors and stop accepting the purchases?

what is actually happening ? ? ? ? ? ?

what is right ?

is there any answer ? ? ?

Equity Investing

why one should invest in equity.

The market was very volatile (as usual) in the recent times.

During 2009 Sensex was at a high of 15600 in June and at a low of  8047 in March.

If you buy and hold at every low you would have gained in an average 20% to 30%.

If you feel the return of 20 % to 30 % in  share market is very less, then you dint understand market and it is not the place for you. you have to start some other business.

You buy regularly at every low and hold it for a long term. ( long term differs from person to person). For someone who earned or lost huge in share market one month is long term.

Normally you hold it for min 3 years, accumulate at every opportunity. if the price of your holding rises more than 70% sell it off. Sit on cash. wait for the opportunity.

It happened between March’09 to June’09. Unimaginable return. Axis Bank, ICICI Bank and Reliance Capital gave more than 150% return.

it is very occasional. at times you may loose also but never sell at a loss. wait for the opportunity to buy. every fall is an opportunity.

So invest in equity, treat it as a business, devote time for this every day.

Happy Trading

to be continued

What’s your money worth

(I feel Budget in India is nothing of interest, for most of the middle class and below, except the direct tax exemptions)

I would like to rewrite here, the article of Ms Mohini Kent on Sunday Times, on the Budget eve.

WEALTH HAS BECOME THE YARDSTICK OF SUCCESS.

“If a man is wealthy,(it means)he is handsome and wise and he can sing well too” it is a Yiddish proverb but it could be applied anywhere in the world, with wealthy people expressing ‘strong’ opinions on everything under the sun. Money seems to confer the highest caste on people and they seen to hold the key to wisdom. we listen to them attentively, hoping some of the magic will rub off on to us.

It is been instrumental in improving our lives and made the world far more democratic because anyone can buy anything today in exchange for a few pieces of paper.

Today,the poor can afford what even the rich found difficult in the past – foreign travel, for instance.

It is one of the major energies of the world, along with sex, although in many cases, the two go together. Even remote tribal who still live in a moneyless world feel the force of money when outsiders use paper currency to buy their land and are granted the right to fell their forests.

So, what do we do? Make money, spend it and enjoy it. In the meantime, it is vital to recognize our relationship with money and how it colors our relationships with others, including those most dear to us. Money is not a piece of printed paper, it has acquired enormous emotional connotations and psychological hues.

Money spells power, control, comfort and security. Fawning friends and the envy of peers makes having money even more satisfying . It gives us a sense of superiority.

Sometimes it seem as if a man’s most enduring love affair is with money, his own money and that of others.

it is an obsession, almost an occult possession by another entity. In its pursuit, men and women can become ruthless, even evil.

Rich men use money to cheat death by trying to buy immortality . some of the foundations they run have less to do with compassion and more to do with their personal wish to perpetuate their names. It’s extremely rare for anyone voluntarily to give up money and power. Andrew Carnegie (Nov25,1835 – Aug 11,1919) was that rare individual. He wondered “what to do with the enormous wealth we have” and wrote that surplus wealth could be disposed off in three ways

1. Left it to the family
2. Bequeathed (willed) for a public purpose
3. Administered in one’s lifetime

Traditionally, people opt for for one of the first two but Carnegie concluded that an individual should “ set an example of unostentatious living; provide moderately for the legitimate wants of those dependent upon him: and, after doing so, to consider all surplus revenues which come to him simply as trust funds” to be used for the good of the community. The man of wealth then becomes a trustee and agent for his poor fellowmen.

Carnegie knew all about poverty. He was born in a one-room cottage in Scotland. His family emigrated to America, where he took up his first job at 13 years in a cotton mill. In a classic rags-to-riches story, he built a profitable empire of steel (which later became US Steel) and became the world’s second richest man, after Rockefeller. After some time, Carnegie sold his company and devoted the rest of his life to philanthropy, building more than 3000 libraries, schools and universities in America. He wrote: “The man who dies rich dies disgraced”. By the time he died, he had given away the bulk of his vast fortune.In India JRD Tata did something similar.

Money can bring us joy; it can bring us misery; it can buy us attention, isolate us; binds families or split them. Everyone have to understand money, build a healthy relationship with it, realize its true value and purpose.

Thanks Sunday Times.

I feel In India, we have more Philanthropists. N R Narayana Murthy and Nandan Nilekani come to my mind immediately.

Govt budget alone can not bring in welfare to all the citizens in any country. The rich and the Corporate have a duty to contribute MORE to the Nation.

File your IT return

You (individuals) are supposed to file your Income Tax return every year before July 31st.

Now you are filing the return for the financial year 2008 – 09.(for the earnings from 1st April 2008 to 31st March2009)

The assessment year is 2009 –10.

No document (even TDS certificate) should be attached to the form.

Income Tax Returns can be filed

1 In paper form using ITR 1 to ITR 4

2 Electronically under digital signature (online)

3  Electronically (online) then submitting the verification of the return in Form ITR – V

click here for E filing

SIP >> Systematic Investment Plan

Did you benefit from the record rise on ‘Golden Monday’ post election results?

Popular belief is that most of the investors could not benefit from this rally as more often than not,

investments are guided by feeling of greed and fear.

Remember, an investor’s worst enemy is not stock market, but his own emotions.

Only those investors

who remained invested throughout the turbulent period

or

invested when market sentiment was at its ebb

or

continued with their Systematic Investment Plan (SIP) have eventually benefited.

I would like to reiterate,

"It is not timing the market, it’s time in the market that is important".

Wealth isn’t something to admire. It is something you create.

Think of each SIP payment as laying a brick. One by one, you can lay the foundation for secured financial future.