FIXED INCOME INSTRUMENTS- A HOT INVESTMENT OPTION

FIXED INCOME INSTRUMENTS- A HOT INVESTMENT OPTION

If you are an investor with an conservative approach and doesn’t want risk element in your portfolio then your portfolio must be consists of fixed income instrument. In today’s market, fixed income instruments are giving higher return as compared to the other options although investment in equity may give higher return but it always carry an risk element, which means that the return may fluctuate as per the market condition.

When it compared with fixed income instrument although fixed income instruments provide the comparatively less return then equity but still its rate of return is fixed throughout its tenure which means it is independent of market.

The following are the fixed income instruments available in the market:-

1.  Fixed Deposits- Rate Of Interest may vary from 8 % to 10.5% p.a, rate of interest may vary from bank to bank and its also depend on the tenure of deposit.

2.  Public Provident Fund- Rate Of Interest is 8% p.a

3.  National Saving Certificates- Rate Of Interest is 8% p.a

4.  Post Office Savings- Rate Of Interest is 8% to 8.5% p.a

5.  RBI Bonds- Rate Of Interest is 8% p.a

The main advantage of investment in above investment is that the investor gets the tax relaxation. The investment made in these instruments, the investor can save tax subject to specifying limit depend upon the different option and as per income tax act, 1965

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GOLD SHINE IN THE FIELD OF INVESTMENT

GOLD SHINE IN THE FIELD OF INVESTMENT

Investment in the gold is hot option in the field of investment. What makes it very popular due to two reasons, firstly it’s a safe investment as its value doesn’t see downward movement as in shares in which returns are not predictable and its give better returns as compared to other investment.

 You can invest in gold through many routes:-

1. GOLD FUTURES

Gold futures is suited for the active investors as in this type of gold investment the risk is high, but the transaction cost, brokerage and warehousing charge vary between .003 to 2.0%.

There is 100% investment in gold in gold futures. In gold futures, returns is mostly higher than those from physical gold, in terms of liquidity, it is highly liquid form of investment.

2. E-GOLD

E-Gold is suited for the passive investors as in this type of gold investment the risk is low, but the transaction cost, brokerage and warehousing charge vary between 0.2 to 2.5%.

There is 100% investment in gold in E-GOLD. In gold futures, returns is mostly higher than those from physical gold, in terms of liquidity, it is highly liquid form of investment.

3. GOLD ETF

Gold ETF is suited for both active as well as passive investors as in this type of gold investment the risk is moderate, but the transaction cost, brokerage and warehousing charge vary between 0.2 to 0.5%.

There is 90-100% investment in gold and 0-10% in debt in case of GOLD ETF. In gold futures, returns is mostly higher than those from physical gold, in terms of liquidity, it is highly liquid form of investment.

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YOUR STRATEGIES NEED TO BE CHANGE AT DIFFERENT STAGES OF YOUR FINANCIAL LIFE

YOUR STRATEGIES NEED TO BE CHANGE AT DIFFERENT STAGES OF YOUR FINANCIAL LIFE

A. an individual’s financial needs are dynamic and your attitude towards finances should evolve over your life cycle

B.  Young professionals are situated in the right spot: they have steady income flow ahead of them and no liabilities. This is the time to start saving.

C.  At this stage, be more aggressive in investing, with more focus on equities.

D. Middle years are when you have a clear idea of your liabilities. Chalk out a clear plan for your financial goals.

E.  This is also the time to start making lump sum payments for certain expenses like house, car and so on.

F.  The final key stage is planning for retirement. The crucial part is here is to understand how much money you will need to live a proper life.

One should be clear in his investment approach. A proper investment portfolio will not only benefit him today but also secure his future. In brief, while planning for retirement, the key is understood how much money you will need to live the life style you are accustomed to. As today’s luxuries may be tomorrow’s necessities.

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source of information:   outlook money 

OWE MORE THAN ONE HOUSE- KEEP YOURSELF READY TO PAY TAX ON OTHER

OWE MORE THAN ONE HOUSE- KEEP YOURSELF READY TO PAY TAX ON OTHER

If you own more than one house property and both the houses are self occupied than the second house will be taxable under the head house property.

the government gives option to assessee to pay tax on the other house property at his own choice, it means assessee has option to pay tax on any house i.e. one house in this case will be self occupied and the other one will be deemed to be let out and its fair value will be taxable under the head house property in the relevant assessment year.

the assessee in this case, if he owned more than one house property and both are self occupied then he should evaluate the fair rental value of both the houses and house whose fair rental value is less, he should pay tax on that according to the slab rate of relevant assessment year.

If the assessee had obtained any housing loan on that let out property (which is deemed to be let out in above case), and paid any interest on above house, then he can claim deduction for the interest paid in the relevant assessment year

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YOUR EDUCATION LOAN CAN ALSO SAVE YOUR TAX

YOUR EDUCATION LOAN CAN ALSO SAVE YOUR TAX

If you have taken any education loan for the higher studies, you can save your tax. This deduction is allowed under section 80e of income tax act, 1961.

Section 80e provides deduction to an individual- Assessee in respect of nay interest on loan paid by him in the previous year out of his income chargeable to tax.

The loan must have been taken for the purpose of pursuing his higher education or for the purpose of higher education of his or her relative i.e. spouse or children.

Higher education means full time studies for any graduate or post graduate course in engineering, medicine, management or for post-graduate course in applied science or pure sciences including mathematics and statistics.

This education is allowed for computing the total income in respect of the initial assessment year ( i.e. the assessment year relevant to the previous year, in which the assessee starts paying the interest on the loan) and the seven assessment year immediately succeeding the initial year or until the interest paid in full by the assessee, whichever is earlier.

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