ARE YOU A NON RESIDENT AND EARN ANY INCOME BY WAY INVESTMENT IN SHARES????

If you are an non resident and earn any income by way of sale of shares in Indian companies then you are come under the tax bracket under the head capital gain.

In case an assessee i.e. a non resident, earn any income by way of transfer of shares or debentures in an Indian company, shall be computed by converting

1.  The cost of acquisition of the assets

2.  The expenditure incurred wholly and exclusively in connection with such transfer

3.  Sale consideration received or accruing as a result of transfer of  capital asset

into the same foreign currency as was initially utilized in the purchase of such shares or debentures. The capital gain so computed in the foreign currency then thereafter converted into Indian currency.

The above said manner of computation of capital gain shall apply to capital gain arising from every reinvestment.

The key advantage of this computation is that the government is giving benefits to non residents with regards to loss that may arise due foreign exchange.

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THINK BEFORE YOU INVEST

Investment is always a key decision factor in the mind of every investor. Every one wants to earn healthy return out of the amount invested by him, but its very difficult to decided in which area the money should be invested whether to invest in shares or mutual funds or fixed income securities or government bonds etc. But after reading this article we enable you to take decisions. The following points may be considered before you invest in any instrument:-

1.      TYPE OF INVESTOR: Firstly you should aware of yourself what type of investor you are. Are you aggressive, moderate or conservative approach investor. What is your risk taking ability?

2.    MAKE PORTFOLIO: After you decide your risk taking ability, you should make your portfolio accordingly, if you are capable of taking risk, then you should invest in equity market which offers you maximum return but it also offer maximum risk to your capital but if you want security of your capital then you may invest in the government bonds, this is save investment, it assures capital but doesn’t offers you higher returns.

3.    DURATION OF YOUR INVESTMENT: There after you should also take into consideration the time period of your investment. If you want to invest money for long period then you may opt for equity market as these are generally provide healthy returns if you are a long term investor.

4.    REGULAR UPDATES: Keep your self updated about investment market that you may plan your portfolio further or may revise your portfolio accordingly

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TAX PLANNING MAKE YOU RICHER!!!!!

Tax planning plays a vital role in your portfolio

A small Portfolio plan has been described herein, which may make you feel the importance of tax planning in your portfolio

Suppose your monthly income is Rs 30,000 and your monthly expenses is Rs 20,000

It means you save Rs 10,000 monthly.

Suppose you just keep this money in your saving account which offers you only 3.5% to 4% interest annually.

By this you will earn interest of Rs 1943 at the end of the year and at the end of year you will have to pay tax on your salary which is Rs 3,60,000 is Rs 18740 (including tax on interest from saving account)

But if you plan your portfolio you will not only earn higher interest moreover you will save your Tax liability too.

Interest earned at the end of year(in Rs)                 

Monthly income                  Rs 30000      

Monthly expenses                Rs 20000

Monthly savings                        Rs 10000

Now,     

Insurance premium (monthly)         Rs 1000        nil

Saving a/c (monthly)                  Rs 2000        388

Tax saving bonds (through sip)       Rs 5000        2249

Public provident fund (monthly)      Rs 2000        899                   

Total                                          Rs 10000       3536

Moreover you have deposited of Rs 1,08,000 in the form of public provident fund, insurance premium and tax saving bonds which is eligible for deduction under section 80c of income tax act, 1961

Therefore, your tax liability will be in this case is of Rs 7688 (including tax on interest on saving account and return on tax saving bonds)

The key highlight of this portfolio is that you have earned an additional interest of Rs 1588 and moreover you have save tax of Rs 8812 and additionally you will get an insurance coverage too and you have some amount in your saving account which is meant for meeting urgent needs.

In this portfolio we have assumed that the monthly interest on saving is 3.5% and interest on tax saving bonds and on PPF account is 8%

The interest rate may vary depending on the investment company’s or different banks or as per government policy.

The tax slab is used for the purpose of assessment year 2012-2013 and the individual portfolio used here is assessee other senior citizen and female assessee.

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SUFFERED ANY LOSS IN BUSINESS????

If you earn losses from business, you can carry forward your loss to the subsequent years where such loss cannot be set-off due to the absence or inadequacy of sufficient profits in the relevant previous year.

Following are the conditions that must be considered for carry forward, carry forward and set-off of losses:-

1.  The loss should have been incurred in business, profession or vocation.

2.  The loss should not be in nature of a loss in the business of speculation.

3.  The loss may be carried forward and set-off against the income from business though not necessarily against the profits and gains of the same business or profession in which loss was incurred, but a loss carried forward cannot under any circumstances, be set-off against the income from any other head other than profits and gains of business or profession.

4.  The loss can be carried forward and set-off against the profits of assessee who incurred that loss, it can now be carried forward and set-off by his successor only if he carried on the same business.

5.  The loss can maximum carry forward for the period of 8 yrs immediately succeeding the assessment year in  which loss was incurred.

6.  As per section 80 of income tax act, 1961, the assessee in order to carry forward the loss to subsequent year, he must required to file income tax return.

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INVESTMENT - A CORE DECISION MAKING PROCESS

Investment is an core decision making process. Decision of making investment in any instrument is very important from the point of view of both return and risk. Investment in an three way process, it means investor should follow the following steps before making any investment

STEP 1. THINK BEFORE YOU INVEST

Firstly, the investor must think in which instrument he wants to invest his hard earn money. If he is of conservative nature then he should opt for instruments which provide least risk. Generally instrument with least risk element provide less return, for example, investment in government bonds, bank fixed deposit etc, these instruments provide least risk which is generally known as safe investment option but these instrument provide interest ranging between 7% to 11 % p.a depend upon tenure of investment.

If he is of moderate nature then he should involve risk element in his portfolio, which provide more interest than of conservative nature investor, for this purpose, he may invest in SIP in diversified mutual funds which offer higher return

But if investor is of aggressive nature and ready to take risk, then he should invest in equity market which gives highest return as compared to the other two, but in this case the risk is highest, an investor may suffer heavy losses.

STEP 2. UNDERSTAND YOUR INVESTMENT INSTRUMENT

Secondly, investor must read all the investment documents carefully, he must aware of the return and risk attached to the investment

STEP 3. INVEST IN THE INSTRUMENT

At last, he should invest in the instrument after reading all the documents, and his portfolio needs.

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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 

HAVE YOU RECEIVE ANY MEDICAL FACILITY, THEN KNOW YOUR TAX IMPLICATIONS

HAVE YOU RECEIVE ANY MEDICAL FACILITY, THEN KNOW YOUR TAX IMPLICATIONS

ALOMOST EVERY EMPLOYER PROVIDE MEDICAL FACILITIES SAY MEDICAL PERQUISITE TO THEIR EMLOYEES FOR HEALTHY ENVIRONMENT AT THEIR WORKPLACE

IF ANY EMPLOYEE RECEIVES ANY MEDICAL FACILITY FROM HIS EMPLOYEE WHETHER IN THE FORM OF REIMBURSEMENT OR ANY FREE MEDICAL FACILITY IS TAXABLE AS PER INCOME TAX ACT, 1961

THE MEDICAL FACILITY MAY PROVIDE IN INDIA OR IN FOREIGN COUNTRIES, IN BOTH THE CASES THE TAX IMPLICATIONS ARE DISCUSSED BELOW,

1. IN CASE MEDICAL FACILITIES/TREATMENT PROVIDED IN INDIA

1. EXPENDITURE INCURRED OR REIMBURSED ON ANY MEDICAL TREATMENT PROVIDED TO AN EMPLOYEE OR ANY MEMBER OF HIS FAMILY IS FULLY EXEMPT WITHOUT ANY LIMIT FOR TREATMENT IN ANY HOSPITAL, DISPENSARIES etc. MAINTAINED EITHER BY EMPLOYER, GOVERNMENT, ANY LOCAL AUTHORITIES, IN HOSPITALS APPROVED BY GOVERNMENT OR APPROVED HOSPITALS FOR ANY SPECIFIED DISEASE LIKE CANCER HOSPITALS
2. HEALTH INSURANCE PREMIUM INCURRED OR REIMBURSED FOR INSURANCE ON HEALTH OF EMPLOYEES OR NAY MEMBER OF HIS FAMILY IS FULLY EXEMPT WITHOUT LIMIT.
3. REIMBURSEMENT BY THE EMPLOYER OF ANY AMOUNT ACTUALLY SPENT BY EMPLOYEE FOR OBTAINING HIS OR HIS FAMILY MEMBER’S TREATMENT IN ANY HOSPITAL OTHER THAN ABOVE, NURSING HOME OR IN A CLINIC IS NOT TAXABLE BUT UPTO MAXIMUM OF Rs 15,000 OR 20,000 I CASE OF SENIOR CITIZEN

INCOME DEEMED TO BE RECEIVED IN INDIA

INCOME DEEMED TO BE RECEIVED IN INDIA

THERE ARE CERTAIN INCOME WHETHER YOU ACTUALLY RECEIVED OR NOT, THE GOVERNMENT WILL ASSUME THAT YOU HAVE EARNED AND RECEIVED THAT INCOME.

THE FOLLOWING ARE THE INCOME WHICH THE GOVERNMENT WILL ASSUME THAT YOU HAVE RECEIVED THAT INCOME

1. THE ANNUAL INCREASE IN INTEREST TO THE BALANCE OF AN EMPLOYEE IN RECOGNISED PROVIDENT FUND (PF) IN EXCESS OF 9.5% p.a
2. CONTRIBUTION OF THE EMPLOYER TO RECOGNISED PF IN EXCESS OF 12% OF THE SALARY OF EMPLOYEE
3. TRANSFER BALANCE IN THE RECOGNISED PROVIDENT FUND FROM UNRECOGNISED PROVIDENT FUND.
4. THE CONTRIBUTION MADE BY THE CENTRAL GOVERNMENT OR ANY OTHER EMPLOYER IN THE PREVIOUS YEAR, TO THE ACCOUNT OF AN EMPLOYEE UNDER A PENSION SCHEME TO IN PENSION SCHEME OF CENTRAL GOVERNMENT (80CCD)

 TIP FOR TAX IMPLICATION

THE ASSESSEE OR EMPLOYEE SHOULD KEEP REGULARLY CHECK THE INTEREST RATE TO HAVE CHECK THE IMPLICATION OF TAX AS EXPLAINED AND ALSO REFER SECTION 7 OF INCOME TAX ACT, 1961

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