February 7, 2017

ASSORTED TAX RATE FOR CIVILIANS ACCORDING TO THEIR EARNINGS

 MoneyMindz.com India's First Free Online/ on-call Financial Advisory

MoneyMindz.com India’s First Free Online/ on-call Financial Advisory  

Arun Jaitley emboldened the individual tax payers in our country by carving the tax rate to 5% for citizens having taxable income within Rs. 2.5 lakhs to Rs. 5 Lakhs from an earlier scheme of onerous 10%. Concurrently, our Finance minister has inflated the surtax of 10% on the 30% tax amount for denizens having an income between Rs. 50 Lakhs to Rs. 1 Crore which was there before to counterbalance the government income from any loss.The new tax slabs which will be commencing from April, 1 2017 are as follows:

General Category (for person up to 60 years age) :

For General Category – Individuals with an age up to 60 years will taxable if income is more than Rs. 2.5 Lakhs. No tax will be foisted upon people having income in between Rs. 0 – Rs. 2.5 Lakhs. A tax of only 5 per cent will be applicable if income is between Rs. 2.5 – 5 Lakhs. Further, the income tax rebate of up to Rs. 5,000 which was earlier given for taxable income up to Rs. 5 Lakhs, has been reduced to Rs. 2,500 and it will be available for taxable income of up to Rs. 3.5 Lakhs. It means if an individual has a taxable income of Rs. 3 Lakhs, his net tax liability will be zero (tax @5% on Rs. 1 Lakhs is Rs. 2,500 minus rebate of Rs. 2,500).

Income Tax
Up to Rs. 2.5 Lakhs Nil
Rs. 2,50,001-Rs. 5 Lakhs 5%
Rs. 500,001-Rs. 10 Lakhs 20%
Above Rs. 10 Lakhs 30%

For income between Rs. 5-10 Lakhs, a tax of 20 per cent will be applicable and for income above Rs. 10 Lakhs a tax rate of 30 per cent will be applicable. However, people having taxable income of more than Rs. 50 Lakhs but less than Rs. 1 Crore, a new surcharge of 10% will be imposed along with the a tax of 30 per cent. For example, if an individual has a taxable income of Rs. 55 Lakhs, his tax liability will now increase from Rs. 15.19 Lakhs earlier to Rs. 16.57 Lakhs now (income tax of Rs. 14.62 Lakhs plus surcharge of Rs. 1.46 Lakhs and education & higher education cess of Rs. 48,263). If taxable income is more than Rs. 1 Crore, then the surcharge will increase to 15 per cent of tax plus education and higher education cess of 3 per cent. However, on taxable incomes where surcharges are applicable, tax payers get the benefit of marginal relief, if applicable.

Senior citizens (for person between 60-80 years age) :

For senior citizens falling in the tax bracket of Rs. 0 to Rs. 3 Lakhs, no tax will be applicable. For income between Rs. 3-5 Lakhs, a tax rate of 5 per cent will be applicable. The tax rate and surcharge will be same as general category for income between Rs. 5-10 Lakhs and above Rs. 10 Lakhs.

Income Tax
Up to Rs. 3 Lakhs Nil
Rs. 3,00,001-Rs. 5 Lakhs 5%
Rs. 5,00,001-Rs. 10 Lakhs 20%
Above Rs. 10 Lakhs 30%
Super senior citizens (for person above 80 years age):

For people aged above 80 years no tax will be applicable for income up to Rs. 5 Lakhs. A tax rate of 20 per cent and 30 per cent will be applicable for income between Rs. 5 Lakhs and Rs. 10 Lakhs and Rs. 10 Lakhs and above respectively as in case of general category.

Income Tax
Up to Rs. 5 Lakhs Nil
Rs. 5,00,001-Rs. 10 Lakhs 20%
Above Rs. 10 Lakhs 30%

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FACTORS TO CONSIDER BEFORE BUYING A GOOD ULIP IN INDIA

The ULIP is the major financial product and is known as the Unit Linked Insurance Plan (ULIP). It is runaway hit, in many town and cities in India. Do not be afraid; make your insurance scheme work for you and your family.

ULIP offers various kinds of benefits and like a normal insurance plan; you will make premiums on a monthly basis. In most of the situations, a good ULIP helps in protecting the interest of the family against any unforeseen situations.

Means To Choose Correct ULIP:

Various ways are present in order to select ULIP and the ways are given below as follows:

  • You must select a good insurance policy, that is easy available offline and online.
  • One must do lot of research and check for ULIP, with the lowest expenses.
  • Please do check for the ULIP, offering more flexibility in choosing the policy terms.
  • Also one must make sure that ULIP offers the flexibility in the field of making premium payments.
  • Make sure that the ULIP is offering death benefits, higher than sum assured and value of funds.
  • Do make sure that a good ULIP is good in dealing situations/medical expenses.
  • A good ULIP is also good in taking care of your retirement and related benefits in a logical manner.

So, one can say that a good ULIP, Unit Linked Insurance Plan, is the best option to protect your near and the dear ones.

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 WHERE DO I INVEST IN?

MoneyMindz.com India's First Free Online/ on-call Financial Advisory

               MoneyMindz.com India’s First Free Online/ on-call Financial Advisory                                     

Imagine you are having all the comfort and luxury in the world and enjoying it to the maximum. You have lot of hard cash and do not know what to do with it. So you started spending the money left, right and centre.

Furthermore, due to this reason, your cash reserves came down very badly. You did not have any clue, about saving your hard earned money and did not know about the place to invest the money.

Moneymindz enters the scene, and has the army of personalised financial advisors, having wealth of knowledge, to advice on various financial products under the sun.

Million Dollar Question —Where To Invest?

Let me break the concept into simple parts, what is good for a cow, will not be acceptable to the lion. Assume the fact that you may/may not have sufficient money under your belt.

Not to worry, you can invest certain part of your hard earned money on financial and non-financial products. I am here to talk about the financial products. Some of the major financial products, where one can go ahead and invest your hard earned money are given below as follows:

National Pension Schemes:

The perfect financial products open to every citizens of India. One can obtain super tax exemption as per Section 80C. Furthermore, the interesting part is that it is important to purchase 40% of the corpus taken through the NPS during the retirements.

Term Insurance:

Let’s face the fact. You must earn well in order to invest well. You must do certain things like purchase a Term Insurance cover for you and your family. IRDA (Insurance Regulatory Development Authority) assist a person to obtain a cover 20 times more than annual income. So, it is simple, if you earning is 10 lakhs, you are eligible for coverage of 2 Crores.

A good house:

After demonetization, cost of real estate segment has come down. This is an open invitation, available for anybody to invest in realty segment.

Stocks:

One may doubt, as to whether investment in stock market can take place. The stock is always subjected to market fluctuations and select stock having the less fluctuations in the market.

Tax Savings Schemes:

One can invest the money in the mutual funds, NSC, PPF, Savings account, fixed deposits and other components in a logical fashion.

Fixed Deposits/Recurring Deposits:

This is creating ultimate waves in the silent stream of the financial markets. One can open the fixed deposits/recurring deposits in the bank and invest your hard earned money. Please do check about FD/RD rates.

Money in Gold:

Process of investment in gold is good and Indians have history of depending on gold more than others. Prices of gold has increased and  hence ideal place to invest. Gold Exchange Traded Funds are the ideal place to invest.

Money in IPO:

When you invest in the IPO, the returns will be always higher. Check for companies having good IPO and invest accordingly.

So, get rid of all confusions and invest wisely to earn better.  Have the maximum fun in life.

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YOU WANT TO SAVE TAX ON YOUR SALARY BUT DO NOT KNOW, WHERE TO START?

Let’s take a situation, where in you are working for the MNC(Multi National Companies)  in India. Salary is good and you get your salary on 30th of every month. Now, if you look at the salary slip there are deductions taking place. Some of the major component, where the salary is getting deducted consists of the following like:

  • Professional Tax
  • Employee Provident Fund
  • Tax Deducted At Source and so on.

Certain questions do come in your mind like are you paying excess taxes? Have you not done any proper tax planning? Do not panic, we would like to understand the way taxes can be saved on your hard earned salary in a logical manner.

Not to worry, Moneymindz is well equipped with personalized financial advisors, giving valuable advice in the field of tax planning.

Case Study: Mr.Raj is working in a MNC company and earning good salary. His salary is INR 25,000. Salary deduction would consist of professional taxes INR 200, tax deducted at source is INR 10,000 and the employee provident fund is INR 4800. He did not try to avoid taxes and hence faced lot of deductions.

Ways To Avoid The Taxes On Your Salary:

Salary Restructuring:

Doing an effective restructuring of salary is the major component. You must ask your manager/ finance team to restructure your salary in such manner that you receive good incentives.

Rent Payment:

In most of situations, company will offer accommodation to the employees. If it is not able to do, then you must find a good house for rentals. You need to deposit rent receipts to the finance team to avoid being taxed.

Leave Travel Allowances:

These expenses are removed from your salary and company gives part of salary as medical allowance. One can claim for LTA twice in a year. Please check these details with the HR department of your firm.

Public Provident Fund (PPF):

PPF is the major investment option introduced by government with reasonable interest rates/returns exempted from taxes. Investors can invest from INR 500 to INR 1, 50,000 in a financial year and get benefits like withdrawals, loans and others.

Life Insurance:

A unique contract with insurance company is life insurance policy.    It is influenced by the needs/goal of the policyholder. It offers protection for entire life of a person. Good to hear that death benefits from life insurance is absolutely tax free.

Unit Linked Insurance Plans (ULIP):

This offers unique coverage for policyholder with amazing investment options, to invest in mutual funds, stocks and bonds. The interesting features of ULIP deals with flexibility, transparency, tax related benefits as well.

5 Year Fixed Deposits:

Fixed deposit is a runaway hit among the Indians. Interest paid is quarterly/monthly and return on fixed deposit is very different from rate of interest. It is exempted from Section 80C of the Income Tax Act.

Equity Linked Savings Schemes (ELSS):

A unique fund, helping investors to get spectacular tax rebates under the Section 80C of the Income Tax Act. The main aspect of ELSS is that investor gets chance of investing in equity markets. Often fluctuates in market and there is no fixed returns. The lock in period of ELSS is three years.

Pension Plans:

Various pension plans available in India, helping a person to use a part of savings, offering steady income, after the retirement. One can receive pension monthly/quarterly or in a yearly fashion.

So, please do not allow your hard earned salary to come under the tax net.

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