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Friday, February 4, 2011

Tips for Income Tax for Financial Year (2010-11)

Govt. imposes tax on Individual/HUF/ companies/ firms the earnings from taxable sources. This tax is called Income tax. Earning is some sources are tax-free. Sources like agriculture, Tax Saving Bonds, Tax Saver Mutual Funds etc. Income tax deduction depends upon the earning. Less earning less or no income tax, much Income tax means much Income tax.
Income Tax Slabs / Rates for Financial Year (2010-11)

For General Citizens

Slab (Rs.)Tax (Rs.)
less than 1,60,000Nil
1,60,000 to 5,00,000(TI – 1,60,000) * 10%
5,00,000 to 8,00,00034,000 + (TI – 5,00,000) * 20%
Greater than 8,00,00094,000 + (TI – 8,00,000) * 30%
For Women aged 65 years or less
Slab (Rs.)Tax (Rs.)
less than 1,90,000Nil
1,90,000 to 5,00,000(TI – 1,90,000) * 10%
5,00,000 to 8,00,00031,000 + (TI – 5,00,000) * 20%
Greater than 8,00,00091,000 + (TI – 8,00,000) * 30%
For Senior Citizens (Individuals age above 65 years)
Slab (Rs.)Tax (Rs.)
less than 2,40,000Nil
2,40,000 to 5,00,000(TI – 2,40,000) * 10%
5,00,000 to 8,00,00026,000 + (TI – 5,00,000) * 20%
Greater than 8,00,00086,000 + (TI – 8,00,000) * 30%

The Tax collected by Government is utilized in various development schemes, payment of employees etc. So it’s our duty to pay tax, because it is returned back to us in other forms.

Tax planning is a very key issue for everyone. Generally everyone think about saving tax when they are asked about deduction of tax on their income. So it’s good to plan your tax saving on the start of a financial year. Calculate your estimates income during the year & your expected tax saving during the year.

At the end of financial year if you see that your tax deduction is beyond your tax limit, then you can claim Tax refund from Income tax office by filling up relevant claim form.

Key points of Tax Saving Plan: -

1. Keep the records of your Tax saving Investment.

2. Save the Receipts of each investment like LIC/ Insurance premium receipt, Mutual fund investment records.

3. Get statement from your bank, of your loan a/c on time to keep watch on the interest, which you have paid on you loan.

4. As per section 80 G of the Income Tax Amendment Act of 1961, 100% of the donations are non-taxable. So it is good potion to donate & save tax and also gain the wishes.

5. Tuition fee paid on your children’s education is also tax-free. So claim tax rebate on it also.

6. Provident Fund account (PPF) and also the National Savings Certificate (NSC) which is a saving scheme of the Post Office Invest in non-taxable schemes and investments. So better to invest in PPF’s & NSC. All these options come under 80C.

7. According to Section 80 DD, Medical insurance. Rs 50,000 of the primary amount are non-taxable, but it can go up to Rs 75,000 if the disability is severe. In your Income tax submission form show this is an expense. Main thing is that preserve all medical bills so that you can show it when required.
8. In last but not least, file your Income Tax Return on time, because late filing attracts penalty. Also you will get refund on time, if any.

8. In this financial year (2010-11), you can save Rs 20000 more above 1 Lac limit. This saving should be in Long Term Infrastructure Bonds.

While investing in tax saving options, one should also ensure that his portfolio should be diversified. Invest in different options of tax saving. It will definitely give you tax relief as well as Income gain.
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Thursday, February 3, 2011

Now it's time to banks fixed deposits

Due to rise in inflation now days the rate of interest on Fixed Deposits (FDs) increased quite frequently. Every bank is increasing their deposit rates. Fixed Deposits (FDs) are the safest way of investing & saving. Also there is flexibility of payment anytime. So if you want to invest safely, FD’s are the best option now.

In present scenario almost every bank’s deposit rate is between 8.75% to 9.30%.

UCO Bank is offering 8.75% for general customers & 9.25% for senior citizens for 456 days under new Scheme called UCO Dhan Vriddhi Scheme.

From 1st Feb 2011, almost every bank has raised their Lending Rated near about 50 Base points. It is a clear signal to increase in Deposit rated in Banks. So we should avail these benefits & invest in FD's of Banks.
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Monday, January 31, 2011

IDFC long term infrastructure bond

IDFC long term infrastructure bond is closing on 4th Feb 2011. You can save 20 thousands from income Tax above 1 Lakhs limit under Section 80CCF. You can purchase in form of Physical form if you are not having any DMAT account. If you are having a DMAT account, then you can put it in your DMAT account & trade in it after lock-in period that is 5 years.

Infrastructure Development Finance Company (IDFC) is in field of infrastructure project. This company is having a big profile in highway development projects. So it is a good opportunity to invest in it via a long term bond. Also it will save tax in this financial year.

You will get assured 8% interest rate on this long term bond.
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Sunday, January 30, 2011

ULIP sales down due to new Guidelines

Now days ULIp’s are loosing their popularity. Since last 2 or 3 months it has been observed for unit linked insurance plans. The new guidelines for ULIPS’s are encourage, but it’s effect is not taking place. According to new guidelines the overall charges on ULIP’s has been cutoff & also minimum guaranteed returns are also prescribed. Inspite of this no goal achieved.

Everyone is hoping that in next six months their may be some increase in ULIP”s sale. IRDA also claimed that premium for ULIP’s has been continuously decreased in last quarter. It is the effect of new norms and guidelines that the 23 life insurers have stopped promoting unit linked insurance plans. In this way near about 250 unit linked insurance plans have been stopped.

But the insurance and banking industry is still hope that ULIPs become more popular product because of new IRDA guidelines. The new norms are much favorable for investors as compare to the insurance companies.

Unit linked insurance plan (ULIP) is not a pure life insurance solution but it is mixup of Life insurance and investment both. If you have sufficient Life insurance cover, then you might be away from ULIP’s, because the primary focus of ULIP’s is over insurance not Profit earnings.
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