Tax Saving Fixed Deposit

Financial year of 2010 – 2011 may be the last year for you to invest in tax-saving fixed deposits. There is a question in everyone’s mind, what can be the effect of abolishment of tax-saving FDs, NSC for investors and banks? For those who still are not aware of upcoming tax-code for the financial year of 2011-2012, Pranab Mukherjee, Finance Minister of India, has proposed a new tax code for the financial year 2011. As per the new tax code, there will no income tax benefits under section 80C for Tax-Saving Fixed Deposits, NSCs, and ELSS.

If the current proposal gets passed by assembly next year, you will not be able to avail tax-benefits for FDs under sec 80C from the financial year of 2011 onwards. So, it may be the last chance for you to put some money in these tax-saving FDs. As an investor, you must invest some amount of money in this tax-saving instrument. You can check for interest rates offered by major banks (SBI, ICICI, HDFC and other private & government banks), so whenever you find an increase in interest rate, invest some amount to avail tax benefits.

These FDs comes with a 5 year lock-in period, and the investment options that will be available after the new tax-code implementation will not be much flexible. ULIPs could be the only option available for you to invest money with a lock-in of 3 years, but as per the various studies, ULIPs do not give much return before 7-10 years.

So, if you want liquidity of money along with tax-saving, tax-saving fixed deposits can be the good option to look out for in the financial year of 2010-2011. As an investor and tax-payers, we may lose some freedom after the new tax code implementation, so utilize the current year to get the maximum benefit.

Update:
As an update, direct tax code has been delayed by one year, i.e. 2012. So, you have an option to invest in Tax Saving Fixed Deposits for one more year, i.e. 2011. Click on the link to find the updates of new tax code for 2012.

New Income Tax Code for 2010 - 2011 by Pranab Mukherjee

Government on Friday, 26th Feb 2010 has proposed new income tax code for the financial year 2010 - 2011. As per the new tax code, positive modification has been introduced in tax slabs.

There will be no income tax till Rs. 1.6 lakh (1,60,000) same as before.
But there are good changes done for other slabs-

There will be only 10% tax from 1.6 lacs to 5 lacs changed from 1.6 - 3 lacs
20% tax from 5 lacs to 8 lacs changed from 3 - 5 lacs
30% tax on the income above 8 lacs.

To give infra sector a boost, additional Rs. 20,000/- tax break is given for infra bonds. Now one can invest upto Rs. 20,000/- in infrastructure bonds.

This is a positive step taken by Finance Minister Pranab Mukherjee to cheer the tax payers in the country. Share Market also welcome the budget and gained more than 2%.

Business Taxes in India - Indian Tax Structure

Every country has its own tax structure and you pay tax depending on the source of your income, whether you are salaried, self-employed or running a business. In India, there are different taxes that you need to pay depending on the nature of your business. If you want to know all the taxes that you need to pay to run a business in India , below link can help you in finding the taxes.

http://hubpages.com/hub/Tax-Structure-for-Businesses-in-India

Money Management Steps

To do any task, you need some way/steps to properly accomplish that work. Same is true when it comes to manage your money, you need to know proper steps to successfully manage you money. Managing your money simply means how you are spending your money and saving it for your future and without being full of debt.

So to manage money, follow the steps provided in this link and save more money and become debt-free.

http://hubpages.com/hub/10-Steps-to-manage-and-save-money

Retirement Planning - Invest Now

It is very important for every individual to plan for his/her retirement. But unfortunately, most of the persons do not plan for their retirement at the right age. They start thinking for retirement when they are near to 40 or 40+. At this age, you will left with around 15 years to build your retirement fund. So if you will start your investments at that time, you may not be able to have sufficient funds to cover your remaining life.

It is always better for you to start planning for your retirement at the right age to have sufficient time to build up your retirement fund to easily live your retirement life.

Click on the link to see more benefits to plan your retirement at the right age. Also check the various investment options you have to invest your money.

http://hubpages.com/hub/Plan-your-Investments-now-to-enjoy-your-retirement-life
http://www.moneymanagementideas.com/investment-options.html

NHPC IPO allotment

NHPC IPO allotment is out. NHPC, India's biggest hydroelectric power generator IPO closed on 12th August 2009. It was priced in the range of Rs. 30-36 and was subscribed by 23.74 times.

Now its allotment status is out on the registrar site, Karvy. You can directly go to http://www.karvy.com/ipoStatus to check the status of NHPC shares allotment by giving your Application ID. You will get the status of allotment of shares.
If you do not know the Application ID, login to your demat account and check in your order book of IPO section to know your Application ID.

Good Luck.

New Proposed Tax Code for Winter 2009 by Pranab Mukherjee

Government on Wednesday, 12th August 2009 proposed a new tax code for Winter session of Parliament 2009. As per the new tax code which is believed to be effective from financial year 2011, Government has indicated radical tax reforms by moderating income tax rates, abolishing STT (Security Transaction Tax) and increasing deduction amount for savings to Rs. 3 lakh.

If the proposal gets passed, then it will be a sign of joy for many income tax payers. Government has proposed different tax slabs and increased the slabs significantly high. Now there would be only 10% tax till Rs. 10 lac of income. So you would have to pay tax on Rs. 8,40,000 (10,00,000 - 1,60,000), i.e. only Rs. 84,000/-.

And if your income crosses Rs. 10 lac, then it would be 20% on the income above Rs. 10 lakh upto Rs. 25 lakh. Above 25 lacs, it would be charged at 30% rate.

As per Finance Minister, Mr. Pranab Mukherjee, Government is abolishing STT but 'long term capital gain tax' may again get introduced on the securities trading. This draft also proposed a exempt-exempt-tax versus an exempt-exempt-exempt (EEE) for savings.

The new code seeks to consolidate and amend the law relating to all direct taxes, that is, income-tax, dividend distribution tax, fringe benefit tax and wealth-tax so as to establish an economically efficient, effective and equitable direct tax system which will facilitate voluntary compliance and help increase the tax-GDP ratio.

As an update, this draft was open for public suggestions and now a second draft is expected to come in the month of June 2010 after considering suggestions. Now, it is expected that Government  may drop the exempt-exempt-tax (EET) proposal for taxation of savings as this was one of the most controversial clauses in the first draft of the DTC.

Major Updates on Direct Tax Code

Click here for New tax code for the year 2010 - 2011.