i was away quite long time i resume writing
Technorati Profile

Stock Markets ......

Many people panic when the share markets go down, and cheers up when the markets go up. There are always winners and loosers in the markets. The best way to keep cool and have steady returns is to be long term invester and not investing the share which are not fundamentally and technically sound and keep tracking of the markets after investment.

The three mantras while investing in stock market as per my opinion is

• When every body purchses you sell.
• When every body sells you purchase.
• Never keep any attachment with shares.

Can we expect “common man's” budget from Finance minister??

Can we expect “common man's” budget from Finance minister??

Every body in India is anxiously waiting for what are the taxes imposed and what tax incentives finance minister of India is imposing in union budget.

In India common man is much burdened with increasing taxes and increasing prices. Inflation is touching nearly 7%. Government is increasing the interest rates to restrict money supply.

Finance ministry may help the common man and salaried employees if he can give the following.

Non tax slab upto 2 lakhs
Income tax slab 5% from 2 lakhs to 2.50 lakhs
Since the fuel prices are increasing increase the exemption under conveyance allowance upto Rs 1000

Exemption under 80C

Exemption limit increase from present 1 lakh to 2 lakh
Working women from 1.35 lakh to 2.35 lakh
Senior citizen from 1.85 lakh to 2.85 lakh
Age limit for exemption under this section to senior citizen should be decreased from 65 to 60

Exemption under 80D

Deductions under mediclaim policies should be increased from Rs 10000 to 20000

Income Tax made simple……………..

Every Indian worries when the financial year comes to an end, the worry is how much tax to be payable, how to calculate tax?????
Read this

Benjamin Franklin opined: “In this world nothing is certain but death and taxes.”

The story of taxes and the civilized man go back a long way. Taxes were levied when Pharaohs ruled Egypt 5,000 years ago. In India, a treatise on taxation existed 2,300 years ago in the form of Chanakya’s Arthashastra. It emphasized on fairness and equity, recommending that the affluent pay higher taxes as compared to the not so fortunate.

The modern system of Indian taxation started taking shape from the year 1922. After Independence, the Income Tax Act in its present form was passed in 1961. For the purpose of taxation, the total income of an individual’s income has been divided under five heads: salaries, house property, profession, capital gains and other sources. A number of deductions are allowed form the gross total income computed on the basis of individual income accruing under the five heads. The deductions allowed are usually in line with the fiscal policy of the government.

COMPUTATION OF NET SALARY
Basic Salary
Commission and bonuses
Allowances
Conveyance
HRA
Leave encashment
Performance rewards
Residential accommodation
Motor car
Gross salary
Less
Deduction from salary
Entertainment allowance
Professional tax
SALARY INCOME CHARGES TO TAX

COMPUTATION OF INCOME FROM HOUSE PROPERTY
Annual value
Less municipal tax
Net annual value (NAV)
Deductions
Statutory deduction
(30% of NAV)
Interest on loan
INCOME FROM HOUSE PROPERTY

COMPUTATION OF CAPITAL GAINS
Sales value
Less
Acquisition cost
Improvement cost
Transfer cost
CAPITAL GAINS CHARGEABLE TO TAX

BUSINESS/PROFESSION
Gross receipts
Less
Expenses incurred to earn the income
INCOME CHARGEBLE TO TAX

INCOME OTHER SOURCES
Interest on bank or company deposits
Interest on National Savings Certificate
Kisan Vikas Patra or debentures and bonds
Interest received on delayed tax refunds
Income from royalty
Winnings from lotteries
OTHER INCOME CHARGEABLE TO TAX

SECTION 80C PRODUCTS
Bank deposits.
Employee Provident Fund (EPF). .
Public Provident Fund (PPF).
Home loans:The total amount eligible for deduction is up to Rs. 1 lakh a year for the principal amount.
Children’s fees: Parents can claim a deduction for tuition fees for a maximum of two children within the overall limit of Rs. 1 lakh. However, payments towards development fees or donations to the institution are excluded.
National Savings Certificates (NSC).
Equity-linked savings schemes (ELSS).
Life Insurance.
OTHER DEDUCTIONS
Health insurance: Under Section 80D, medical cover premium is tax-deductible up to Rs. 10,000, with an additional deduction of up to Rs. 5,000 if the policy is in the name of a senior citizen (65 years or older) and the premium is paid by him. If someone below 65 buys a plan for his dependents, he can avail benefit upto Rs. 15,000.
Educational loan: The interests on loans taken for higher education are also eligible for deduction from your total income under Section 80E. There is no monetary ceiling on the interest you can claim as a deduction. The loan must have been taken from a financial institution or an approved educational institution. Remember, repayment of loan or interest on loans taken by parents for higher education of their child is not eligible for deductions.
Charity:To avail tax benefits under Section 80G, donations must be made only to specified trusts. The tax breaks vary according to the trust to which you have donated.
Medical treatment: Any expenditure for the medical treatment (including nursing) of a handicapped person, training and rehabilitation of a person suffering form a permanent physical disability (including blindness) or form mental retardation, qualifies for a deduction under Section 80DD upto Rs. 50,000. A life insurance policy bought for the benefit of such a handicapped person is also eligible for this benefit up to Rs. 50,000. In case the disability is severe, the claim can go up to Rs. 75,000.

DEDUCTIONS AVAILABLE

Sections When, where and how much of deductions
80C Rs. 1 lakh in specified instruments like life insurance and ELSS
80CCC Pension plans of life insurance companies; 80C limit stands reduced

80CCC investment
80D Rs. 10,000 deduction on mediclaim, Rs. 15,000 for senior citizens
80DD Rs. 50,000 reduced from total income of a person handicapped dependent
80DDB Rs. 40,000 and Rs. 60,000 (sr citizen) for expenditure on treatments ofspecialdiseases
80E Interest on education loan – entire amount tax deductible
80G Donations (all donations don’t qualify for 100% deduction)
80GG Deduction according to formula for rent paid for housing
80U Rs. 50,000 deduction from total income for handicapped persons


HOW MUCH TO PAY AS TAX
TAX RATES- FOR ALL EXCEPT SENIOR CITIZENS AND WOMEN

Taxable income (Rs.) Tax rates Surcharge Education cess

Upto 1 lakh Nil Nil Nil
1 lakh to 1.5 lakh 10% of Rs. 50,000 Nil 2% of tax
1.5lakh to 2.5lakh Rs. 5,000 + 20% of Rs. 1 lakh Nil 2% of tax
2.5lakh to 10lakh Rs. 25,000 + 30% of

(taxable income minus Rs. 2.5 lakh) Nil 2% of tax
10lakh and above Rs. 2.5 lakh + 30% of

(taxable income minus Rs. 10 lakh) 10% of tax 2% of tax