Filing income tax return – Yes, No, Maybe?

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FILING income TAX RETURNS - YES, NO, MAYBE?

The doorbell rang. It was Vijay, my friend. We were meeting after a long time to play our favourite game of chess.

“Vijay, I am about to finish filing my income tax return for this year. Give me a few minutes.” I request him.

“Sure. Take your time.”

He engaged himself with laying down the pieces on chess board for the game.

I finished filing the tax return, came back and sat next to him on the sofa.

“Done?”

“Yes.” I said with a feeling of great satisfaction. “Have you filed yours?” I asked inquisitively.

“No, no. I haven’t filed my income tax returns in the last 3 years.” He said as a matter of fact.

I was surprised. “Really! But why?”

“It is simple. The company where I work deducts TDS on the salary I get. There is no more tax that I have to pay. What is the need to file tax return?”

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Tax free, Guaranteed returns

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GUARANTEED RETURNS

“Sir, you invest Rs. 1 lakh per year for 10 years and after 20 years, you will get Rs. 20 lakhs guaranteed, tax free.”

Isn’t this going to get your mouth watering?

Well, the absolute number of Rs. 20 lakhs is quite a big number, that too guaranteed and tax free.

It is big enough to get you thinking and consider the investment. However, like a good investor, you would search for options.

What’s the alternative?

Let’s consider the Bank Fixed Deposit. A Bank FD is one of the safest investments with guaranteed returns.

If you invest the same Rs. 1 lakh every year for 10 years in a Bank Fixed Deposit at a 7 % rate of interest, what would you get?

The answer is Rs. 29.08 lakhs. But, the interest is taxable as per your tax bracket.

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Insurance – the investment mirage

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Insurance - the mirage of investment

Insurance continues to disappoint.

Every comment or email that I receive reflects the disillusionment with investment based insurance products, more specifically with “Pension Plans”.

The customer now wants to surrender these plans. Some are not happy with the returns, others don’t see the fit with their goals.

I wonder how millions of people were taken for a ride.

The answer is easy. Here’s a piece that you should read to know why? Insurance: All that is wrong with it and you!

The Pension Plan reality

In reality the pension plans are – “wolf in sheep’s clothing”.

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Bank FDs or Liquid, Ultra Short funds plus MF taxation

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Alternative to a Bank FD- ultra short term, liquid

There are 3 posts that appeared on Unovest Blog and unless you have signed up to receive the posts in your inbox, you are likely to have missed reading them. What is the investment alternative to Bank FDs? Alternative to Bank FDs has been one of the hottest searches by investors. Low returns plus the taxation doesn’t make it attractive … Read more

The 32 fund portfolio – Diversification vs Diworsification

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Mutual Fund Diversification or Diworsification

How many funds do you have in your portfolio?

“I will have to count.”

After 10 minutes.

“It is 32 funds.”

Did you say 32?

“Yes.”

What are these many schemes doing in your portfolio?

“Diversification.” It was mentioned as a matter-of-fact. 

What does having 32 Mutual Funds in your portfolio mean?

Let’s understand this in two parts.

Part 1: It means a lot.

You believed in the theory that about 25 to 30 stocks make a good diversified portfolio and hence that would be true for mutual funds as well.

You believed that diversification is the best bet against ignorance or so said the Oracle of Omaha  – you don’t exactly know the right fund to invest in and hence accumulate many – at least some will perform.

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Announcing “Money and You” Workshop in Pune

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Investing Workshop - Money and You - Vipin Khandelwal

So, I did my first Money and You workshop in Gurgaon on June 12 and it was quite an experience.

For the participants, there were discoveries as a result of interesting and animated discussion.

Vikas Lakhanpal who works with American Tower Corporation, attended the Gurgaon workshop and this is what he has to say:

It was an eye opener.

This one single feedback has encouraged me to take this initiative forward.

I am now glad to announce the next “Money and You” workshop in the city of Pune.

What will this workshop offer?

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