Trade Big, Pay Less! Thanks to the Discount brokers!

Shopkeeper: Rs. 51,500/- only.

Me: What??????

Shopkeeper: It’s an iPhone, Ma’am.

Me: Yeah, right. (Grumpy face)

And I came out of that shop with a heavy heart knowing full well that my Dad had just spent half a lakh rupees on a phone he would use only for making and receiving calls, something he was easily doing with his Nokia 6600 (whose even scrap value is zero) all these years.

I am sure we have all felt this feeling. When we ordered double cheese lasagna (with guilt trips) at our favourite restaurant when all we needed was Daal-Roti to quench our hunger. Or when we bought the top model of a car with Bluetooth, touch screen and speakers knowing well that we wouldn’t use these features.

Already feel that pain??

Let me make your heart heavier. Continue reading “Trade Big, Pay Less! Thanks to the Discount brokers!”

Learn to Budget before you Graduate

Probably, the only thing that can compete most with music in evoking different emotions in different human beings upon hearing it is – the word Budget!

The lazy dread it, the broke fear it, the snob looks down upon it, the ignorant avoids it, the accountant grapples with it yet everyone needs it!

Okay, so let me begin by making you feel good about it (so that you read further ;)).

Always wanted to be the CEO of a company?

Imagine being that CEO who manages his own cash flows!

Imagine always having enough money to buy the things you need!

Imagine being able to readily answer the persistent question of “Where does my money go?”

Excited already? Well, wait till you read the next line.

Continue reading “Learn to Budget before you Graduate”

Building Reserves v/s Debt Reduction – A Choice Worth Examining

This post has been contributed by Subhashini Attalani with editorial assistance from Team Fintuned.

Before you begin reading this article, let me tell you that this is not one of those traditional personal money management article(s) that you have been consuming. Yet, this article will afford you some amazing insights that will not only help you manage your money smarter but be super helpful when you make the decision about a crucial aspect regarding your business and that’s the debt appearing in your books.

Slide1

Thomas Fuller once remarked, “Debt is the worst poverty.” And, don’t we strive to minimize/end poverty? But should we always try minimizing debt when we have extra cash? That is an interesting question to address and let us try doing that in this post. Continue reading “Building Reserves v/s Debt Reduction – A Choice Worth Examining”

Please Relax, It is Just Tax

Even though we have said it umpteen number of times, we would keep saying it.

tax7

Yes! WHY SO SERIOUS.

It is that time of the year when everyone is a “little worried” about filing IT returns and paying tax as the date closes in. Well, Fintuned would like to help there. So, here is a quick 5 slide on how we can help. 

Cheers,

Mihir

All in One: New form 12BB for salaried employee

As a salaried employee you have to submit your income tax declaration statement at the beginning of every financial year to your employer. It is a provisional statement which has details about your proposed investments and expenses for the given Financial Year that are income tax deductible. Till now there was no standard format for this.

So, Income Tax Department has recently launched a new Form 12BB, which from now onwards has to be submitted declare HRA, LTA, Section 80, and interest paid on home loans.

However, with the introduction of Form 12BB, government has standardized this process.

The notification will be effective from June 1, 2016. Here are a few important things you should have before you fill up this form:

Sr No. Nature of claims Evidence or particulars
1. House Rent Allowance Name, address and PAN number of the landlord/landlords where the aggregate rent paid during the previous year exceeds Rs. 1, 00,000.
2. Leave travel concession or assistance Evidence of expenditure
3. Deduction of interest under the head “Income from House Property” Name, address and PAN number of the lender
4. Deduction under Chapter VI-A Evidence of investment or expenditure

You can download Form 12BB from here. It’s a PDF version. Below we have provided a snapshot of the form, so that you can have a look at it and see what all to file.

form-12BB

For any assistance, you just need to drop an email at fintuned.net@gmail.com

Cheers!

 

It Is A 2-Minute Read. But, It Is Important

CAGR Meme

Does this ever happen to you? It is problem so common that every 1 out of 5 people experience it (Swear, we didn’t make it up :P)

Jokes aside, it is actually confusing more often than not to understand whether the returns delivered by your investment are good, bad or average. The problem gets acute when your investment has been for a period that is more than one year because you are unaware of how much your investment made year-over-year.

So, what’s the solution?

CAGR or Compounded Annual Growth Rate

While you are obviously aware of acronyms like bff, OMG, ROFL, LMAO and so on, let us quickly decode an absolutely essential acronym that would serve you well for the rest of your life. Yes, CAGR.

To be absolutely precise, CAGR is the best measure when you have to measure the growth of your investment or for that matter, any trend, when the time period is more than one year i.e. multiple periods.

So, how is CAGR calculated? It is a simple formula

[(End value – Start value)/Start value] ^(1/(End date – Start date)) -1 ] x 100

Well, it may look a little complex but to be honest, it is absolutely simple. So simple that, my 10 year old cousin just loves solving for CAGR. Want to see? Let us take numbers from the above meme

[(100000-50000)/50000]*(1/3)-1]*100

Quick tip: The reason I took 3 is because the investment stayed for 3 years (periods).

To clear dino’s confusion therefore, the above investment earned 25.99% per year on a compounding basis which when compared to any instrument is pretty awesome. 

See, it is that easy! 2 minutes over and we are happy you got through till the end 🙂

Cheers,

The Chronicles Of A Bank Note

India is a land of writers. If the citations from history are to be believed, one would realize that India has produced more than a few unparalleled gems in the field of writing. To put this in right perspective, I am reminded of a quote by Mark Twain:

India is, the cradle of the human race, the birthplace of human speech, the mother of history, the grandmother of legend, and the great grand mother of tradition. Our most valuable and most instructive materials in the history of man are treasured up in India only.”

Undoubtedly, some writers and creative artists have elevated India’s respect with their work. However, there remains a section and (a considerably huge chunk) that loves to write but at wrong places. From heritage buildings to currency notes, their creativity mostly finds a vent at inappropriate places.

At Fintuned, we love creativity but hate disrespectful and undesirable practices. Therefore, in this post, we take up a very grave issue that persists big-time in India – writing, drawing and soiling currency notes (it is more prevalent than you think).

scribble-01

(It looks cute on her with a notepad but ugly with you on a currency)

Continue reading “The Chronicles Of A Bank Note”

Is Filing Your IT Return a Pain? Well, One Aspect Solved.

In our journey of associating with people to help them out with a myriad of money management queries, the frequent ones have been related to maintenance of documents and submission of same while dealing with regulatory requirements.

Documentation

So, as a starter from our side we thought of compiling a quick list of documents that are required while filing your tax return. Take a stab at it:

1. PAN Number Verify it online with I.T department by going through this link : https://incometaxindiaefiling.gov.in/e-Filing/Services/KnowYourPanLink.html
2. Form 16 – for Salaried  A statement issued by your employer which has details of your Salary, the taxable salary amount after various perks and allowances, the TDS deducted by your employer, the deductions you have claimed and the overall tax due.
3. Documents rcomeelated to Interest Income
  • Bank statement/passbook for interest on savings account.
  • Interest income statement for fixed deposits.
  • Debentures yielding interest
  • TDS certificate issued by banks and others, in case tax has been deducted on your interest income
4. Form 26AS It reflects all the Income Tax received by the I.T. Department with respect to you. This is a tax credit statement which shows TDS payments, voluntary tax payments made by you. Form 26AS should match all tour TDS certificates. Link to view Form 26AS : https://incometaxindiaefiling.gov.in/e-Filing/UserLogin/LoginHome.html?nextPage=taxCred
5. Sec 80C investment documents
  • Your contribution to PF, NSC, ELSS, ULIP, RGESS etc.
  • Your children’s school fees
  • Life insurance premium payment
  • Stamp-duty and registration charges
  • Principal repayment on your home loan

Maximum deduction can be claimed up to Rs. 1.5 lakh

6. Sec 80D Medical Documents ·   Premium receipt for medical insurance premium paid for self, family and dependent parents.
7. Sec 80G – Charitable donation statements ·   Receipt issue by the charitable organisation

·   Pan number of the charitable organisation

8. Interest paid on a housing loan Interest on housing loan is eligible for tax saving up to Rs 2.5 lakh. This is for a self-occupied house.
9. Stock Trading Statement The stock trades that were made during the year may attract Capital Gain tax.
10. If there is income residential property ·    Housing Loan repayment certificate

·    Municipal Corporation Tax Receipt

 

 

Picking a Stock? It is Your Call.

Your smartphone, your job, your house etc. are all significant decisions that you made on your own accord. Sure, you had all the help in the world but the final call was taken by you. Do you agree?

However, when it comes to stock selection we heavily rely on someone (might be the broker, accountant or even that friend who is a DJ and might have minimal idea on picking companies). A very dear friend of mine who is a long-time contributor to famed investment websites in the US keeps telling me this “In the US, people read and then make their choice in most cases. However, in most cases in India, we readily invest in a company (you would want to time the market, wouldn’t you?) and then read, if time permits.

To be honest, I do not have statistics to prove it but even with a minimal sample of people we have seen this at play. However, we love to talk more about the solution than the problem and the simple solution here is “to initiate and cherish the idea of incessant reading so that we can become graduate to becoming better investors and not just stock market participants.

How do we do that?

As Travis Kalanick mentioned today at the Startup India Conference, problem solvers are innovators and innovation alone is the key to tackling a challenge. The Indian Equity markets have undergone a massive change with the oncoming of discount brokers like Zerodha, RKSV and others. Almost exclusively, this disruptive force has altered and continues to change the landscape of stock market broking in India. Owing to a lean model of operations, they have thought people to research on their own and place their bets with complete onus.

In that respect, we have also initiated a small but definitely notable exercise here at Fintuned. Just last week, we commenced the publication of research reports on Indian companies. When we started, the reports contained an explicit recommendation on the strategy to be adopted for that particular stock. However, we have changed that.

Since our last report, we have decided to release a complete SWOT analysis of the company without any word on the strategy. So, our idea is to foster knowledge and opinion about the stock but not the decision. Any reader who goes through the SWOT analysis will only have to study a lot more to take a final call on her position in the stock. Therefore, our reports will only affirm facts but the home run will be hit by you.

It goes without saying that the final decision is always taken by the reader but rather than being a buy, sell, hold voice in her head, we prefer being a mere step in the entire process.

So, head straight to our research section and check out our latest release.

Cheers,

Mihir

There Is No Free Lunch, Is It?

This article has been contributed by Riddhi Kharkia, with inputs from the entire team.

Okay, so there is an ad that has been playing for long and if you are a big cricket buff (read: IPL devotee), you surely couldn’t have missed it (okay, have you made your guesses). Let me give it away to you because this post wouldn’t begin without the name of the brand behind these advertisements. The ad that I am talking about is “Freecharge”. To be honest, the series of ads conceptualized by Freecharge have brilliantly summarized the significance of this service/brand.

Now, you must be definitely wondering—how on Earth is the Freecharge ad related to money management or this blog. Since it is no quiz and unfortunately you would not be getting points for figuring out the connect, let me give this away as well. Basically, seeing this ad, I thought of citing the incomes that are “free” of “charge” by the Government of India. So, you know what we mean by Freecharge 😉

Coming straight to it, tax is payable on all incomes earned in India by an Indian resident. However, there are some exceptions to this rule and certain categories of income have been specifically exempted from tax. Such incomes are known as Tax-free incomes.

Here, we are presenting the most common tax-free incomes that every tax payer should be aware of. The joy of tax-free income is beyond measure.

  Income Details
1. Interest on Savings Bank Account –   Tax free up to Rs. 10,000
2. Long-term Capital Gain on Sale of Shares/Mutual Funds – Wholly exempted from tax- Shares/Mutual Funds should be held for minimum 12 months

– Security transaction Tax (STT) must be paid while purchasing

3. Interest  or any payment received on PPF/PF –   Wholly exempted from tax
4. Dividends from Shares /Income from Mutual Funds –   Wholly exempted from tax-   Dividend must be received from Domestic company only
5. Educational Scholarships –   Wholly exempt from tax, in the hands of the person who receives it-   Not necessarily a government-financed scholarship
6. Amount received through Will or Inheritance –   Wholly exempted  from tax-   But when the amount is invested, only the income earned on that amount is taxable
7. Amounts received by way of Gift on Marriage –   Wholly exempted  from tax-   Gift can be anything and from any person
8. Money received from your EPF account –   Wholly exempted from tax, provided money is taken out after 5 years of continuous service
9. Money got under Voluntary retirement Scheme (VRS) –   Tax free up to Rs, 5,00,000-   Employees of Public sector companies or an authority established under a Central or State govt are also eligible
10. Leave Travel Allowance (LTA) received from the employer – Tax free up to the amount of bills of travelling provided
11.  Maturity or Claim or Surrender amount received by Life Insurance Company – 100% tax-free provided the premium paid did not exceed 20% of the sum assured.

Well this is it!

If you are aware of some income that we might have missed out in the list, then please mail us/comment on this article and we promise to make the change.

Thank you for your patience.

Cheers.