Monday, May 28, 2018

How to Save Tax in FY 2018-19

Paying taxes is important keeping in mind the country’s public infrastructure and facilities. When we want our country to prosper with all good infrastructure and facilities, paying tax is one way to contribute towards it. Studies show that only one-third of the total population in India is eligible to pay income tax. This is because India is a developing country and a significant amount of people earn less than 2.5 lakh annually. Hence, every individual who earns a taxable income should be proud to be a part of a taxpaying population of India.

save tax in FY 2018-19

While paying tax is a statute in India, there are also a good many ways to save your tax outgo legally. Anyone earning less or equal to 2.5 lakh per annum do not have to pay tax. However, any income earned more than 2.5lac is taxable under different tax slab. Note that the tax rates are bound to escalate with every minor boost in income. So regardless of how much taxable income you produce, the government also provides certain tax-exemptions & deductions with which you can save tax legally and pay a lesser amount of income tax eventually. Here is a lookout for few such tax-saving options:-

1. Tax-saving option u/s 80c of the I-T Act, 1961

The most popular tax-saving options for individuals and members of Hindu Undivided Families (HUFs) are provided under this section of the I-T Act. Section 80c of the I-T Act includes various expenses and investments on which a taxpayer can claim the deduction and enjoy maximum savings. The maximum amount of deduction one can claim under section 80c of the I-T Act is Rs. 1.5lac. The taxpayers can use this entire amount in one financial year to reduce their tax outgo.

2. Tax-saving options other than section 80c of the I-T Act 1961

Apart from the tax exemptions provided to people under section 80c, there are quite a lot of health insurances premiums, home loan and post office saving schemes with which one can save money on income tax. In addition to this, taxpayers can also save a good amount of tax by creating a Hindu Undivided Family (HUFs) - a group of married Hindu individuals. HUF would also include a creator or Karta and his/her family members. The advantage of creating a HUF is that you can divide your income into two entities – one is you yourself as an individual tax-paying entity and second is via HUFs. This way you can claim tax deductions twice and save money significantly in the long run.

How you can save tax in the financial year 2018-19?

The basic criterion to save tax is same as that of the previous year like you must start preparing your tax-saving reserves at the start of the financial year. Most taxpayers start preparing for it at the eleventh hour when the financial year is about to end. As a result of which they are not left with enough time to plan things smartly and options for investment. More often than not, decisions taken in haste do not prove to be beneficial. If you plan at the beginning of the financial year, you will have ample of time to pick and choose the best investment option that may not only help you save tax but also assist you in fulfilling your long-term goals. You must also note that the tax-saving investments you make at the beginning of the FY 2018-19 should be used to make wealth as well and not just to save tax.

Things to keep in mind while making tax-saving investments for the FY 18-19

1. Check whether the tax-saving expenses that you are making now shall be claimed later or not. This includes expenses related to your child’s tuition fees, insurance premium, health insurance, investment in savings scheme to name a few. Deduct this amount from 1.5 lakh to understand how much more you need to invest. Always remember that you need not have to invest the entire amount that is taxable if the operating expenses are covering some portion of it.

2. Always choose your tax-saving investments keeping in mind your goals. Investment in Equity-Linked Savings Scheme, Public Provident Fund (PPF), National Saving Certificate (NSC), Sukanya Samriddhi Yojana, EPF, NPS are some of the popular options that come with a significant amount of tax savings benefits.

Conclusion: - In the recent announcement, the standard deductions are made under budget 2018, while the structure of the income tax slab remains the same. In addition to this, the tax liability of citizens has also been raised in the union budget 2018 except for some categories of senior citizens. For this reason, the taxpayers of the country are required to be more vigilant in making tax-saving investments.

A word of advice: - Since tax-saving is a complicated process, you need to be calm and composed while making decisions. Also, blindly following your fellow colleagues and making same investment may not always work in your favor. This is why it is imperative to look at your goals and profile before making an investment. Also, investing the entire amount that is liable for a tax deduction (as per your income slab) is not important if your expenses are covering it.

All You Want To Know About Post Office Schemes

Post office is one of the major banking service providers in India. It is owned and managed by the Indian government. The fact that the Department of Posts offers several investment schemes for all genres of people is the reason why most people especially senior citizens and retirees prefer post office schemes over other investment avenues. If you’re also planning to invest in post office schemes, here’s a sneak peek into the details of everything you want to know about the post office schemes.

post office saving schemes

Different Types of Post Office Saving Schemes

1. Post Office Savings Account: - The post office savings account is opened only by the cash deposit of a minimum of Rs 500/-. To keep the account active, at least one transaction each of deposit and withdrawal has to be made using this account in three financial years. The deposit and withdrawal of money in the post office savings account can be done through electronic mode at the core-banking (CBS) post offices. An account holder can transfer their PO savings account from one post office to another as and when required. To avail the cheque facility, maintaining a minimum balance of Rs.500/- in the account is a must. However, minimum balance to be maintained is a non-cheque facility account is Rs 50/-.

2. Sukanya Samridhi Yojana: - This scheme is for better rearing and bright future of your daughter. The Sukanya Samridhi Yojana scheme can be taken for your girl child of up to 10 years of age. Parents of a twin-girl child can open a maximum of 2 accounts under this scheme. The minimum of Rs.1000/- can be deposited in this scheme and it may exceed a maximum of Rs 1, 50,000/- per year. Legal guardian or parents can open the account in the name of the girl child. Sukanya Samridhi Yojana scheme can be closed after completion of 21 years. One can even opt for a normal premature closure of the account after completion of 18 years however the girl should be married by then.

3. Senior Citizens Savings Scheme (SCSS): - Any individual aged over 60 years of age can open this account. Plus, retirees on superannuation or under VRS can also enroll in for this scheme provided the account is opened before the completion of one month of the receipt of retirement. The maturity period of SCSS is 5 years and one can run more than one senior citizens savings account both singly and jointly with their husband or wife.

4. Kisan Vikas Patra: - It is a savings certificate scheme launched by the Department of Posts in the year 1988. As part of the scheme, an individual can purchase the certificate also known as the Kisan Vikas Patra for himself or on behalf of a minor from any departmental post office. The Kisan Vikas Patra can be transferred from person to the other and from one post office to the other conveniently. Also, it can be en-cashed after one and a half year or two from the date it has been issued.

5. National Savings Certificate: - This scheme is specially designed for government employees, entrepreneurs and other salaried individuals who are taxpaying citizens of the country. Though there is no maximum limit on the purchase of National Savings Certificates, an investment of up to 1.5 lakh is tax-free u/s 80C of Income Tax Act. 

In addition to this, other prominent post office savings schemes include Post Office Time Deposit Account, Post Office Monthly Income Deposit Account, 5-year Post Office Monthly Recurring Deposit and the most common Public Provident Fund (PPF) scheme. 

The interest rates on Post Office Savings Scheme 

To help you know more about the post office savings scheme, the table below highlights the interest rates of different post office saving scheme:-

Post Office Schemes

Applicable interest rates

Rate of compounding

Post office savings account

4.00%

Quarterly

Sukanya Samridhi Yojana

8.1%(with effect from​ 1-01​-2018​​)

Annually

Kisan Vikas Patra

7.3%(with effect from​ 1-01​-2018​​)

Annually

National Savings Certificate

7.6%(with effect from​ 1-01​-2018​​)

Annually

Post office monthly income scheme account

7.3%(with effect from​ 1-01​-2018​​)

Annually

15-year Public Provident Fund

7.6%(with effect from​ 1-01​-2018​​)

Annually

Senior Citizens Savings Scheme (SCSS)

8.3%(with effect from​ 1-07​-2018​​)

Quarterly

1 Year Post Office Time Deposit

6.6%(with effect from​ 1-01​-2018​​)

Quarterly

2 Year Post Office Time Deposit

6.7%(with effect from​ 1-01​-2018​​)

Quarterly

3 Year Post Office Time Deposit

6.9%(with effect from​ 1-01​-2018​​)

Quarterly

5 Year Post Office Time Deposit

7.4%(with effect from​ 1-01​-2018​​)

Quarterly




































The Bottom Line

It is an incongruity that most people in India are not aware of such government-based savings schemes offered by the Department of Post and, thus continues to invest in bank fixed deposits and other related schemes. It may also come as a surprise to many that post office savings scheme constitutes of more than 6lac crore balance in its savings scheme deposits, which is almost half of what the biggest public sector bank SBI holds and twice the deposits ICICI – the largest private sector bank holds in India.

With its unparalleled reach, post offices cover almost every part of the country with 95 percent pin code coverage. Furthermore, a post office primarily covers a large part of rural areas where there are no banks so far. The process to apply for post office savings scheme is simple and can be useful for the investors in the long run. In addition to this, India Post offers insurance schemes as well and with a huge array of savings schemes that truly transforms it into a financial giant with the best in class reach, brand and saving schemes that Indians trust. Credibility is also not a problem here because the Department of Posts of fully controlled and managed by the Government of India that makes umpteen efforts to make your post office saving experience highly valuable and of use.

Monday, March 19, 2018

How to Find the Best Rates for a Loan by Using a Loan Calculator

A loan calculator has appeared as a boon for all those people who like to keep their expenses and financial disbursals streamlined. This online tool is not only used to determine the loan eligibility but is also used to calculate and find the best rates on a loan. To put it simply, a loan is one of the common ways to cope up with the urgent money requirements; however, to settle the loan amount, a borrower has to pay fixed monthly EMIs to the bank throughout the loan term.

An EMI stands for the Equated Monthly Installments that the borrower has to pay to the lender within the stipulated period of time. One must calculate the loan EMI prior to getting a loan as it helps him borrow the amount which can be easily repaid. Initially, the interest component of the EMI would be larger than the principal amount, but as soon as the loan depreciates, the principal component forms the major part of the EMI.

Here’s the formula to calculate EMI

E = P .r. (1+r) n / ((1+r) n – 1), where,

E stands for EMI

P is the principal loan amount you are applying for

R is the interest rate calculated on the monthly basis (it can be calculated as rate of annual interest/12/100. So if the interest charged by bank is 10.5% per annum, it can be calculated as 10.5/12/100 = 0.00875)

N is the loan tenure or the duration in number of months

So let’s suppose if your borrowed Rs 10, 00,000/- as loan from the bank at an annual interest rate of 10.5% for 10 years (or 120 months) that your monthly EMI would be

10, 00,000 * 0.00875 (1+ 0.00875) 120 / ((1+0.00875)120 -1) = Rs. 13, 493/-

Now the total amount payable to the bank against the loan will be Rs. 13, 493/- * 120 = 16, 19,220 of which 6, 19,220 will be the total interest that you need to pay to the bank.

Applicants who are not good at calculations or are looking for a much simpler way to find the best rate for a loan can use the loan calculator to get accurate results.

How to use loan calculator?

Loan calculator comes with a user-friendly interface and is extremely easy to use. All you need to do is to visit the official website of the particular bank from where you want to apply for a loan. search for the online loan calculator on the home page of the website and once you find the tool, you need to fill in some essential information related to the loan that includes:-

1. The principal loan amount that you want to avail (in Rs.)

2. The loan term (in months or years)

3. The rate of interest (in percentage)

4. Advance EMIs or EMI in arrears (applicable for car loan only)

5. Some loan calculator tool may also ask for the processing fee that the bank charges on every loan.

Upon entering these details in the loan calculator, click on “Submit” to get the results instantly. You can make as many searches you want using a loan calculator to examine the monthly EMI and loan amount that you can easily repay. Note that the use of loan calculator is extremely free of cost. Since it can be accessed online, it saves a lot of your time that you would otherwise spend in visiting the bank personally. Accuracy is yet another advantage of using loan calculators. So next time you apply for any loan, your first step will be to search results on the loan calculator and then visit the bank for further queries and apprehensions.

Reduce Your Income Taxes by Owning a Home Business

Tax system is complex. Each year a thousands of people struggle to save tax but end up paying more than they actually should. If you too are amongst such taxpayers, you must seek advice from a tax specialist or an accountant who would guide you on how to deposit your tax wisely. Besides, you may also reduce your income taxes by owning a home business. Here’s how?

Let’s suppose you have a full-time job but you are also a travel consultant who runs a small business at home. So now since you run a business from home, you must be using a car to travel back and forth possibly to drop off your business advertising pamphlets. It could also include your supermarket visits, grocery shopping, etc (coincidentally) while on the way to post a flyer or meet some client related to your business, which makes 90% of your automobile expense tax deductible. In view of the fact that you have an office in your house, you claim at least 30% tax deductions from mortgage interest, house maintenance, water bill, electricity bill, rent (if you don’t own a house), repairs made in your house for business, etc. The use of telephone, internet and any other facility that is required to conduct a business from home can also be claimed as business deductions.

Furthermore, if your business requires you to travel to places within or outside India, your airfares, meals while traveling, hotel accommodation, car rental, the purchase of any types of equipment like video, camcorder and cell phones are other essential tools for your travel business that will be entirely tax deductible. This way you can save a lot of money that you would otherwise use to pay taxes. However before taking the plunge and claiming tax deductions from your home-business make sure you meet IRS qualification that states that your home should be your principal place of business. However by any chance, you operate your business from a separate location other than your home; you cannot claim deductions for use of your home. Still, IRS determines a few factors to approve the deduction:-

1.
The relative importance of activity that is performed at each of your business location

2. How much time you spend at each of your business location

If you manage your business solely from home, you’ll have to abide by the following clauses:-

1. You use the business place at home solely for business activity, management and administrative purposes.

2. Apart from your home, you have no other fixed place to conduct the business management and administrative work. However, you may do some business related work outside your home. For instance, your car.

Other than this, to get the IRS approval, you are required to prepare an IRS audit that ensures that you are not violating any rule or regulation and your home office is used "regularly and exclusively" for business purposes. One important point to note is that home business deductions are limited. You can claim deductions for your home business expenses to reduce your business income for the year, but if you had a business loss, these deductions are not possible in any circumstance. Also, not all home businesses are treated the same and may reduce your yearly taxes. There are special rules applicable to daycare business operations and if you use your home for storage space, you must seek advice from an accountant or tax attorney to come up with a better tax-saving alternative.

Wednesday, February 14, 2018

Five Easy Blogging Tips For A Profitable Blog

Creating a blog is an easy way to get started making money online. However, as with any business, you need to keep your eye on your blog's profitability. If you're new to blogging, these five tips will help you to make money with your blog.

1. Set blog goals

Ideally, you should set your blog's goals before you create your blog. If you set your goals first, you will be able to estimate the potential traffic you can attract to your blog, and therefore the amount of income you're likely to make.

So before you create your blog, write down:

* Your blog's topic (for example digital photography, photo retouch or diet tips, or whatever topic you'd like to create a blog about);

* Use keyword research tools to discover how many people are searching for your blog's topic online each day:

If there are fewer than 100 searches, look for another topic. Don't shy away from topics which have lots of competition online - lots of competition means that there's a lot of interest, and a lot of traffic too. So if your topic has 5000 search a day, and millions of Web pages, go ahead and create your blog.

* Decide how you will make money from your blog. Will you sell advertising space? Sell products? Make a list of revenue streams for your blog;

* Estimate the income your blog will make in your first, second, third and fifth years. Yes, this is mainly guesswork, however it will motivate you to keep blogging when you see your blog's potential.

If you're completely new to blogging, and have no idea how to set your blog's goals, then get a blogging mentor, or ask questions at forums. Your blog has the potential to make a great income for you, if you treat your blogging as a real business.

Now you've set some goals for your blog, set up your blog and start blogging.

2. Diversify your blog revenue

In your first year of blogging, focus on creating content for your blog, and experiment with various forms of income. There's always a new income-generator coming out, so test out as many forms of revenue as you can.

3. Concentrate on content - make it useful

The bigger your blog, the more traffic you'll get from the search engines, and the more readers you'll attract. Therefore, concentrate on creating good content for your blog. All the time you spend on content will be rewarded.

4. Remember to use keywords in your posts

Once your blog's a few months old, the search engines will start sending you traffic. Keep that traffic coming by writing posts which include keywords, but don't go overboard. If you keep writing, you'll attract many "long tail" searchers.

5. Publicize your blog

Once your blog's making some income, set aside a portion of that income to promote your blog. There are many ways in which you can advertise your blog; again, experiment to see which forms of advertising work best for you.

Watch for other bloggers' advertising, and if you can see that bloggers are advertising in a particular area month after month, you can be sure that it's profitable for them, and will perhaps be profitable for you, too.

So there you have five easy blogging tips which will help you to create a profitable blog.

Thursday, January 18, 2018

What Is Knowledge Management?

Benefits of Knowledge Management

Experts get better at what they do by learning more. Some people can only learn by trying to do things themselves, but most people learn a lot from each other. When people share expertise fully and openly, when they write essays, for example, the sum is greater than the parts. Quantum leaps in knowledge can be generated when experts collaborate. Then there is simple efficiency. Time and other resources are wasted every time employees have to learn something through trial and error, working in isolation. The pace of change and innovation is so great that one person cannot do it all. When experts collaborate, progress can be made much faster than any one employee working alone. Speed is the essence today – speed of execution as well as that of innovation.

knowledge management


Problems with Knowledge Management

Some experts are not that great at collaboration. They like to figure things out for themselves and can’t be bothered with passing on their knowledge to others. Many such talented people also hate the bureaucracy associated with having to document everything they do. Then there is the old saying “knowledge is power.” Just as knowledge gives organizations a competitive advantage, individual knowledge workers also know that the uniqueness of their expertise enhances their marketability.
There is also the fact that pooled knowledge may be better for efficient execution than for innovation. For example, if you want to know how to make a sale to a client in a foreign country, it is wise to find out what your colleagues did that worked for them. But innovation often occurs through live collaboration rather than the accessing of stored knowledge. Brainstorming does not necessarily tap into existing knowledge. Rather, it creates new insights out of nowhere. Similarly, many of the greatest discoveries in science and technology happened virtually by accident. Someone experiments by trying out solutions on a trial and error basis to see what emerges. Often, the unexpected results are the more interesting ones. Knowledge management has a mechanistic ring to it that could stifle the entrepreneurial spirit of employees who work best in a very experimental way.
There is also the common organizational culture of functional silos where managers are territorial and want to keep the power of their department’s expertise to themselves. Finally, knowledge becomes obsolete so fast that it hardly seems worth the effort to capture it. Knowledge management is still worth doing, however, despite these and other obstacles. Ideally, it makes less sense to document everything an organization knows than to focus strategically on the specific areas where knowledge adds the most critical value, where it offers the greatest competitive advantage.
How to Manage Knowledge
Several knowledge management initiatives have failed for a number of reasons, one of which is that they are too centrally driven. They are less interesting to potential users if they feel no ownership for them. Communities of practice are one way around this problem. Rather than centralize all knowledge, specific user groups or types of experts are formed into specialized networks. After effectively localizing the management of knowledge, the next step is to involve the users in designing a knowledge sharing process that they can sign up to and will use. This raises the question of the fundamental purpose of knowledge management. Is it to store knowledge for all employees to access or is it more about sharing and collaborating in real time?
Our educational system stuffs knowledge into the heads of students that it thinks will be useful to them several years later. Often, most of this knowledge is lost because students don’t feel a need for it at the time. It has no application in the here and now for them. A knowledge management system based on this philosophy is bound to fail. Organizations that foster live collaboration during an actual project are more likely to succeed. On the downside, the relevant expertise may not be captured for later use, but the organization achieves its most important objective – to exponentially transform the expertise of multiple experts into tangible competitive advantage.

Author bio: Necole Hardison, writer and editor Thewritemyessay.com
Necole graduated Harvard Business School and studied many executive education programs. She is a business strategic expert by day and essay writing fanatic by night, writing all sorts of great content. Necole already helped a lot of people with an essay writing and does not plan to dwell on it.

Monday, January 8, 2018

How Much Income Tax Can You Save, if You Take a Home Loan?

Buying your first residential property with the help of a home loan can get you several tax benefits. These deductions will not only enable you to save big on your income tax outgoes but also allow you to manage your expenses efficiently. If you want to learn how much income tax you can save, if you take a home loan, below is the list of deductions that you can claim:

1.  Deduction on interest: With every home loan comes the liability of paying EMI. However, the interest amount of the loan EMI can be claimed as a deduction, if you are both the owner as well as the co-borrower of a home for which you have taken home loan. You can claim this deduction in the year the construction of your home is completed. Let’s suppose the construction of your home is completed on 30 September 2015. You can claim the deduction for interest for the complete 12 months in the financial year 2015-16. This way you can claim the deduction of Rs. 2 lacs for the new house you stay in. However, if you have put the same house on rent, the interest of entire year can be claimed as a deduction.

2.  Deduction on principal repayment: As the EMI of a loan constitutes both the interest and the principal amount; you will also get benefit for principal repayment. Under section 80C of the income tax act, the part of the EMI which is paid towards the principal can be claimed for deduction. For this, you can calculate the yearly principal amount and claim it for deduction. You can claim Rs. 1.5 lac as a deduction under Section 80C.

3.  Tax deduction on pre-construction interest: You can also claim a deduction for pre-construction interest of your home loan but make sure you make these claims in the beginning of the financial year in which the construction is completed. For this, you must first add the entire pre-construction interest and then claim it in equal payment. Your total deduction on pre-construction interest should reach more than Rs 2 lacs if you reside in the same house and not putting it on rent.

4.  Deduction on registration charges and stamp duty: Under section 80C of the income tax act, you can claim the deduction on stamp duty and registration charges as well. But this deduction is only claimed in the same year these payments were made.

5.  Deduction under section 80EE: You can claim tax deduction under the section 80EE if you are the first-time buyer whose property price is not more than Rs 40 lacs and those who have borrowed the loan of Rs 25 lacs or less. To claim this deduction, another clause is that your home loan should have been approved in between April 1, 2013, to March 31, 2014. Under this section, you can avail a maximum deduction of Rs. 1 lac which can be claimed in any one financial year, i.e. 2013-14 or 2014-15. However, this benefit does not exist for the current financial year 2015-16.

Conclusion: Home loan comes as a boon for those who want to buy their own house and these income tax deductions certainly act as the cherry on the cake. With these deductions, new homeowners can save big but only if these claims are made on time. In addition to this, a little awareness of all types of tax deductions is important to act accordingly. For your further help, many websites provide tax saving calculators with which you can easily find out how much tax can you save if you apply for a home loan. These calculators have a user-friendly interface, thus can be used by anyone with ease.
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