Union Budget 2015-2016 What to Expect ?

The annual national budget for FY 2015 -16 is on its way to be unveiled in a day's time. Every year it brings a lot of hope to improve our current financial situation. The small changes tweak our home budget to a great extent. We are affected by its announcement as not every state has its head promising lower tariffs on electricity and water. All that the budget can do is broaden the gap to accumulate savings and better lifestyle, but not the reservoir of monthly income. The income may improve only when there are special rebates or tax holidays announced.

So what would you like in this budget:

• Higher basic tax exemption limit for both - male and female
• Increased limit for deduction under Section 80C (currently at `1,50,000)
• Additional deduction beyond the clubbed limit of `1,50,000 for investment in pension products to induce long term savings.
• Increase in health insurance premium deduction - especially for senior citizens. (currently at `20,000 for senior citizens)
• Higher exemption limit for non guaranteed education loans. Preferred interest rate on education loan.
• New tax savings especially for investment for girl child (up to 12 years).
• Revised reforms in MWP Act to safeguard the rights of spouse and children.
• Revision of allowances limits for salaried class especially in medical and conveyance.
• More initiatives to promote low cost housing projects
• Low prices for essential commodities

 Your homework once the budget is out: 

• Establish your new projected total income.
• Calculate the change in taxable income.
• Make a list of all your fixed annual deductions available for claims and start investing in it.
• In case of any additional deductions announced utilize it only if matches your goal planning tenure.
• If retirement savings have not begun, consider to begin saving for it.
• Start all your paper work from April itself.

Be Informed. Be Proactive.

The national budget is a precursor to design our own home budget. 

Devise your own financial plan today.

Thanks and Regards

Team

Saarthi Financial Planner

Email: saarthifp@gmail.com

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Making investment in Real Estate

Making investment in real estate requires a lot of caution and verifications- right from site selection till the registration of the land. Here’s a quick checklist to ease your purchase.

• Ask the seller to share all original documents to confirm that the land has a clear and marketable title. A certified copy can be obtained from the local sub-registrar's office on payment of a nominal fee. Don’t rely on photocopy as it might signify that the original are mortgaged.   
• Obtain 'No Encumbrance Certificate' for the past few years to ensure that it has not been pledged or there are no outstanding loans on the property. Also, get clearance under the Urban Land-Ceiling and Regulation Act wherever applicable.
• Appoint a lawyer who could certify from the documents about the legal status of the property.
• In case of sale by an authorized representative or agent- check whether he has registered power of attorney to sell the property.
• Seek assistance from a reputed evaluator to assess if the price quoted is the correct market value.
• Sale deed or Agreement to sell must be executed by the seller and buyer. Make a clear agreement on the price to be paid and payment terms. Payment should include a clause on payment, on possession and registration.
• The Sale Deed prepared earlier is only an initial contract. Before registration, the Final Sale Deed is prepared on stamp papers of appropriate value which will be the prevailing rate of stamp duty in the respective States. This set of documents should be executed by the seller.
• Under Section 230A of the Income Tax Act, 1961 all Sale Deeds in case of immovable property valued at more than `25 lakhs should be cleared by the Income Tax Officer. Only then, the Registrar will register the property.

Thanks and Regards

Team

Saarthi Financial Planner

Email: saarthifp@gmail.com

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Plan your Windfall Receipts Well

Last week, a fellow train traveler was discussing with me her marriage ceremony focusing with all the week long “rasam” and about all the unusable home appliances she had received. She was not sure if she should start using them or store it away for gifting it to others. I was tongue tied for a moment, thinking “Oh My God, she wants to get rid of her presents which are indeed her loved ones’ blessings and good wishes.”  However, it came to me as a revelation that she got three food processors and five hand blenders, also couple of dinner wares. I sympathize with her situation; she is in no position to command her desired gifts and has no choice but to pass on her gifts forward.

Financial windfalls can come in varied forms, such as an inheritance, large gifts, structured settlements, retirement lump-sums or even lottery winnings.  Upon receipt, most are not prepared to handle such a large sum and often make many mistakes. It is not uncommon that we are also gifted with unexpected or irrelevant gifts/ assets from our loved ones, which have some financial value, attached to it i.e. like your mother’s designer wear saris or traditional jewelery. Some of the other common gifts received include:

1. Expensive artifacts or paintings
2. Collection of stamps or coins
3. Old home in home town or tier II cities
4. Non dematerialized  Shares & bonds

The most common question we find asking ourselves on receiving them is, “What will I do with this?” or even more confused with the situation “Why me?” In order to find a feasible solution to your query, we would recommend you to follow a three point simple agenda:

1. Bifurcate between ‘I need it’ and ‘I don’t need this’ – Make a quick decision about your gift whether you find it useful or not. If it is usable by neither you nor your near ones, it is best to dispose it at the earliest and best possible price.  However, if want to own the gift, it would be recommended to plan the right utilization of it to maximum growth.
2. Get the latest value of Investible Assets – Accept the ownership titles of the acquired assets and add the latest valuation to your net worth to give you a correct picture of your financial worth. Bring the acquired assets in usable format.
3. Maintain the acquired assets well – Plan a suitable investment plan for the gained asset in the most feasible manner that can help you in wealth creation in long run. Avoid the temptation to splurge the amounts for a temporary gratification.

Windfall receipts are not regular and free of encumbrances, we should be very careful in planning out the utilization of proceeds from the receipts. Take your financial planner in confidence to plan if you are anticipating any such receipts.

Thanks and Regards

Team

Saarthi Financial Planner

Email: saarthifp@gmail.com

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Do you know about easy tax filing services by Income Tax Department ?

It is a well known fact that tax filing has never been a simple job even however SARAL the government claims it to be. Kudos to the less known, convenient and almost, free service initiated by Income Tax department.It is true; you can file your tax return in a correct form and convenience of your home. In 2007, The Tax Return Preparer Scheme was conceptualized by the Income Tax Department (ITD).The purpose of the same was to propagate and increase the number of tax filing individuals, who earlier shied from filing their Income Tax Returns.

In order to facilitate these individuals, the department has trained fresh graduates to help file your returns online.They not only file your returns but also compute the taxable income for you. They attach their name and details on the IT return to authenticate the entire return computation.This would be helpful in case of future queries. The fees charged by them are nominal at Rs 250 for regular tax payers. If however you are filing taxes for the first time and 3% of the tax liability if more than Rs 250 will be borne by the Income tax Department else the difference would be paid by the assessee to reimburse the Tax Return Preparer. But it is a nominal fee to be paid to avoid all the hassles and confusion over tax filing.

So, next time you delay your decision to pay your tax liability you can take help of your local Tax Return Preparer.The details of your local TRP are made available on the website http://www.trpscheme.com/locate-trps.aspx?mpgid=12&pgid=12 . Also you can take the onus to spread the good word among your other salaried colleagues or from non accounting background, who detest the jargons forms involved in tax filing.

Pay your taxes on time and contribute to your country’s revenue.It will help you build a more strong economy for ourselves.

You can get more details about the scheme from the following link:-http://www.trpscheme.com/default.aspx

Thanks and Regards

Team

Saarthi Financial Planner

Email: saarthifp@gmail.com

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