e-Nagar

July 19, 2010

Quitting job: Reduce your Income-Tax arrears

Filed under: Investing — pegasus @ 9:22 PM

Most companies assume that you would be employed for the full financial year when you file the income tax returns. However often because of higher education (MBA), marriage or due to foreign opportunities the Income tax computation goes haw-wire. What makes things worse is that getting a refund is practically impossible and takes several years. So here are few tips to help you.

1. Be proactive: One of the primary reasons why Income Tax deducted by the employer is high is because the person had not communicated his/her intentions to the accounts department well in advance.
2. Collect all bills. Certain expenses like communications and medical reimbursements, LTA, company expense account etc which were incurred are tax deductable only if the employer’s form 16 reflects it. So don’t be lazy in submitting these bills.
3. India is in a progressive taxation environment. As a result as the income rises, so does the taxation rate. As a result if you are employed for only 6 months, don’t be surprised if your IT goes down by not 50% but 60-70%. This is the major source of IT arrears. There are 2 ways around it.
1. Inform your company well in advance that you would be terminating your employment in the mid year.
2. Reduce your IT projection so that the income tax gets revised downwards. This can be done by claiming for all the tax reliefs possible, even if it is fictitious. You can file that you intend to take a home loan (50,000/- tax relief) or donate money in one of the tax exempt funds. This will reduce your tax liabilities and IT arrears.

PS: Please consult your tax consultant.

July 18, 2010

Yeh hai Mumbai Meri Jam !

Filed under: Humor — shobhendrasrivastava @ 1:27 PM

In India, Traffic jams are a procedure of everyday life. The saying goes around here – If you are not consistently stuck up in traffic, then you are not really moving around a lot. In fact , in India , one requires to dedicate specific time slots daily for meeting traffic jams. Only once in a blue moon it so happens that the roads are sparsely populated.
However a blue moon is a rare thing. And if one is living in Mumbai – the most densely populated city in the world, then the blue moon simply does not exist. In Mumbai, just like in any other city in the world, the sun rises in the east and sets in the west but the traffic always rises in the north , south , east , west , up (air space congestion) , down and in any other direction that you can come up with.

Mumbai Traffic

Living three years in Mumbai has helped me accumulate some  observations which can be of aid when it comes to Mumbai traffic.—

1 . While in Mumbai , one should always carry a hygrometer(a device which measures moisture content in the air around us) with him/her. The intensity of Mumbai Traffic is directly proportional to the moisture content in the air.
As absurd as it may sound, the claim for hygrometer is well supported with data –When there is moisture or worse a slight drizzle in the air, people drive a fraction slower than their usual speed just to be careful to avoid any slippery incidents (Indian roads are supportive of the idea of driving fast). This reduction in speed is cascaded to the traffic behind and eventually brings the traffic to a complete halt. Some fools worsen their speed and hence the traffic by getting all romantic while admiring  the clouds and the rains while driving.
In fact with time and experience, you can deduce from the hygrometer reading the amount of time that you have to be stuck standstill in the traffic. A reading of 60 % (slightly above normal moisture) means that you are to be standstill for 18 minutes. So why not leave the car amidst the traffic and grab a few eatables from the roadside shop? A reading about 80% gives you ample time to catch a good 40 minutes power nap in the car. Anything about 95% should be seen as an opportunity to catch a 2 hour movie in the nearby theatre.

2. Many inexperienced with Mumbai traffic rules make the fundamental mistake of thinking that a queue in Mumbai means standing one behind the other.In Mumbai , a queue means standing one besides the others  and if there is less space then the definition of queue is extended to mean pushing others away and then standing one beside the other.
You don’t want to me more late than you already are to reach home, do you? Then you need to adapt your concepts regarding the queue.

3. Regularly play carom , snooker or billiards .You should gain expertise on one of these games  before you hit the Mumbai roads with your vehicle. These games develop your idea of tricky angles and deviations. This knowledge is critical while driving – you never know when you may need to squeeze in between a few cars to move ahead. Or worse you may have to deflect yourself at an angle when some novice is trying the same squeeze with may end up in his somersault.

4.Always carry good quality ear plugs with you.  For even though the traffic is jammed for the next 5 kms ahead of you, the person just behind you is always convinced that he/she is stuck in this traffic only because of you and if somehow you get out of the way ,  he /she  would whizz to home in 5 seconds . Hence this person keep honking the horns of his/her car ceaselessly.After the few minutes , the ceaseless honking with be accompanies by ceaseless cursing and swearing. Without a nice pair of ear plugs, you will be distracted with all this noise while you are busy swearing at the person ahead of you.

Happy Driving !!!!

July 17, 2010

Tax Saver Loans: rent receivables

Filed under: Investing — pegasus @ 12:28 AM

If you own a residential/commercial property that has no debt on it and earns a steady rental income then read ahead.

Current Indian income tax rules promote tax savvy individuals to take on bank loans. However most individuals are in so much hurry to pre-pay their mortgages that they miss out on this opportunity.

Firstly government allows individuals to get tax rebate on 1.5 half lakh rupees of interest expense on home loan. So that is a cool saving of 50,000/- per annum in tax.

Secondly as per the current income tax laws, an individual has to pay income tax on the rental income. 15% of the income can be offset as maintenance. However if one takes a small loan against that property, then its interest expense can be deducted from the rental income and save tax.

One can get home loan for 8.25% p.a. and save tax using the above mentioned procedure, then effective interest rate would be 5.45% p.a. (tax rate of 33%). One can use this loan to clear the higher interest rate debt or reinvesting the money received in tax (and risk) free securities that earn a higher return one can save tax.

E.g.: post office PPF generates 8% per annum tax free returns.

PS: I am not an authorized tax consultant. So please check with your financial/tax planner before taking out such a loan.

July 14, 2010

The Little I

Filed under: life, Poem — shobhendrasrivastava @ 2:54 AM

Little Lights in the sky
Little stars twinkle my eye
Little moon above so high
Little eyes can see so high.

Little wings of the butterfly
Little rain drops falling by
Little chirp of the bird that fly
Little cloud in the sky.

Little sound the wind with fly
Little grasshopper jump so high
Little nut of squirrel shy
Little rabbit runs so why .

Little sound and the train go by
Little dog to catch insect try.
Little cat on tree so high
Little plane up in sky.

Little cow chew and mow
Little seeds the farmer sow
Little egg the chicken lay
Little frogs croak to say

Little leaf on the ground fall
Little tree will grow so tall
Little dew on rose so small
Little sound of church toll.

Little little the world so all
Little little I will know it all
Little little I see with my eye
Little little learns the Little I .

Too good to be true

Filed under: Miscellaneous — pegasus @ 1:21 AM

Guilt and quest for a clear conscious is a very powerful emotional drive which can make even the biggest of the sacrifice look small. Different people have different ways to live guilt free again. Some people overcompensate, while others rationalize their thoughts and actions.

Today at the cafeteria table that probably this would be the origin of the term “too good to be true.” A husband who showers his wife with gifts and flowers and is being extra nice is probably because it’s his way of apologizing to his spouse.

I surprised to discover that few of the most religious men were also one of the cruelest men on earth and many of them ill treated and owned several slaves. Some of them rationalized their actions by claiming that they were only doing the God’s work by purging the world of evil and blasphemous. Others rationalized ill treating the slaves by considering them sub-humans. They even went over-board by claiming that enslaving Africa was a “White mans burden (duty)” and by doing so they were civilizing this Dark Continent. These arguments might looks totally stupid today, but they served their purpose and allowed these men to sleep worry-free.

July 11, 2010

The Two of Me

Filed under: life, Thoughts — shobhendrasrivastava @ 11:28 AM

There are moments in our life where we stare at defeat and difficult times.
We are at the crossroads – we do not know what to do.
At these times, our inner self seems divided in two – our I and You.

We stop , listen to both and we think……….
Then
Some of us follow the I
and
Some of us follow the You.

Two of Me

The Me – I

A fear hides in the heart
That dreams would die only as dreams
Unfulfilled ambitions yet
And soul would depart
Body would lay satisfied
But wanting soul would still scream.

Even then ,
No more dreams now I strive to pure
No new dimensions I try to explore
Too many constrains the free will found
It killed the dreams, I lived to bound

Past boundaries have punctured the heart
More failures may rip it apart
So I live now this vegetative life
Daily chores and no delight
No excitement in life for sure
But at least pain I bear No More !

The Me – You

You may fear to die,
You may not – I cannot say
But you fear to live
One by one you kill each day

Intense pain is better
Slow pain to death – Never!
Dormant life is sin for sure
So precious life is
Vegetation is no cure .

Attempt and action
Coulld bring joy
Could bring sorrow
But they bring an alive tomorrow
Dream and decision
May give pain
May give gain
But they make you live again.
Inaction is state of defeated mind.
A champion lives each moment
All the time.

Today you vegetate
By taming your soul
Tomorrow the body
With age will tame you old
Before you decay
Yourself you cure
One life, Do More !

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