Invest to Drive Your Passion

Investing for your passion and perusing it will make you feel comfort and complete. If we do what we like, we will give something extra to it!

You may like cycling and you wish to buy a cycle for trips during weekend. You feel to enjoy your passion. But purchasing cycle out of your monthly income may affect your finances until you have a surplus. There may be lot of hindrances from your family and friends. When you have a bike and car, why you want a cycle now? and lot more questions.

If photography is your passion you need to better Lens for camera to smart yourself . Few may fancy to learn a musical instruments like guitar, Keyboard. But they kill the passion due to the financial constraints and keep running to earn more!

Mentotax gives a solution for this with weekly investment without giving trouble to your finances to pursue your passion.

Buying a cycle/guitar/Lens would require Rs 10000/- today but by end of the year you may require Rs 10500/- due to inflation.

Start accumulating Rs 10/Week and increase it along with every week.

Week     Amount
1               10
2                20
3                30
..                 ..
..                 ..
51              510
52              520

Until you accumulate Rs 5000/- keep parking it in savings bank account where you will not withdraw for routine expenses. Your investment will fetch you 4% return for 30 weeks.

On 31st week shift your funds to Mutual Fund Liquid Schemes. Because good liquid funds need minimum investment of Rs 5000. Your investment can fetch you 6.5%. By end of the year you can save Rs 14537 with average 5.5% returns equivalent to your inflation.

Which can be utilized for purchasing your Cycle/guitar/Lens. Never give up your passion!!

Don't worry about anything!! Start investing to drive your passion in you without troubling your finances!!

#Passion #investing #MutualFunds

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Tax Benefits on Housing Loan

Yesterday we have read about how to recover the interest outgo in housing loan by investing 15% of EMI.

Today we are going to discuss on various tax benefits available along with housing loans. What will be the net interest rate after taking tax element into consideration.

Tax Benefits on Housing Loan:

* Principle portion remitted during a financial year is exempted from income up to maximum of Rs 1,50,000/-under Section 80C of income tax act.

* Interest portion remitted during financial year is exempted from income up to maximum of Rs 2,00,000/- under section 24 of income tax act.

So Maximum amount of Rs 3.5 Lakhs can be availed as tax benefits.

Since section 80C accommodates other exemptions like Employee provided fund, Life Insurance, ELSS, PPF. So It is mostly not possible for salaried class to get maximum exemption on principle portion in Housing Loan.

Mr Ram who has availed housing loan of Rs 30,00,000 for 20 years at 8.5% interest rate.

Ram starts paying EMI of Rs 26035 in the month of April. He will remit Rs 312417/- out of which Rs 252710 will be interest portion and Re59707 will be principle portion.

If Ram is in 30% Income tax slab he can save up to Rs 62400 in his taxes. Which works out his net interest rate equivalent to 6.42%

Considering 20% tax slab, He can save up to Rs 41600 and net interest rate will works out at 7.11%

If he is in 5% tax bracket , even he can save maximum of Rs 10400 in tax and net interest rate will be equivalent to 8.15%

#Only Interest portion on hosing loan is taken into account for calculation.

Mentotax recommends to pay your debts regularly and Utilize the tax exemption. Submit declaration to your employer to avoid deduction of TDS by collecting provisional interest certificate from your bank. If you are paying higher interest portion than what you utilize for tax savings mentotax advises to start prepaying it.

#Mentotax #HousingLoan #Investment #Interest

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How to Recover Interest Outgo on Housing Loan?

Availing Housing Loan is the biggest financial decision that most people take in the lifetime. For many Indians getting a dream home is the first life goal.

Recent developments in the real estate sector like RERA Act( Real Estate Regulation and development act ) and various scheme by government in providing affordable housing like PMAY ( Prime Minister Awas Yojana) has made easy access to home loans for all segments of people.

Housing Loans are always sanctioned for longer tenure, considering the repayment capacity of individuals, Source of income generation, age and various factors.

Banks sanctioning the housing loan charge interest from the borrower and He repays the debt through EMI (Equated monthly installment). EMI consists of interest portion and Principal portion. Beginning years Interest outgo will be more and it’s reduced over years.

Consider Mr.Ram has availed Rs 30,00,000 housing loan for 20 years at 8.5% Interest rate per annum and he needs to pay a EMI of Rs 26035 per month. By end of the loan tenure he would have paid Rs 62,48,400/-

Principle amount of Rs 30,00,000/-

Interest portion of Rs 32,48,400/-

Here we come to reduce your financial burden!

Mentotax recommends you to invest Rs 2643/- via SIP (Systematic Investment Plan) in equity mutual funds for 20 Years to recover the interest portion on the Housing loan.

Investment of Rs 2643/month in the equity fund that gives average return of 15% for 20 years can fetch you Rs 32,49,100 /-. Your corpus generated via investment can nullify your Interest portion on the housing loan.

Isn't that a better option to reduce your debt?? Being debt free is the financial freedom!!

Next post is on Tax Benefits on Housing Loan! Keep Reading!!

#Mentotax #HousingLoan #Investment #Interest #Tax

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Start Cultivating Investment habits in you!

Everyone wants to save more and be financially independent but hardest thing about saving more money is getting started.

People wants to get rich very quick, but they start to invest only at the later end of the life. There expected corpus will not be made because of less compounding effect. Simple Concept, If you want to be rich, Make your money to compound, Invest as early as possible.

Every Individual as their own kind of investment, Few People invest in Mutual Funds, Few People take risk and invest directly in shares, Few People in Gold, Land, Small savings schemes in post office. Its up to the risk appetite of the individuals. Cutting your routine expenses and investing that will help you in balancing your finances.

Example sacrificing a movie per month:

If we think about weekend, First thing that comes to our mind is movies, if we try to skip one movie over the weekend and save Rs 1000/Per month and invest the same in mutual fund that fetch you 8% return on average, In a year you could save 12960/- This amount can look smaller now if the same is invested for 25 Years, Your Corpus can grow up to Rs 9,47,452/- . If it is invested for 30 Years your investment will grow up to Rs 14,68,150/-

Sacrificing a movie can fetch you over Rs 15,00,000/- to balance your finances. Start cultivating Investment habits in you to financially independent. This kind of savings will help you to maintain discipline in spending, Savings and Investing from young age.

Mentotax guides you in planning your monthly budget to financial goals!!

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Health Insurance - Its Importance and Tax Benefits

Health Insurance - Its Importance and Tax Benefits

We never know when emergency will strike us, it can surprise us at any moment, and we need to protect our self and family from any medical emergency. Medical expenses are growing at more than 10% every year. It is always advised to have Medical Insurance covering your entire family in investment portfolio.

Health Insurance is mandatory for every individuals, Even though employer provide group health cover for employees, It is always advised to avail a personal cover for you and family. Foremost Importance in financial planning is covering you with adequate life and health cover.

Health insurance takes care of all your hospitalisation expenses. Few policy offer pre and post hospitalisation cover of 60 to 90 days.

Health Insurance are available in various forms

·                   *  Individual Policy

·                   *   Family Floater Policy

Family Floater Policy covers all the members of family who are insured against specific sum assured in the policy. Health Insurance is available in various forms like Hospital Cash Products, Critical Illness Cover Products etc.

Health Insurance premium paid can be exempted under section 80D of Income Tax Act. Apart from Health Insurance Premium, Preventive Check-up done during the Financial Year amounting to Rs 5000 is also can be exempted under  section 80D of Income Tax Act.

Person Covered	Excemption Limit	Preventive Check-up	Maximum Excemption
Self and Family	Rs 25000	Rs 5000	Rs 25000
Self, Family and Parents	Rs 50000	Rs 5000	Rs 55000
Self, Family and Senior Citizen Parents	Rs 55000	Rs 5000	Rs 60000

Mentotax Recommends to avail Health Insurance as early as you can. Since the premium of health insurance increases with age. Mentotax advises to carry out preventive health check-up, because prevention is always better than cure.

You can avail max tax exemption from Rs 1300 to Rs 18720/- based on your tax slabs.

Person Covered	Maximum Excemption	Tax Slab
		5%	20%	30%
Self and Family	Rs 25000	1300	5200	7800
Self, Family and Parents	Rs 55000	2860	11440	17160
Self, Family and Senior Citizen Parents	Rs 60000	3120	12480	18720

#Mentotax  #HealthInsurance  #Tax  #80D  #FY2020

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Know Your Tax Slabs - FY 2020

Knowing Your income tax slab will boost you in budgeting your income and plan your taxes. Income tax is paid on the taxable income after all the deductions and exceptions under various sections of  Income Tax Act.

As per latest Interim budget , If a person with total taxable income below 5,00,000 is exempted from paying tax. He/She can claim rebate of Rs 12500/- under section 87 of Income Tax Act.

Here is Income slab and tax rates for people whose taxable income exceeds Rs 5,00,000/-

Tax Slab Table:

Apart from Income Tax slab surcharge has to be paid if income exceeds 50 Lakhs.

Surcharge:

* 10% surcharge on income tax if the total income exceeds Rs.50 Lakhs but below Rs.1 Cr.

* 15% surcharge on income tax if the total income exceeds Rs.1 Cr.

Cess :

Health and Education cess : 4% cess on income tax including surcharge.

Mentotax will help you understand your taxable income. Guide you in utilizing the maximum tax deductions and exceptions. Mentotax will also help in plan your finances aligned with taxation.

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Welcoming Financial Year 2020

Financial Year is a period used by government for accounting, budget and taxation.Our financial year starts from 1st of April and ends at 31st march.

Financial year in case of individuals are used to assess the income from various sources and to pay taxes to government.

Mentotax recommends the following for the new financial year:

1. Earn, save, invest and then spend.

2. Increase your SIP (Systematic Investment Plan) by 10% from the last year

3. Declare the Tax exemptions to the employer in April itself to avoid deduction of TDS. Money today is more valuable than Later.

4. Plan your budgets alligned with your finances

5. Repay your debts, will make you financially independent.

6. Start building your Emergency corpus.

7. Get yourself and family covered with Health and Life Insurance.

8. Start investing based on your Life Goals.

Don't Worry!! Mentotax is here to guide you.. We together can welcome FY 2020 with lots of hopes and aspirations.

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