Prajna Capital - An Investment Guide

Investing money for short-term, say up to 1-11/2 years has generally been an issue. As it is the interest rates / returns are quite low. On top of this, there could be taxation issues, which will further reduce the effective returns. Equity/equity funds may not be a prudent option for short-term. Therefore, we need to consider mainly the interest-based investment options. What do we usually do? Since it is quite convenient, very often the money keeps lying in the Savings A/c itself (also, maybe it is psychologically satisfying to see a big balance in one’s account). But don’t forget - this earns you just 3.5% p.a. interest and that too taxable. Hence, it is not good to keep too much money in the Savings A/c. The next common thing to do is to make a Fixed Deposit ( FD ). This may earn you 6-9% interest depending on the tenure. But this too is taxable (if you are in the highest tax bracket, even a 9% FD will fetch you just 6.3% post-tax returns). So, given the fact that there are better ...

10-point checklist for planning your taxes Planning for tax investment from the beginning of the year is a good practice. But, Inot dome well in advance better to start when the end of the fiscal is less than three months away. Now is the time to start planning your taxes. The following is a ten-point checklist. 1. The most important thing to do is start compiling a list of the Tax Deduction at Source( TDS ) you have paid. TDS operates like tax already paid i.e. from your final tax liability you have to pay only such amount that is over and above the tax already deducted. It is important for all taxpayers to collect the TDS certificates after the end of the fiscal year. Though these don’t have to be attached with the tax return anymore, they have to be filed and kept on record and produced before the ITO if called for. 2. If you have availed of housing finance, be sure to collect the certificate of your EMIs and the total interest paid from the housing finance company. 3. If you ha...