Prajna Capital - An Investment Guide

With rising input costs and falling margins, it has become imperative for the company to cut costs and has decided to cut its employee strength by 20% in order to reduce its wage bills. Rather than retrench employees and invite litigation (and the wrath of trade unions), the company has advanced a more humane approach by instituting a voluntary retirement scheme ( VRS ) that is open to all employees. Here are the few things I have asked him to consider while making his decision: 1) NOT A PERMANENT RETIREMENT Although called “retirement”, a VRS does not stop the person from taking up another employment as long as the employment is not with the same company or group. 2) TAX BENEFITS A VRS designed in accordance with Section 10(10C) of the Income-tax Act, 1961 allows the recipient to enjoy tax exemption on his compensation up to a maximum of Rs 5 lakh once in his lifetime. 3) OTHER TERMINAL BENEFITS A VRS ideally should be over and above other terminal payouts auch as Provident Fund, g...

Before you decide to hang up your shoes and chase your dreams, it’s important to do some financial planning so that you can enjoy the golden age to the fullest. THE definition of golden period in one’s work or professional life has now assumed a new meaning. Today, the ‘golden age’ is one when at the peak of your career, you decide to snap your ties with competitive work and spend time on what you always wanted to do. In terms of jargons, some prefer to call it — semi-retirement. Take the case of 42-year old Rajesh (Name Changed). He was doing well for himself as a marketing head in an MNC when he decided to take a break from the daily, hectic work schedule and started to learn pottery. Rajesh, who use to head a team of B-school graduates, is now enjoying his stint as a pottery teacher to young kids. But before you decide to hang up your shoes and follow your dreams, it’s important to do some planning so that you can enjoy the golden age to the fullest. FIRST THINGS FIRST Analysts bel...