Financial Gym

 Let’s take a trip down the memory lane to the days when a new kind of digital currency stormed the internet, turning rags to riches and then consequently riches to rags. Why did this catch the eyes of so many people? What made this different from other types of investments or currencies? A lot of people just jumped in the train without knowing answers to these questions, much like how they do in stock markets. The wise jumped off the train just as swiftly when they were ahead. So, let’s see what the fuss is all about and how it is used and taxed in India? The Technicalities How to obtain/buy cryptocurrencies? Is cryptocurrency a currency or a tradable instrument? Taxation in India Why is cryptocurrency so much frowned upon? Should you buy it? The Technicalities Cryptocurrency is a digital currency secured by cryptography and are decentralized networks based on blockchain t...

GST is a concept that every common man thinks they know about, and some even try to advise the professionals on it. But, what is GST? As I said in my second post, GST is an indirect tax. You are paying taxes to the government irrespective of your income. It is levied as a percentage on product/service value. How is GST different from previous taxes? GST was introduced to achieve the objective of “One Nation, One Tax”. The primary taxes that GST replaced are Value Added Tax (VAT), Excise Duty, Customs Duty, Central Sales Tax (CST) and Service Tax. Other secondary taxes like entertainment tax, luxury tax, tax on gambling, betting, and lottery, etc. Contrary to popular belief, GST was not introduced by the current government. In 2000, the then PM Sri Vajpayee set up the committee to draft the GST law. In 2006, the then Finance Minister P Chidambaram proposed the introduction of GST in the budget. So, in reality, neither political party can claim GST as their baby. And...

  Let me start by saying that whenever I say “Investment”, I mean long-term or at least mid-to-long-term investments. Not in this post, and not in any future posts will I talk about making money quickly. Because there is no such thing as quick money making. There is only quick money-losing. So, if you are looking for that head over to Instagram or YouTube where a lot of people talk about how they made Rs. 10 lakhs from just Rs. 10 thousand. And I also won’t talk about investing in Cryptocurrency. Okay, let’s start. In my other post, I talked about investments for which Income Tax deduction is available. An investment is something you make in order to get some returns on your money. For most of us, it is more than savings, but less than our primary income. It goes without saying that with higher risk you will get higher returns. I remember the days when Savings accounts used to fetch 5% interest. Now, FDs are in that segment. Would we see days where ...

“Can I claim HRA if I am living with my parents?” is one of the most frequent questions that I get. In this post, I’m going to clarify that along with many other doubts you may have had or will have. I will tell you how to save as much tax as possible. All the things here will, of course, be legal ways to save tax. Table of Contents What is HRA? How HRA is taxed How much of HRA can be claimed as an exemption? Can I claim the exemption if I’m living with my parents? Is it possible to claim both HRA exemption and housing loan interest and principal deduction? Why is my employer asking for the landlord’s PAN? Can I claim just rent paid as a deduction? What is HRA? HRA or House Rent Allowance is a part of the salary provided by employers in order to help their employees in regard to their rent payments. Normally your CTC consists of different components like:     1. Basic salary. ...

  In my last post, I talked about investments that you can make in order to avail deduction from your income. These investments can be made by all individuals regardless of their nature of income. The deductions are covered under Chapter VI of the Income Tax Act. Among those, we will be specifically talking about section 80C and its subsections. Table of Contents When should I invest? Investment proof for IT Return List of eligible investments Limit on deduction availability Conclusion When should I invest? Let me first explain the concept of Financial Year and Assessment Year. In Income Tax, you come across the term “Assessment Year” more than “Financial Year”. A Financial Year (or Previous Year) that starts in April and ends in March, is the one in which you have actually earned money or incurred expenses. The current financial year is 2022-23. An Assessment Year is the one i...

 I wanted to start my first post with a joke, but it was cut short, just like my salary. Anyway, here's one: What do the Government, a mugger, and your kids have in common? Ans: They all take your money. There are basically two types of taxes that are applicable to most of us - Income Tax, otherwise known as Direct Tax. This is called direct tax because it is directly dependent on your income. Tax is collected as a percentage of your income. And if your income is below the limit then no tax is collected. Goods and Service Tax (GST), otherwise known as Indirect Tax. This is called indirect tax because the tax collected doesn't depend on your income. Anyone who is buying something is paying a tax called GST. Let us talk about Income Tax today, specifically Income Tax for salaried individuals. The Income Tax Act calls taxable units "Person". A "Person" consists of: Individual Hindu Undivided Family Company Firm Association of Persons or Body o...