04 KALEIDOSCOPE ERGO Monday, January 5, 2009

Mini quiz
First correct answer wins a free 2009
executive diary
Tax planning can also be
about maximising wealth
Q1. How many stocks are there in the
sensex?
A.10
B.30
C.4523
D.10000

Q2. Which of these funds invest only in

fixed income securities?
A.Equity
B.Debt
C.Balanced
D.Money market

Send answers to 9281398889 or

finergo@goergo.in If you think the right answer for
Q1 is A and for Q2 is B sms as 1A2B

Word morph
Below are some words related to Part 3
personal finance. Try to find out the

T
he objective of any tax planning
max number of words by changing exercise should be to maximize
just one letter wealth and not reduce tax by
itself. Many a times by reducing
For example: money - 1 toney 2 motey 3 tax to the minimum, we are actually
mosey 4 mopey 5 honey 6 coney 7 boney reducing our wealth. Let’s see how
optimize tax benefit tools and maxi-
1. Stock mize wealth.
Invest, Save and Spend- Maxi-
2. Invest mize Section 80 C benefits
This section includes a number of
3. cash tools for investments, savings and
expenses with tax benefits up to a
4. Insure maximum of Rs.1,00,000/-.
Investments options include ELSS
Mutual Funds, ULIP (Unit Linked In-
surance Plans) Insurance premiums
(Subject to Life cover being equal to
Scary protest a minimum of 5 times the premium)
and Pension plan investments.
The Savings options are: EPF,
PPF, National Saving Certificate, Ki-
san Vikas Patra and Housing loan
principal
The Expense option: Children’
school fees (excluding special fees,
bus fees, etc)
Pension plans are better avoided
as they generally do not get tax bene-
fits at the time of maturity which
means you save tax today but pay it
when you get the pension. Only 30% Rs.15,000/- for non-senior citizens funds (zero tax in this case) and > 3
of the maturity amount in a pension and Rs.20,000/- for senior citizens. years for buildings (20% of indexed
plan is tax free. The rest can be used Maximize this with good insurance value). Don’t sell land as land itself,
to buy a pension annuity or add the cover. Check Finergo dated 08 Dec make some development on the land
money to “other income” in income 2008. This premium is not an invest- - build a house, a commercial space
computation and get taxed again. ment per se. But in times of emer- or at least develop it into multiple
Ordinary ULIPs with 5 times cover gencies, it is a life saver! Literally! sites with water & EB connections,
can give you the benefit without the Shift to Long Term Capital Gain and then sell. That way you attract
쒀 Protesters hold a scary mask as they pain. (Avoid Short Term Capital Gains) long term capital gains, which is al-
demonstrate against Israeli military Maximize Section 80D Ensure that your investments are ways lesser than short term capital
strikes on Saturday in Germany. This section is for health insur- long term in nature - >1 year for eq- gains. Next week we will understand
AFP PHOTO ance premium. The limits are uity and equity oriented mutual the other tax savings options. ■