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Mahesh

Mahesh Padmanabhan  | Answer  |Ask -

Tax Expert - Answered on Feb 01, 2023

Mahesh Padmanabhan has specialised in payroll, personal and corporate taxation for more than two and a half decades, enabling him to provide practical, realistic and correct advice to his clients.
He is a member of The Institute of Chartered Accountants of India and has a degree in cost accounting from the Institute of Cost Accountants of India.
He is also a qualified information systems auditor. ... more
Prasanna Question by Prasanna on Feb 01, 2023Hindi
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Hi Mahesh, how much will a person in the highest tax bracket save if her/his income is not taxable up to Rs 7 lakh of income? What other benefits will the new tax regime bring for the salaried in all the tax brackets?

Ans: Hi Prasanna
While the increase in limit from Rs. 5 Lakhs to Rs. 7 Lakhs is merely to accomodate the lower income segment and does not really make a difference to the highest tax bracket individuals. In this context, earlier, individuals whose income did not exceed Rs. 5 Lakhs had to pay Nil tax whether or not they opted for the new regime. The budget proposals has enhanced this limit to Rs. 7 Lakhs for individuals who opt for new tax regime but the earlier limit of Rs. 5 Lakhs would remain for individuals who opt for the old regime.

The slab rates for new tax regime have been tweaked to provide a small reduction in the tax liability as compared to the previous year.

Also, standard deduction benefit that was not available to an individual opting for new tax regime has now been allowed.

All in all, opting for new tax regime may now be beneficial.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Mahesh

Mahesh Padmanabhan  | Answer  |Ask -

Tax Expert - Answered on Feb 01, 2023

Asked by Anonymous - Feb 01, 2023Hindi
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Dear Sir, what is the difference between new and old tax regime as per new budget announced? What are the benefits? My annual salary is 10LPA
Ans: Hi
The difference between the old and new tax regime is that many deductions and exemptions are not available if an individual opts for the new tax regime.

Standard deduction, PT deduction, Mediclaim, Life Insurance, PF, NPS, Donations etc., are some of the common deductions that would not have been available to an individual opting for the new tax regime. The benefit that the individual would get by opting the new tax regime is that she / he would get lower rates of tax slab as compared to an individual opting for old tax regime.

With the new budget proposals, the FM intends to extend atleast 3 distinct benefits to individuals opting for the new tax regime.

1. Standard deduction would be available to be claimed
2. Slab rates of tax has been rationalized (improved) to give better tax relief to the individual
3. Individuals opting for new tax regime have got enhanced Nil tax window of Rs. 7 Lakhs as compared to old tax regime limit of Rs. 5 Lakhs. As your income even after the standard deduction would be above Rs. 7 Lakhs, this benefit is not really applicable to you.

If we look at an income of Rs. 10 Lakhs with standard deduction of Rs. 50000; you would pay Rs. 52,500 under the new tax regime (current budget proposal) as compared to Rs. 67,500 under the new tax regime (last year budget). So effectively comparing apple to apple, you have an additional saving of Rs. 15,000 in taxes

..Read more

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Anu

Anu Krishna  |1330 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 27, 2024

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I am a Single mother (divorcee) of 4year old kid. I was separated when the kid was around a year old, because of his habits and abusive nature. I didn't want my to go through the same The father or his family never asked to see the kid. Now my kid asks questions "where is my dad", "everyone has father, where is mine". It breaks my heart and i am not sure how to handle it. How can I tell my kid that the father doesn't want to be involved in a polite way so that it doesn't break my kid.
Ans: Dear Sushma,
I am sure this is really tough for you.
What I can suggest is actually reading out books to him that explain separation/divorce through stories. This will enable him to understand that there are families and not all families are the same. But do ensure that you give him a good image about his father. Bitterness as a seed can grow and that is not healthy for a child at all. As the story progresses, you may want to insert the truth that in some families, the father/mother are not involved and choose to be away. This maybe difficult for him to fathom right now but slowly comparing his life with his friends, he will have more questions as he grows up. Take it one day at a time...break the truth gently and very age appropriately and right now, stories seem to be the better way.

Later in life as he grows even older, he can choose to seek and understand the truth in his own way. It may seem like a big contrast then but he will know that you had in his childhood come from a space of concern for his emotional growth.

You may also check in with other single mothers and they will surely have some things to share on it...at the end of the day, do what you think is right as a mother for your child.

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

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Ramalingam

Ramalingam Kalirajan  |7162 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 27, 2024

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Dear Sir, I am 38 years old and I want to invest 60 lakh in mutual fund as lumpsum or STP over one year. I am planning to break it to 4 parts of 15 lakh each and invest in Nifty 50, Nifty midcap 150, one multi cap and one flexi cap. I have an invest horizon of 20 years. I have invested in real estate so I have already diversified myself so want to stick to mutual funds for 60 lakhs. Please advise if this is wise or am I being dumb?
Ans: Your financial planning shows a clear and thoughtful approach. Allocating Rs 60 lakh with a 20-year horizon is wise. However, let’s evaluate your strategy to ensure optimal diversification, risk management, and returns.

Diversification Achieved:
Your existing real estate investments ensure risk is spread across asset classes.

Long-Term Horizon Advantage:
A 20-year horizon allows you to absorb market volatility and maximise compounding benefits.

Focus on Mutual Funds:
Sticking to mutual funds for this corpus is logical and efficient.

Reassessing Your Allocation Plan
Lumpsum vs Systematic Transfer Plan (STP):
Lumpsum investment can expose you to market timing risks. Use STP over 12–18 months to reduce volatility.

Equity Fund Categories Selection:
Your idea of investing in large-cap, mid-cap, multi-cap, and flexi-cap funds is balanced.

Issues with Index Fund Allocation
Concerns with Nifty 50 and Nifty Midcap 150:
Index funds lack active management, leading to missed opportunities during market fluctuations.

Benefits of Actively Managed Funds:
Active funds aim for better returns through expert fund manager insights and stock selection.

Advantages of Multi-Cap and Flexi-Cap Funds
Multi-Cap Funds:
These funds provide exposure across large-cap, mid-cap, and small-cap segments, ensuring balanced growth.

Flexi-Cap Funds:
Fund managers can freely allocate investments to market segments based on opportunities.

Complementary Approach:
Combining these funds with active large- and mid-cap funds ensures robust diversification.

Strategic Recommendations
Adopt a Blend of Active Funds:
Replace index funds with actively managed large- and mid-cap funds.

Focus on Quality Fund Selection:
Choose funds with consistent long-term performance and experienced fund managers.

Allocate Based on Risk Appetite:
Consider 60–70% allocation to equity funds for growth and 30–40% to hybrid or debt funds for stability.

Start STP Immediately:
Park your lumpsum in liquid funds and systematically transfer to equity funds monthly.

Taxation Awareness
Equity Mutual Funds Tax Rules:

LTCG above Rs 1.25 lakh is taxed at 12.5%.
STCG is taxed at 20%.
Debt Funds Taxation:
LTCG and STCG are taxed as per your income slab.

Plan Exit Strategy:
Use SWP (Systematic Withdrawal Plan) after 20 years to optimise tax benefits.

Risks and Monitoring
Mitigate Market Risks:
Diversified fund selection and STP lower volatility risks.

Review Regularly:
Monitor your portfolio yearly and rebalance if needed.

Avoid Over-Concentration:
Ensure no single fund category dominates your portfolio.

Additional Suggestions
Emergency Fund:
Ensure an emergency fund of at least 6–12 months' expenses.

Insurance Coverage:
If not already covered, secure adequate health and term insurance.

Avoid Unnecessary Additions:
Stick to mutual funds without over-diversifying into unrelated assets.

Final Insights
Your planned allocation reflects thoughtful diversification and long-term focus. Replacing index funds with actively managed funds can enhance returns. Using an STP will balance market volatility effectively. With consistent monitoring and expert fund selection, your Rs 60 lakh investment can achieve your 20-year goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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