Change Is Very Difficult But Excellent For Life

– By Anil Bharti

Each and every individual have their own way to live their life but one thing is very common that most of them wishes to see one day miracle in their life – it’s a different matter that it happens only with very few of them. (Also refer last blog of Pentagraph – penned by Meghashyam about miracle  (Miracle Happens But ……). It simply proves that only wish to have great thing in life would not do , this only does not have the power to bring great changes to your life.

Then what will… ???

I think the CHANGE ( Willingness to Change , ability to change and Confidence and adoptability to Change ) does have all the ingredient to get miracle in your life but is very painful .Will start from our day to day life . We know that we must get up early in the morning for the various benefit but is really very difficult. Many of us ,set up alarm to get up in the morning but when the time comes in the morning, we very conveniently switch it off to continue our sleep for some more time promising ourself  that will do it from tomorrow onwards definitely .Think, if this, a simple habit – can’t be changed  – changing for investment definitely would always remain a very difficult task.

People feel happy listening about great successful individual and clap for them – remember they are great because of the flexibility /Changes- they have adopted in their life – must have gone through the pain of getting up early in life .If there is a desire of great things – adopt the CHANGE which would give certainly pain for some time but joy for all through life. We advise to young employed individuals – who just have started working to start SIP of 5000/- and increase 10% every year – which could bring excellent wealth to them after 20/25 yrs. –very few are willing to believe in this… but it happens …Miracle happens.

One simple story, I would like to narrate to make you understand how difficult is to change. This has been taken from Mahabharata.

All the learned men of Mahabharata decided to give one barren parcel of land to Pandava to avoid clashes between Kauravas and Pandava .Finally, the barren land was given to Pandava. The Pandava was very upset but finally Krishana- their advisor, made them agree to accept this as their luck and start their onward journey from there itself – the place was known as – Khandavaprastha. After years of hard work the Pandava made the barren land like heaven and renamed this as – Indraprasta .

Few years later, Pandava invited – all their relatives to Indraprasta to celebrate their success. As we know – all from Hastinapur has come and enjoyed the celebration but Duryodhan was very upset seeing their success and said to his Mama – Shakuni – that he needed – Indraprasta also otherwise he would sacrifice his life .

Shakuni said – don’t worry Bhanje (Nephew) , I would help you and asked Duryodhan to invite Yudhisthira to play Juwa (Gambling).The invitation went to Yudhisthira and they called a meeting . All Pandava except Yudhisthira was opposing for this but finally agreed as big brother wanted to go and enjoy this game leaving all worries. Finally, we all know what happened – Yudhisthira lost everything – his entire Kingdom, Brothers, wife including himself.

After this win, in the evening the celebration was on and everyone in the Kauravas gang was enjoying. At one corner – Duryodhan and Shakuni were too enjoying and during the conversion – Duryodhan asked Mama- how could you do this ?. Shakuni has given a very simple answer that Yudhisthira is a habitual jurari .He always used to play and enjoy this game.
The moral of the story is – the man irrespective of his knowledge, wisdom & experience – can’t leave easily their habits, like many of us failed to wake up early in the morning. So, changing the habit is really very difficult .That is the very reason – we failed to make people understand to save for future by starting a very small investments and the flexibility and courage to change is acceptable to only 2% people.

One final thing – if you would have observed in the entire Mahabharata – whenever Pandava was in trouble, their Advisor – Krishna had saved them but this was the only reference where Krishna – the advisor was not there.

So, I am leaving you all to think … the role – might be of an advisor – in your journey!

Happy Investing !!!

Budget 2018 Decoded

– By Meghashyam Sinkar

That way Budget is regular affair but media makes every budget utmost important for ruling Government and every species on the planet .

This year budget created too much hype about equity taxation / LTCG (Long Term Capital Gain ) and how it is going to impact Aam Aadmi . Surprising critics cry foul about poverty , unemployment who does not have any money for investments ……forget about investing , they dont have any savings and then data shows hardly 5 -6% of population is putting money into equity and they are claiming how taxing these people take the sentiments down . Anyways , Let us try to decode the Budget 2018 in terms of personal finance and taxes .

  • LTCG ( Long Term Capital Gain )

Until now , there was no tax on equity or equity oriented funds if you hold it for more than one year ( Long Term ) under section 10(38) provided STT (Securities Transaction Tax ) is paid .However, now it will be taxable but comes with certain terms .

Long Term Capital Gain (LTCG ) exceeding Rs 1 Lakh on investments in equity or equity oriented funds to be taxed 10 % and ALL GAINS TILL JAN 31, 2018 WILL BE GRANDFATHERED .

The computation of long-term capital gains in different scenarios is illustrated as under –

Scenario 1 – An equity share is acquired on 1st of January, 2017 at Rs. 100, its fair market value is Rs. 200 on 31st of January, 2018 and it is sold on 1st of April, 2018 at Rs. 250.

As the actual cost of acquisition is less than the fair market value as on 31st of January, 2018, the fair market value of Rs. 200 will be taken as the cost of acquisition and the long-term capital gain will be Rs. 50 (Rs. 250 – Rs. 200).

Scenario 2 – An equity share is acquired on 1st of January, 2017 at Rs. 100, its fair market value is Rs. 200 on 31st of January, 2018 and it is sold on 1st of April, 2018 at Rs. 150.

In this case, the actual cost of acquisition is less than the fair market value as on 31st of January, 2018. However, the sale value is also less than the fair market value as on 31st of January, 2018. Accordingly, the sale value of Rs. 150 will be taken as the cost of acquisition and the long-term capital gain will be NIL (Rs. 150 – Rs. 150).

Scenario 3 – An equity share is acquired on 1st of January, 2017 at Rs. 100, its fair market value is Rs. 50 on 31st of January, 2018 and it is sold on 1st of April, 2018 at Rs. 150.

In this case, the fair market value as on 31st of January, 2018 is less than the actual cost of acquisition, and therefore, the actual cost of Rs. 100 will be taken as actual cost of acquisition and the long-term capital gain will be Rs. 50 (Rs. 150 – Rs. 100).

Scenario 4 – An equity share is acquired on 1st of January, 2017 at Rs. 100, its fair market value is Rs. 200 on 31st of January, 2018 and it is sold on 1st of April, 2018 at Rs. 50.

In this case, the actual cost of acquisition is less than the fair market value as on 31st January, 2018. The sale value is less than the fair market value as on 31st of January, 2018 and also the actual cost of acquisition. Therefore, the actual cost of Rs. 100 will be taken as the cost of acquisition in this case. Hence, the long-term capital loss will be Rs. 50 (Rs. 50 – Rs. 100) in this case.

Please note that any transaction made during Feb 1,2018 to March 31, 2018 will have existing treatment of taxes

  • There will be 10 % of dividend distribution tax on the equity dividend .Please note that the dividends will be tax free in the hands of investors.

  • Allow a standard deduction of ₹40,000 in lieu of the present exemption in respect of transport allowance (₹19,200) and reimbursement of miscellaneous medical expenses (₹15,000) . Please note that this benefit can be availed by Pensioners also which were not there initially .

  • To avail benefit of any deduction under section 80C, 80D, 80CCG etc. the person would have to file return within due date specified by the government .

  • Exemption of interest income on deposits with banks and post offices to be increased from ₹10,000 to ₹50,000 for senior citizens (Section 80TTB) .
    Please note that senior citizen who avail this benefit will not be able to avail deduction under section 80TTA i.e. deduction in the respect of saving bank interest upto Rs 10,000/-

  • The deduction under Medical Expenditure on treatment of critical diseases has incrased to Rs 100,000/- from Rs 60,000/- in case of senior citizen (Section 80DDB)

  • Limit of deduction for health insurance premium and/ or medical expenditure increased from ₹30,000 to ₹50,000, under section 80D for senior citizens

  • The lock in period of Capital gain bond under section 54EC has been extended from 3 years to 5 years from April 1 , 2018 .

    Pentagraph view on the budget is that Budget has come and gone . All the negatives and positives will have short lived impact on the market .  We strongly believe and suggest you to have your clarity on your financial goals and then invest accordingly .

    Happy Investing !!!