Whenever we receive money as a salary, sale of shares/mutual funds, sale of property etc we lose a part of it to three monsters who eat of money and doesn't let you save and invest for the future. First Monster I am sure you must have noticed that if you earn say 6,00,000 per annum that comes to 50,000 a month but the actualy amount you get in hand is approx 35 k - 40 k. yes here is the first monster which eats your money before ti comes to you. TAX TAX TAX Second Monster This one eats your money every single day. The house you dream of buying one year down the line is not affordable after one year. Your dream vacation is now too expensive to afford. Thanks to the second monster INFLATION Third Monster I'll keep this one simple. The third monster is YOU who doesn't invest money for his future but live in the present spending all the money unaware of the big commitments in future. We can reduce the burden of tax by investing in the right instruments. We cannot do anything about inflation as we do no control it but yes we can definitely invest in instruments which gives us returns more than the inflation rate and keep our money safe. Lastly, If we will not save for our self and our family's future...Who Will.
Well said ,Shaishav. The first monster can be tamed to a little extent only by investing in taxsaving schemes and making the most of the deductions available. The second monster and the the third one can be tamed only if you learn to live a simple life with financial prudence.
Shaishav, I want to curb the first monster. My question: can we claim tax rebate on HRA and housing loan both while staying in own house?? If not what is the best way to reduce Tax in this situation?? Thanx Deepa
Hi Deepa, The answer to your question is NO. The reason is that both the situations are mutually exclusive i.e. If you are paying rent you cannot be the owner and vice versa. However, if your house is outside the limit from where you cannot travel to your office daily then you can claim both tax deduction. Regards, Shaishav
Shaishav, Thanx for reply. I just wanted to know one thing if we keep on staying in a rented house and put our own house on rent and show the rental income. in that case both rebates will be applicable??
Hi Deepa, Yes, you can claim both the exemptions in this case as well and the income from rent is taxable at your hands and will be accounted for under "income from other sources". Regards, Shaishav
Shaishav, When there is a working couple having a own home in a different state, staying currently in rent house in a different state. Can they both claim HRA from this rented house and get tax benefit on EMI that needs to be paid for the house in other state?? Couple working for different companies and loan is on one partner name.
Hi Priya, Yes they can claim both the exemptions. I would like to clarify one point here that you cannot claim if the loan is on your name you also have to be the owner of the property i.e. if both husband and wife have taken the loan on their name but the property is registered in wife's name then only wife can claim the home loan benefit not the husband. I have also answered your query on financial planning for retirement, kids education etc etc. I hope you read it. Regards, Shaishav