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04 KALEIDOSCOPE ERGO Monday, December 15, 2008


Tax planning demystified

Winner gets a free Personal Finance Health
Check up from Finerva.
1. What is the rate of Income Tax for a per-
son with salary between 3, 00,001 and
A. 15%
B. 21%

– PART 1 A five-part series

C. 20%
D. 33.33%
2. Which is the only type of mutual fund
given below which will gives you tax benefits?
on Income Tax
A. Mid-cap funds
B. Income Funds
C. Monthly income planss
D. Equity Linked Savings Schemes
Send your answers to or SMS
your answers to 92813 98889. For example if you
choose A as the answer to question 1 and B as
the answer to question 2 type it as 1A2B and
send it.

Word power
Find out as many as possible words which
can be made using the letters of the words
given below
Words should be at least 4 letters long.
Proper nouns do not count. Duplicates
don’t count.
Money, Income, Wealth, Invest
Answers A.1 meno 2 money 3 mony 4 nome
5 omen
B.1 cine 2 cion 3 coin 4 come 5 cone 6 coni 7
emic 8 icon 9 income 10 meno 11 mice 12
mien 13 mince 14 mine 15 monie 16 nice 17
nome 18 omen 19 once
C.1 eath 2 haet 3 hale 4 halt 5 hate 6 heal 7
heat 8 late 9 lath 10 lathe 11 tael 12 tale 13 teal
14 tela 15 thae 16 thaw 17 thew 18 twae 19 wale
20 weal 21 wealth 22 welt 23 whale 24 what 25
wheal 26 wheat 27 whet
D.1 inset 2 invest 3 neist 4 nest 5 nets 6 nevi
7 nite 8 nites 9 nits 10 sent 11 senti 12 sine 13
site 14 snit 15 stein 16 tens 17 ties 18 tine 19
tines 20 tins 21 vein 22 veins 23 vent 24 vents
25 vest 26 vets 27 vies 28 vine 29 vines 30 vise

his five-part series will demysti- ute to achieving your financial goals. tax reliefs.
fy everything you wanted to Every decision has to contribute to- Your investments in ELSS with a 3
Gold Rush know about Income Tax.
Tax planning has been a
wards your life goals. year lock-in period helps build the
capital markets, over a period of
year-end issue filled with anxieties. A Tax benefits time. This in turn brings more in-
time when auditors, tax consultants, The basic concept of giving relief vestment and foreign exchange into
insurance agents, your office ac- is that, the investments expenses in the country, thus developing the
countant and so many others certain instruments can be used to economy as a whole.
pounce on you for investments. And build the nation’s resources and in- Your expenses for the education of
at the same time the government is frastructure. By building a house you your children, reduces the govern-
eager to take its share of your salary. help industries like cement, steel, ment’s burden to provide them with
The problem is that you end up banks and brick making; and pro- education. You get a tax relief. This is
with a plan which is not synchro- vides employment to many skilled the reason only specific instruments
nous with your long-term financial and unskilled workers. So you are in- give you tax relief.
plans. People borrow money at 18% volved in the development of the na- The bottom-line: The choice of the
to invest in bonds giving 8% returns tion. Thus reducing the instrument and the quantum invest-
to save tax. government’s burden and to that ex- ed/spent should depend on your fi-
The question is, do I invest only tent you are given relief from paying nancial goals and not just based on
쒀 A saleswoman displays a diamond ring
for the sake of saving tax? The an- taxes for spending your money. your tax-liability. The next articles
worth Rs.1.5 crores and bangles worth
swer is a big no. In fact, there are By paying insurance premiums will help you take the decisions relat-
Rs.50 lakhs, at the Vijayawada Gold and
situations when it is advisable to pay you are sharing the government’s ed to your income tax. ■
Diamond Jewellery Fair-2008 that began
your taxes rather than getting into an burden to give financial security to V. Ramachandran, Branch Manager,
investment which does not contrib- its citizens. You are rewarded with