Chinese Mobile Phones: Indian Man dies after being electrocuted by China Made Phone

As per the reports, a 25 year old person from Gujarat's Panchmahal district died after being electrocuted while using his China Made Mobile Phone.

Man Dies from Electric Shock from Chines Mobile Phone

The person is said to be using the Chinese Cellphone while it was plugged in for charging. The deceased is being reported to be 25 year old Dhanji Damor.

This news should send the shock waves and a word of caution among the hundreds of thousands of Indians (and the people around the world), who have been purchasing and using China Made mobile phones without giving a thought to security, guarantee period and safety measures which are supposed to be looked at and offered by established companies.
Although the government has been tightening the rules to ban the use of illegal handsets like those without poper IMEI numders, there are still many safety concerns that need to be looked at when it comes to Cheap Chinese Phones.
Few months back it was the nokia phone battery (made in China) which was reported to have bursted. That had caused a major problem for Nokia brand.
Although the rules are in place, still the grey market in countries like India is filled with Cheap Chinese Phones which are being sold on the street shops as well as online at much discounted price compared to other branded phones.
People go in for the "cheap and best" offers, ignoring the required guarantee/warantee and most importantly hardly worrying about the safety hazards and problems they may face.

LIC Jeevan Arogya Policy: Review Analysis & Details

Details about LIC Jeevan Arogya Policy & review, analysis and opinion about LIC Jeevan Arogya Policy.
All of you may have seen the LIC Jeevan Arogya Policy ad on television as well print - the ad has a punchline - "A Comprehensive health plan that takes care of your EXTENDED Family too". Generally, the words used in punchlines of any ads adefine its USP. So what do we conclude from this punchline about LIC Jeevan Arogya Policy? The first thing comes to mind is that this health plan from LIC will cover your extended family as well, that will include your parents-in-law.

Section 80C Tax Benefit on Expenses

Details about tax benefits and deductions which can be claimed under section 80C of Income tax
Continuing further from our previous part: Section 80C Tax Savings: Complete List of qualifying investments, here is the list of expenses which give you tax relief or tax deductions under section 80C.

Children’s Education Expense:
If you are paying for the education for your own children, then you can claim tax benefit on tution fee paid to the school or education institute. You need to maintain the receipts for claiming the tax benefit under section 80C.

Stamp Duty and Registration Charges for a home:
If you have bought a home (on your own or home loan), then you can claim tax benefit under section 80C for the registration charges and Stamp Duty charges paid towards purchase of your home. To see more on Home Loan related Tax Benefits, please check Home Loan Tax Benefits and All Home Loan Articles

So, these 2 options add to the list of qualifying expenses and investment which can be claimed for tax relief under section 80C.
Please note that investments usually have a lock-in period where you get your money back, while expenses are those which you have to pay like school fee, registration charges, etc.

What are the problems or disadvantages of section 80C ?
Nothing in this world comes without problems.
the first problem with section 80C investments is that ALL COLLECTIVE SUM of tax benefits that can be claimed is Rs. 1 lakh ONLY.
So if you have your provident fund amount at 65,000, you buy a life insurance policy by paying a premium of 30,000 and invest in a pension plan Rs 40,000 and repay your home loan PRINCIPAL amount as 25,000. Total of all your investments comes to 1.6 Lakhs.
However, since there is a limit of ONLY 1 Lakh under all collective investments you make under section 80C, you can claim tax benefit of only 1 Lakh Rs. even though you are investing Rs. 1.5 lakhs under all qualifying section 80C investments.

The second problem goes clubbed with this 1 lakh limit - there is so much wide variety of options available under section 80C, that individuals soon see their limit of 1 lakh getting frozen.
Other problem is with the ignorance about these limits. People end up buying policy after policy and investment after investments. What they dont know is that because of all these multiple investment options clubbed into on single section 80C with a limit of 1 Lakh, their investments have goen way above the limit, but they can get benefit only upto Rs. 1 lakh.

So take your own call. Decide on your own and then make a calculated investment for maximum and optimum tax benefit.

Section 80C Tax Savings: Complete List of Qualifying Investments

List of qualifying investments under Section 80C Tax Savings
Continuing further from our previous article part I Tax Savings details for Section 80C, here is the list of Qualifying Investments which are eligible for tax deductions under section 80C. The list is huge, that means you have lots and lots of options to select for tax saving as per your individual need and risk appetite. However, there are also some shortcomings of this huge no. of options.

Provident Fund (PF) & Voluntary Provident Fund (VPF):
Now-a-days, almost all companies are legally required to deduct Provident Fund from employees salary. This itself forms a major constituent of the investments under section 80C, for all the salary class employees.
Apart from the normal PF, any investments you make on your own in the Voluntary Provident Fund (VPF) also qualifies for tax saving under section 80C.

Public Provident Fund (PPF): On the lines of PF and VPF, the 15-year long PPF contributions also qualify for tax savings under section 80C.

Life Insurance Premiums:
Any premium you pay towards life insurance policies for you own self, your spouse or your children, qualifies for tax savings. However, please note that you can NOT claim tax deduction for life insurance premiums paid for your parents, in laws, siblings, etc.
If you have multiple policies, you can add all of their premiums together and claim for the collective sum. And most important point - manay people think that only LIC policies premiums are eligible for tax deductions, its not so - any life insurance policy premium paid to private insurance firms also qualifies for tax benefit under section 80C.

Equity Linked Savings Scheme (ELSS):
For the high risk takers, the ELSS scheme which has a minimum lock-in period of 3 years and invests your money in equity mutual funds also qualifies for tax savings.

Home Loan Principal Repayment:
If you have taken a home loan, there are two components you need to repay back to the bank or NBFC - first is the interest component on the loan amount and second is the loan amount itself, i.e. the principal amount.
Under section 80C, you get a tax relief on the repayment of principal amount. To see more on Home Loan related Tax Benefits, please check Home Loan Tax Benefits and All Home Loan Articles

National Savings Certificate (NSC):
If you have bought the 6 year long tax saving NSC, then that amount can be claimed for tax deduction under section 80C.

Infrastructure Bonds:
Recently, government came out with the new section especially for tax deductions to be offered for investments in Tax Free Infrastrucutre Bonds.
See more details on them and a list of available Tax Free Infrastructure Bonds.

Pension Funds – Section under 80CCC:
This is a special sub-section called 80CCC, which is a part of section 80C, exclusively for investments in pension funds. So if you are investing in any qualifying pension funds either from government or provate financial companies, then you can claim tax benefit on that investment.

Tax Saving Bank Fixed Deposits (5-Yr FDs):
Special Fixed Deposits issued by bank in the name of minimum 5 year long Tax savings fixed deposits give you another option for tax savings.

Senior Citizen Savings Scheme 2004 (SCSS):
This is recently introduced scheme under which ONLY senior citizens can invest and get returns of around 9% per annum. Any investments made in this SCSS scheme is eligbile for tax deductions.

5-Yr post office time deposit (POTD) scheme:
There are multiple post office savings scheme available for investments for various tenure. However, only one of them, that of 5 year and currently offering 7.5% interest rate is eligible for tax benefit. No other post office saving scheme qualifies for tax deductions.

NABARD rural bonds:
NABARD i.e. National Bank for Agriculture and Rural Development has issued special bonds called the NABARD Rural Bonds. Investments in these bonds is tax free under section 80C.

Unit linked Insurance Plan ULIP Investments:
Any ULIP investment, basically a mix of investment and insurance gives you tax deduction under section 80C. However, one must be aware about the long lock in periods and heavy policy charges which vary from one ULIP scheme to the other.

All the above mentioned schemes qualify for the tax benefit under section 80C. However, they are all investment schemes where you need to put in money for a certain period of time (lock-in period) to claim tax benefit. Apart from that, there are other certain expenses also which can give you tax relief under section 80C. Head on to next part Section 80C Tax Benefit on Expenses

Tax Savings Section 80C: List of Qualifying Investments under section 80C

Details about List of Qualifying instruments under Section 80C of the Income Tax for tax savings and tax benefit purposes
We all know the need for tax savings. Especially the salaried employees take this very seriously. In this article, we specifically cover the details of investments which can be made under section 80C, for benefit of tax savings.

Section 80C Tax Benefits

The section 80C allows for a limited amount of your taxable money to be deducted from your taxable salary, thereby giving you the benefit of tax savings. So how much tax savings can you make for the various savings under section 80C depends upon your individual gross salary and the investments you make under section 80C.
Let's take an example:
Suppose your taxable salary/income is Rs 5.8 Lakhs. Based upon the current income tax slabs, you need to pay tax on the entire 5.8 Lakhs at the rate of 0% for first 1.8 Lakhs, then at 10% for the income of 1.8 Lakhs to 5 lakhs, and 20% for the rest 80,000 Rs., which is above 5 Lakhs. The total tax on 5.8 Lakhs (including cess and surcharges) will be around 51,500 Rs.

Howver, now suppose that you make an investment of say 85,000 in tax saving instruments which qualify under section 80C. Now all the maths changes for your tax calculations.
Reduce the 85K from your income, you are left with net 4.95 Lacs only. Now, you need to pay 0% tax on forst 1.8 laks, and then 10% for the income from 1.8 lacs to 4.95 lakhs. Now, the total tax on 4.95 Lakhs (including cess and surcharges) will be around 34,505 Rs
Hence, in this particular case, just by investing 85,000 Rs., you were able to save taxes worth almost Rs. 17,000. You also brought down your effective tax slab from 20% to 10%.

Let's take another example. Suppose there is someone who has a net income/salary of Rs. 8.8 Laks. So his tax will come to around 121,540.00
Now suppose He too invests the same 85,000 in tax saving instruments under section 80C. Hence, his taxable income comes down to 7.95 Lakhs. Now, his effective tax is 95,790.00 only.
Hence, in this particular case, just by investing the same 85,000 Rs., this person was able to save taxes worth almost Rs. 25,750.

Most importance Point from the above example: Effective Tax Benefit from section 80C depends upon your individual total income, and your tax slab. The higher income bracket you are in, the more you save on taxes by investing in tax saving instruments under section 80C. You can attempt to bring down the tax slab to a lower bracket depending upon your own income details.

Now, from the above example it is clear that one can benefit by investing in section 80C qualifying instruments. Then we proceed to the next step - What all options are available for investments under tax savings under section 80C?. Please note that not just investments, some of your expenses can also be eligible for tax deductions under section 80C. Proceed to the Complete List of Qualifying investments under section 80C

Tax Benefit On Home Loan

Details about Tax Benefit On Home Loan as per the Income Tax Guidelines for year 2011 With the increasing real estate prices, especially in metro cities, it is next to impossible for an individual to purchase a house on their own. The only option left for him/her is to go for a Home loan or a House Loan. Although its a big long term commitment to take a home loan, but there are certain benefits attached to it in terms of Tax deductions on home loan or commonly known as Home Loan Tax Benefits. Let's see all the possible scenarios which an individual (or joint applicants) can fall into after taking a home loan, and we explain what all tax benefits can be achieved for home loan borrowers, as per the Income Tax rules of the year 2011.

Tax Benefits, Tax Rebates, Tax Deductions available On Home Loan

Let's begin with the basics first: We all know that once you take a home loan, you need to repay that through EMI. The EMI you repay each month to the bank is made up of two components - (1) Your INTEREST accrued on the Loan amount and (2) the part which goes to PRINCIPLE Loan Amount. In the remainder of this article, we will refer them as Interest and Principle components.
Good news is that as per the Income Tax rules for the financial year 2011-2012, both the above mentioned components of home loan qualify for tax rebate. Here are the details:

On the Interest Component Payment - Tax rebate is possible under section 24(b) upto a maximum of Rs. 1.5 Lakhs.
On the Principle Component Payment - Tax rebate is possible under section 80C, but there is a OVERALL limit on section 80C of 1 Lakh.

But, please note that there are 2 important conditions to be met for claiming the tax benefits on Home Loan:

1. The applicant must have taken the Home loan after April 1st, 1999.
2. The possession of the property must be within 3 years from the year in which loan was taken by the borrower.

Hence, in total, in a given financial year (say April 2011 to March 2012), you can claim a MAXIMUM tax rebate of Rs. 2.5 Lakhs for your Home Loan Repayment. However, note the use of the word MAXIMUM - one hardly gets a chance to claim the entire 2.5 lakhs tax benefit. How? Let's see.

Please note that these are "DEDUCTIONS". Hence, whatever qualifying amount you are eligble for (say 2.5 Lakhs), that gets deducted from your income completely. To understand this, let's say there is a salaried person who has an annual income from salary as 7 lakhs. Now, if he manages to get the full 2.5 lakh tax deduction for his home loan, then his net taxable income comes down to only (7-2.5) = 4.5 Lakhs only.
So how does he benefit?
Earlier, his taxable income wa 7 lakhs which took him to 20% tax bracket as per the Income tax slabs 2011-2012 for General tax payers.
After taking the home loan and being eligible for maximum home loan tax rebate of 2.5 Lakhs, his taxable income has come down to just 4.5 Lakhs. Hence, he is now in 10% tax bracket.
That's a big benefit - coming down from 20% tax bracket to 10% tax bracket.

Related: All Home Loan Articles
If you have any questions/queries regarding home loans or HRA claims, the FT Times team will be happy to address them. Please post your questions in the comments section by clicking on the link "Post a Comment" at the end of this page

The tax benefit you can claim depends upon what you are repaying as interest and what you are repaying as principle of your home loan component.
As mentioned above, On the Interest Component Payment - Tax rebate is possible under section 24(b) upto a maximum of Rs. 1.5 Lakhs. Generally, there is no problem in claiming tax benefit for this interest component. Why? Because there are no other things clubbed with section 24(b). Now a days, with EMI's running in the range of 30K per month, on an annual basis it is possible that you end up paying more than 1.5 lakh rupees as interest component. Hence, it is possible to claim full 1.5 Lakh as interest component tax benefit.
Continue further to details of Tax Benfits available on Principle repayment of home loan in the article: Home Loan Tax Benefit

Home Loan Tax Benefit

Continuing our series on home loan articles, in this article we discuss the case of Tax Benefits on Principle repayment on Home Loans. Previous article was on Tax Benefit on Interest Rate Repayment of Home Loan. You can have a look at the other Home loan Tax Benefits Scenarios at All Home Loan Articles where we discuss various scenarios on eligibility for home loan tax benefits.
The problem is with the component of Principle repayment of home loan. Why? The reason is that this component is considered under section 80C of the IT act. Unfortunately, there are lot more other investments which are clubbed in section 80C, and the ENTIRE SUM TOTAL of all these components has a maximum tax benefit limit set to 1 Lakh ONLY.
What are the other Components clubbed into Section 80C along with Principle Portion of Home Loan Repayment for Tax Benefit?
Along with Principle Portion of Home Loan Repayment, there are Provident Fund, PPF, NSC Savings, Life Insurance Premium, ELSS, Pension Funds, Tax Savings Fixed Deposits, etc. For a full list of what all is covered, please see our article on Tax Benefit Section 80C.
Now that causes a problem - especially for salaried class people. Usually, Provident Fund gets deducted for each salaried person and that takes away the cream (or majority) of investment under section 80C. If your annual PF contribution is Rs 60,000, then you only have another 40K left for claiming tax benefit under section 80C.
Add to that a scenario if you also have a Life Insurance Policy with annual premium of Rs. 15K, then you are left with only 25K. Hence, to consider your tax benefit eligibility for repaying as principle of your home loan component, you must sum up all the investments/expenses you are making under section 80C. If that sum crosses 1 lakh, then you cannot claim any tax benefit for repaying as principle of your home loan component.
If that does not cross 1 Lakh (say it is only 75K), then the maximum you can claim for tax benefit on the principle home loan component is 25K.

Related: All Home Loan Articles
If you have any questions/queries regarding home loans or HRA claims, the FT Times team will be happy to address them. Please post your questions in the comments section by clicking on the link "Post a Comment" at the end of this page

Let's see that with an example.
Scenario No 1: Home Loan & Home Possession in the same Financial Year: i.e. say you took the home loan in April 2011 and got the possession of your home in February 2012 (both in same financial year (Apr 2011 to March 2012)
Suppose you are paying an EMI of Rs. 35,000 per month. So total you pay 35K *12 months = 4.2 Lakhs.
Out of this, suppose your interest component is 3.5 Lakhs and Principle component of home loan repayment is 70K.
Now, since the maximum limit on interest repayment tax benefit under section 24(b) is 1.5 Lakhs, your interest tax benefit will be only 1.5 lakhs, even though you have repayed 3.5 lakhs for interest component repayment.

Now come to the principle repayment, which is 70,000.
Here this comes under section 80C, which has a collective limit of 1 Lakh ONLY. Hence, if you are having Provident fund of Rs 60,000 and have also taken an Life Insurance policy of 20,000 making it a total of 80,000, then you have only (1Lakh - 80K) = 20K left for claiming principle repayment on home loan.
So even though you repayed 70,00 as principle of your home loan component, you can claim only 20,000 in the given scenario.

Scenario 2: Home Loan taken NOW for under-construction property. Possession received in next Financial Year: This is the typical scenario which occurs mostly. You book a flat in an under construction apartment. The builder promises possession after 1 year taking it to next financial year. So here is the example: Continue to next article Tax benefit on Pre-EMI home loan payment for under construction property