Tool Kit | wealthymatters

Of Flipping And Taxes

January 26, 2014 Leave a comment

wealthymatters

Those who churn real estate investments fast,without planning and preparation, are likely to pay the highest tax. This is because if the property is sold within three years of purchase, the short-term capital gain is calculated by deducting from the sale price the cost of acquisition, the money spent on improving the property and the transfer cost.This gain is included in the taxable income for the year the money is received and taxed according to the person’s tax slab and can be calculated using free tax calculators.

An investment gone wrong will result in a short-term capital loss.Short-term loss from sale of a property can be set off against capital gain from any other short- or long term asset during the financial year.

The option of setting off short-term loss against capital gain is a big advantage here.It helps reduce tax outgo.If the current year’s capital gain is inadequate, the net capital loss can be carried forward for eight financial years for adjusting against any gain.

Filed under Alternative Assets, Tool Kit Tagged with carry forward loses, flipping properties, Investing in real estate, postaday, short term capital gains tax, short term capital loss, tax implications of flipping properties

Capital Gains Tax On Inherited Properties

January 26, 2014 2 Comments

wealthymatters At present, there is no tax on inheritance in India. However,when you sell these inherited properties, you would be liable to pay income-tax in India on the gains earned by you on the sale.

For determining capital gains, you will get a deduction of the cost incurred by the previous owner to acquire the property as well as any expenditure that you directly incur to sell the property. If the date of acquisition of the property is more than three years back, you will get a deduction of the indexed cost of acquisition which is the original cost as adjusted by the cost inflation index from the year of purchase to the year of sale. If the property has been acquired before 1 April 1981, you have the option of substituting the fair market value as on 1 April 1981 in place of the original cost. Thereafter, you can claim indexation benefit on the substituted cost.

The rate of tax, including cess on long-term capital gains, is 20.6% and on short-term capital gains, it is 30.9%. If your income exceeds Rs.1 crore, the rate of tax would be 20.66% and 33.99%, respectively. Read more of this post

Filed under Tool Kit Tagged with capital gains tax on sale of property, Double Tax Avoidance Agreements, Foreign Exchange Management Act, inheritance tax, postaday, withholding tax

Twitter Wisdom

January 24, 2014 Leave a comment

wealthymatters

Filed under Entrepreneurship, Tool Kit Tagged with dealing with people, how to deal with people, postaday, relationship advice

Wealth Addiction

January 22, 2014 Leave a comment

wealthymatters Now if you are wondering what the heck this term means,just read the quote below:

The term was coined by Philip Slater and is the title of his book dating from the 1980s. Should you wish to read it,you can get a copy here:Link.I can’t say I endorse all his arguments but the book will give your brains a workout and get you to see things from interesting angles.

In my last year on Wall Street my bonus was $3.6 million — and I was angry because it wasn’t big enough. I was 30 years old, had no children to raise, no debts to pay, no philanthropic goal in mind. I wanted more money for exactly the same reason an alcoholic needs another drink: I was addicted.

After graduation, I got a job at Bank of America, by the grace of a managing director willing to take a chance on a kid who had called him every day for three weeks.

The end of my first year I was thrilled to receive a $40,000 bonus. For the first time in my life, I didn’t have to check my balance before I withdrew money. But a week later, a trader who was only four years my senior got hired away by CSFB for $900,000. After my initial envious shock –his haul was 22 times the size of my bonus — I grew excited at how much money was available. Read more of this post

Filed under Theory, Tool Kit Tagged with managing wealth addiction, Philip Slater, postaday, Sam Polk, SN Goenka, Wealth Addiction, wealtholic

The Value Of A Simple Degree

January 21, 2014 Leave a comment

Middle class Indians have a thing for Medical and Engineering degrees.Both are undoubtedly fine pursuits but the limited number of seats in good colleges means that a lot of aspirants or more particularly their parents, have to settle for lesser colleges often without the requisite faculty and infrastructure.Under these circumstances,why not consider other courses?

A simple degree from a decent college might still get you a job in the sector and company of your choice.Also as these courses are less demanding,you could find the time to explore the world more,get some work and life experience,network and maybe even build a business on the side…….Overall there is no reason to believe you will be a loser in the game of life.