Kavitha Menon's Blog

Tax Laws related to Gifts Gifts can mean taxes for the receiver as well as the giver .Iif you know laws related to gifts given or received you can avoid taxes or minimize their impact. I. Some gifts do not attract any taxes for the receiver. These gifts include Gifts from a relative. Relatives include Spouse of the individual; Brother or sister of the individual; Brother or sister of the spouse of the individual; Brother or sister of either of the parents of the individual; Any lineal ascendant or descendant of an individual; Any lineal ascendant/descendant of spouse of the individual Gifts received the occasion of the marriage of the individual, or Gifts received under a will or by way of inheritance, Gifts received in contemplation of death of the payer.   The Problem of Clubbing of Income Although the gift itself is tax free, in some cases it could attract clubbing of income. Income and wealth from gifts given to minor children, the sp...

Property investments have to be carefully considered and evaluated. There are many online sites that help you make preliminary inquiries about location, prices and deals in property markets. Here are a few such websites that you must go through for preliminary investigations about the property that interests you. 1. Property Search Portals There are several websites dedicated to listing properties directly from builders, property owners as well as from agents/brokers. These sites help you scan through hundreds of properties from the comfort of your home. Mainly the features they offer are Facilitating search amongst several properties by sorting them on the basis of price, location, covered area etc. Providing information about amenities, local infrastructure like schools or hospitals, connectivity and price history. Sites like magicbricks.com, a leading real estate portal, help you not only search but also register your requirements, which is in turn relayed to l...

My client complained that he was being offered a ridiculously high rate of interest on his car loan. It was surprising because he was a 'Privileged' customer of his bank and had no other liabilities. On enquiry, he was told that he was offered a higher rate due to bad CIBIL score. What is a CIBIL score and how did it impact my client's rate of interest on his car loan? CIBIL stands for Credit Information Bureau (India) Ltd. It collects information about borrowers like my client from all Banks and lending Institutions operating in India, collates such data and creates, maintains and distributes a report on credit history of commercial and consumer borrowers like credit card users, home loan or personal loan borrowers. Their report called Credit Information Report (CIR) is a factual record of a borrower's credit payment history compiled from information received from different credit grantors. Its purpose is to help credit grantors m...

Peer groups include family, work colleagues, friends etc who influence our decisions with respect to several aspects of our lives. It is natural behavior to conform to general norms followed by these groups. Unfortunately pressure to conform to peer group norms can cause severe damage to financial wealth. Common money mistakes that one makes due to peer pressure can be avoided if you can recognize them and taken corrective and preventive action. I have enumerated such mistakes that investors make due to peer pressure. 1) Making money decisions to maintain status in society: Here's an example of a client who was born into a rich business family, lived in South Mumbai and had a roaring family business. In his mid forties a family dispute broke up the entire business and he found himself left with no assets and no business. He had no means of starting afresh and had taken heavy private loans at ridiculously high rates of interest to fund high living expe...

As parents retire and age, adult children have the additional responsibility of looking after their physical, emotional and financial well-being. Care for parents, whether independent or dependant, includes three important areas Medical Care Investment and Income Management and Estate Planning I have expanded briefly on these areas. Medical Care  Everyone goes through a stage which requires long term medical care of parents. One needs to plan on financial aspects of such care. In the good old days of joint families, at least physical care was never an issue as miscellaneous aunts and siblings could take care of the elderly. In the absence of such a support structure, it is necessary to plan in advance for a scenario where one of your parents would require long term medical care. The cost of care includes not only actual medical expenses but also the cost of lost hours of work and the cost of arranging external arrangements like appointing full time nurse, infrastructure ...

While making financial plans, young couples are eager to start saving for their children's future and this is often on their top priority list. They want to be ready when their child will need financial assistance to purse expensive higher study courses. With a little bit of planning they can secure their child's future with the following three step process. Investment Planning: Step one of the process involves knowing firstly how much you will need to save and secondly which instruments are right. How much to save  - Lets say an engineering degree will cost approx Rs.10 lakhs (including cost of tuition, books etc) while an Masters abroad can cost another 20-25 lakhs today. A similar course, 15 years from now, at a 10 % rate of inflation will cost Rs.41 lakhs and Rs. 83 lakhs respectively. Use this calculator given below to find out how much you will need to save for your child's future. Download Calculator [xls]. Choice of investment vehicle  - It is a known f...

K We all love the idea of home away from home. Away from the pollution and fast life of the city, a vacation home seems to be a perfectly romantic way to spend a weekend every now and then. But are they really good investments? To evaluate a vacation home as an investment option, consider the following Liquidity  - Vacation homes are tough to sell. The developer from whom you may be planning to or already purchased the apartment can use several marketing tools like advertising in national dailies, attractive brochures and events to market his homes. You on the other hand have no such resources except utilizing the services of a broker. Think in terms of future demand or rental demand and the investment prospect looks less rosy. Transportation  - A back breaking, nerve wreaking joyride is not something you would look forward to after a hard week at work .Your location needs to have good roads or other means of transportation like railways that will take you there without s...