power of subconscious mind by joseph murphy

how to influence people and make friends by dale carnegie

maximum success by brian tracy

Everybody wants to create wealth but some people create real wealth. Becuase some people are the focus to grow wealth other just daydreamers. We required the regular contribution of our income towards wealth creation fund so that we can achieve financial freedom. But lack of knowledge and guidance only a few achieve those goals.

So how can we create wealth in long run?. Today, I want to explain a great topic called, Wealth creation formula. why this is wealth creation formula because of the power of compounding interest.

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”― Albert Einstein

SIP:- Systematic Investment Plan is the easiest way to investment

The concept of SIP is very simple and easy due to the need for less fund required to start the investment compared to one-time investment with a large amount. So it is very affordable in India to develop investment habits. But a lot of people not aware till now, some are aware but not taken seriously.

Benefits of  SIP

Power of compounding

Compound interest provide much higher return compared to one-time investment

Tax saving investment in under section 80

• Long in a period of investment is 3 years
• investment

Lowest login period

Compare to other investment instruments Elss have an only login period of 3 years

2x higher return on Rd 

Compare to Fds and another traditional investment ELSS return is much higher.

 

India is big economic but only 5 to 10 percent people in India pay income tax. This is the main cause of high tax rate in India.

But when we consider the whole income tax. Income Tax has a lot of tax planning section. If a taxpayer properly plans according to all deduction mention in income tax act, then a taxpayer easily claim deduction in income tax

Tax saving section in India

Major deduction in income tax is section 80 c. U/s 80 c, a taxpayer can claim Rs.1,50,000 deductions in total income. Due to this reason this section is playing a major role in tax planning.

Tax saving option under section 80 C to 80 U

1.Deduction in respect of Life Insurance premium, Contribution to Provident Fund, PPF.

Life Insurance

Individual spouse and child

Fixed Deposited

Tuition fee for children

Repayment of housing loan

 

2.Loan Taken for Higher Education Under section 80E

If any taxpayer has taken loan for higher education purpose, any family member a

son, daughter, wife, brother and any other family member. In this case a taxpayer plan income tax deduction. The principle amount of loan not allow but interest amount of loan taken allow.

Note: For a period of 8 years from the year he starts paying interest

Self, spouse, child

 

3. Under section 80g  of income, tax donation is exempt

 

Finance minister specific some criteria for deduction in u/ s 80g as some donation are 100 percent deductible or some 50 percent.

 

4. Deduction in respect of rent paid under section 80GG

If a taxpayer living in rented house, then u/c 80gg claim deduction in rent paid. Most of the person not aware this section.

Limit of deduction: Maximum 5000 p.m. or 25 percent of adjusted GTI or Excess of rent paid over 10 percent of adjusted GTI

5. Deduction in respect of interest on deposits in savings account

Interest received on saving account is considering as an income, therefore consider as a taxable income.

Eligibility limit

Individual and HUF

Deduction limit: Above the 10000 consider taxable income

 

 

6. Insurance

Deduction allows in U/ s 80D is Rs.15,000 and Rs.20, 000

Under section 80 is 15000 exempt from income tax

 

 

In case of Business deduction

1. 100 percent deduction of profit from the eligible business of the eligible startup

 

2.Deduction in Royalty Income under section 80QQB

Note: Individuals who are resident in india and are authors

100 Percent of such income or 300000 whichever is less