Byapaar.com – The Indian Business Blog

The Union Budget for the financial year 2008-09 has brought few smiles on the faces of middle class people. It is clear that, the UPA government has an eye for early national pools -may be by end of this year and hence there is lots of cheers for the all powerful middle class.

The Finance Minister has not only raised the taxable income level from that of last year, but it has also offered some schemes to lessen tax liability. For example, if someone is earning a monthly income of Rs. 25,00/month, his current tax liability is around Rs. 3,347.50/month. In the new taxation syste, the liability for the same income will be Rs. 1,287.50/month and that too without claiming any tax benefit on offer.

So how to save this extra money?

The best way, according to analysts is to invest in real estate. Due to higher interest rates – the rela estate market has been going through a price adjustment or correctional phase over the last few months. So price is quite stable at the moment. The new budget is not offering any extra benefit under Sec. 80 C or Sec 80 D – but due to lower tax liability, the taxpayer can easily utilize the fund judiciously.

The Sec. 80 C has been facilitating tax benefits for certain saving instruments including repayment of home loans. But only Rs. 1,00,000/annum can be accounted for this purpose. One can also claim benefit for Rs.1,50,000/annum as repayment of interest for the housing loan. So thats a cool benefit for Rs. 2,50,000/annum.

Another attractive factor in this regard is that, some banks are already lowering interest rates for housing loans and it seems that, the home loan interest rate might come down further due to global meltdown trend.

Now, we may consider how one gains through investment in real estate properties. Studies have shown that value of Indian real estate properties has seen a compounded annual growth rate of around 15-18 percent. S, the value is always increasing.

Just one point to be cautious is that, the government is giving these sops for personal or live in properties only. If some one buys a property and sells it within next five years, then he/she will have to pay taxes for all these years.

If you have a house and are pondering at what to do – just go ahead, take home loans, buy a nice property and rent it out. The rent will help you pay the EMI (Easy Monthly Installment) and by the time you are ready to settle down, your home loan liability will be NIL. You can enjoy your superannuiation benefits for your recreations. Just remember one thing – the tax implications in this case will have to be worked out after deducting the rent you get. Still you are the winner.

True to its name, the booming Indian economy has demonstrated its strength once again by putting four Indians in the top 10 of Forbe’s list of top 10 wealthiest people in the world. Just for information, Warren Buffet, Chairman of Berkshire Hathaway Inc. and the Bridge partner and fellow philanthropist pal of Bill Gates, the Microsoft Founder has pushed his friend to third position to claim the title of world’s richest man with a net worth of a staggering $ 62 billion, an increase of $10 billion over last 12 months. The Mexican telecommunication tycoon Mr. Carlos Slim is estimated to be worth $60 billion enabling him to surge ahead of Bill Gates, worth $58 billion.
But there is no surprise in the list which has seen lots of changes in the top 10 over the last 13 years except Bill Gates holding the number one position during this long period. The surprising element is the rise of four Indian into the top 10 richest billionaires club. The booming Indian economy has resulted into a scorching stock market that shored up values of these four Indian business moguls. Heading the list of Indians at number four in the Forbe’s list is L.N. Mittla, the steel baron ( ArcelorMittal) with a net worth of $ 45 billion. Following him at number five is Mukesh Ambani, Chairman of RIL at $43 billion thus making him the richest resident Asian. His estranged sibling Anil Ambani who broke away from the main RIL group is the sixth richest person in the world worthy of $ 42 billion a net gain of 12 places and $23.8 billion during last 12 months. K.P Singh, who is leading Indian real estate boom with DLF has become the fourth Indian in the top ten ( at number eight) as his fortune rose to $30 billion due to stock market boom.
The list of Billionaires club is now pegged at 1,125 and not surprisingly the US heads the list with 475 billionaires, followed by Russia (87) and Germany (59). India heads the list of billionaires in Asia with 53, 19 of them making their debut. This takes India to fourth in overall position in the Forbe’s list.

Resources:-

Most of the refinance schemes are based on the assumption that multiple creditcard withdrawls can do the trick. This is common sense. Whether one is in real estate or health industry, one should know that debt consolidation is not a good way of removing money kinks. And great houses for sale this season are certainly no reason to take this risk.

The US greenbuck sank to a historic low beyond 1.53 mark against the stronger Euro ahead of the ECB meeting on Thursday. This has rattled investors worldwide and pushed gold prices at an all time high. The European Central Bank is expected to keep the interest rate at the same level as this higher interest rates over the US rates is the source of Euro’s strength.
Tomoko Fujii, the head of economics and strategy for Japan at Bank of America in Tokyo says -
“There are pretty clear expectations for a widening in interest rate differentials, keeping the dollar at a disadvantage,”
Analysts feel that, it is not only the interest rate for which investors are dumping the US Dollar for the Euro, but there are other factors as well. Recent data coming out of US points towards an economic contraction that has made people weary to put their money on the greenbuck. According to the ADP Employer Services, the US private sector has cut 23,000 jobs during February and coming employment data update also seems to hold bleak prospect.
On the other hand European stocks are coming under severe pressure due to the competitiveness factor caused by a soaring Euro. Banks are the worst hit despite stock markets saw a slight gain yesterday after loss for five straight days . The Japanese Nikkei also gained 1.9 percent on Thursday.

Resources:-

According to the latest quantitative finance research, most of the loan schemes have been noticed to have a definite change in the pattern of preference. Where business loans have been booked for like anything, cheap loans are not being demanded anymore. Maybe the risks associated with bad credit loans has something to do with this. In any case, for the first time in history of economics, moneysupermarket actually has an explanation for every change.

During his post-budget interaction with industry chamber the Assocham, Indian Finance Minister Chidambaram told that he felt home loan rates up to Rs. 20 million should be reduced and it is the duty of the RBI and other banks to see to it that the housing loan rate is slashed.

To quote Mr Chidambaram -

“I shall certainly bear in mind that there is public demand that interest rates for borrowers, who borrow (housing loans) up to Rs 20 lakh, must be lowered,”

According to Chidambaram, around 80 percent housing loans fall under the category of below Rs. 2 million and they carry a low risk for banking and credit industry. Hence, all banks should encourage to tend home to people by offering incentives and sops  through interest rate cuts. This would stimulate a lot of key industrial sectors.

The Finance Minister also lauded the efforts of RBI ( Reserve Bank Of India) Governor for drawing up a policy that maintains a balance between high rate of growth with that of low inflation.