Category Archives: Tax Calculator

How to Calculate Returns from Systematic Investment Plan


There are various modes of investments in mutual funds available. However, investing in mutual funds through systematic investment plans (SIPs) is the most considered avenue of all.

One major reason being, SIP helps to tackle the market volatility better. Investors can buy more units when there is volume gain and fewer when the value rises. Amidst, all this there is one question that every investor ponders upon: How are SIP returns calculated?

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It is an easy task to calculate returns when lump sum investments are made. As the entry and exit of the investment is defined, along with the expected returns. However, when it comes to SIP, where the exit date is confirmed, but there are multiple investments made at different intervals.

In such case, internal rate of return or IRR method is of great help. IRR is useful not only for SIP returns but also for estimating returns from money back insurance policies and bond yields. This calculation method equates the discounted value of the stream of investments (also known as cash outflows) to the discounted exit value of the investment (cash inflows). The discount rate that equates the present value of cash out flows and the present value of cash inflows is the rate of return earned by an SIP.

What is IRR?

IRR or internal rate of return

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Internal rate of return (IRR) is the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equal zero.

Internal rate of return is used to evaluate the attractiveness of a project or investment. If the IRR of a new project exceeds a company’s required rate of return, that project is desirable. If IRR falls below the required rate of return, the project should be rejected.

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Home Loan Tax Exemption Changes to Rs. 2 Lakh


It seems that the Union Budget report of 2014-15 has sprung a pleasant surprise on home loan borrowers, by hiking the deduction on home loan interest under Section 24 from Rs 1, 50, 000 to Rs 2, 00,000. This will enable purchasers to save an additional amount of almost Rs 15,450 from their tax liability. Enhancement of Section 80C’s limit is also positive for those, paying large EMIs but are still not getting full tax benefits on the repayment.

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The hike is also expected to lower the interest rates for home loans. So in case someone is planning to take a housing loan of about Rs 25,00,000 at a 10% rate of interest, for a period of 20 years, the EMI will be around Rs 24,125, which adds up to almost Rs 2, 89,500 annually. Also Post-Budget, the buyers can avail a deduction of about Rs 2,00,000 from their taxable income. This will enable the buyers to save around Rs 61,800 from tax liability but only if their income comes in the tax bracket of 30.9%.

Experts believe that buyers in big metros like Delhi, Mumbai and Bangalore, where most flats cost more than Rs. 1 Crore, would not be affected by this reform. However, this will be an incremental difference in case of homes within the price range of Rs. 25 lakh to Rs. 50 lakh, which may or may not be located in the metropolitan cities.

It is said that the benefit of this hike will be more in case of the salaried class, compared to the rest to some extent. Flat buyers in case smaller cities where prices are expected to be comparatively lower are expected to fee the real difference of the hike.

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Many property experts also believe that the current relaxation existent in the FDI norms for real estate are also expected to open up a new stream of cheaper money for developers, with the tax hike. They also say that the tax pass through status for Real Estate Investment Trusts (REITs) to avoid double taxation will bring in more investments into the property development sector.

Tax Planning Calculator: Simplify Your Task!


Tax Planning CalculatorThe payment of taxes in India is one of the unavoidable expenses that every Indian must endure as long as they are living in the country. These amounts are levied by the State and the Central Governments, and also by some of the local authorities in the country such as the Municipality. Taxes are meant to be paid throughout the year, i.e. throughout the assessment year. This year starts from April 1st, 2014 and will end on March 31st, 2015.

Tax planning is therefore one of the most important activities that a person does in order to maintain a sound financial plan so as to meet their financial goals and objectives. A very tedious task to conduct, manually otherwise; there are a variety of online, free tools and calculators that facilitate in the process. One of the most important types of calculators is the Religare Online tax planning calculator.

They are easily available online, where they can be found on different websites belonging to mutual fund companies and other financial portals. They can help a person to determine their estimate tax liability, along with their average and marginal tax rates.  All a person has to do is enter in key details (information) such as salary income (basic & DA) per month and per annum, net business income, age, the amount that a person as invested/paid for deduction under Section 80C / 80CCC / 80 CCD of the Income Tax Act.

These online tools calculate your tax liability within a few moments after processing the data. They are known to be accurate and efficient tools to facilitate in the process. They are extremely useful to help a person calculate their liabilities to the Government, keep a record/track of all transactions, eligible tax credits, etc.

So, why make use of these online calculators? Not only do they save a great amount of time, but are accurate and efficient as well.  While making investments in a variety of financial instruments is very important, it is also very important to know how much money of yours is paid for tax. This can help a person to keep a tab/record of their finances and feel far more in control of their funds.  This is one of the best time-saving tools available to ensure this process.