Announcement

Collapse
No announcement yet.

Builders & Real Estate Bulls Theory Proved Wrong

Collapse
X
Collapse

Builders & Real Estate Bulls Theory Proved Wrong

Last updated: November 1 2016
12768 | Posts
  • Time
  • Show
Clear All
new posts

  • Re : Builders & Real Estate Bulls Theory Proved Wrong

    Originally posted by realacres View Post
    Sj2013 has rightly said that income will be clubbed with husbands income only.
    Similarly, even in RE, if property is on wife's name who is not working & is put on rent, the rent income will be added to husbands income + husband will end up getting under scrutiny of IT dept for 'Benaami transaction' is money has not been actually transferred to wife's account first before buying flat & the same reported to IT dept.
    No it is possible to buy property in wife name without clubbing if you can show gift from father in law or long term independent income from other sources and if you file annual tax returns diligently. Rent will be her independent income.
    Originally posted by suryawork View Post
    What if emergency funds are needed and you are not available to sell off your bonds/investments ?
    Money in your account can be made immediately accessible to spouse while investments will take a few days to settle and money being credited .
    Tax free bonds can be sold at the click of a button
    Originally posted by Sj2013 View Post
    There is one more way actually, make FD with re-investment option instead of pay at maturity. With this mechanism,

    1] the interest earned in first year being a reinvestment, will NOT be clubbed into husband's income as it went into investment (read expense and hence not income)
    2] at end of 2nd year of the maturity, the interest on FD is NOT clubbed with husband's income as it is wife's own income

    I read this mechanism somewhere in economic times. Make sense but not sure
    This is correct but difficult in practice.
    Originally posted by Que Sera View Post
    Actually tax free bonds can be used to transfer income to specified relatives.. Or investments in say equity funds which are held for more than a year.

    Basically Any investment leading to tax free income which cannot be clubbed. The income can then be invested in a "taxable" high yielding asset if so desired in the name of the lower earning spouse/relative
    True. But only the income becomes wifes not the capital. Plus money doesnt compound.

    With PPF or NPS capital also becomes wifes after 15 years for all practical purposes. Plus power of compounding.

    Equity funds or shares is dangerous to use for transferring funds. Long term capital gains is anyway tax free in your own hands. The point is to get tax free interest income.

    If the purpose is tax free interest income in wife name then all these can be done. But all of these is dangerous for using to buy a flat in wife name for rental income in her name.

    Best option is give money to father in law, brither/sister in law or other relatives who can help and have that person gift it back to wife.

    Basically wife can receive gift from anyone except husband and husbands parents.
    Last edited by Venkytalks; September 25 2014, 01:09 AM.
    Venky (Please read watch a or before posting)

    Comment


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      VenkyTalks,
      Getting money gifted from brother in law of wife etc is a good way.
      Only thing Brother in law may be questioned as to his source of money.
      The wife. can maintain a dairy of gifts on birthdays,festivals,(aka one famous lady politician),savings out of monthly expenses to account for her money.
      Major children can also be gifted money by parents.
      You can take advantage of all these provisions,but at the end of it,there is no escaping IT.
      Best is to pay IT and make do with the rest.Most salaried people face this disadvantage.Their money is easily traceable.
      However much you twist around and move funds,the net result is tension and fear of penalty.

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        SJ

        You are repeating the point I am making..the clubbing happens at first level. So the interest in the first year is clubbed and taxed . You are assuming by reinvesting the interest, zero tax is payable for two years which is a recipe for disaster.

        As the article clearly says, If this money is reinvested and earns an income, it will be treated as your wife's

        That is why a tax free bond or equity fund with tax free income at the first level is the best bet to save the 30% tax at the first level and maintain liquidity. The reduction in tax at the second level is a "sone pe suhaga".

        (Actually Venky as suggested by you, if you are going to buy tax free bonds anyways, make the little lady happy and save taxes..win win . Same for equity funds which may be a part of your asset allocation. The benefit with this method is that your investment planning does not change since the tax planning is integrated with your investment strategy.)

        The interest for the first year can then be invested in a FD 10% or maybe a good quality Corporate NCD at a higher rate and increasing the effective rate of return.

        The tax free interest/gain on equity fund is not taxed at the first level, so no clubbing. Reinvest the funds, earn income on it in the second year...and it is not clubbed. I hope the concept of first level is clear now.
        Last edited by Que Sera; September 25 2014, 09:25 AM.
        Life is what happens when you are making other plans. Enjoy it

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          Pune Metro project is approved by PMO in less than 24 hours.

          Pune Metro gets PM nod in

          Pune RE will crash now

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            Navratri came with good news for prospective home buyers - significant new launches announced on very first day of Navaratri.
            Check out today's edition of Sakaal - marathi daily for details.

            New launches include wakad, PS, moshi, charholi, kondhwa and so on..

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Originally posted by anirban8 View Post
              Pune Metro project is approved by PMO in less than 24 hours.

              Pune Metro gets PM nod in
              Nice show Pawar/Chauhan duo.
              State Govt Efficiencey : Five years to submit an application
              Central Govt Efficiency : 24 hours

              People are best judge.
              Originally posted by anirban8 View Post
              Pune RE will crash now
              So sad to know that . Like no Metro then also fall predicted, come Metro so also fall predicted.


              investwest. U should read Navratri launches are desperation of builders clear inventory and no prizes for guessing prediction on RE prices on that background.
              Last edited by compuwalah; September 25 2014, 11:58 AM.

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                Metro or No metro Pune RE will fall big time. Investors will loose money in short, middle, long or whatever terms. End Users will be better off renting than buying even if they have to switch their apartments every year or 2 with their families, furniture etc. For everyone the reasons for buying or not buying has to be same. In this scenario only fence sitters will gain and they will display their knowledge (read: half baked) in this RE forum.
                More importantly if you are not buying the idea of a RE crash then you must be a RE investor who is expecting 40-50% CAGR and not an end user.
                Many poor fellas are still waiting for a list of projects which are quoting 20-30% discounts (crashed) but yet to get an answer from the knowledgeable big guys.
                Last edited by anirban8; September 25 2014, 12:25 PM.

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Originally posted by vaibav123 View Post
                  VenkyTalks,
                  Getting money gifted from brother in law of wife etc is a good way.
                  Only thing Brother in law may be questioned as to his source of money.
                  The wife. can maintain a dairy of gifts on birthdays,festivals,(aka one famous lady politician),savings out of monthly expenses to account for her money.
                  Major children can also be gifted money by parents.
                  You can take advantage of all these provisions,but at the end of it,there is no escaping IT.
                  Best is to pay IT and make do with the rest.Most salaried people face this disadvantage.Their money is easily traceable.
                  However much you twist around and move funds,the net result is tension and fear of penalty.
                  True.

                  Actually I did not know at marriage that one should start separate tax file immediately. Did not have enough money - only after many years of marriage I discovered the rules and ways.

                  Applicable only if wife doesnt work - which is becoming rare nowadays.

                  Ideally all the money received by wife at marriage should be kept in totally separate bank account and yearly tax should be filed. At marriage it is easy to show a few lakhs as gift - so make max withdrawals in cash and deposit cash into the account - acceptable by any tax officer.

                  As the money keeps increasing over say 10-15 years, it will mount up to a big sum. Only funds received from father in law etc should go into this account - give him 50,000 in cash which he can use for expenses and get a 50,000 cheque from him every year or six months. After 10-15 years it will amount to about 30-40 Lakhs with the magic of compound interest. At that point one should buy the rental flat in her name and the rent will be taxed in her name = tax free income.

                  You dont have to wait for your children to become major. Put an RD for as many years as needed to become major in child's name. There is no TDS on RD - main advantage. When your child becomes major the accumulated money would become tax free in his name - assuming it is in middle class levels of saving !

                  PPF limit of 1.5 lakh cannot be legally used for minor because the limit is your plus minor combined 1.5 lakh limit.

                  Practically I know many have done it - i.e many have 1.5 in own, 1.5 in wife and 1.5 in each child's name. It is illegal but I guess nod nod wink wink does go on ?
                  Venky (Please read watch a or before posting)

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    Originally posted by Venkytalks View Post
                    True.

                    PPF limit of 1.5 lakh cannot be legally used for minor because the limit is your plus minor combined 1.5 lakh limit.
                    what about lock-in period of 15 years on PPF?
                    How does 1L plan for 15 year help you? In PPF, your 15L becomes 31L. Will you be able to do the same thing in 31L after 15 years which you do it in 15L today?

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      Originally posted by Que Sera View Post
                      SJ

                      You are repeating the point I am making..the clubbing happens at first level. So the interest in the first year is clubbed and taxed . You are assuming by reinvesting the interest, zero tax is payable for two years which is a recipe for disaster.

                      As the article clearly says, If this money is reinvested and earns an income, it will be treated as your wife's

                      That is why a tax free bond or equity fund with tax free income at the first level is the best bet to save the 30% tax at the first level and maintain liquidity. The reduction in tax at the second level is a "sone pe suhaga".

                      (Actually Venky as suggested by you, if you are going to buy tax free bonds anyways, make the little lady happy and save taxes..win win . Same for equity funds which may be a part of your asset allocation. The benefit with this method is that your investment planning does not change since the tax planning is integrated with your investment strategy.)

                      The interest for the first year can then be invested in a FD 10% or maybe a good quality Corporate NCD at a higher rate and increasing the effective rate of return.

                      The tax free interest/gain on equity fund is not taxed at the first level, so no clubbing. Reinvest the funds, earn income on it in the second year...and it is not clubbed. I hope the concept of first level is clear now.
                      Thanks for clearing. I thought investment means any investment like FD here. Actually "investment" means only tax free investment products and not taxable, right?

                      Comment

                      Tags: None
                      Have any questions or thoughts about this?
                      Working...
                      X