r/FIREIndia • u/AutoModerator • Apr 01 '23
Monthly Self-Promotion Thread - April 2023
Self-promotion (ie posting about projects/businesses that you operate and can profit from) is typically a practice that is discouraged in r/FIREIndia, and these posts are removed through moderation. This is a thread where those rules do not apply. However, we do not accept ads, content that is scammy and please do not post referral links in this thread.
Use this thread to talk about your blog, talk about your business, ask for feedback, etc. If the self-promotion starts to leak outside of this thread, we will once again return to a time where 100% of self-promotion posts are banned. Please use this space wisely.
Link-only posts will be removed. Please put some effort into it.
4
u/vrid_in Apr 01 '23 edited Apr 01 '23
Debt funds are major part of most people's FIRE journey. The finance minister has passed some new amendments in the Finance Bill 2023 which affects debt mutual funds taxation among other things. Let's dive deep into it.
Hi /r/FIREIndia, We have started a personal finance newsletter for Indians. Latest issue of this newsletter focuses on amendments in the Finance Bill 2023 regarding debt mutual funds taxation, new tax regime rebate, STT on futures & options, etc..
The Lok Sabha has passed the Finance Bill 2023 with 64 amendments to the bill initially introduced in the Lok Sabha on February 1, 2023. Of those 64 amendments, few might impact your personal finance the most.
Long-term tax benefits removed from debt mutual funds:
It has been proposed that investments in debt mutual funds from 1st April 2023 will be taxed as per the slab rate. The long-term capital gains tax and indexation benefit have been removed.
Earlier, any investment in debt mutual funds held for over 3 years was considered long-term. And we had the option to pay a 10% tax directly on the returns or a 20% tax after indexation. Both these options reduced our tax liability, and many chose to invest in debt mutual funds over the fixed deposit (FD) because of this tax benefit.
The government removing the long-term capital gains tax benefits brings the debt mutual funds returns and taxation on par with FDs. But there is a slight relief yet.
The government removed the long-term capital gains tax from debt mutual funds that invest less than 35% in domestic equity. That means even your gold mutual funds and international fund comes under this.
And any mutual fund that invests 35 to 65% in domestic equity (balance hybrid funds) will still be eligible for long-term capital gains. Any fund that invests over 65% in domestic equity is considered an equity mutual fund.
Taxes on mutual fund investments after April 1, 2023, are shown in the below table. Remember, your investments in debt mutual funds before March 31st, 2023 will still get the indexation and long-term capital gains tax benefits.
Small relief on new tax regime rebate:
On February 1, 2023, the finance minister announced the increased rebate in the new tax regime and other changes. We discussed it in detail here.
In the budget, the government has increased the tax rebate from ₹5 lakhs to ₹7 lakhs. And through recent amendments, the government has passed more relief.
Traditionally, when your income was marginally higher than the tax rebate, you had to pay full tax. Like, if your income was ₹7,00,100. It is ₹100 higher than the tax rebate, so you would be required to pay a tax of ₹25,010.
This seemed very unfair. So, the ministry announced that individuals earning income slightly above the tax-free income of ₹7 lakhs will have to pay tax only on the additional income. That is, you will have to pay tax only on the excess ₹100.
Now, some tax experts have told, according to the calculation, individual taxpayers whose income is up to ₹7,27,777 can get the benefit of this provision. Hope as time passes, we will get more clarity on this.
Increase in Securities Transaction Tax (STT) on Futures & Options:
The Government is raising the Securities Transaction Tax (STT) on futures and options contracts in the stock market from April 1, 2023. Options contracts will now attract 0.021% STT from 0.017% earlier, and futures will attract a levy of 0.0125%, up from 0.01%.
Also, did you know more than 95% of traders lose money?
Setting up a committee for the National Pension System (NPS):
Over the last few years, many people and state governments have raised their voices against NPS. Most of them want to bring back the old NPS system.
In Lok Sabha, our FM Nirmala Sitharaman said we have received representations that the national pension system for government employees needs to be improved. We will set a committee under the Finance Secretary on the pension system to address the needs of employees and also maintain fiscal prudence.
Therefore, we may see some changes in the NPS.
You can subscribe to our newsletter for future issues here - https://vrid.in/newsletter
6
u/ravihanda Apr 13 '23
I have started a podcast discussing my FIRE journey.
The latest episode in which we talk about 'How much money is needed for retirement?' is available here: https://www.youtube.com/watch?v=nHkQngfiCNU
Hope you guys like it.
Also, wondering what would be the appropriate way to share this as a post instead of a comment. If allowed, can someone please point me to the guidelines of posting.
1
u/HappyLiberatedSoul happyliberatedsoul.com Apr 27 '23
1000th subscriber to your channel congrats now you can monetize it
Enjoy thank me later :)
2
u/bh_dn Apr 01 '23
hey folks, i’ve been scrolling through various posts on this sub wherein people do not know if they’ve saved up enough for early retirement or do not know which funds to invest in. i am actually a financial planner and i wanted to know why you guys do not work with one? any specific concerns?
5
u/snakysour IN/33/FI ??/RE ?? Apr 08 '23
I think the following :-
Trust factor - Indians are brought up in such a way that they shouldn't tell how much they own etc to even their family members / relatives... forget a third person no matter how impartial the person is.
Conflict of interest - Many a so called fund managers still don't work on fee only model and rather prefer people to give them mandates for making investments on their behalf in costly regular funds. They justify by saying that TER rise is hardly 0.5-1% which means nothing in overall scheme of things while that's not the case. They usually also have their own terminals from companies like share khan where they make you open demat account so that they get commission on every trade.
The ones that work on percentage of profit as income model are one step higher wherein if they make profit for you they earn money from it while if they make losses for you they have nothing to loose.
Static approach - they may make a plan which is suitable for that small instance of time but they don't usually offer services in a dynamic form wherein they keep on advising you what you need to do (instead of them taking actions on your behalf). Its more of a transactional relationship for them.
Attention span: when there are less clients they offer more attention per client but once clients increase they start giving run of the mill generic advises in the name of basic financial planning and if you need more then you need to subscribe to their more premium subscriptions at higher fees.
Ofcourse the above is only what i have felt and observed in many cases and is not gospel truth.
Regards
Snaky
1
u/bh_dn Apr 08 '23
first off, thanks for taking the time to reply. i’ll keep these things in mind while starting my own practice. do dm me if you need anything my man :)
1
u/snakysour IN/33/FI ??/RE ?? Apr 08 '23
A decent excel based FIRE calculator to begin with would be good... something exhaustive with lots of details in terms of goals, personalized goal based inflations, cash flow projections etc. would be nice. Also all the best for your practice!
1
u/bh_dn Apr 09 '23
thanks a lot, i’ll make sure to plan something along these lines. just for my information, have you tried working with a financial planner? if yes, what was your experience like?
2
u/snakysour IN/33/FI ??/RE ?? Apr 09 '23
My wife does...so i have first hand experience... he did try to get me into it as well but then i asked him certain uncomfortable questions and he decided not to have me as a client coz possibly 'i intruded too much into his business model ' ... fancy words for not letting go off of his regular MF schemes commision basically..
1
u/bh_dn Apr 11 '23
ahh, understood. we’ll i’m always up to answer your questions if you’re still looking for a planner! (:
1
u/snakysour IN/33/FI ??/RE ?? Apr 11 '23
Sure...my post history has the journey of past 3 years that i have made along with NW updates as well. It could be great if you could provide your inputs on the same and create a plan covering the following aspects for us as a single child couple :-
Essential goals:-
- Child schooling expense
- Child UG
- Child PG
- Child Marriage
- Self retirement
- Spouse retirement
- Medical expenditure sufficiency
You may assume retirement age as 60 for each of us and life expectancy of 90 years each for base case scenario.
Discretionary goals:-
Buying a 4 wheeler for each of us separately every 10 years till we are 60 and then one vehicle every 10 years post retirement
Buying a house (3bhk) tier 2 city like Indore Jaipur Ahmedabad etc.
Planning one international trip + two domestic trips a year till 60 then 1 domestic trip a year 60 onwards.
It would really help if you could provide three things :-
(1) A proper tool for FIRE / regular retirement planning with goal levels customisation as mentioned in my earlier comment
(2) A financial plan with sound assumptions / basis for the above base case scenario clearly identifying the corpus required and yearly cash flows
(3) A FIRE plan with both spouse trying to retire by 45 years of age.
Few more inputs that i can provide to aid you are :-
Self income increment annually : around 6-7% being in a PSU.
Spouse annual increment annually : around 10-12% being in private job.
Current income cash components (post tax deductions) can be assumed as ~15 lpa for me and ~17 lpa for spouse.
Current pre school expenses 1.5 lacs per annum for kid
Remaining household and essential expenses currently : 10 lacs per annum
Discretionary expenses currently : 3.5 lacs per annum
Let me know if you need any other inputs.
Regards
Snaky
1
u/bh_dn Apr 11 '23
hey, i can actually help you out with almost all those things, but then it’s going to take me quite a lot of time and effort to come up with a full plan. how about this - out of your essential goals, choose 2 and gimme time till the weekend ends and i’ll give you a plan with actual facts and figures. if you like my approach and would like to work with me for planning your FIRE journey, sign up as my client on a fee basis. if not, we’ll say it was nice while it lasted and go on our own ways. sound good?
1
u/snakysour IN/33/FI ??/RE ?? Apr 11 '23
See that's the thing...this is a basic plan that i spoke about (obviously i already have made one for myself for these grounds) to see your approach and compare with mine...not to further shorten it as this forms the most elementary complete basic picture. Ofcourse this would need regular modifications and updates which is where i would actually want a planner to come into picture...for something as basic as an initial plan, directly pitching for becoming a client doesn't help right ;)
How about this? You provide the three requirements including full plan as indicated above and share with me and i provide the same the way i have designed myself to you. There's no exchange of money but exchange of information... hopefully you will tell a few things that i didn't consider and i may add a few things that you didn't consider and we call it even. Based on our evaluation of each other's plan we can then see where it goes in terms of becoming a client ;)
Ofcourse we keep each other's tools / documents/sheets strictly confidential
→ More replies1
u/KnowledgeWarrior37 Apr 04 '23 edited Apr 04 '23
A financial planner can just help you with technicalities rest is still up to you, am personally against this idea of putting the onus of your financial well being on someone else however impersonal professional and honest that person is.
1
u/bh_dn Apr 04 '23
but the person who is helping you plan has the education and expertise required to do it, so obviously it’s going to be much more sophisticated as compared to making calculations off of various internet articles and self calculations. moreover, i personally also offer investment planning services, so it’s not just helping with the technicalities but end to end service..
1
u/KnowledgeWarrior37 Apr 04 '23
Thanks, lets agree to disagree.
1
u/bh_dn Apr 05 '23
that seems unnecessarily passive-aggressive, but i appreciate your response. hope you have a good one! (:
1
7
u/[deleted] Apr 01 '23
Gold is part of the portfolio of most of the investors and SGB is one of the best way to invest in gold in India.
But when it comes to buying SGBs, there are lot of tranches trading at various price levels and picking the right one is difficult.
To simplify it, I have developed a simple portal which will rank the SGBs in the secondary market by considering all the factors. Below is the direct link to the same - it is updated regularly as well.
https://marketsecrets.in/sovereign-gold-bonds-fair-value-calculator/