Yes, many individuals, firms & companies are paying Income Tax on income which is not required to be spent. They pay Income Tax on such unrequired income just because of their negligence or lack of financial planning.
At first instance, they pay heavy income tax on their regular income (salary or business income) and now also pay Income tax on their surplus funds! Such persons are soft target of banks. Banks offer facility of “auto sweep FD” to lure them(funds get automatically converted into Fixed Deposit (FD) when balance in savings bank account exceeds certain limit which is called auto sweep FD).
There are other persons who prefer FDs from corporate House or choose other instruments like postal schemes etc. Again, question comes why do you pay Income Tax on such income? Is it that you need that income? No? We have a solution.
Just put that extra funds into Open Ended Debt Based Fund (OEDBF) and get rid of paying Income tax every year so long as you do not require that income!! You may refer my relevant writeup sent to you four years ago on 01-07-2014 which was titled “ How Many Heads of Income You Have Declared This Year in Your Income Tax Return ? ”Please refer link:(press ctrl and click to open the link) http://ow.ly/d/7KTR,
Further start SIP in OEDBF so that you do not accumulate a bigger amount with your Banker!! Of course, withdrawal will take only 24 workings hours and that too, will get directly credited to your Bank Account. Well, advantages offered by OEDBF over FDs can be summarized as: (1) No tax till you withdraw any amount as compare to FD where tax is payable on accrual basis. We can provide calculator on your request to know how much financial loss one incurs by investing in FDs over a period of time. (2) Lesser amount of tax in case of withdrawal from OEDBF in first three years of investment as compare to FD. (3) Very small amount OR no amount of income tax in case of withdrawal after three years of investment in OEDBF. (4) With the removal of one Head of Income and corresponding savings in Income Tax, one can take extra business Income to increase business capital. (5) There is no TDS and no submission of Form 15-G/H. (6) Very easy to understand and calculate return on investment in case of OEDBF as compare to Auto Sweep FD. Have you ever checked interest credited by Bank under auto FD? This is of course a big challenge!! (7) Monthly In come can be started whenever required. Last but not least, (8) since return on investment is taxable as Capital Gain and not as interest income, religious sentiments of Muslim community is also honored.
Pl. notes that I am sending this write up to all my clients across the globe using mass media communication technology. Incase these comments are not applicable/acceptable, you may please ignore the same.
