Money Saved is money earned

The budget is out and as usual every individual looks at how it impacts his bottom line. In this budget, with the change in tax slabs, the outgo in terms of tax deduction would decrease. That means more money in hand. If your income is above eight lakhs, it is substantial i.e. Rs. 50,000/- plus, but it would be less depending on the tax slab you were in. 

The amount is not small. If we assume that our income was the same, the additional saving would come to around Rs.4,200/- per month. Let us look at what we can do with a sum of around Rs. 4,000/- per month.

All of us have a dream, a short term dream or a long term dream. This amount could be kept aside on a monthly basis to meet this dream.

Till date we have seen that once the income tax slabs and rates are announced they have always been honored.  So our first assumption would be that the finance minister would keep his word and in that case we should start planning we have around 2 months to do it.

There are many of us who are not able to save because of some commitments. Therefore we are not even able to do our investment of Rs. 1 lakh. If you are in this bracket, then start investing in tax saving schemes, using the tax saved per month for investment. With this the tax saving would increase giving you more money in your hands.

Now if you have been taking care of the Rs. 1 lakh in Sec. 80C, then you should go for some investment which would help you create a good corpus. Go in for SIP’s in some good Equity mutual fund.  Other options would be to go for a pension plan. No harm in planning for your retirement, right?

If your dream is a short term dream, go for a recurring deposit.

Another way of increasing the money in your hand would be to pay off some old debts or credit card dues. You will save on interest and financial charges. Increasing your EMI amount could also help you get debt free sooner.

In this budget the finance minister has also announced an addition deduction of Rs.20,000/- in long term infrastructure bonds. Details are not clear, but then it would still be a saving for the long term with an additional saving on tax.