Money Today Archive September 4, 2008 Issue
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Edition: September 4, 2008

Cover Story

Priya Kapoor

How to get the best of both worlds

Many employees are opting to be consultants to avoid deductions and reduce taxes. But watch out for the pitfalls before you become one.
  • How to redesign your pay structure There is no one-size-fits-all kind of ideal salary structure. It all depends on your needs and financial situation. Money Today shows you how people at different income levels and age profiles should restructure their pay packages.
  • Customisation is here to stay It is important to structure a package in such a way that the basic is not too large to be taxed too much, but is large enough for the provident fund contribution to make sense.
  • Pay for performance Once offered as a way of dodging tax, perks are today being used to retain employees and increase productivity.
  • Negotiating a new salary No two compensation structures, even in the same industry, are always similar. Comparing apples with oranges, as one typically does, is not a useful exercise.
  • Variable perks The variable pay comprises the allowances and reimbursements that come to you as cash. Learn how to make the best use of them by rejigging their proportions in your compensation package.
  • The fixed portion Your salary slip lists out the fixed part of your monthly take-home income. Here’s what you should know about the different components mentioned in the salary slip.
  • Get the most from your salary Many companies are shedding the rigid salary structure and allowing employees to rejig their pay. Learn how to make the most of your income by restructuring your salary efficiently.
Mutual Fund
The Taurus Libra Taxshield, with minuscule assets under management, has delivered exceptional returns in the past year. Equity diversified funds are steadily regaining lost ground.
  • Taxation terms While investors should consider several risk-return measures before investing, an important factor to take into account is the manner in which income or profits from investments are taxed.
  • 'Volatility offers opportunities' Volatility gives an advantage to those who invest in equities for the long term.The present scenario will prove to be an ideal opportunity.
Tax
Yes, Section 24(b) of the Income Tax Act allows deduction of interest due on home loan from the head 'Income from house property'.
Stocks
Fertiliser stocks gained ground as a new urea policy is expected to benefit these companies.
  • Bigger orders, better bets The state of a company’s order books is a good indication not only of the market demand but also of its capacity to generate higher returns on its stocks.
  • The benefit of IPO grading In response to the Money Today story on how rating of IPOs has been of little help to retail investors (Read 'Do We Need IPO Grading?') Crisil’s Arun Panicker argues that grading helps if investors know where exactly it belongs in their investment decision process.
  • Some hopes, many fears Despite the recent bullish trend and hopes of a revival, Dipen Sheth opts to retain the 50% equity exposure and wait for the worst to be over.
Real Estate
Kamya Jaiswal
If you are buying a pre-owned house, make sure you inspect it for structural and legal soundness to avoid any nasty surprises later on.
BASICS
The high cost for borrowers is high income for depositors. Today, almost all banks offer a 10% rate on fixed deposits of 1 year. But even this rate is lower than the rate of inflation.
Portfolio Doctor
Kolkata-based Saibal and Sumana Sinha must understand expense accounting and invest the monthly surplus in mutual funds to exploit their risk appetite.
Books
Namrata Dadwal
With tips on issues ranging from career to buying a house, Pond covers every possible aspect of personal finance in a simple and engrossing style. But experienced investors may find the book of selective use, says Namrata Dadwal.
Query Corner
All stock prices do not move at the same rate. Some stocks shoot up very quickly while others move at a leisurely pace.
Insight
The rupee has reversed its trend by gaining against major currencies.The gain against the US dollar was minimal but was steeper against the Australian and European currencies.
Editors Note
Rohit Saran
Some of the most profound lessons in life are also the simplest. This issue's cover story explains one more tenet of financial wisdom-that the composition of your salary can be as important as the amount.
Talk Back
Thank you for pointing out the error. It’s heartening to know that our readers are well informed and go through the issue with an eagle eye.
Upfront
The only way to master the art of stock investing—low risk and high returns—is to take the time-tested route of long-term investing.
Now and Then
If you have been focusing on fuel and food inflation, scan your shopping bill more closely.
My Idea
Priya Kapoor
Her paintings are not the usual oils-on-canvas. Using jute rope, 55-year-old Varsha Rishi creates works of art that have helped turn her unique hobby into a money-making venture.

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July, 24 2008

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