Category: Personal Finance

I started investing way back in 1989 when I started my career and I remember I would actually wait for the Bhav copy in the evening at Vile Parle station. I saw the whole Harshad Mehta bull run, but did not get carried away by it. I invested in companies whose products I consumed every day. I had read ‘One Up on Wall Street’ by Peter Lynch at that point in time. So, I bought Indian Shaving Products, which is known as Gillette India today. I bought Colgate-Palmolive, P&G Hygiene etc. I still continue to own them.

Money is freedom and freedom means the ability to do something I want. For me, I get happiness by doing something for the society. So, money helps me to pursue a little bit of philanthropy, educate under-privileged children etc. While cash makes one happy, for me it is also important that money goes around. Just a few months back I lost my wife to cancer after a two-year battle. Irrespective of the money you have, it means little if it has no purpose. When I give back to the society, it makes me happy to see those smiles.

My single-biggest goal today is to get my daughter a good higher education. I am going to achieve that by investing in equities. If one goes abroad to study, one has to set aside atleast ₹3 crore. Once her education is done, she is on her own. I have sufficient savings that I have done over the last 30 years which can help me lead a comfortable life. I never hade a flashy lifestyle and so I was able to save right from my first job.

When the market started reacting to Covid in February/March, we were not prepared for Covid, leave alone understand what it was. Markets then crashed. I did nothing as a reaction, but I did realise that one must have a good emergency corpus because we don’t know when or from where the next negative event will come from.

I don’t believe in investing when you are already carrying loans on your head. Your priority should be to pay off the loans. Only then does one have the peace of mind to have a long horizon for investments. If you have a loan and then your portfolio goes out of whack, then the trouble could be bigger especially if there is a job loss or pay cut.

I am a hardcore equity investor. Right now, equity is 47 per cent, 28 per cent in real estate, 2 per cent in gold and the rest is in fixed income where the bulk is in EPFO. I dont believe in fixed deposits, because they dont beat inflation.

I invest in equity that part of my money which I will not require in the next 10 years. Equity markets go through cycles and I will be in a far better position if I give 10 years to a great company, rather than 3-5 years. My real estate exposure appears bumped up due to me buying the next-door house.

Otherwise, rental yields at 1.5-2 per cent is practically nothing, even lower than liquid funds.

Following right asset allocation is very important. When a large drawdown happens in markets, one should move from debt to equity.

I started buying art about 4 years ago. It is more instinctive. My collection is small and consists of works by Sujata Achrekar, Dinkar Jadhav, Ann Ray etc.

On paper while Colgate stock may have optically moved from ₹17 to ₹1700 and there are many such examples, actually my most successful investment is the 300-400 books that I have. The wealth of knowledge that I have got cannot be measured by IRR. They have helped me become a better individual.

I bought a stock and sold it for ₹3 per share profit after listening to somebody else. Had I held on, the position would be worth crores today. The mistake was not doing my homework at that time. That’s why I say one should not be overawed by what others say. We tend to question ourselves a lot. Once you have the conviction, just go with it. Markets will keep going up and down.

It’s very simple. Follow asset allocation. When a large drawdown happens, move from debt to equity. That is where asset allocation comes in.

I personally err on the side of conservatism. I know what works for me and what doesn’t. Doing your homework diligently matters. For instance, if you don’t read last 5 years annual report of a company, you shouldn’t directly invest in stocks. I stay away from things that I don’t understand even if a big expert tries to convince me. I also don’t blindly follow what others are doing. At the end of the day, it is all about my hard-earned money. Nobody is going to replace that money if things go wrong.

The Central Board of Direct Taxes (CBDT) has extended the deadline for submitting income tax returns for the fiscal year 2021. The deadline for submitting TDS for the fourth quarter of the fiscal year 2020-21 has been extended to June 30. As a result, the deadline for submitting Form 16 has been pushed from June 15 to July 15. But if you are a taxpayer, then you may have to pay higher TDS from July. According to Finance Act 2021, if a taxpayer has not paid TDS in the previous two years and the TDS deducted each year surpasses Rs 50,000, the Income Tax Department will impose a higher rate while submitting income tax returns (ITR) beginning from July 1, 2021.

A new section 206AB was inserted in Budget 2021 to collect TDS at a higher or double rate on some types of income if the declaration of income was not submitted for the preceding two years and TDS withheld in each year surpasses Rs 50,000. To penalise individuals who neglected to submit income tax returns, the government announced new Sections 206AB and 206CCA under the Income Tax Act. This TDS clause specifies a higher rate of tax deduction for certain individuals. According to the Section 206AB, the TDS shall be deducted at a higher rate if:

• A taxpayer has not filed income tax returns for the last 2 years
• The deadline for filing the IT return under section 139(1) has passed.
• If the total aggregate tax deducted or collected at source of the taxpayer in each of the preceding two years surpasses Rs 50,000.

TDS rates applicable

• Twice the rate stated in the applicable section.
• Twice the rate or rates in force; or
• At a rate of 5%.
• According to the new Section 206AB, the tax shall be deducted at the higher of the two rates provided in this section and in Section 206AA. The rate for TCS collection under section 206CCA of the Act will be 5% higher than the rate stated in the relevant provision.

Exceptions under Section 206AB

Section 206AB will not apply to TDS deducted under Section 192 for salary or withdrawals from Provident Funds under Section 192A. TDS on profits from card games, crossword puzzle, lottery, horse race or any other games under Provision 194B or 194BB will also be exempted from the new provision.
It would not apply to TDS on cash withdrawals exceeding Rs 1 crore under Section 194N or income from investments in securitisation trust under Section 194LBC. Non-resident i.e. deductee or collectee who do not have a permanent establishment across India would also be exempted from Section 206AB.