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Bharata Finance Posts

Where should you invest your money in 2017 for best returns

Are you a risk taker? How good are you at taking a risk? How much loss can you bear? Or, do you like to play safe? What is your age? Based on the answers to these questions, we would be able to tell where and how you should invest your money in 2017.

Generally speaking, you can invest your money in the following way:

Invest in savings

The first most thing you should invest your money is in savings. You should atleast have 1.5 lakh in your bank account for any emergency needs.

Invest in land

Investing in land always has given unmatchable profits. Even today, post demonetization, the real estate market is still a gold mine for many investors. The land price has increased at an enormous pace, and it is expected to follow the same trend. Real estate is one such sector that will continue to grow exponentially from here on.

Invest in FD

Want to play safe? Invest in a Fixed deposit. Fixed deposit is the best-assured investment plan. Nothing beats fixed deposits when you want secured interests for longer terms. The best part about FD is that you will never be in loss. However, with the development of the country, the interest rate would keep on decreasing and will be lower than the current rate. You can invest 15 percent of your money in FD.

Also Read: Why you should invest in Fixed Deposit

Start SIP

Have you started investing in SIPs? If not, then start today. Keep long-term view in mind. If you are below 30, you can start 2-3 ELSS. The best thing about ELSS is that you will be able to save tax since it comes under section 80C of income tax act.

Also Read: Avoid these 5 mistakes when investing in ELSS

Invest in Share Market

This is the best way to earn without paying taxes on the profit. As of now, you need not pay taxes on the profit you are making, provided you sell your shares after one year from the date of purchase. Plus equity market has grown a lot in the last 20 years, as it continuous to do so even today. If you invest in right stocks, there are huge chances of making a good amount of money. But for that, you may need a good knowledge of stock market. Research, learn and invest. Please note, investing in stock market is risky. If you invest in wrong companies, you may end up losing all your money in no time. It is always better to consult a certified investor and take suggestions from him/her before investing.

Invest in Mutual Fund

Don’t you understand stock market? Or if you do not have much time to keep track of the market on a regular basis, you may invest in Mutual funds. Mutual funds are taken care of by investment bankers who understand the market; they buy shares of companies after doing comprehensive research. But again, mutual funds are risky too. Chances are there that you may lose your money. So, you must read the scheme related documents carefully before investing.

Also Read: Why you should invest in Mutual Funds

Invest in LIC

Did you invest in LIC? If not, you should invest some part of your earnings. And, investing in LIC falls under section 80C of Tax, so you don’t need to pay tax (subjected to terms and conditions). It is one of the mostly used Tax saving schemes in India

Invest in Health Insurance

Get a health insurance today. With mere 10000 INR a year, you can start a health insurance in India. If not used, you may lose the entire money. But if you think in longer perspective, you can save a lot with a proper health insurance policy.

Public Provident Fund

Public Provident Fund is one among the low-risk investment options that ensure excellent returns in the long run. It is completely tax-free and liable to tax deductions under the section 80C of Income Tax Act. The only disadvantage is that in PPF the amount gets locked up to 15 years after which it matures. But from the retirement point of view this will give good annuitized returns. Also since PPF is a government managed scheme the unpredictable trends of market rates post demonetisation are not applicable. Thus this scheme also offers a certain level of stability.

How Taxation Helps in the Growth of a Country ( like India )

Economic growth is categorized by the supply chain of the financial division, the measurement being GDP or Gross Domestic Product. We all know without setting goals nothing can be achieved. So there is a scale in case of GDP. There is a potential or desired GDP calculated as per the economic scenario, and there is the actual GDP which is the turnover in practice. Our economy runs to bridge the gap between the potential and the actual GDP. Estimating a potential GDP is what imbibes focus and action to achieve it. That is where taxation comes in. Taxation involves the citizens of India paying the government a fixed amount in accordance to their earnings as PF and gratuity that is income tax in layman language. Taxation plays the essential role in economic growth and is the primary reason why the economy of India is growing and striving with increased GDP rates at the time of world recession.

Income Taxes And Growth

Taxation can make or break an economic system, so a lot of attention is given to it. Proper taxation is the primary necessity which will satisfy both citizens and the growth scale which the government is aiming at. Proper taxation involves a two-fold advantage. It creates a kind of economy termed as “slack-economy”.¬† This is an economy where the demand increases at a steady rate due to the mass scaleability by the citizens to meet the supply. Thus there is a synchronization in the demand and supply chain. This synchronization is what raises the GDP. Therefore with taxation it is crystal clear how revenue generation is working for the growth of the country.

GST And Economic Growth

Another angle of taxation has been recently introduced. It is the GST or the Goods And Services Tax. GST aims at creating a unified market. The GST is one common tax rate that will be applied to individual products being sold in the market. It will be independent of state-level VAT(Value Added Tax), state level sales tax and state level service and duty taxes. A central tax called GST will be imposed on all goods being produced and imported to India. This GST will be agreed upon by all state government and will be the autonomous tax throughout the country. It should be noted that GST will not negatively affect capital, corporate and income tax figures. It simply aims at creating a broader, simpler and unified economy. The entire concept has been designed to improve the ratio of tax to GDP by equalizing it all over the country. This concept of a unified market will go a long run as far as economic growth is concerned, as studies suggest that with the introduction of GST there will be an average increase in growth rate by 1.3%.

To summarize the benefits of taxation: Taxes are being used to manufacture products. Proper taxation is raising the demand for the product. Meanwhile, there is an equivalent supply to meet the demand. Therefore both in turn function to raise the revenue. The result is a steady growth of the country.