10 Avtar of god and evolution of mab kind

"Mom, I am genetic scientist. I am working in US on the evolution of man. Theory of evolution, Charles Darwin, have you heard off him? " Vasu asked.

His Mother sat down next to him and smiled, "I know Darwin, Vasu. I also know that what you think he discovered is old news in India."

" Yeah sure Mom!" Vasu said with sarcasm.

"Well if you are too smart then listen to this, " his Mother countered." Have you heard of Dashavatar? The ten avatars of Vishnu?" Vasu nodded.

"Then let me tell you what you and Mr. Darwin don't know. The first avatar was the Matsya avatar, it means the fish. That is because life began in the water. Is that not right?" Vasu began to listen with a little more attention.

"Then came the Kurma Avatar, which means the tortoise, because life moved from the water to the land. The amphibian. So the Tortoise denoted the evolution from sea to land.

Third was the Varaha, the wild boar, which meant the wild animals with not much intellect, you call them the Dinosaurs, correct? " Vasu nodded wide eyed.

"The fourth avatar was the Narasimha avatar, half man and half animal, the evolution from wild animals to intelligent beings.

Fifth the Waman avatar, the midget or dwarf, who could grow really tall. Do you know why that is? Cause there were two kinds of humans, Homo Erectus and the Homo Sapiens and Homo Sapiens won that battle." Vasu could see that his Mother was in full flow and he was stupefied.

"The Sixth avatar was Parshuram, the man who wielded the axe, the man who was a cave and forest dweller. Angry, and not social.

The seventh avatar  was Ram, the first thinking social being, who laid out the laws of society and the basis of all relationships.

The eight avatar was Krishna, the statesman, the politician, the lover who played the game of society and taught how to live and thrive in the social structure.

The Ninth avatar, the Buddha, the man who rose from Narasimha and found man's true nature. The nature of Buddha, he identified man's final quest of enlightenment.

And finally, my boy, will come Kalki, the man you are working on. The man who will be genetically supreme."

Vasu looked at his Mother speechless. "This is amazing Mom, how did you.. This makes sense!"

"Yes it does Vasu! Now have your idlis."

How returns from various asset classes are taxed

EQUITY:

Stocks:

1. If you hold on to them for a year, the long-term capital gain is tax free
2. Short-term capital gain is taxed at 15%
3. Dividends are tax free

DEBT FIXED INCOME INSTRUMENTS:

Savings a/c:

1. Interest up to Rs 10,000 is tax free, taxed at slab rate after that
2. TDS not deducted on savings interest.

Fixed deposits:

1. Full interest taxed at slab rate
2. TDS of 10% if interest in any financial year crosses Rs 10,000

Recurring deposits :

1. Full interest taxed at slab rate
2. TDS not deducted on RD interest

Tax-free bonds:

1. Full interest is tax free
2. The long-term capital gain (after holding for 1 year) taxed at 10%
3. Being interest bearing instruments, no indexation benefit allowed
4. Short-term capital gain taxed at marginal rates.

Normal bonds and debentures:

1. Full interest taxed at slab rate TDS of 10% if interest in any financial year crosses the Rs 5,000 mark
2. The long-term capital gain (after holding for 1 year) taxed at 10%
3. Being interest bearing instruments, no indexation benefit allowed
4. Short-term capital gain taxed at marginal rates.

MUTUAL FUNDS:

Equity funds :

1. Long-term capital gain (after holding for 1 year) is tax free
2. Short-term capital gain is taxed at 15%
3. Dividends are tax free

Arbitrage funds:
(Provided they maintain equity fund status)

1. Long-term capital gain (after holding for 1 year) is tax free
2. Short-term capital gain is taxed at 15%
3. Dividends are tax free

Equity oriented balanced funds:

1. Long-term capital gain will be tax free
2. Short-term capital gain taxed at 15%.
3. Dividends are tax free

Debt funds :

1. Long-term capital gain (after holding for 3 years) is taxed at 20% after indexation
2. Short-term capital gain taxed at marginal rates
3. Dividends are tax-free in the hands of the investor, but scheme pays a very high dividend distribution tax of 28.32%

Debt-oriented balanced funds :

1. Long-term capital gains (after holding for 3 years) taxed at 20% after indexation
2. Short-term capital gain taxed at marginal rates
3. Dividends are tax-free in the hands of investors, but scheme pays a very high dividend distribution tax of 28.32%

Gold funds:

1. Long-term capital gain (after holding for 3 years) taxed at 20% after indexation
2. Short-term capital gain taxed at marginal rates.

GOLD :

Gold bullion and ornaments :

1. Long-term capital gain (after holding for 3 years) taxed at 20% after indexation
2. Short-term capital gain taxed at marginal rates.

Gold bonds :

1. Small interest received in the middle will be taxed at slab rates
2. Long-term capital gains (after holding for 1 year) taxed at 10%
3. Being interest bearing instruments, no indexation benefit allowed
4. Short-term capital gains taxed at marginal rates.

INSURANCE :

Endowment policies
1. Final proceeds tax free if premium in any year did not exceed 10% of the sum assured
2. TDS of 2% if the total receipt crosses Rs 1 lakh in financial year
3. Investors should consider service tax paid on premiums also while calculating returns
4. For endowment plans, it is 3.5% for first year's premium and 1.75% for the renewal premium.

Ulips :

For ULIPs, service tax is 14% on all charges (like mortality charges, AMC fees, switch fees, etc)

REAL ESTATE :

1. Rent received (or notional rent for the locked up second home) are taxed at slab rate
2. Deductions available for rent includes property tax, repair costs, home insurance, etc
3. The long-term capital gain (after holding for 3 years) is taxed at 20% after indexation
4. Short-term capital gain is taxed at the marginal rates.

REAL ESTATE INVESTMENT TRUST (REIT) :

1. Long-term capital gain (after holding for 1 year) from REIT units listed and traded in stock exchanges will be tax free 2. Short-term capital gain from REIT units listed and traded in stock exchanges will be taxed at a lower rate of 15%
3. REIT will be pass through vehicle and is not liable for any income received by it
4. Rents received by REIT and distributed will be taxed at the hands of investors as rental income
5. Interest received by REIT and distributed will be taxed at the hands of investors as interest income
6. Dividends received by REIT and distributed will be tax free in the hands of investors.

Securities Transaction Tax (STT): STT is levied on stocks and equity mutual funds in lieu of tax-free dividends and also lower capital gain taxes. Equity mutual funds are defined as schemes that maintain more than 65% equity exposure and because of that, equity oriented balance funds and arbitrage funds also comes under this category.

Dividend distribution tax (DDT): The mutual fund dividends are tax-free, but there is a dividend distribution tax (DDT) applicable for debt mutual funds. The high DDT (works out to be 28.32% now) has taken the sheen out of the dividend options in debt mutual funds.

Indexation benefit: While computing long-term capital gain (LTCG), indexation benefit is provided as compensation against inflation. For example, if the LTCG is 10% p.a. and the inflation is 7% p.a., you need to pay tax only on 3% additional gains. Indexation benefit is not available for instruments that have interest components.