I was wondering how much money will required to retire in India and live of on interest/investments ? I have done a small math and i would require about Rs/- 40000 PM cover my monthly expense including entertainment, grocery, rent electicity, phone bill and trips to different places 2-3 times a year. What are FD Rates in India and Taxes on them ?
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Posted on: 05-01-10 20:49:21
Quote:
Originally posted by kapilmalik
I was wondering how much money will required to retire in India and live of on interest/investments ? I have done a small math and i would require about Rs/- 40000 PM cover my monthly expense including entertainment, grocery, rent electicity, phone bill and trips to different places 2-3 times a year. What are FD Rates in India and Taxes on them ?
Rs 40,000 p.m. in which year? 2010? 2020? what about increase in prices due to Inflation?
If you are earning interest in India, living in India and paying taxes in India, I don't see any relative advantage.
Higher interest income earning there is offset by higher inflation and possibly higher taxes in retirement.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
There are different investment opporunities in India which is tax free that is if you are Indian resident.
Each person can invest upto 3 lacs in MIS (monthly Income scheme) in post office for himself and another 3 lacs in spouse name and for children above 18 years 3 lacs each. The interest rate is 8% p.a tax free and if interest is reinvested then you get annual yield 8.67%.
other than this, one can invest in NSC which also fetches 8% pa but out of this 180000 is tax free (2007-8) and rest is taxable. One can invest upto 5 lacs.
one can also deposit the funds in FDR in banks interest rate varies 8 to 10% according to no. of years invested. Here interest upto 10000 is not taxable above 10000 w have to pay TDS. It is deducted directly by bank but you can file returns and get back refund.
Other than all above, there are investment in FDR in Tata,Birla and other big companies which is safe investment even in IDBI flexibonds/ICICI bonds/retirement schemes which gives attractive interest rates but then interest above 2500 is taxable. TDS is deducted and interest is credited to your account.
There are tax free bonds like RBI bonds, Kisan vikas patra. All investment in India fetches 8% p.a and majority are tax free.
Yo can also invest in PPF which is for tax saving scheme. PPF interest rate was 12% p.a but now it is 8% p.a and you can invest upto 70000 p.a per person which is tax free. above 70000 is taxable.
There are many infrastructure scheme where you get tax rebates.
If I recollect anything else then I shall post it on the forum.
(P.S. INVESTING IN RETIREMENT PLANS WITH ICICI PRUDENTIAL IS HIGH BENEFICIAL). THEY HAD SCHEME LAST YEAR IN WHICH THEY WERE OFFERING RS. 40000-60000 PM RETIREMENT BENEFIT.)
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The best way to find yourself is to lose yourself in the service of others.”
Mahatma Gandhi
You can invest in Rs 50000 denomination deposit in Sri Ram Transport or so many other companies, they give a higher return (+2to3% than bank).
you save on taxes if it is less than 50000, u knw what i mean, and is secured.
Otherwise invest in a residential real estate in the city u are moving in, and rent it.
my 2 cents are time tested, as present Indian government policy are not much for NRI investments.
Rs/- 40000 PM way to high and only needed for cities like Mumbai or Delhi and they are not good for retiring
link to site
http://www.stfc.in/deposit.asp#
link to deposit rate http://www.stfc.in/int_rate.htm
