Is Donald Trump taking a perilous path???

Trump is offering bilateral deals to UK and India, and perhaps also China. But against Iran, Russia, Mexico and even Germany, his tirades continue.

Donald Trump’s election promise was to make America great again. As of now, he is grating everyone again and again! Alongwith his chief strategist, Stephen Bannon, (a man who loves war, and predicts one with China within 5-10 years), Trump is upending all relationships. According to German newspaper Der Spiegel, ‘Trump and Bannon pursue a vision of autocracy’. Investors would do well to study the profile of Bannon, who calls himself a Leninist. When asked what that meant, he said he wanted to destroy the State, bring everything crashing down, and destroy all of today’s establishment!

A cause for concern

The duo’s statements, and responses to world leaders, give several causes for concern.

China: Even before Trump, the US viewed China’s accelerated rise in economic (and, consequently, military) power with alarm. In a must see documentary ‘The Coming War on China’, John Pilger, the producer, points out that whereas international media covers the building of runaways on man made islands in the South China Sea, there is no mention of the 400 US bases encircling China, which provoke it to act in self defence.

Increasing military expenditure: Military technologies are horrendous, with each country acquiring better missiles to attack with and improving their anti-ballistic missile technology systems. Both the US THAAD and Russia’s S400 anti-missile systems are frighteningly awesome (India has agreed to buy five systems from Russia, and has also developed, jointly by Tata and L&T, together with DRDO, the Pinaka system which has been tested successfully).

There are several other military technologies. The capex on such systems are, however, destructive, by definition. John Ma, founder of Alibaba, pointed out at Davos that American companies have made huge profits, but the money has been squandered ($11 trillion) on wars.

Pressure on India

India too, has to spend on military technology, to counter the threat of hostile neighbours. Thus, the Trump agenda of destabilisation will result in money that could have been spent on building infrastructure, to be spent on building destructive weapons, instead.

End of multilateralism: Trump has withdrawn US participation in the Trans Pacific Partnership (TPP), a multilateral agreement between 12 countries, to cut import tariffs for 18,000 products. Trump and Bannon prefer bilateral agreements, because it is easier to pressurise one (smaller) country under a bilateral agreement than to stick to the terms of a multilateral one. Trump is offering bilateral deals to UK and India, and perhaps also China.

There are others Trump tirades against, including Iran, Russia, Mexico and even Germany. The ability of the US to pay for everything (more military spending due to escalation, more product prices due to trade wars and more infrastructure spending) is dependent on the ability of the US to sell its bonds.

Source: thehindubusinessline.com

Budget 2017: How to pay less tax this year and beyond

It is said that nothing in this world is certain except for death and taxes. However, you can soften the blow from the latter, legally of course. 

It starts with knowing the difference between your salary income and total income and includes minimising tax on allowances that are part of your salary. Your income is from five broad sources: 

Salary Income from an employer, including value of perks and allowances 
House 
Gain or loss from the real estate you own 
Business 
Net profit from any business or profession 
Capital Gains 

Profit/loss from sale of a capital asset (property, shares, jewellery, mutual fund units) 
Other 
Any income other than the four mentioned 

DEDUCTIONS AVAILABLE 
*HRA, medical expense reimbursement, LTA, conveyance allowance etc 
*Standard deduction (30% of income post house tax), and interest paid on loan for buying/construction of the property 
*Expenditure for business or profession, and losses from previous years 
*Depends on asset, holding term, indexation, losses carried forward and investment in specified options 
*Dividends are tax free. As are gifts from specified relatives or  .. 

A taxpayer has to pay tax on certain income even if he/she has not earned it. It includes: 
*Income earned through investments in the name of a child (below 18 years). In this case, the minor’s income is clubbed with that of the parent who earns more. 
*Income from investments made from the taxpayer’s income in spouse’s name. 
*Income deemed to be earned from letting out a second property even if it is lying vacant. 

The exemption is limited to the lowest of 
1. Rent paid less 10% of salary* 
2. 50% of salary* where the house is situated either in Delhi, Mumbai, Kolkata or Chennai, and 40% of salary in other cities 
3. Actual HRA received 


*Salary means basic salary and dearness allowance 

*If your CTC doesn’t contain HRA, deduction for rent paid is available from gross taxable income, subject to various limits (maximum deduction 5,000 per month). 
*If you live in a house you own, the HRA component is fully taxable. 

What if accommodation is provided by the employer? 
Tax implications depend on: 
*Type of accommodation – hotel, serviced apartment, leased accommodation. 
*Whether the property is owned by the employer or leased by the employer for you. 
*Whether the accommodation is furnished or not. 
*Your salary level. 

Depending on a combination of factors, you may check with a tax advisor which is more beneficial to you — claiming HRA or living in flat provided by employer. 

Leave travel concession (LTC) 
You and your family’s travelling expenses on an annual holiday within India are eligible for a tax break. For eg, if you are travelling by air, it is limited to economy class airfare for the shortest route to your destination. No exemption is available for hotel and local conveyance expenses. Keep the bills handy. 

Leave Encashment : If you haven’t availed of your entitled leave, you may have an option to get it encashed. With an increasing realisation that employees who avail of annual leave are more productive, most employers permit such encashment only on retirement or resignation. The maximum aggregate exemption available in a lifetime is 3 lakh. 


Reimbursements 
Reimbursements such as medical expenses of up to 15,000 per year or your telephone expenses, including data charges, are exempt. There is no cap on the maximum amount that can be claimed for phone expenses. However, your employer may pose an internal cap. In addition, if you get meal vouchers, such as Sodexo coupons, these are exempt from tax to the extent of 50 per meal 

Children’s education allowance: 
This gets you a limited monthly tax break of 100 per child and 300 per child for hostel expenses (both restricted to two children) 

Car perquisites: The perquisite value of a car benefit provided by an employer to you depends on who owns the car, the capacity of the engine, whether you or the employer pays for its maintenance, running cost (including fuel), driver, and if the use is official or personal. Some employers also offer car on lease, which could bring down your income tax significantly Transport allowance: Any such allowance paid by employer to meet your daily conveyance needs between office and home is tax-exempt up to 1,600 per month 

Employee Provident Fund (EPF) & gratuity 
PF withdrawal after rendering 5 or more years of continuous services is tax-free. However, if you withdraw prior to completion of 5 years of service, the withdrawal becomes taxable under various heads of income. There are a few other scenarios where the PF withdrawal is tax-free such as termination on account of ill health etc. You will be entitled to receive gratuity after rendering 5 years of services and any such payment on termination or retirement is tax exempt up to a maximum of 10 lakh in a lifetime. 

Source:Economic times