One of the World's Tallent Buildings

Indian Realty’s Growth Chart

With perfect elevation and an even slide up, the Indian Realty’s Growth Chart could be an envy of many of the renowned architects of the world. After all, the structure has been created with extreme patience and hard work. Hundreds and thousands of people have toiled day in and day out to carve out this magnificent structure and it has not disappointed either. Among the many who have gained through this escalating Realty Growth Chart of the country, the ‘Aam Aadmi’ has not been left behind and has managed to have his share in the pie too. This common man of India, who has had an opportunity of investing in an instrument which seems to require no cooling down, has taken full advantage of the uptrend in the market.

And this is not about the country. This uptrend in the realty market of the country has been attracting many foreign investors and real estate developers to look towards India for exponential growth. And the demand for the same is real. Such has been the escalating interest in the Indian Realty Growth Story abroad that not only are their large firms entering the country, the growth story is even being thrown open to the general public in those countries who have the willingness and the money to participate in the rally. If one has managed to catch a glimpse of the news papers today, i.e. 22^nd October, 2010; one would realize that Jaypee Group, in association with Concept tree, is organizing an Indian Property Show in Auckland, NewZealand. This comes as great news to the people associated with the industry in India.

However, this Indian Realty Growth Story might seem unprecedentedly euphoric to people, but, it might have already started to sound alarm bells to some of the domestic investors. Here are the reasons why:

1. Studied in Economics, Higher Demand – Higher Price: The growth of the real estate market of the country has been due to multi dimensional reasons. While one reason towards this growth has definitely been improved architectural structures and construction standards, the catalyst that the continuously increasing demand because of the continuously increasing population has played can’t be ignored either. However, this unabated demand rise is also causing a rise in the prices and it would continue to do the same in the near future. This implies that the common investor with reasonably shallow pockets might be pulled out of the race because of such sky rocketing prices.
2. Like stock markets like realty: It has been experienced through various mediums, including the stock markets that the foreign investors have not been following conventional wisdom while investing, at least the wisdom which is commonly considered conventional in India. Taking a leaf from the Indian Stock Markets’ books, one would learn that the foreign money started withdrawing from the markets when the analysts and the experts were the most buoyant and suddenly a common Indian investor found himself in doldrums, left with nothing but to calculate his increasing losses with every passing day. A similar scenario could surface with the realty markets too, if high emphasis is put on the foreign money as it lays more than essential stress on the external sources few people have control over.
3. Demand Dip: As the trend has already started suggesting, a demand dip doesn’t seem very far. This is because with the continuously escalating prices the investors find themselves being starved of options within their range; and therefore, the markets are gradually seeing a dip in the number of active players in the market. The market, now, seems to be revolving around some High Net Worth Individuals but sustenance for a long time on such limited numbers could be a question, the answer of which could only lie with the future.

Sip into the Systematic Investment Plan (SIP)

Invest small, Earn LARGE

Not many of us would have ever missed the story of the rabbit and the tortoise. We all know how the tortoise, despite its slow pace, managed to outpace the rabbit in the race by its sheer consistency and patience. Why did the rabbit lose? There could be numerous reasons to it. One, definitely, is inconsistency but what is more important is that the time when it decided to put in a large effort might not have been right, given the environmental factors. The tortoise, on the other hand, kept continuously going at its sedate pace and the environmental factors were small and widely dispersed in the long time duration that the tortoise spent on the race track.

This timeless story definitely has a moral and an impact on our lives today. The stock markets have shown tendency to be volatile. Such has been the inconsistency, displayed by the equity markets, that novices have sometimes managed to earn big while the grandfathers of the market, who have spent years, eating, drinking and sleeping the stock markets, have had their stocks testing their depths and losses counting their glory at their peaks. The need of the hour, with the volatility in the markets showing no respite in the near future, is to be the tortoise and not have intermittent investments of large amounts. It would instead be suggested to invest smaller amounts at frequent intervals.

Let us take an example. Hypothetically assuming that a stock was at a level of 5500 points in January, 2010. It then went to 5750 in February 2010 and took a deep plunge to 5000 in March 2010. April and May of the same year were stable with the stock being at 4950 and 5100 levels respectively. June saw a further dip to 4750 levels while July saw a revival taking the stock to 4900 points. The stock sky rocketed to 5500 points in September, with August seeing levels of 5250.

January, 2010	5500
February, 2010	5750
March, 2010	5000
April, 2010	4950
May, 2010	5100
June, 2010	4750
July, 2010	4900
August, 2010	5250
September, 2010	5500

If we look at this hypothetical situation, we would realize that if we were intermittent investors and we would have invested in the stock in February then we would have been at a loss of Rs. 250 on each share. Assuming that there were 120 shares, the total loss counts to Rs. 30,000.

On the other hand, if we were a regular investor and had been purchasing 10 shares of the stock every month, notwithstanding its levels, then we would have been in a different situation. Following, would have been our portfolio’s value in case we purchased shares of the stock every month.

Month	Stock Rates	Investment	Current Profit/Loss
January, 2010	5500	55000	0
February, 2010	5750	57500	-2500
March, 2010	5000	50000	+5000
April, 2010	4950	49500	+5500
May, 2010	5100	51000	+4000
June, 2010	4750	47500	+7500
July, 2010	4900	49000	+6000
August, 2010	5250	52500	+2500
September, 2010	5500	55000	0
Total			+28,000

Hence, with the same number of shares and the same time duration; a sedate investor is able to earn Rs. 28,000 while many other investors might be incurring losses because of their approach of betting big during selected periods.

Such continuous periodical investment is called the Systematic Investment Plan (SIP). Under this scheme, the investor is required to put in a fixed amount of money at fixed time intervals into the stock markets. This is done through the medium of Mutual Funds, who receive the regular investments from the investors and invest the amount into the stock markets. Such systematic investment plan could start from an amount as low as 500 and could then notch up to higher amount levels. Since their inception, such plans have been able to deliver results and the returns are such that the investors have been spell bound by its effectiveness. All in all, it seems like a prudent option to be going slow to be getting big.

Invest, Earn & Save

As a youngster enters the highly enchanting but competitive job market, one realizes that life is much more than a simple 'Truth or Dare' game played in the college campus, while munching on a Double Cheeze Pizza. The college days are gone and we have made enough hay while the sun was shining. Now is the time to deal with the grey clouds and battle hard to survive, and if survived then look at a distant dream of being victorious in the field that one is in. One such grey cloud that one keeps struggling to make ends meet with is the process of filing one's return. Putting efforts to earn enough is a challenge but doing the same to save what one has earned through one's sweat and blood is a challenge all the more and many people bob down to it, losing their precious money in the process.

However, saving tax, ignoring its mystical facade, is a feat conquerable enough and knowledge of tax saving investment avenues along with the intent to make efforts towards the cause is a potent enough weapon in the hands of a lone ranger out on a battle to save one's hard earned money. What follows in this article is a list of tax exempted investments officially declared by the government, which could help crack the code of Tax Savings.......................

1. Exemption under Section 80C: Being one of the more preferred options of tax saving, Section 80C provides exemption from income tax on varied investments. These investments include National Savings Certificate (NSC), Public Provident Fund (upto Rs. 70,000/annum), 5 years bank fixed deposit, Unit Link Insurance Plans (ULIP), School fees of children, repayment of the principal amount of home loan and Employee Provident Fund among others. Except for PPF, one could invest a total of Rs. 100,000 in all other investment options and avail an exemption of income tax for the same amount under Section 80C.

2. Exemption under Section 80D: This exemption works well, especially for the people who have got themselves insured against any medical problems occurring to them or their family in the future. Section 80D provides an exemption to tax on the premium paid by an individual for Medical Insurance of oneself, one's spouse and children. One can claim deductions up to Rs. 15,000 and this amount could be further boosted by Rs. 15,000 for the medical insurance premiums of one's parents. In case of senior citizens, the exempted amount is Rs. 20,000 with the condition that the payment is made through cheque.

3. Exemption under Section 80DD: If one has incurred expenses on the treatment of a dependent, who is disabled in some way, then such amount of expenditure could be claimed for deduction under Section 80DD. The exemption amount varies between Rs. 50,000 and Rs. 75,000 depending upon the severity of the disability for the which the treatment process was initiated.

All these investment acts as two sided advantage gainers for the investor. On the one side, one saves on the taxes and on the other, one gains the returns that such investments generate, which in some cases are pretty handsome.