Jun 25, 2010

Answers: Money Teaser #5

The answers are based on the Original version of DTC and not the revised one:

Ans 1: Taxman assumes that house rentals in Delhi are still a lot higher than Gurgaon and Noida.

Similarly, according to government, cost of living is higher in Kolkata as compared to Pune, Bangalore, Gurgaon and other such non-metros.

Ans2: To compensate for the extra expenses incurred by women to make themselves look presentable for office.

Ans 3: To encourage
daily commuters to use public transport (or start cycling) thereby reducing traffic congestion and pollution levels and also saving money in the process.

Ans 4: So that CAs and Lawyers can make a living out of it. And, Fisher can blog about it.

Ans 5: To simplify the tax laws for a CA student who was finding it difficult to comprehend the complex provisions of current tax laws. Now he can have a sigh of relief because probability of his passing the examination increases manifold.

Ans 6: Because it contains so many secrets.

Ans 7: Now there won’t be any need to submit fake bills (Rent bills, LTA vouchers, Medical bills etc.) to claim the tax benefits. It was particularly a big headache to arrange bogus travel tickets and fake medical bills.
Further as the number of choices for investments for tax saving purposes stands reduced, the tax planning will become a lot easier. After depositing some amount in PPF, the balance will go to life insurance. In other words, DTC will make it easier for individuals to invest in life insurance. However, there’s one pitfall also: you might have to run after your insurance agent because they will get too busy (now there won’t be any need for agents to convince you any more regarding the importance of investing in life insurance product). It might also reverse the maxim “the insurance is sold and not bought”.

Ans 8: The DTC will help companies reduce the work of HR & Accounts department because now there will not be any need to bifurcate your pay package into different components such as HRA, LTA, Medical reimbursement etc. And there won’t be any need to collect all the evidence (rent receipts, LTA & medical claim vouchers) from the employees.

Ans 9: Because it is one of the best long term saving instrument available for your retirement.

Ans 10: Every transaction of purchase, sale or expenses exceeding Rs 50 need to be supported by a serially numbered bill / receipt containing the name, address and such other particulars as may be prescribed. And for expenditure less than Rs 50, payment vouchers shall be required.

Also see:

1. Money Teaser # 5 – Tax
2. How to live a Purposeful Life

1 comment:

  1. AnonymousJune 25, 2010

    Can you explain the answer to Q.9 in detail ? which policy ? what kind of return ??


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