Mr Balwant Jain is a leading columnist for Taxguru, Indian Express, Housing.com, DNA, Moneycontrol and is also a known face on Times Now, He is a visiting faculty at NMIMS for “Personal Financial Planning” subject and very active on Twitter and Quora. Today, we got a chance to have a one to one with the man himself.
So, without further ado,
Tell us about yourself.
I am a Chartered Accountant, a company Secretary and a Certified Financial Planner. I was born and brought up in a small village in Rajasthan. I passed my B. Com. Examination from Rajasthan and then came to Bombay. As I loved what I studied, I passed all my examinations in the first attempt and secured an all India rank in my C. A. Final examination. For the initial 23 years, I ran my own consultancy firm and it was only in 2006 that I quit my practice and joined the industry. I worked for Reliance Retails Limited as GM Internal Audit, Apnapaisa Private Limited as CFO and Company Secretary and for Bombay Oxygen Limited, a listed Company as their Company Secretary.
What got you interested in taxation and personal finance?
Being a Chartered Accountant, I was always interested in income tax. Moreover, my stint being a consultant made me interested in personal finance as well.
Your favorite books.
My favourite books are Fountain Head and Atlas Shrugged by Ayn Rand and The Alchemist by Paulo Coehlo
Your favourite hobbies.
Reading, Travelling and cooking
How would you advise the retail investors who want to invest in an SCSS or PPF account?
PPF and SCSS are excellent products for the people who do not want to take a risk with their investments. SCSS helps senior citizen get decent regular returns for their day to day expenses. PPF is an excellent product for your safe and good asset diversification. PPF can be used for building a corpus for your children as well.
Is reverse mortgage still in? How can senior citizens benefit?
For those senior citizens who have not been able to accumulate sufficient funds to meet their day to day expenses after retirement and who own a house of their own, a reverse mortgage is an excellent product. With a reverse mortgage, you can receive money to sustain yourself after retirement till you turn 80 and continue to live in your house till you and your spouse live.
If someone is buying a house, what should be the top 5 things you would advise them?
For a person who is buying a house, my advice would be
- Buy your house when you have decided to settle in the place
- Do not wait to buy the house till you have accumulated full cost of the house, buy one once you have sufficient margin money to pay.
- Buy ready to move in house and never go for an under-construction property
- Never be overweight in real estate
- Buy a house in joint names even if the other person is not contributing to the house to ensure smooth succession of the property
- Never ever take a home loan to save tax. Take a home loan when you need to buy a house and the tax benefits are incidental.
What is your take on life insurance products and what type of schemes do you recommend the average investor?
Never mix insurance and investment needs. Never ever invest in life insurance. Buy term plan for your insurance needs and for your investment needs to invest in equity mutual funds via Systematic Investment Plans.
What is your advice to people who want to invest in stock markets? Show they invest through direct equity or mutual funds? Any tips?
Investing in equity is a full-time job and requires specialisation and in-depth research and knowledge. I do not advise investing in equity directly. Instead, invest in equity through mutual fund schemes. Map your investments to your specific financial goals. Review your investment regularly.
How much Gold should a person ideally hold?
Personally I am not a great admirer of gold as an investment product. Yes, gold helps you insulate against the risk of inflation. However looking at the volatility in the gold prices, I would advise investors to invest in gold so that their social needs of gold for a marriage of children are met and not beyond that. Gold should also be bought over the years and not at one go.
What are your expectations from the upcoming budget?
As is widely believed the budget should bring in tax reliefs for individual taxpayers. In my opinion, the tax slabs should be rationalised. The first slab of 5% for income between 2.50 lakhs to 5 lakhs may be retained. As there is a steep rise in the rate after the first slab, in my opinion, the finance minister should introduce a slab of 5 to 10 lakhs of 10% and then 20% for income between 10 lakhs to 25 lakhs and 30% slab for income between 25 lakhs to 1 Crore. An all-inclusive slab rate of 40% with no surcharge may be introduced for income above 1 Crore.
What personal tax mantras do you advise the average salary payer to follow?
I would advise the salary earners to start saving for their retirement from the first salary. They should avail the benefit of deduction of Rs. 1.50 lakhs under Section 80 C by investing money in ELSS what is left after EPF, home loan repayment, school fee etc. They should avail the additional benefit of Rs. 50,000/- available under Section 80 CCD(1B) by contributing to NPS account. One should always be able to save something irrespective of your income level.