Will investing INR 1 lakh each year be enough for your future goals? How rule of 72, rule of 114 can help you?

• 72/ Rate of Return= years to double your investment
• 114/Rate of Return= years to Triple your investment
• 144/Rate of Return= years to Quadruple your investment
• ( Range this works for range of rate of return 5% to 13%, than change 1 point for 3%
• eg. use 73 for 15% ROR)
• To understand the rule of 72 formula, you need to divide 72 by the expected annual rate of return. For example, say you invest INR 1 lakh every year in an investment that earns 8% interest annually. Now if you divide 72 by 8, you will get 9 which gives you the number of years it will take for your money to double. So, your investment will grow to INR 2 lakh in nine years.
• INR 1 lakh in 2023 will be worth just about INR 21,291 after 24 years, all thanks to inflation (assuming an annual inflation at 6%). So, it is of utmost importance that you take into account the rising inflation while saving money for future goals. Inflation increases your cost of living and decreases your spending power.
If you feel INR 1 lakh per month is adequate to maintain your lifestyle, you will need INR 2 lakh after 12 years to maintain the same lifestyle, considering inflation at
• 6% per annum. So, it is important to know how fast your money can grow. To beat inflation, you need to invest smartly.
Invest where Expected Rate of Return more than Rate of inflation + 72/Years to Double Eg. 6%+ [72/12]i.e. 6 = 12%

8 Accounting Mistakes that can destroy your profit!!!

1. Mixing Personal and Business Finances
2. Failing to Reconcile Bank Statements
3. Inefficient Budget Management
4. Not Preparing Financial Statements
5. Not Following Established Accounting Policies and Procedures
6. Neglecting to Monitor Cash Flow
7. Overlooking Tax Obligations and Compliance
8. Avoiding Professional Consultation

Stuck at Finalization of Books of Accounts?
Here is a summarised checklist.

1. Reconcile Banks, Cash and Credit Accounts
Reconcile monthly balance, check whether ledgers are correctly selected. check daily cash balance must not go negative.

2.Turnover
Reconcile Sales with whats you showed to Central Government and State Government.

3. Purchase
Reconcile purchase with whats you showed to Central Government and State Government.

4. Account Recievables
Match Payments to Invoices, Debit notes, post late Interest and discount entries if any. create outstanding days report.

5. Account Payables
Match Payments to Bills, Credit notes, post late Interest and discount entries if any. create outstanding days report.

6. Inventory
Match Physical Stock with Inventory in books, pass stock journal entries if needed.

7. Profit and Loss
Check direct and indirect incomes and expenses thoroughly, look for negatives, errors and do cleanup.

8. Balance Sheet
Check Balances, Depreciation ,Tax Accounts, loans, Investments, look for negatives, errors and do cleanup.

Select Tax Planning over Tax Evasion: A Wise and Ethical Choice

In the realm of finance, taxes play a significant role in shaping personal and business decisions. While minimizing tax liabilities is a common goal for many, the approach taken to achieve this goal can have vastly different implications. One approach, tax evasion, involves illegal activities to deliberately underreport income or overstate deductions. However, there's a far more responsible and ethical path available: select tax planning.

Select tax planning is the strategic management of financial affairs within the boundaries of the law to minimize tax liabilities. Unlike tax evasion, which involves breaking the law, select tax planning leverages legal tax-saving strategies to optimize financial outcomes while maintaining compliance with tax regulations. Here are compelling reasons why select tax planning is not only a prudent choice but also a morally sound one:

Ethical Integrity: Select tax planning operates within the confines of the law, respecting the societal contract that underpins our economic system. It upholds the principles of honesty, transparency, and integrity, ensuring that individuals and businesses contribute their fair share to the public coffers while maximizing legitimate tax-saving opportunities.

Sustainability: Tax evasion is a short-sighted and unsustainable practice that can lead to severe consequences, including hefty fines, legal penalties, and reputational damage. In contrast, select tax planning focuses on long-term financial sustainability by optimizing tax strategies that are both legal and ethical. By adhering to legal frameworks, individuals and businesses can avoid the risks associated with tax evasion and build a solid foundation for future growth and prosperity. Risk Mitigation: Engaging in tax evasion exposes individuals and businesses to significant legal and financial risks. Tax authorities actively pursue and prosecute tax evaders, employing sophisticated tools and techniques to detect fraudulent activities. In contrast, select tax planning mitigates these risks by ensuring compliance with tax laws and regulations. By adopting a proactive and transparent approach to tax management, individuals and businesses can safeguard themselves against the adverse consequences of non-compliance.

Reputation and Trust: Trust is a valuable currency in the financial world. Engaging in tax evasion can tarnish reputations and erode trust among stakeholders, including customers, investors, and business partners. In contrast, select tax planning fosters trust and credibility by demonstrating a commitment to ethical conduct and compliance with legal standards. By maintaining a reputation for integrity and responsibility, individuals and businesses can attract opportunities and forge strong, enduring relationships in the marketplace.

Contribution to Society: Taxes play a crucial role in funding essential public services, such as education, healthcare, infrastructure, and social welfare programs. Engaging in tax evasion deprives society of much-needed resources, undermining the common good and exacerbating social inequalities. In contrast, select tax planning ensures that individuals and businesses contribute their fair share to the collective welfare, supporting the provision of public goods and services that benefit everyone.

In conclusion, while the temptation to engage in tax evasion may be strong, the ethical and practical considerations make select tax planning the superior choice. By adhering to legal and ethical standards, individuals and businesses can optimize their financial affairs while upholding integrity, sustainability, and trust in the broader community. Ultimately, select tax planning not only benefits individual taxpayers but also contributes to the overall well-being and prosperity of society as a whole.