Livemint. She also talks about the latest changes in the income tax legislation, which affect the Gen Z, scope of cryptocurrencies as an asset class, the impact of artificial intelligence, among other things. As youngsters' starting salary is not very high, they need to understand that the new tax regime is good for them.
If your total deductions in a year is less than or equal to ₹1.5 lakh, the new tax regime is better. And when the total deduction is more than ₹3.75 lakh, the old tax regime turns out to be more favourable. But if the total deduction falls between these two brackets, one needs to make use of income tax calculator and make a comparative analysis before opting for one regime over the other.
Another important thing that the youngsters need to remember is that daily travel and conveyance allowances are still permitted in the new tax regime. This is beneficial for the young people who might have to travel a lot for their office work. I believe they should invest in four financial instruments right from the young age: term insurance, medical insurance, PPF and equity & mutual funds.
I can say from my personal experience that starting term insurance early is good because the premium would be quite affordable. Also, insurance should be treated differently from investment. And if they have a side gig or have an income from internship, they can invest the same in mutual funds.
It is important to remember that you don’t learn about personal finance unless you do it. They should do it themselves instead of relying on a broker. They can even seek their bank’s help for making an investment.
Read more on livemint.com