NEW DELHI: The government crackdown on unaccounted cash since November 8 has put many investors in a state of disarray. If one deposits Rs 1 crore in a bank account, half of it will get deducted by the way of income-tax, and the remaining 25 per cent or Rs 25 lakh will be locked in the anti-poverty scheme without interest. The remaining Rs 25 lakh can then be invested in stocks via mutual funds or direct equity.After four years, the amount invested in equities could double to around Rs 50 lakh, and one would also be able to withdraw Rs 25 lakh from the locked-in scheme. Thus, the total amount at the end of four years would be somewhere closer to Rs 75 lakh.Porinju said the equivalent utility value of Rs 75 lakh at the end of four years is equivalent to Rs 1.25 crore, when one thinks of the added value, peace of mind as well as dignity. To explain, he said that Rs 75 is pure white money in hand after 4 year with projected reasonable return on equities (almost double) which is interest free deposit.The utility of Rs 75 lakh received of notional Rs 1 cr invested is much higher compared with Rs 75 lakh stashed in bed.

Source: Economic Times November 29, 2016 08:40 UTC