Podcast - Here’s why taxes impact your investing decisions

	A	B	C	D	E	F	G	H	I	J	K	L	M	N	O
1	Point 1: Effective Tax rate of a Fixed Deposit
2		FD Rate	Tax rate	Effective FD Rate
3	Bank	8.00%	33%	5.36%
4
5	Point 2: Effective tax rate of 20% on 30 lakh income
6		Earning
7	Earning	3,000,000
8	Taxed at
9	15 lakh+ slab	600,000	1.5 lakh plus 30% of what is above 15 lakh in income
10	tax rate	20.00%
11
12	Point 3: Difference between 8% on FD and 8% on debt mf
13
14		Fixed Deposit			Debt MF
15	Year	8%	33%	<- tax rate	8%	20%	<-tax rate on say 30 lakhs of gains as in Point 2
16	0	100			100.0
17	1	105.4			108.0
18	2	111.0			116.6
19	3	117.0			126.0
20	4	123.2			136.0
21	5	129.8			146.9
22	6	136.8			158.7
23	7	144.1			171.4
24	8	151.8			185.1
25	9	160.0	effective return		199.9	tax to pay	after tax	effective return
26	10	168.6	5.4%		215.9	23	192.7	6.8%
27	11	177.6			233.2
28	12	187.1			251.8
29	13	197.1			272.0
30	14	207.7			293.7
31	15	218.8			317.2
32	16	230.6			342.6
33	17	242.9			370.0
34	18	256.0			399.6
35	19	269.7	effective return		431.6	tax to pay	after tax	effective return
36	20	284.1	5.36%		466.1	73	392.9	7.1%
37
38	Point 4: Effective tax rate on a massive debt fund corpus												Scenario where this is your only income
39	Year	Corpus	Withdrawal	Return at 8%	NAV Start		Units Start	Units at end	Sell units	Profit	Tax at 20% (point 2)	Tax rate on withdrawal	Tax Paid	Explanation	Effective tax rate
40	0	37,500,000		3,000,000	100	108	375,000
41	1	37,500,000	3,000,000	3,000,000	108	116.6	347,222	319,444	27,778	222,222	44,444	1.48%	0	Upto 7L = 0 tax	0.00%
42	2	37,500,000	3,000,000	3,000,000	116.6	126.0	321,502	295,782	25,720	427,984	85,597	2.85%	0	Upto 7L = 0 tax	0.00%
43	3	37,500,000	3,000,000	3,000,000	126.0	136.0	297,687	273,872	23,815	618,503	123,701	4.12%	0	Upto 7L = 0 tax	0.00%
44	4	37,500,000	3,000,000	3,000,000	136.0	146.9	275,636	253,585	22,051	794,910	158,982	5.30%	24,491		0.82%
45	5	37,500,000	3,000,000	3,000,000	146.9	158.7	255,219	234,801	20,417	958,250	191,650	6.39%	53,738		1.79%
46	6	37,500,000	3,000,000	3,000,000	158.7	171.4	236,314	217,409	18,905	1,109,491	221,898	7.40%	76,424		2.55%
47	7	37,500,000	3,000,000	3,000,000	171.4	185.1	218,809	201,304	17,505	1,249,529	249,906	8.33%	99,906		3.33%
48	8	37,500,000	3,000,000	3,000,000	185.1	199.9	202,601	186,393	16,208	1,379,193	275,839	9.19%	125,839		4.19%
49	9	37,500,000	3,000,000	3,000,000	199.9	215.9	187,593	172,586	15,007	1,499,253	299,851	10.00%	149,776		4.99%
50	10	37,500,000	3,000,000	3,000,000	215.9	233.2	173,698	159,802	13,896	1,610,420	322,084	10.74%	183,126		6.10%
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