Section VI: Income Tax and Your Financial Planning

• Ques: Diversify your financial basket
• Ans: DO NOT PUT ALL YOUR EGGS IN ONE BASKET.
  • Diversification is needed to hedge the risk associated with any investment instrument.
  • You can invest in company secured fixed deposits which are available at higher rate than bank and are secured against the company’s assets i.e., building, plant and machinery etc. In case the company closes down its business, then your money is paid by selling these assets. Unsecured fixed deposits should be avoided.
  • Diversify your portfolio by investing in commodities like gold, silver, metals, agricultural commodities etc. through NCDEX or MCX. Commodity trading can be done online through demat account with brokers. The 10% to 15% margin of the contract value is payable. It is just like investing in equity shares but with lower margins high returns/risk.