India’s Income Tax Laws are framed by the Government. The Government imposes a tax on taxable income of all persons who are an individual’s. Every individual who qualifies as a resident of India is required to pay tax on his or her global income. A tax return holds and clutch reports of income, expenses and other applicable or relevant tax information. Tax returns must be filed every year by an individual’s or person on or before 31st July of the next financial or monetary year. An ITR is the tax form which is basically used to file an income tax with the income tax department or subdivision. Income tax return (ITR) is a form in which the taxpayers file information about his income earned and tax applicable to the income tax department. According to these laws levy of the tax on a person or an individual depends upon his residential status. As per the income tax act, it is compulsory or obligatory to file Income Tax Returns Filing in India If your unpleasant and coarse income exceeds Rs. 2.5 Lakh in the financial year then you be obliged to or must file income tax return.
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In finance, the term refers as the rate of return on security.
Tax yield, is the product of the tax rate and tax base
The yield would be 15.38%.
Municipal Bond Tax Equivalent Yield This calculator will estimate the tax-equivalent yield (TEY) for a municipal bond. Income generated from municipal bond coupon payments are not subject to federal income tax. In addition, if the bond was issued in your state of residence, you can also avoid state income taxes. Use this calculator to determine the yield required by a fully taxable bond to earn the same after tax income as a municipal bond.
The symbol for John Hancock Tax-Advantaged Global Shareholder Yield Fund in the NYSE is: HTY.
yield on debt = 6.3/.70 = 9%
subtracting a 36% marginal tax rate from 100% leaves 64% of income retained "net" of tax. Therefore Multiply .64 times 9% and get a 5.76% after tax yield.
To find the federal tax rate at which the buyer would be indifferent between Muni bonds(which are tax free) and Corporate bonds(which fall under your tax bracket tax rate) you follow this simple formula: Corporate Bond Yield=(Municipal bond Yield)/(1- Federal tax rate) In this case you would solve for the Federal Tax Rate and get an answer of .25 or 25% http://luhman.org/Nts/Bond/140_Municipals.html
Corporate investors own most preferred stock, because 70 percent of preferred dividends received by corporations are nontaxable. Therefore, preferred often has a lower before-tax yield than the before-tax yield on debt issued by the same company. Note, though, that the after-tax yield to a corporate investor and the after-tax cost to the issuer are higher on preferred stock than on debt.
Yield is return or revenue on investment, profit is Yield minus expenses or tax. It may not cover every form of investment, but in general it should show the diff.
As of July 2014, the market cap for John Hancock Tax-Advantaged Global Shareholder Yield Fund (HTY) is $126,449,193.12.
muni yield must equal 10% to be equal to the tax shield 6 percent of the treasury yield. 100(muni yield) = 100(t-yield)/(1-(marginal tax)) 100x = 100x .06/(1-.40) 100x = 100x .06/0.6 divide both side by 100 x = .06/0.6 x= 0.10 muni rate equals 10%
When choosing a bond fund for your investment portfolio, there are two very broad categories to choose from - taxable bond funds that hold mostly corporate and government securities and tax-free bond funds that hold mostly municipal bonds. The average investor might be enticed by the tax-free bond fund mainly because of the words "tax-free". Who wants to pay taxes to the government if they don't have to, right? But there are definitely cases when they will not make sense. The best way to determine if a tax-free bond fund makes sense is to calculate it's taxable equivalent yield. (This is assuming that a taxable and tax-free bond fund are substantially the same investment. In reality, there are credit quality and other issues that need to be judged in addition to the yield offered before making a final investment decision.) In order to calculate the taxable equivalent yield, you'll need the tax-free yield and your current tax bracket (which can be found from your tax return, the IRS or any number of financial websites). Take the tax-free yield and divided it by one minus your tax bracket. For example, if you're in the 31% tax bracket and you can obtain a 4% tax-free yield, the taxable equivalent yield will be 5.8% (4 divided by .69). In other words, you would need to obtain a taxable yield of at least 5.8% in order to "outyield" the tax-free investment. This is why municipal bond and other tax-free funds are considered to be better suited for those in higher tax brackets. A muni fund allows a high income investor to avoid a greater level of taxes than a low income investor. It's a simple calculation but it can go a long way to point you towards the right investment.
Figuring Taxable-equivalent Rate for a Bond Here's the formula for figuring the precise taxable-equivalent rate for any bond: Subtract the federal marginal tax bracket percentage from the number 1, and divide the tax-free rate by the result. For example, assume you're in the 28% tax bracket and are offered a 5.75% tax-free bond. You would divide 5.75 by 0.72 (1 less 0.28) and find that the taxable-equivalent yield is 7.99%. In other words, you'd need a taxable investment paying more than 7.99% to beat the return on the 5.75% tax-exempt. In the 35% bracket, the divisor would be 0.65 (1 less 0.35) and the taxable-equivalent yield would be 8.85%. Figuring Tax-exempt Equivalent of a Taxable Yield There's a similar formula for figuring finding the tax-exempt equivalent of a taxable yield: Subtract the federal marginal tax bracket percentage from the number 1, and multiply the taxable rate by that number. The result is the tax-free rate. Assume you're considering a taxable investment yielding 8%. If you're in the 28% tax bracket, multiply 8 by 0.72 (1 less 0.28). The result is 5.76, telling you a 5.76% tax-free yield will put the same amount in your pocket, after tax, as an 8% taxable yield. In the 35% bracket, the multiplier would be 0.65 (1 less 0.35), so a tax-free yield of 5.2% will match a taxable yield of 8%.