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Ken, Caravan, Swades, Planes ….

Arun 2 Comments

Take a look at this pic first-

So … at work today, my next cubicle neighbour “Ken” – who is the one of the most knowledgeable and helpful person at work – said to me “do you want to see my car pics?
At first I was like “what?” … and then thought “ah ok!” … and then thought “did he said what i think he said” …
But I said “sure! why not!? … you bought a car lately? show me the pics”
And then he showed me these pics of the new van he bought and I was totally blown away! 🙂 …
I was like – Woowwwww!
I was like – Awesomeeeeeee!
I was like – Mind blowing!
In fact, I felt so happy and maybe somewhat proud also that now I know someone who actually owns a Caravan … ! 🙂 … just kidding 🙂 …
Ken promised he will bring the van someday to office 🙂 … I am now sincerely waiting for that day 🙂
I showed these pics to Smita also and she said the same thing that came to my mind too – it reminded us of the BOLLYWOOD movie Swades where Shahrukh takes a Caravan in India to visit his “Kaveri Amma” at an Indian village “Charanpur” … and when his friend asked why does he need a Caravan – Mohan Bhargav (the NRI returned) said – are yaar! gaon mein rehne ka kya intezam hoga kya pata? (oh my friend! who knows what lodging arrangements will be there at the village)
… Swades has simple incidents like this in the movie, which make it my fav movie, but that deserves a separate post.
Anyways, while later Ken showed me another awesome thing that I didnt know. He showed me some of this bookmarks for “Buying Planes” 🙂 …
Again when he first said “buying planes” I was first like “what?” … and then thought “ah ok!” … and then thought “did he said what i think he said”
I mean I sincerely thought he is saying “buying plane tickets” and I told that to Ken too … Ken said no he really means “buying planes” 🙂 … He (and one other colleague Morgan) then explained me how buying plane is another usual thing in America. (maybe not so usual, but still, its a concept which I dont think I have heard ever in India)
So just now I searched on google and I did find some websites to buy and sell planes-
Awesome! … Buying and selling planes online like we do for Cars – an industry which I was totally unaware till today! (and I consider myself an ecommerce expert!!)
While I was talking to them, I remembered I have actually seen it in many HOLLYWOOD movies – so I thought probably rich American farmers have it – cuz I remember something similar from the “Pearl Harbor” movie .
I asked Ken and Morgan too – “so who buys these planes? is it farmers?”
Ken said – “No … it is usual people like you and me. Say someone is staying in Pennsylvania and need to travel to Florida frequently. Think about how much time he saves if he buys a plane”
I thought ok fine, but what about the cost to buy a plane!… So Me and morgan glanced over pricetag of one plane too – it was around $500K … which actually didnt sound that bad as I thought. I mean it is still half a million, but whatever, nothing beats owning a plane… right? 🙂
Ken and Morgan further educated me that it is actually the maintenance that costs more (reminds me of an Indian saying we have – one must be rich if he owns an elephant … or one saying I read one time advising that hiring a carpenter sometimes is so costly that it is like getting elephant sitting at your home) …
In short … owning an Elephant in India is similar to owning a plane in America … funny but true!! 🙂
Ken said you need to get your plane recertified after certain hours (1000 / 2000 hours) – Morgan added that is “flying hours”. (ok- sounded like the annual car registration thing that we need to do … lol, itz hard for me to leave my “car mentality” 🙂 )
Ken added that you cannot add any accessory to your plane or try doing any modification yourself to the plane. You need to get a certified professional to help you. Say you want to add a bag on the sideway of your plane, you cannot do, you need a certified professional.
It made sense to me … because aerodynamics is a field you dont want to mess with … unless you are a bumblebee lol 🙂 (quoting Shiv Khera)-
According to scientists, the bumblebee’s body is too heavy and its wingspan too small for it to be able to fly. But the bumblebee doesnt know that and it keeps flying.
When you don’t know your limitations, you go out and surprise yourself!
So I further asked them – where do they keep those planes? I mean is it possible to keep it at your home in pennsylvania and then fly from there to your other home at Florida? … Morgan said there are some communities in America – yes – which have things like that. Ken added usually it is at/nearby airport – at/nearby hangers.
Lastly, Morgan told me something more that I didn’t know – John Travolta is one of those guys who owns planes – he actually owns a Boeing 707!!! … haha, awesome!! – so he keeps them at home. He is also a pilot, and probably has affiliation with some airline company … and flies for them. (Ken added – big money!) … Morgan didnt remember which airline company, but just now I found it on wiki (it is Qantas)-

Travolta is a certified pilot and owns five aircraft, including an ex-Australian Boeing 707-138 airliner. The plane bears the name Jett Clipper Ella in honor of his children. Pan American World Airways was a large operator of the Boeing 707 and used Clipper in its names. The 707 aircraft bears the marks of Qantas, as Travolta acts as an official goodwill ambassador for the airline wherever he flies. His $4.9 million estate in the Jumbolair subdivision in Ocala, Florida, is situated on Greystone Airport with its own runway and taxiway right to his front door

More about John Travlota piloting career is here.
So … that is enough knowledge for ONE day! 🙂 .. like they say you learn something new everyday!

Budget 2010: Income Tax Comparison between 2010 and 2009

Arun 1 Comment




Dr Pranab Mukherjee presented the budget today for this year. And, like all years, the one thing that Aam Aadmi like me looks in the budget is Income Tax related changes.
This year also Pranab da changed few things in Income tax which actually looks good to me so far.
  • One of my favourite finance bloggers Deepak put a very basic tax calculator / comparison tool where you can compare how much benefit or tax saving you will have this year viz-a-viz last year.
I took lead from him and put my own excel to chart out the differences for INDIAN MAN having annual taxable income between 2.5L to 10L . (emphasis is on “MAN” as women and senior citizens have slightly different income tax rates)
The results of this excel may not be rocket science, but to the excel fanatic I am – it provides a easy to understand representation of how this budget benefits different income slabs in India. (like they say – I am the “visual” kind of person)
Here is Income Tax Slab for last year [Source:wiki]
  • No income tax is applicable on all income up to Rs. 1,60,000 per year. (Rs. 1,90,000 for women and Rs. 2,40,000 for senior citizens)
  • From 1,60,001 to 3,00,000 : 10% of amount greater than Rs. 1,60,000 (Lower limit changes appropriately for women and senior citizens)
  • From 3,00,001 to 5,00,000 : 20% of amount greater than Rs. 3,00,000 + 14,000 (slightly less for women and further less for senior citizens)
  • Above 5,00,000 : 30% of amount greater than Rs. 5,00,000 + 54,000 (slightly less for women and further less for senior citizens)
And the new announced tax slabs for 2010-11 are as follows:
  • No income tax is applicable on all income up to Rs. 1,60,000 per year.
  • From 1,60,001 to 5,00,000 : 10% of amount greater than Rs. 1,60,000
  • From 5,00,001 to 8,00,000 : 20% of amount greater than Rs. 5,00,000 + 34,000
  • Above 8,00,000 : 30% of amount greater than Rs. 8,00,000 + 94,000
Note – there is one interesting thing I noticed this time that there is no “women” or “senior citizen” specific announcements this year. No comments on that for now.
Before we proceed any further, the usual Disclaimer: This is NOT tax advice. This is educational material only. Use your own mind before you make any decisions. I am anything but not a tax expert 🙂
Few other things to note-
1. This excel is based on Taxable Income – so it is not your Gross Salary or CTC.
To explain this, say you are getting a salary of 5 Lakhs per annum, but you have invested 1 Lakh in Section 80c and 1 Lakh as Home Loan Interest. That means your taxable income is 3 Lakhs per annum (not 5 Lakhs).
2. In my excel I have not factored in the additional Rs 20,000 tax deduction announced today related to Infrastructure bonds. That will surely put additional tax benefits on your hand, in my opinion lots of people will utilize that to lower their taxable income by additional Rs 20K.
So, whatever … the thing we all love about excel is you can printout charts to visualize things – so the first chart I pulled out was to show how much additional income people will get per month in their paychecks.
As you can see, anyone earning below 3 Lakhs will NOT get any additional money on their hand this year compared to last year. (on a sidenote that means this budget should NOT be nicknamed “Aam Aadmi Budget”, because that will infer that “Aam Aadmi = people having taxable income more than 3 Lakhs” – which I think is far from the reality… isnt it :-))
The good news – everyone above 3 Lakhs per annum will get some benefit on his take home salary, which will keep increasing till 8 Lakhs per annum and then will go constant at Annual benefit of Rs 51,500
Other thing I calculated was “Effective Tax%age” which is by dividing “Annual Tax” to that of “Annual taxable income”.
On that I noticed that people having taxable income 3L will get 0.33% benefit this year – last year they were paying 5.32% tax (effectively) and this year they will be paying 4.98% (effectively)
That will keep growing till 8L income when people will have 6.44% benefit!! – last year they were paying 18.54% tax (effectively) and this year they will be paying 12.10% (effectively)
After that since the tax amount remains constant, but the base increases … so the “Effective Tax %age Difference” comes down, but still it means everyone above 8L taxable income will get Annual benefit of Rs 51,500
I think there are other parts of the Budget which I will blog about in coming days… but that’s it for a Friday evening.