Taxes: "A 'Financial Charge' or a 'Fee' or any 'Other Levy' Imposed upon an individual or a legal entity by a State or a Functional Equivalent of a state to fund various 'public expenditures'. A failure to pay, or evasion of or resistance to 'Taxation', is usually punishable by law."

A Fixed Deposit with a bank @ 8% per annum (we don't get this rate anymore 😟). 10 year period. Interest is Compounding Quarterly. Interest is not withdrawn at quarterly intervals but, is let to Compound / Grow with the capital. Assume a marginal 15% average tax rate on Income.

Impact: Interest earned (yearly) - treated as income from other sources.

Tax - One pays a 'yearly tax' (as per their tax slab), whether the interest is taken out or left to grow. "Cash from your pocket goes out". E.g. - a 1 crore deposit @ 8% interest for 10 years...Grows to Rs.2,20,80,397/- with an Interest Earned of Rs.1,20,80,397/-…………..Does that look good ? 🙂

In the process of getting Rs.1.2 crs; one has paid Rs. 18.12 lacs as TAX during the period @15% tax rate per year. If I increase the tax rate to 20% per year, one pays Rs.24.16 lacs as TAX & at the peak rate of 34.60%, it is 41.80 lacs 😳

In effect - 18.12% of one's capital is paid as tax @ 15% rate. 24.16% of one's capital is paid as tax @ 20% tax rate & 41.80% of one's capital is paid as tax @ the peak rate. Now, does this sound good 🙂

We haven't even explored the Inflation / Purchasing Power erosion, impact 😀

Your hard earned Money, matters. Taxes Matter, even more.