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Showing posts with the label investment in FD.

How indexation adjust inflation

What is inflation and Indexation and How indexation adjust inflation ? Should one invest in fixed deposit? tThe government has discontinued the indexation benefits from the financial year 2025, announced in the Budget for FY-2025 . First of all let's understand what is inflation in a layman terms. The general rise in prices is called inflation. This rise in prices may be due to many reasons from demand side and supply side. For example, if supply remains constant and demand for a particular item increases its price will also increase. And if demand for a particular item decreases it's price will also come done if supply remains the same. Same way we can say that if supply of a particular item increases in the market at constant demand then it's price will decrease and if supply decreases and demand remain same, then the price will increase. Inflation affects your income. That why the government gives dearness allowance (DA) to the employees and dearness relief (DR) to the ...