US credit card deal

Visa Inc, MasterCard Inc and banks that issue credit cards have agreed to a $7.25-billion settlement with US retailers in a lawsuit over the fixing of credit and debit card fees in what could be the largest antitrust settlement in US history.

The settlement, if approved by a judge, will resolve dozens of lawsuits filed by retailers in 2005. The card companies and banks will also allow stores to start charging customers extra for using certain credit cards in an effort to steer them towards cheaper forms of payment.

The settlement papers were filed on Friday in Brooklyn federal court.

Swipe fees — charges to cover processing credit and debit payments — are set by the card companies and deducted from the transaction by the banks that issue the cards, essentially passing on the cost to merchants, the lawsuits said.

The proposed settlement involves a payment to a class of stores of $6 billion from Visa, MasterCard and more than a dozen of the country’s largest banks who issue the companies’ cards.

The card companies have also agreed to reduce swipe fees by the equivalent of 10 basis points for eight months for a total consideration to stores valued at about $1.2 billion, according to lawyers for the plaintiffs.

The deal calls for merchants to be allowed to negotiate collectively over the swipe fees, also known as interchange fees.

Merchants will also be required to disclose information about card fees to customers, and credit card surcharges will be subject to a cap, according to the settlement papers. Surcharge rules will not affect the 10 states that currently prohibit that practice, which include California, New York and Texas.

An additional $525 million will be paid to stores suing individually, according to the documents.

Courtesy- Reuters

Is filing the Income Tax Return compulsory?

As an Individual you are required by law to file your Income Tax Returns, if your total income without allowing deductions (such as Section 80C etc) exceeds the basic exemption limit.

For Assessment Year 2012-13, the basic exemption limits are the following:

•   For Men below the age of 60, the exemption limit is Rs. 1,80,000.

•   For Women, below the age of 60, the exemption limit is Rs. 1,90,000.

•   For Senior Citizens, whose age is between 60 years to 80 years, the exemption limit is Rs. 2,50,000. This is identical for men and women.

•   For Super Senior Citizens, of the age of 80 years or more, the exemption limit is Rs. 5,00,000.

What does Total Income without allowing deductions (such as Section 80C etc) actually mean?

Let’s say, your gross total Income is Rs. 2,00,000. You have paid Rs. 50,000 in LIC premium for claiming deduction under Section 80C. Your Taxable Income is Rs. 1,50,000 (Rs. 2,00,000 - Rs. 50,000). The tax payable on Rs. 1,50,000 is Zero.

However, even in this situation, you are required to file your Income Tax Return as your gross total Income exceeds the basic exemption limit of Rs. 1,80,000. (Assuming you are not a senior citizen).

Exemption for filing Income Tax Return for Salaried Employees

For the Assessment Year 2012-13, there is an exemption from filing the Income Tax Return for Salaried employees, subject to the following conditions.

•   Your Total Income after deductions (such as Section 80C etc.) is up to Rs.5,00,000/-.

•   Income other than Salary should be only from Saving Bank Interest, up to Rs.10,000/-. If you have any other source of Income like House Property, Capital Gain, or even interest from fixed deposits, you will have to file your Income Tax Return.

•   You must declare this Interest Income from the Saving Bank to the Employer. The employer then has to deduct the TDS taking into account your Interest Income.

•   If you have a refund due, you need to your file your Income Tax Return to claim this refund.

This exemption is difficult to get in actual practice. You will most likely have to file your Income Tax Return.

This is because; you must declare your Interest Income to your employer before 31st March of the Financial Year. But in most cases, the Bank issues the Interest statement after 31st March. So it is virtually impossible to report the Bank Interest to the employer in time.

Compulsory filing of Income Tax Returns if you have foreign assets.

For the Assessment 2012-13, it is mandatory to file your Income Tax Return if you have any foreign assets. Even though you may not have any taxable Income.

When is e-filing your Income Tax Return compulsory?

For the Assessment year 2012-13, e-filing of the Income Tax Return has become compulsory for the following cases:

•   If your Total Income exceeds Rs.10 Lakhs, then you must e-file your Income Tax Return.

•   If you own foreign assets, you must e-file.

I have paid all my taxes; do I still need to file my Income Tax Return?

As explained above, the law has placed an obligation on you to file the Income Tax Return even if you have no tax due.

Courtesy- http://in.finance.yahoo.com/news/is-filing-the-income-tax-return-compulsory-.html

Pension push

The Pension Fund Regulatory and Development Authority (PFRDA) today lifted the cap on the number of fund managers and said they could charge any fee subject to a limit.

Earlier, pension fund managers had to bid for a predetermined number of slots in the New Pension Scheme (NPS) and charge a uniform fee. The new system lays down the eligibility criteria for registration as fund managers.

“There is no limitation on the number of fund managers,” a government release said.

“The managers are now allowed to prescribe their own fee charges, subject to an overall ceiling to be laid down by the PFRDA.”

Finance ministry officials said it was expected to “provide for an economically viable business model” attracting a fresh set of entrants and resulting in price competition and lower fees.

Fund managers will be expected to market NPS to buyers through their own marketing and distribution channels.

NPS has still not achieved any significant progress in the private sector, and the industry was waiting for these guidelines.

The changes follow the recommendations of the Bajpai Committee, set up by the PFRDA, to identify the reasons behind the slow progress of NPS.

Courtesy: - http://www.telegraphindia.com/1120713/jsp/business/story_15722819.jsp#.UABJ-LUe6ac

ICICI sells Kingfisher debt to Srei

A global debt fund managed by Srei Infrastructure has bought ICICI Bank’s Rs 430-crore loan to ailing Kingfisher Airlines.

India Global Competitive Fund (IGCF), which bought ICICI Bank’s entire outstanding debt exposure, is managed by Srei subsidiary Srei Venture Capital.

The arrangement works like this: suppose, ICICI Bank had given Kingfisher a loan of Rs 100 at an annual interest rate of 8 per cent or Rs 8 per annum. 

If India Global buys the loan for, say, Rs 80, the fund will continue to earn an interest of Rs 8 from Kingfisher. So, the yield on the investment by India Global increases to 10 per cent compared with 8 per cent enjoyed by ICICI Bank.

In case Kingfisher fails to repay the loan, India Global can sell the collateral kept by Kingfisher to secure the loan from ICICI Bank. If the value of the underlying collateral is worth Rs 100, India Global stands to make a gain of 25 per cent on its investment of Rs 80 by selling the securities for Rs 100.

The true financial management!!!!

Rules for non-bank ATMs

The Reserve Bank of India (RBI) today stipulated that non-bank entities wanting to establish automated teller machines — known as white label ATMs (WLAs) — must have a minimum net worth of Rs 100 crore.

It also set stiff targets in terms of how many such money dispensing machines need to be installed.

It may be recalled that the central bank had come out with draft norms on white label ATMs in February. Announcing the final guidelines today after seeking views from banks, public, ATM network operators and non-bank entities, the RBI said non-bank entities, known as white label ATM operators (WLAO), would have to maintain a net worth of Rs 100 crore at all times.

The apex bank said while the WLA operator was entitled to receive a fee from the banks for the use of ATM resources by the bank customers, they could not charge the customers directly for the use of WLAs. Further, the current guidelines on five free transactions in a month as applicable to bank customers for using other bank ATMs will be inclusive of the transactions effected at the WLAs.

While the authorisation for setting up a WLA operation will be initially for one year, the central bank set tough targets as regards the number of such machines that can be installed. Non-bank entities can choose from three schemes.

Under the first scheme, they will have to establish at least 1,000 WLAs in the first year. In the next year, the number will have to be at least twice those established in the first year. In the third year, it will have to be three times the number set up in the preceding year. For every three WLAs installed in tier III to VI centres, they will be allowed to establish one outlet in tier I and II centres.

According to the second scheme, a minimum of 5,000 WLAs will have to be installed every year for three years. Under the third scheme, the entity will have to set up at least 25,000 WLAs in the first year and at least another 25,000 in the next two years.

At present, only banks are permitted to set up ATMs.

According to the RBI, though there has been a 23-25 per cent year-on-year growth in the number of ATMs (over 90,000 now), they have been largely been deployed in Tier I and II centres.

Tax relief for more services

Fourteen more services have been put on the negative list for the purpose of taxes as the government streamlines the administrative procedures of this vital revenue source in its bid to usher in a goods and service tax regime in the country.

The negative list includes those services that will not pay the 12 per cent levy. The new entrants to the roster that take the total list to 38 include advocates serving entities with a turnover of up to Rs 10 lakh, and libraries and entities providing public conveniences. The new negative tax regime will come into effect from next month.

According to the guidance note on the implementation of the negative list of service tax released by finance minister Pranab Mukherjee today, the entities providing merger and acquisition services, too, will be kept out of the ambit of the tax net.

“The new approach to taxation of services is intended to take the country and the economy a step closer towards the introduction of goods and service tax,” Mukherjee said while releasing a 107-page book — Taxation of service: An Education Guide.

Mukherjee said that with the expansion of the service tax base, it would be possible for “the Central Board of Excise and Customs to exceed the collection target of Rs 1.24 lakh crore in the current fiscal”.

The government has collected Rs 97,000 crore by way of service tax in the last financial year. For the current year, the government has hiked the service tax rate by 2 per cent to 12 per cent.

According to the service tax guide, the 14 new services, which will be exempted from payment of tax include services provided to the government, local authorities or a government authority for the repair and maintenance of an aircraft.

It said services provided by way of public convenience such as provision of facilities of bathrooms, washrooms, urinals or toilets would be on the list.

The other services, which would be exempted from tax, include auxiliary educational services and renting of immovable property provided by educational institutions in respect of education.

Expensive Banking service

Banks have increased the service charges as the RBI has imposed several conditions on services, such as the daily interest payment and 5 free ATM transactions.

As a result, the interest outflow of banks has increased and added to the cash flow.

This has to be recovered...

Just go through the link below-

Expensive Banking services

Try to avoid loan against your insurance policy.

Many people for various reason do not want to continue paying their insurance premiums and think of discontinuing their insurance policies.

While for some, the reason for discontinuing their policy would be a scramble for cash, for many others, it would be a sudden realisation that their policy is offering very low returns. 

However, many do not know that if you have not paid your insurance premium for three continuous policy years, you do not get anything back from your life insurer.

So, before buying a policy, you should assess your financial ability to pay your future premiums. You should separate your investment and insurance needs. 

Insurance is not an investment avenue and should not be bought for high returns.

Why is it so?

When a life insurance policy is in force for a minimum of three years, it would acquire a cash value.

The cash value is the savings portion of a life insurance policy. It is derived when your premium payments are more than the cost of insurance, whereby, the excess goes into a cash value account and draws interest.

If you decide to surrender your life insurance policy, the insurer will pay you the cash value, also known as surrender value. You will, however, suffer a loss if you surrender your policy before the maturity period.

Surrender value of a traditional insurance policy:

Surrender value of a policy is the amount you would receive from the insurance company if you surrender the policy to the company before its expiry.

That is, if you want to discontinue (or cancel or terminate – it has different names) a policy before it matures, this is the amount you would receive from your life insurance company.

The surrender value is paid to you at the time of discontinuation of the policy.

The surrender value consists of a portion the premiums paid by you, plus any bonuses accrued.


The surrender value is calculated by the insurance company depending upon the time for which the policy was in effect (the age of the policy), the total duration of the policy, the premiums paid and any bonus accrued.

Surrender value also takes into account any accrued bonuses, but after reducing them by a factor called “surrender value factor”. The surrender value factor depends on the number of premiums paid and remaining.

The policy needs to be in force for at least 3 years before it attains a surrender value. That is, you need to have paid premiums for at least 3 years before you can surrender the policy. Thus, if you surrender the policy after say 2 years, you would lose the premiums paid.

The company may have a condition of minimum years before any bonuses are paid as a part of the surrender value.

In the initial years (say when the policy is 4-5 years old), the surrender value of an insurance policy is usually quite less. This is to discourage you from withdrawing early from your insurance, which is actually a long term contract between you and the insurance company.

Due to high initial costs, a traditional insurance plan does not have a surrender value in the first three years. 


The amount of surrender value will differ across insurance companies and depends on factors such as number of premiums paid and for how many years, full tenure of the policy, type of plan (money back, whole-life plan, endowment plan), and the bonus accrued on the plan.

Most insurers pay the guaranteed surrender value, usually equal to 30 per cent of all the premiums paid minus the first year’s premium, and all premiums in respect of optional rider, if any.

Insurers also offer a special surrender value, or a non-guaranteed surrender value, which depends on the sum assured, bonus, policy term, number of premiums paid, and is higher than the minimum guaranteed surrender value.

In a money back plan, the surrender value will be very low because money is paid to the policyholders in frequent intervals. 


Similarly, in a whole life plan, the maturity tenure is very long and, therefore, the surrender value gets reduced as you have to discount for a long period.

Compared with whole-life and money back plans, endowment plans have a higher surrender value. Most traditional single premium plans pay around 90 per cent of the premium as surrender value, excluding premium for optional rider and extras, if any.

Also, although, in case of single premium policies, the surrender value is accrued immediately, you get the money only after three years.

It is to remember that term insurance plans do not have any surrender value.

Surrender value of Ulips:

Unit-linked insurance policies (Ulips) are a combination of investment and insurance. The insurer will take into account the present net asset value (NAV), number of units left, sum assured and several other factors to decide the surrender value.

Since the major portion of your premium is deduced as charges in the initial years of an Ulip policy, it makes surrendering an Ulip before five years a loss proposition.

Since Ulips have a lock-in of five years, the surrender amount will only be paid after five years from inception of the policy and there will be surrender charges.

With the volatility in the stock market’s today, many who invested in a Ulip in the past one year, are seeing their fund value negative.

Many frustrated policyholders would be thinking of surrendering their plans. In such a case, where your fund value is negative, you should wait till the fund value improves. 

So, pay the premium for three years and then surrender. You can also make partial withdrawal  if allowed in the policy term and invest in some other financial instruments.

Also, remember that Ulips do not have a loan facility.

Using the option of taking a loan against your policy:

To get the loan value, one should know the surrender value, which is dependent on paid up value of the policy.

Paid up value:

Paid-up Value is the reduced amount of sum assured paid by the Insurer, in case the Insured discontinues payment of premiums. This is applicable only when the Insured has paid the premiums in full for the first three years.

1)In a money back plan, the surrender value will be very low as money is paid to the policyholders in frequent intervals 

2) In a whole-life plan, the tenure is very long and, therefore, the surrender value gets reduced as you have to discount for a long period 

3) Compared with whole-life and money back plans, endowment insurance plans have a higher surrender value 

4) Since Ulips have a lock-in period of five years, the surrender amount will only be paid after five years from inception of the policy 

5) In such a case where your see the fund value to be negative, you should wait, pay the premium for three years and then surrender 

Paid up value available at maturity or death = No of premiums paid x sum assured/number of premiums payable.

Unless, you are sure that you will pay back the loan on your policy within a year please do not take a loan.

Also, never take a loan on a paid up policy as you are not paying a premium. So, the surrender value of your paid up policy will not rise as fast as the interest on the loan.

Usually, the interest and the loan amount will become more than the paid up value of the policy in two years. As a result, the insurance company will cancel and forfeit your policy.

If you are sure of paying back the loan fast, then this option can be exercised as the interest rate is 9-10 per cent, compared with a personal loan, which will come at 15 per cent interest rate.

Your loan amount will be maximum 90 per cent of the surrender value.

Compulsory disclosure of overseas assets irks taxpayers

Filing of income tax returns has become more complicated from this year for those having bank accounts or any other assets overseas. The government has made it compulsory for Indian as well as expatriate resident individuals to disclose their overseas assets.

"The overseas assets will not be taxed, but it is an additional hassle for taxpayers," said Neeru Ahuja, partner, Deloitte Haskins and Sells.

Apart from the additional hassle, Ahuja said, expatriate resident individuals find it as an intrusion into their privacy.

"Many people are complaining. Expatriates who have come here to work even for a short period are required to disclose assets back home. It is an intrusion into their privacy," Ahuja told IANS.

The Central Board of Direct Taxes (CBDT) recently notified the new tax return forms for the tax year 2011-12 or assessment year 2012-13, mandating disclosure of foreign assets. In the tax return forms called ITR 2/3, a new section called 'FA' (Foreign Assets) has been introduced to disclose foreign assets.

As per the notification, individuals having taxable income exceeding Rs.1 million (nearly $20,000) and domestic and expatriate resident individuals with assets located overseas have to file their returns through the electronic mode.

"Resident individuals are required to file tax returns in India irrespective of whether they have income chargeable to tax in India or not," said Ahuja.

As per the Finance Bill 2012, resident individuals having assets, including financial interest in any entity located outside India are required to furnish tax returns electronically from financial year 2011-12 onwards giving complete details of such assets.

In other words, income is not the only criteria to file an income tax return in India now. Those resident individuals who have assets outside the country are compulsorily required to file income tax return, irrespective of whether they have any income generated in India or not.

The government has made disclosure of foreign assets mandatory in a bid to trace black money, which has become a big political issue in the country.

Although there is no official figure, some private research puts quantum of illicit money held by Indians to the tune of $1.4 trillion.

The government recently released a white paper on black money, but did not give any estimate.

The government argues that the mandatory disclosure of foreign assets is aimed at preventing generation and circulation of unaccounted money and tracking undisclosed assets.

However, such a disclosure could cause undue hardship to individuals, especially the expatriates' family who qualify as residents due to physical presence in India. For example, spouses of foreigners who work in India or Non- Resident Indians (NRIs) returning to India will invariably need to make disclosures of their foreign assets.

"It is not clear how the additional information may be used, but it will cause hardship to genuine tax payers," said Ahuja.

Courtesy-http://timesofindia.indiatimes.com/nri/other-news/Compulsory-disclosure-of-overseas-assets-irks-taxpayers/articleshow/13897750.cms

Relief in Home loan

The RBI today asked banks to immediately stop charging penalty on the prepayment of home loans taken on floating interest rates.

The apex bank said the Damodaran committee on customer service on banks had observed that foreclosure charges on home loans were resented by borrowers.

This is particularly so considering that banks were found to be hesitant in passing on the benefits of lower interest rates to the existing borrowers in a falling interest rate scenario.       

The removal of the charges or penalty will lead to a reduction in the discrimination between existing and new borrowers. Besides, the competition among banks will result in a finer pricing of floating rate home loans.       

Some banks were charging prepayment penalty of 1-2 per cent of the outstanding loans.

In the monetary policy for 2012-13, the RBI had proposed “not to permit” banks to levy the charges. It had said detailed guidelines would be issued separately.       

Earlier, the National Housing Bank had directed all housing finance companies to desist from imposing a prepayment penalty.

Buying gold in India

Apart from gold ETFs and gold monthly income plans there is a more direct way to invest in gold. That is by buying gold coins. I use the word direct because you buy physical gold, and don’t have to pay fees to the middle-man, thereby eliminating at least one layer in between.

The flip – side is that you will have to store physical gold with you, but most of you would have bank lockers to store jewelry anyway.

Here are a few things you should know about buying gold coins in India:

1. Reputed banks sell gold coins: The most important thing to me is that reputed banks like SBI also sell gold coins, and that reduces the chances of fraud, and someone selling you something which is of less purity than they claim. 

A lot of banks have entered this space, and they sell gold coins through their branches. Not every branch will sell you gold coins, so you need to go to the bank’s website and find out the closest branch that will do so.

2. Different sizes: Gold coins are available in different sizes, so you can buy the ones that suit your needs the most. The usual sizes are coins of 2, 4, 5, 8, 10, 20 and 50 grams. The coins are 24 carats, and the banks guarantee their purity too.

3. PAN needed if you are buying gold coins worth more than Rs.50,000: If you plan to buy gold coins worth more than Rs.50,000 then the bank will ask you for your PAN details. I don’t think a jeweler will ask for similar documentation, and that might be one reason to go to a jeweler to buy a gold coin.

4. Banks won’t buy – back your gold coin: I have not seen any banks that you can sell your gold coins to. They are happy to sell you their gold coins, but you can’t go to them and sell it back to them. You will have to sell the gold coins to the jeweler, and this is probably another reason for buying gold coins from jewelers in the first place.

5. You might pay a premium for buying gold from a bank: Now, I started off extolling the virtues of buying gold coins from reputed banks, and I will end this post by mentioning that if you compare prices between your local jeweler and some banks – you might find a difference.

There will be a difference even when they guarantee the same purity. A lot of people think that this premium is worth it because the price is higher when you go to sell the gold, but that is not always true. 


You don’t get this premium while selling off your gold coin. In effect, buying gold coins from your jeweler might turn out to be cheaper than buying it from a bank. It is up to you to decide whether the difference in price is worth it to you or not.

These were just some points that you should keep in mind while buying gold coins – I am going to write more about this topic in the future because a lot of people are interested in this, and would love to hear if any of you have had any experience with buying gold coins.

Kingfisher loss mounts

Kingfisher Airlines has suffered its worst quarterly loss at Rs 1,151.52 crore during the January-March period of 2011-12. The losses have more than tripled from Rs 355.54 crore in the year-ago period.

The fourth-quarter losses contributed to almost 50 per cent of the Vijay Mallya-owned airline’s losses for the fiscal ended March, which stood at Rs 2,328 crore (Rs 1,027.4 crore).

“The company has a focused fleet re-induction plan and hopes to be back to full-scale operations in the next 12 months backed by a recapitalisation plan that the company is actively pursuing and confident of achieving,” Kingfisher said.

The Kingfisher scrip fell as much as 8 per cent to a new low in morning trade.

The shares have plummeted over 73 per cent from its all-time high of Rs 44.30 on June 8, 2011.

The airline has never made a profit since its inception in May 2005. “Operational cost savings were offset by a steep hike in fuel prices and sharp depreciation of the rupee, which negatively impacted over 70 per cent of the cost base,” Kingfisher said in a statement.

During the quarter, income from operations stood at Rs 741.28 crore against Rs 1,626.65 crore during the same period of the previous fiscal.

The airline has been facing a rough weather for about a year, burdened by a debt of about Rs 7,057.08 crore.

New health cover

Health insurance must be provided to people up to 65 years, and all mediclaim must be settled within a month.

In its draft norms, the Insurance Regulatory and Development Authority has also stated that an insurer must say in writing the grounds for refusing to provide a policy.

The norms come more than a year after consumer rights activist Gurang Damani filed a public interest litigation in the Bombay high court against the regulator pertaining to the settlement of medical insurance claims.

Insurers will have to provide cashless facility to policyholders undergoing treatment in a particular hospital even after it is removed from the list of preferred service providers.

Insurers should ensure that empanelled hospitals — where cashless facilities are offered — are spread across different cities and not confined only to the metros.

The draft also talks about portability, under which a policyholder can migrate to another insurer, without losing any benefit.

It has also proposed special provisions for senior citizens.

All the terms and conditions in the policy document have to be explicitly spelled out in a simple language.

Insurers will have to take into account any cumulative bonus that has accrued to the policyholder to determine the sub-limits on various expenses.

Till now, insurers used to consider only the initial sum assured to determine the sub-limits on expenses such as hospital room rents and daily ICU allowance.

Non-life insurers issuing policies will have to reimburse the policyholder 50 per cent of the medical examination cost prior to providing a cover. If the policy is issued by a life insurer, it will have to bear the entire cost of the check-up.

Insurers will also have to disclose in the policy document any loading charged on the premium through a pre-defined table.

If the individual claim experience for each of the three preceding years is more than 500 per cent of the premium at present, the insurer will load the renewal premium according to the table. A hike in premium must be mentioned in writing and properly justified.

Policies will now cover non-allopathic treatments, provided they are obtained from a government or an accredited hospital.

NAV calculation formula

As stipulated by IRDA, the Net Asset Value (NAV) computation formula for Linked Funds stands modified effective August 18, 2011

Old Formula: (As prescribed by IRDA and as Stated in the policy document) The basis used for calculation of NAV would be the Appropriation Price and Expropriation Price. The Appropriation Price shall apply in a situation when the company is required to purchase the assets to allocate the units at the valuation date  The Expropriation Price shall apply in a situation when the company is required to sell assets to redeem the units at the valuation date.  The NAV per unit of each Investment Fund will be calculated as per the prevailing IRDA guidelines mentioned below When Appropriation Price is applied: The NAV shall be computed as:  (Market Value of Investments held by the fund + The Expenses incurred in Purchase of the Assets + Value of Any Current Assets + Any Accrued Income Net of Fund Management Charges - Value of any Current Liabilities - provisions, if any)  Divided by the number of units existing at valuation date (before any new units are allocated) When Expropriation Price is applied: The NAV shall be computed as: (Market Value of Investments held by the fund - The Expenses incurred in Sale of the Assets + Value of Any Current Assets + Any Accrued Income Net of Fund Management Charges - Value of any Current Liabilities - provisions, if any) Divided by the number of units existing at valuation date (before any new units are allocated) Modified Formula: (As stipulated by IRDA effective August 18, 2011) (Market Value of Investments held by the fund + Value of Any Current Assets - Value of any Current Liabilities & Provisions, if any) Divided by the number of units existing at valuation date (before creation or redemption of any units) Please note that the above change is effective 18th August 2011 and all the policy contracts issued by us (linked funds) stands modified to the above extent.

Stricter prepaid SIM card rules

The Supreme Court today set up an expert panel to examine the feasibility of imposing stricter norms for selling prepaid SIM (subscriber identity module) cards. Two members each from the Telecom Regulatory Authority of India (Trai) and the department of telecom (DoT) will be the members of the committee, which will submit its report in three months, said a bench of Chief Justice S.H. Kapadia. The DoT will then consider the recommendations. In 2010, the department of telecom, in consultation with the home ministry, had issued mobile connection guidelines, which called for strict adherence to the customer acquisition form while issuing SIM cards. However, mobile firms have been unable to adhere to the strict rules, which emphasized on updating the subscriber details in their database and activation of the SIM only by authorized persons. The rules also required companies to revivify subscribers when they changed their tariff plans. Also no customer shall be given more than one prepaid or post-paid connection. If an individual wants more than one connection, the person has to give reasons. Last month, the telecom regulator had argued in favour of easing of the guidelines, pleading before the Supreme Court that the new norms will put “unnecessary burden” on operators as well as subscribers.

Schroder buys 25% of Axis mutual arm

Axis Bank today sealed an agreement to sell a 25 per cent stake in Axis Asset Management Company Ltd (Axis AMC) — its wholly owned subsidiary — to Schroder Singapore Holdings Private Ltd.

Schroder Singapore is a wholly owned subsidiary of global asset management firm Schroders, which had funds worth £187.3 billion under management as of December 2011.

The deal is subject to regulatory approval and is likely to be completed this year.

The deal provides Axis AMC access to Schroders’ global distribution network.

Profit surges

Axis Bank has clocked a 20.3 per cent rise in net profit at Rs 1,277.27 crore for the fourth quarter ended March 31 against Rs 1,020.11 crore in the same quarter last fiscal.

Total income grew to Rs 7,647.94 crore from Rs 5,817.06 crore a year ago.

Interest income improved to Rs 6,060.32 crore from Rs 4,366.6 crore last year.

The bank has proposed a dividend of 160 per cent, or Rs 16 per share, for 2011-12.

For the entire fiscal ended March, net profit grew 25 per cent to Rs 4,242.21 crore from Rs 3,388.4 crore last year.

Tax relief hope for PE funds

The finance ministry seems to have accepted the arguments of private equity funds that they are subject to the same rate of capital gains tax as foreign institutional investors.

Investments of private equity funds in unlisted firms are currently taxed at 20 per cent, while foreign institutional investors pay half of that rate.

It is anticipated that fresh amendments to the finance bill were likely once Parliament takes it up.

India’s proposed general anti-avoidance rules (GAAR), which stop funds from abusing the zero tax status of countries such as Mauritius, while playing on Indian bourses have unnerved the private funds.

GAAR, brought in this year’s finance bill, allows tax authorities to declare any business deal to be an “impermissible avoidance arrangement” if part or whole of the deal has been crafted with the intention of obtaining “tax benefits”.

The move to tax PEs on a par with FIIs was in the works for some time.PE firms, including big names such as Carlyle, Khazanah, Temasek and Warburg Pincus, reportedly sold off shares worth over $1.8 billion in the first three months of 2012, much of it after India announced that it would implement GAAR in the future.

The government would continue to reiterate through policy pronouncements that FIIs who had “substantial commercial interests” in any tax haven would continue to benefit from low or zero tax regimes of these countries as provided by the direct tax avoidance agreements signed with them.

“DTAAs will continue to be valid and are not being sought to be over-ridden,” as per the blog source.

The government will also make it clear that there will be no short- or long-term capital gains taxes for participatory note holders. There were apprehensions that participatory notes would be taxed under the new GAAR rules.

As per the finance ministry, the trading of participatory notes just led to the change of hands of a contract note or a derivative — underlying assets or shares in India do not change hands.

They wanted to set at rest “worries” of participatory holders who have as much as $20 billion of Indian stock assets in their portfolios.

Many investors, who want to test Indian stock markets or who wish to play without the bother of registering themselves with Sebi use these participatory notes, which are certificates with underlying Indian shares.

It’s estimated that FIIs have invested about 10 per cent of their approximately Rs 10,00,000-crore portfolio in India through participatory notes.

IFSC CODE

What does IFSC mean? 

Indian Financial System Code (IFSC) is an alpha-numeric code that uniquely identifies a bank-branch; it’s an 11 digit code.

• The first 4 alphabetic characters represent the bank.
• The 5th character is 0 (zero).
• The last 6 characters represent the branch.

IFSC is used by the NEFT system to identify the originating bank branch and also to route the messages appropriately to the concerned bank branches.

List of IFSC codes, branch wise is available with RBI:

http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=2009

RTGS VS NEFT

There has been a lot questions about the differences between a RTGS and a NEFT money transfer, get all your doubts clarified here.

Employee Provident Fund

Your ever elusive Employee Provident fund balance can now be checked online, here's how...

A lot of us do not have even an idea on how much money we have in our Employee Providend fund account (EPF) . So in this post we will see how one can check his EPF balance online and get the details back through sms . Earlier I used to search a lot on checking EPF balance online and I came across some links , but most of them never worked. But few months back I successfully got sms with my EPF balance. Let me show you that.

http://www.youtube.com/watch?v=Gc2FyJo6g9I&feature=player_embedded

How to check your EPF balance status online

• Go to this EPFO website link
• There will be a link below the page to check your status online , click on that (direct link)
• You will see a drop down there to select the PF Office State ( like Maharashtra, Karnataka , Delhi etc) . Select your PF office .
• Once you select the State , you will see a list of different cities office, like for Karnataka , you can see one of the options as “Bangalore” along with the “data available upto” date , so you can get your EPF balance till that date only .
• Choose the city office
• You will be taken to the page where you will have to fill in EPF account number , Your Name and mobile number and Submit.

How to enter your EPF account detail ?

For an example lets say Manish Chauhan worked in Bangalore and had a  EPF account with number KN/62345/876 . This name “Manish Chauhan” is the name appearing in EPF slip .

In that case 62345 will be the Establishment Code (which will be first blank column) and 876 will be the account number (third column) . The second column will be blank in most of the cases , it’s actually the sub code or extension of the establishment code.

Important Points

• Note that the name should be exactly same as it appears in EPF slip
• The office and state have to be selected properly , In a single start there can be many offices , make sure you choose the right one.
• The SMS can come a little late , so please be patient
• The amount can be only upto a certain date which will be mentioned in the SMS

Can you share if you have are waiting for your EPF money from long time ? Are you facing problem in getting right information on why your EPF money has not reached you ?

PAN explained

PAN is a 10 digit alpha numeric number, where the first 5 characters are letters, the next 4 numbers and the last one a letter again. 

These 10 characters can be divided in five parts as can be seen below. 

The meaning of each number has been explained further.

1.        First three characters are alphabetic series running from AAA to ZZZ

2.        Fourth character of PAN represents the status of the PAN holder.
•          C — Company
•          P — Person
•          H — HUF (Hindu Undivided Family)
•          F — Firm
•          A — Association of Persons (AOP)
•          T — AOP (Trust)
•          B — Body of Individuals (BOI)
•          L — Local Authority
•          J — Artificial Juridical Person
•          G — Government

3.       Fifth character represents first character of the PAN holder’s last name/surname.

4.        Next four characters are sequential number running from 0001 to 9999.

5.        Last character in the PAN is an alphabetic check digit.

Nowadays, the DOI (Date of Issue) of PAN card is mentioned at the right (vertical) hand side of the photo on the PAN card.