RBI penalises SBI for violation of norms PTI

The Reserve Bank on Wednesday said it imposed a fine of about Rs. 5.60 lakh on the State Bank of India (SBI) for violation of currency chest norms.

“The Reserve Bank of India has imposed a penalty of Rs. 5,62,555 on July 12, 2013, on SBI for violation of the terms of agreement with RBI for opening and maintaining currency chests,” the central bank said in a statement.

The penalty was levied in connection with deficiencies and lapses in the operation and maintenance of the currency chest at the Secunderabad branch of SBI, it said.

Last month, the RBI had imposed a penalty of Rs. 3 crore on SBI for violating know your customer (KYC)/anti-money laundering norms.

The penal action by RBI was taken after an online portal alleged violation of KYC norms and money laundering by banks and financial institutions.

“After considering the facts of each case...Reserve Bank came to conclusion that some of the violations were substantiated and warranted imposition of monetary penalty...” the central bank had said in a statement.

It is anticipated that financial sector entities had offered to open bank accounts and lockers for customers without following KYC norms, convert their black money into white and obtain fictitious PAN cards.

Those named in the expose include SBI, LIC, Punjab National Bank, Bank of Baroda, Canara Bank, Reliance Life, Tata AIA, Yes Bank, Indian Bank, Indian Overseas Bank, IDBI Bank, Oriental Bank of Commerce, Dena Bank, Corporation Bank, Allahabad Bank, Central Bank of India, Dhanlaxmi Bank, Federal Bank, DCB Bank and Birla Sun Life.

ATM woes top banking grievances

Hundreds of complainants aggrieved by shortcomings in banking services found their grievances redressed within a short period of two months, thanks to the Office of Banking Ombudsman (OBO), Chennai. About 96 per cent of the complaints from individuals ranged from non-dispensation of cash at ATM outlets despite their savings bank account getting debited, inordinate delay in returning the fixed deposit account of a deceased person to the guardian, failure to return title deeds, delay in sanctioning of loans or rejection of them without a valid reason and giving of wrong advice to bank customers, among other issues. Ten banks accounted for 75 per cent of the complaints. While cash transactions-related issues were resolved with the help of CCTV cameras installed at the ATM outlets, the other issues were resolved by inspecting the documents available with the respective banks. In a specific case, an individual had refused to file a complaint when he came to know his ATM card was misused by a relative. Sujatha Elizabeth Prasad, Chief General Manager, Banking Ombudsman Chennai, said: “Most of the problems arose due to lack of financial literacy among the customers. We are going to places where the awareness is low.” 

All Business Stalwarts are in the race for “Bank” business

Tata, Birla, Ambani... all the marquee names of India Inc want to float a bank.

The Reserve Bank of India (RBI) said it has received 26 applications from industrial houses such as Tata Sons, public sector units and non-banking financial companies for bank licenses, the last of which were handed out a decade ago.

India Posts has also applied, perhaps offering the most compelling case in terms of network — something that can overwhelm the spread of State Bank of India, India’s biggest commercial lender.

The RBI was earlier not too keen to hand out licenses to companies with exposure to broking or real estate. However, these restrictions were removed in its final guidelines.

The RBI is expected to give not more than two to three licenses before the end of this financial year.

Several industrial houses have applied through their NBFC arms. These include Reliance Capital steered by Anil Ambani, Aditya Birla Nuvo run by Kumar Mangalam Birla, Indiabulls Housing Finance and Bajaj Finserv.

Videocon Group applied through its arm Value Industries, while the Pawan Ruia Group, which owns tyremaker Dunlop in India, has applied through Suryamani Financing Company.

Micro financiers such as Bandhan Financial Services and Janalakshmi Financial Services have also applied for a licence.

Among companies with a sizable exposure to capital markets, India Infoline and Edelweiss Financial Services have applied.

The guidelines to set up a new bank need 10 years of financially sound and successful track record and minimum paid-up equity capital of Rs.500 crores. The new bank must have at least 25% branches in non-banked rural areas and get listed in three years.

RBI opened window for new banks after a decade of granting licenses to Yes Bank and Kotak Mahindra Bank. There were few others who were granted the license to set up a bank but they failed.

Among the more unknown names are UAE Exchange & Financial Services, a remittance company and INMACS Management Services, a consulting and advisory firm.

Mahindra & Mahindra Financial Services opted out of the race last week saying the guidelines were too tough and expensive for NBFCs.

New Passport Application Process

With effective from 21st June, 2013, Government of India has changed the process of applying for Passport & Launched an Online Payment System for Passport Applicants!!

New Process & step by step process here: http://bit.ly/11uvJLL

Mediclaim premium rates going to hike

All medical insurance providers in India are going to increase the premium rate very soon once they got the nod they have already applied from IRDA to offset losses. The hike could be between 20 and 40 per cent. General insurers, both from private and public sector, had reportedly approached the regulator for 10-40 per cent revision in health insurance tariff to protect losses.

Audi bets on Q factor to drive sales

Audi India is looking to strengthen its Q range of cars by bringing in an upgraded Q7 next year followed by the Q2.

“Forty per cent of our sales are from the Q range, which include the Q7, Q5 and Q3. It will grow to 45 per cent this year when we have the Q3 having a full run,” company head Michael Perschke said at the inauguration of a company showroom at Bhubaneswar.

Though Audi will introduce the A3 next year, it is not thinking of bringing its hatchbacks. “I don’t think selling luxury hatchbacks in the Rs 20-25 lakh range is going to be very lucrative because if you add bells and whistles to it, the price rises to Rs 26 lakh with which you can buy the Q3,” he said.

The strategy is in contrast to that of Mercedes, which is slated to launch the A-Class hatchback, and BMW, which is planning to bring in its 1 series.

At present, Audi assembles the A4, A6 and the Q3 at its Aurangabad facility where it has invested 30 million euros for five years. It will start assembling the Q5 and the Q7 from July.

“This covers 90 per cent of our sales and so I am deriving the maximum cost benefit from local production. We are producing 10,000-12,000 cars on a single shift per annum. The facility has a capacity of 18,000-20,000 units. We will achieve that in terms of sales by 2015,” Perschke said.

The company has set a sales target of 10,800 cars this year after securing the No. 1 position with sales of 9,350 units in 2012-13 and 2,616 units in the first quarter of 2013.

Rivals BMW and Mercedes sold 8,416 and 7,239 cars, respectively, in the last fiscal. In January-March, BMW sold 1,410 cars, while Mercedes sold 2,009 cars.

Last year, Audi India had a 31 per cent share in the premium segment, which grew by 29,000 units. Racing ahead of its rivals with a 63 per cent growth last year, the company will be happy to post a growth of 15-20 per cent this year, Perschke said.

“Despite the high interest rates, depreciating rupee and rising input costs, the macro-economic conditions in India are good and we are looking to sell as many units (i.e. 30,000 units) that we sell in Japan today by 2020 or even more,” he said.

Courtesy- http://www.telegraphindia.com/1130525/jsp/business/story_16935781.jsp#.UaC6Q7WnxmA

Google tool to tackle your digital afterlife

What happens to all of your digital stuff after you die?

That is the existential question that Google is trying to address with a new dashboard for users of Gmail, Google+, Drive, Picasa and other Google services.

Google calls it the “Inactive Account Manager” and it’s a new way to manage your digital afterlife. It allows you to specify what you'd like to have happen to your data after you die or become inactive for an extended period of time, say after three, six, nine or 12 months. (Google will send a text message and an email before taking action).

You can have different directives for different products. You can delete all those cat videos you viewed on YouTube but save your family photographs for posterity on Picasa.

“We hope that this new feature will enable you to plan your digital afterlife — in a way that protects your privacy and security — and make life easier for your loved ones after you’re gone,” Google product manager Andreas Tuerk said in a blog post.

The Inactive Account Manager — “not a great name, we know”, Tuerk’s post acknowledges — can be found on your Google Account settings page.

Google has come up with a technology solution to a matter of hotly debated public policy.

Lawmakers across the country have begun to consider digital property legislation as survivors complain they can only gain access to their loved ones’ digital affairs with a court order.

Congress may also take up the issue.

Many Internet service providers do not allow people to hand over control of their accounts to their heirs even if they make that request in their will. Google still doesn’t hand over control of accounts after death; it just hands over the data.

It’s unclear if other Internet companies will roll out similar afterlife tools. Facebook has wrestled with how to confirm that users have in fact died and how to let survivors turn that person’s page into a memorial. All that grim talk about death and dying brought out some gallows humour in the comments section.

Quipped Terry Cameron from Fort St John, British Columbia: “Love this. Can you let me post from the grave as well? Heh.”

Courtesy: by JESSICA GUYNN, LOS ANGELES TIMES

Start export or Import business

If you are going to start export or Import business of goods or service and both are required certain approval and registration with Reserve Bank of India, Custom Department, Central Excise, Service Tax and Value Added Tax / Central Sales Tax Department.

These departments imposed certain conditions to avail tax exemption one of important condition is to obtain registration with the Controller of Foreign Trade. So, it is important to oblation registration with the Controller of Foreign Trade, which is called Import Export Code Number.

Before planning exporting goods or services, a business man or tax advisor should ensure registration otherwise take following steps prior to start export, import of service and goods:

1. Before starting any business a person should decide character of business entity, which may be one of the following legal entities:

a. Proprietorship

b. Partnership

c. A.O.P. (Association of Person) or body of individuals (incorporated or not)

d. H.U.F.(Hindu undivided Family)

e. Trust

f. Cooperative Society

g. L.L.P. (Limited Liability Partnership)

h. Private Limited Company

i. Public Limited Company

Proprietorship is an oldest and most independent method of doing business. The proprietorship business commencing under the seal and signature of individual, with the individual’s name or any other name as the individual take decision.

Partnership firm is governed by the Indian Partnership Act, 1932. Indian Partnership Act prescribe minimum and maximum limit of partners. Partnership firm can be formed with two individuals but maximum limit of partners shall not be more than twenty.

It may start from any specific date and determinable at/on specific date or at will. The partnership firm is run under an agreement between partners; it is always favorable to reduce in writing on specific stamp paper which is differing from State to State. Although Partnership deed’s registration is not mandatory but registration with registrar of Firm is always good and preferable.

A.O.P. is an abbreviation of Association of Person, although it is not governed by any specific law but it form by an agreement between the member of A.O.P. It is more and less as a partnership firm. The agreement shall be registered with sub registrar. A.O.P. performs business collectively for specific purpose. The Income Tax Department recognizes A.O.P. and its taxable rate is as an individual.

H.U.F. is an abbreviation of Hindu Undivided Family, Generally, Indian people except Jain Sikh, Muslim and christen or having faith in any other religion except Hindu are eligible to form H.U.F. It is recognized by the Hindu Law.

It is recognized by the Income Tax department and other business related Indian Department as a separate legal entity. It managed by a eldest male member of the family called KARTA and other member of the H.U.F. is called Coparcener. Coparceners are those members of the HUF, who can ask their share from the HUF property or business and eligible to form H.U.F. individually after marriage with Hindu girl.

One or so many settlers can settle trust, which is managed by the trustees. Trusts are two type one Public Charitable Trust and Private Discretionary Trust. It is misapprehension that the trust can run only charitable, social and educational activity.

Charitable, social and educational activates are performed by the public Charitable trust. Any organization could not perform such activities without financial resources and then there is no harm in doing business activity. In my opinion for attaining the purposes/ objects trust can perform business activities also.

Before, settling a trust, setter should keep in mind that the trust cannot dissolve but can be merge/ amalgamate with the trust having similar objects. Trustees could not get financial gains from the trust property or business otherwise may lose Income Tax Exemptions.

Cooperative Society is greatly unique method of doing business or work. Co-operative Societies main purpose to do work/ business collectively with limited capital resources and expertise of its member.

There are two levels of Societies, one is governed by the Multi State cooperative Societies Act, 1984, it is central act extended to whole of country and the society registered in this act can work at national level (All Indian State) with the head/ principle office at one place.

Another is State level Act like The Delhi Cooperative Societies Act, 1972. Societies registered at state level are confined with one state. Cooperative Society can form with minimum seven members and there is no upper limit. Members of the Society are called shareholder with the limited liability and its registration is mandatory.

Limited Liability Partnership is a newly introduced concept in India in the year 2008. It is central Government Act namely the Limited Liability Partnership Act, 2008 and its rules are the Limited Liability Partnership Rule, 2009. During formation of Limited Liability Partnership, it require to get reservation of its name and then to file all papers electronically as well as heard copy of papers along with the prescribe fee.

Private Limited Company is an artificial creation of a judicial person governed by the Indian Companies Act, 1956. It is Central act. A Private limited company can be formed with minimum two people or artificial persons and maximum limit is fifty. Capital is divided into shares duly subscribed by its shareholder; they may be friends and family members. Share holder can get profit by way of dividend. Its registration is mandatory. First of all its name is approved by the Registrar of companies and then file papers along with prescribe fee by the promoter director.

Public Limited Company is more or less same as the Private Limited Company it is formed under the same act but it required minimum numbers of promoters are Seven and there is no maximum limit of shareholder. It is differently managed from Private Limited Company, after its formation, it requires to obtain commencement of business certificate.

It is advisable before deciding character of the business entity one must take serious consideration about its name, its partner/ member and shareholders because these people pay significant role in running the business. Secondly, Government compliances should be minimum.

2. The second step is to obtain PAN card from the Income Tax Department. In case it is proprietorship, it require proof of Identification as well as residential proof with two photograph, Partnership required only copy of partnership deed, A.O.P. required proof of Identification and residence proof of all members, Identity proof and residence proof of Karta and Trust, Cooperative societies, Limited Liability of Partnership and Public Limited Company required proof of Incorporation and karta, CEO, managing trustee’ identity and address proof along with Income Tax Form 49A.

3. Third step is to open Bank account, if the business is in the name of business entity bank open current account while in the individual, cooperative society and trust can operate saving bank account.

4. After completing all above formalities, If a business entity is starting business of export/ import of commodities and willing to chew fruit of export, he should obtain Value Added Tax and Central Sales Tax Registration, the taxability on purchase and sale will be NIL. He can purchase Goods against form “H” without paying Tax. 

If the goods are dutiable under Central Excise, exporter/importer should get registration with Central Excise Department. In case he is service provider/ recipient of export/ import services outside/inside India against convertible foreign exchange. The service provider/ recipient should obtain Service Tax registration, these export of services are exempted under the Rule 3 of the Export of Service Rule, 2005.These days Value Added Tax Department insisting for PAN number while Service Tax as well As Central Excise are providing PAN base registration number.

5. After completing all these registration formalities before exporting/importing of goods or services one has to obtain registration with The Controller of Foreign Trade. The Controller of Foreign Trade established Zone wise offices to facilitate public at large, where an exporter/importer can obtain EXPORT and IMPORT CODE.

a. For obtaining Import and Export Code, application called ANF-2A is prescribed, it is divided into four parts i.e. A,B,C and D. The ANF-2A should fill carefully and avoid cutting and correction. If there is any correction, it is duly signed or attested by the authorize person.

b. Part-A is as simple as any other application but it required to past one photograph identical as attested by the Banker.

c. Part-B is a Performa for the purpose of Banker, it must printed on the Banker’s letter head, with authorize person’s photograph duly attested by the bank official with email address.

d. Part-C, is specifically for modification, in case new application, need not to fill first and second point otherwise it must be completed and signed by the authorize person.

e. Part-D is declaration, which is duly signed and filled by the authorize person.

Note: Authorize person may be self-Proprietor, authorize partner, Authorize director or authorize CEO/ manager etc.

6. All the pages of application should be signed by the Proprietor, authorize partner, Authorize director or authorize CEO.

7. Fee for registration/ code number is Rs. 250/- by way of draft in favour of Zonal DGFT (CLA)……… (Place of Zonal Office)

8. The following documents should be self-attested by the applicants:

I. Photo Copy of Identity proof of applicant.

II. PAN copy of business organization and if it is proprietorship firm then proprietor’s PAN photo copy.

III. Two Additional photograph of proprietor/ authorize person (without any attestation identical as bank attested).

IV. Photocopy of Excise Registration, service Tax registration or VAT registration as applicable.

V. A self-address Envelop duly pasted Rs. 30/- post Office stamp.

9. An authorization letter in favour of person submitting documents with his signature, attested photograph and his telephone number, duly attested by the applicant.

10. A covering / request letter mentioning the documents are filling with the application.

Motor insurance premium to be costlier

Motor insurance premium will become more expensive from next month, with the insurance regulator allowing up to a 20 per cent increase in third party rates in view of rising inflation and the history of claim settlement.

“The overall percentage increase in the motor third party portfolio works out to 18.9 per cent. The above rates will be effective from April 1,” the Insurance Regulatory and Development Authority (IRDA) said in a notification.

Charges for third party cover will go up for two-wheelers, passenger cars and commercial vehicles.

For passenger cars not exceeding engine capacity of 1,000cc, the revised premium is proposed to be hiked 20 per cent to Rs 941 per annum. For two-wheelers exceeding 350cc, the premium will go up 18.30 per cent to Rs 804.

For goods carrying vehicles, excluding three-wheelers, with carriage capacity exceeding 40,000 kg, the premium will be Rs 15,035 per annum.

There is no increase for three-wheelers used to carry passengers for hire with carrying capacity not exceeding six people.

In case of four-wheelers carrying more than six passengers, the increase is to the extent of 20 per cent from the existing level.

The earlier hike, which was done in March 2012, was disputed by a transporters’ association, which had fought a legal battle against the IRDA and general insurers in Calcutta High Court.

However, after eight months of litigation, the court had passed a verdict in favour of the hike.

Hike assurance

Earlier in 2012, while asking general insurers to hike the provisioning — capital to be set aside to pay the future claims as it takes years to settle claims under this category — against the third party motor portfolio, the IRDA had assured them that it would allow a hike in third party rates gradually.

The IRDA had dismantled the third party motor insurance pool from April 1, 2011 thereby linking premium rate with the prevailing market rate.

Tax blow to Nokia

The income tax department has served a Rs 2,000-crore demand notice on Nokia for alleged evasion, on which the company has obtained a temporary stay. The department had on March 15th asked the firm to submit the tax demand, which the Delhi high court stayed on March 22 in view of an appeal filed by the firm.

Nokia has approached the court regarding the time period set by the department to furnish the stated tax demand. Nokia confirmed receiving the notice and said it was in “full compliance” with laws related to its business operations.

“Nokia confirms it has received an order from Indian tax officials. Nokia reiterates its position that it is in full compliance with local laws as well as the bilaterally negotiated tax treaty between the governments of India and Finland, and will defend itself vigorously.

“In this regard, Nokia filed a writ before the Delhi high court last week and on Friday, March 22, the court has issued a notice to the income tax department to file its counter affidavit and has granted interim stay on the entire tax demand raised against Nokia till further orders,” a Nokia spokesperson said in a statement.

The IT department will file its reply on or before April 10 in the Delhi high court stating it has issued the notices under sections that “enable and authorise” it to issue such a time-bound notice, department sources said.

Unnecessary investments in insurance products to save tax can cost you dear in long-run

It is a story that is told innumerable times during the first three months of every New Year. Financial advisors of every hue would recount horror tales of how individuals who rush for 'last minute tax planning" end up with an investment portfolio of "wrong products" that doesn't serve any purpose. However, the moral of the story seems to have had no desired impact on the audience.

Most financial advisors claim that the ancient practice of last minute rush is going on even this year, too. Typically, they end up buying insurance products, as insurance companies are most active during this period. In fact, most of their business comes in the period of January to March.

As you might have guessed already, "wrong product" in financial parlance means an insurance product and financial advisors often claim that most buyers are saddled with these products — ranging from term plans to unit-linked products to pension products — forever as they have no idea how to take remedial actions. The main trouble with most of the insurance products is that these are costly and are also long-term products.

It is equally painful for clients because in some cases they will lose money as most insurance products wouldn't make money in the first few years because of charges deducted upfront from the premium, and they also have to forego some more money because of surrender charges.

PERILS OF THE FRIENDLY ADVICE

The trouble begins when someone shops for tax-saving instrument in a hurry. If he/she walks into a bank for a 5-year fixed deposit that would fetch deduction under Section 80C, the bank official would start talking about a product that gives assured returns plus lot of extra things that an FD doesn't offer. If it is not a bank official, a neighborhood investment expert is always there to sell an insurance product with a very small cover because it would fetch him/her a better commission. (Please, go through my early post know your financial advisor)

Investment experts say most individuals go blindly by what the sales person says and they don't even bother to cross-check the basic facts. "Since they are in a rush, they don't actually have the time to get into the details. They are mostly happy that their tax-planning is done for the year.

Passport re-issues timeline

I had been to the Passport Office thrice in the last one month. Before heading to the Office I had my usual preconceived notions about Governmental Bureaucracy.

Quite to my surprise, after dropping my application and that of my Parents, I received my re-issued Passport as well as my Father’s Passport in about 8 to 10 business (working) days. Considering the fact that I made a normal application and our Passports were valid (i.e. not expired).

Point is…if you are in real hurry (i don’t know how you might end up in such a situation), you can opt for Tatkal and the Passport will be (re)issued to you in about 2 weeks’ time frame (or earlier). 

Based on my personal experience, I received my reissued Passport (i.e. renewed for another 10 year period) within 8 working days (spread across 2 – 3 weeks). More or less, it is wise to use the normal application as you pay INR 1500 less (at the time of writing this).

Please follow the instructions listed on the Passport India website. It is pretty much self-explanatory. As an additional information, if your (about to expire) Passport has been issued by an out of region Passport Office (say, abroad), it still takes about 10 working days (about 3 weeks) to get the reissued Passport.

NOTE: For some reason the word renewal is used by the Ministry of External Affairs to indicate the renewal of passport for the next nine years after an emergency passport was issued for a short period of one year. That service is done on a free-of-cost basis.

Tidbits: Apply for Passport re-issuance at about 8 months ahead of its expiry date. Most of the countries expect at least a Passport that is valid for six months. If you are out of Country (say, abroad), I think you can factor in the processing time at the nearest Embassy/Consulate.

Fresh Passport Applicants can check this link if they prefer to submit the Police Clearance Certificate along with the application.

More is not always better while investing to save tax

Most salaried employees are running around to make last-minute investments to save income tax and provide the proof of investments to the employer. This is because most companies ask their employees to submit the proof of their investments in January to avoid deduction of higher taxes from the salary.

Last minute tax planning is an age old practice that forces tax payers to make hasty, and often wrong, decisions. Typically, some individuals invest more than the required amount to save taxes. They also end up parking money in wrong products in the process, which may have an adverse impact on their cash flows and return prospects.

It is not surprising that the insurance industry do most of its business during the tax- saving season between January and March every year. "Often we tend to buy products or make investments without doing the due diligence on our total tax structure.

Having a tax plan in place at the start of the financial year will help you make better decisions and even reduce the burden on financials at the end of the financial year," says Nitin Vyakaranam, founder & chief executive officer, Artha Yantra, a financial planning firm.

A SMALL 80 C BASKET

Tax planning is all about Section 80 C for many individuals. They believe they are claiming all tax break if they invest Rs 1 lakh in some of the usual investment tools like public provident fund, national savings certificates, tax planning mutual fund scheme and so on.

But what tax payers don't account for is the employees' contribution to provident fund, children's school tuition fees and the principal repayment of housing loans also qualify for tax deduction under Section 80 C, which is capped at an overall limit of Rs 1 lakh.

If you invest anything over and above Rs 1 lakh in ELSS, life insurance, PPF or NSC, it does not give you an extra tax benefit. It is just that your money gets locked in for a certain period which can range from 3 to 15 years in the above mentioned products.

For example, EPF contribution and life insurance premiums are covered under Section 80C apart from the principal repayment of housing loans. That means most regular employees can invest only a few thousands extra under Section 80C.

For example, if your EPF contribution is Rs 5,000 per month, it would exhaust more than half of Section 80 C. Add your life insurance premium and you will know how little you can save under the section.

"Typically, your existing investments would include your contribution to EPF, life insurance premiums, housing loan repayment, stamp duty and registration fees paid, children tuition fees, etc.

If the sum of all these exceeds Rs 1 lakh, then you don't need to invest further as the deduction is capped at Rs 1 lakh," says Vaibhav Sankla, director, H&R Block, India. However, if the sum of your tax-saving investments is less than Rs 1 lakh, then you may consider investing the balance amount for additional tax benefits.

For example, if your existing investments are to the tune of Rs 60,000 then you can still make additional tax saving investments of Rs 40,000 (Rs 100,000 minus Rs 60,000).

"But the tax saving on the additional investment would be Rs 4,000 only. In such cases, many tax payers would rather opt to pay income tax of Rs 4,000 than blocking Rs 40,000 in a tax-saving scheme," says Sankla.

Courtesy-http://economictimes.indiatimes.com/personal-finance/tax-savers/tax-news/more-is-not-always-better-while-investing-to-save-tax/articleshow/18027366.cms

Some investment options in 2013

  Gold or Silver:

Since the rupee is expected to appreciate this year, it's time to curb your investment in gold this year. Opt for investing in silver instead as a short-term investment. If you want to stick with your investments in gold, limit your overall investment to be 5 to 10%.

Property:

Growth this year in the main metropolitan property values are expected to decline or roughly remain the same. Focus on investing in tier-2 or 3 cities which have more potential to grow.

Equity:

Investing in equity can be quite tricky and volatile. Stick with equity if you are planning to invest long term.

Debt mutual funds:

These mutual funds invest primarily in negotiable certificates of deposits or corporate deposits. When interest rates decline, this is probably your best bet for an investment.

Large cap mutual funds:

Investing in a large cap mutual fund can give you quick returns within 1 to 3 years as there is very less share market downtrend.

Just keep it in the bank:

Investing in top fixed bank deposits can give you some really good annual returns. Interest rates are at their peaks and you can gain up to 9.25% interest on your investments.

Happy investing!

How to get rich quick in 2013

India is no longer a land that worships the mind. More than anything else it worships the material. Even our temples have become grounds for quid pro quo where blessing is not what people seek but just riches. We are no longer happy with homes. We want to live in monuments. We want farmhouses with pools and dubious women swimming in them. We want to wear brands that we will never be able to pronounce and read books that have so many shades of grey that we may never be able to count. We are the new India. Where collectors of art have nothing to do with the appreciation of it. Where people have become collectors of titles and friends without appreciating the value of either. Where it is not important as to who you are but how you live. Where the Nano is a symbol of poverty rather than some technological marvel. Where politicians build statues of themselves with handbags that are kept open. Where brother fires at brother only for a few more square yards of land. We are a country that even makes materialism shine through in weddings and birthdays. In the good old days we were happy with a cake. Today’s brats need more: they need five-star hotel parties with luscious Mummies attending who’d be better off sharing Tutankhamen’s tomb. I have a quaint rule. I rarely attend weddings but do make it a point to attend funerals. At least in the latter you know the name of the person who’s just passed away. Today’s weddings are a despicable show of wealth. We in India have overtaken the world as far as weddings are concerned. From the Versailles to Venice, there is an infection that has spread with the benign catering of this elegantly named Munna Maharaj. Our schools are no better. There was a time you went to school on the dint of merit. Today you go there on the dint of your father’s money: legitimate or otherwise. So, in an India like this, it doesn’t pay to be poor unless of course you are die-hard Communists but then again, Communists are hardly human. Our parents would worry if we made unnecessary phone calls when we were young. But today, your parents want you to carry a smartphone only so that their peers can appreciate them for their savoir fare. So, in this kind of India, you must become rich and you must do that quicker than your neighbour or for that matter some ghastly relative who has been the attention of your evil eye. So, here is a guide to becoming rich and doing so quickly at that. This is not as exhaustive a list as it should be but will serve the purpose for 2013. 1 Join politics but not for the people. Do it for the money so that youremain focused and don’t have to worry (or feel guilty) about water, sanitation and electricity. If you, in the process, can muster up an army of goons, that will only enhance both your prestige as also your bank balance. Most politicians in this country are fine examples of rags-to-riches and tearing up other people to leave them in rags. It would be best to avoid two parties however. Avoid joining the Communists or for that matter the Trinamool. Both these parties are stupidly clean and tolerate zero corruption as far as money is concerned. If you join the DMK or the AIADMK, you will see the quickest return on investment. If you however join the Congress in Bengal you may not even see Rahul Gandhi leave alone a loaf of bread. The other parties, which allow you to live and let’s be rich, are the NCP, SP, BSP and about 73 other registered parties. 2 Become a Government servant and ensure that you are never promoted where the CAG could scrutinise your activities; so it would help to rise to the level of a joint secretary or even a director in any Government department. Try working for any department that has to do with land, power, water, forests, finance, excise, alcohol, law and order and so on. It is tough at the beginning but then the longer you are in Government the swifter you lose your conscience so it is all a matter of time. 3 Start a co-operative and see how everyone else other than you loses both the plot and the monies. There are, however, fine examples of those who have been very successful with co-operatives. One became the nation’s President and the other is president of a national political party. This is the most honorable racket you can get into other than legalised gambling but since the latter is only in Delhi’s farmhouses it will be a while before you can get there. 4 Marry someone rich. This is the oldest trick in the book except it is getting refined now. There is no stigma in the male being the house-help if he can dig into his wife’s riches and equally into other men’s wives. I am seeing this remarkable trend of gender neutrality become all pervasive. Become a good solid househusband but for that you will have to work hard. You will need to work out and make sure you never utter an intelligent word which should not be difficult if all you do is pump iron. So, go forth into the world and stalk the place for unhappy single ugly but rich women and you might find that pot (literally so) of gold. 5 Become a media barren. If you look around today, editors are richer than most industrialists and they have greater power as also greater cerebral acceptance, which is a good thing. Also, the other remarkable thing that is happening in today’s India is that some media barons have become wily businessmen. The media is only their side-interest: their main interest could well be drug or gunrunning but then who cares once you are rich. So, you may well try and become a media baron by starting a magazine that no one will ever read or running a channel that even Renuka Choudhry will not appear on. But it will surely get you on some Rich List and that way you can begin the journey of conning the banks and other sundry honest folks. 6 Become a sports administrator. Look around you and you will observe the power and money that some of these sports folks command. The rule, however, is you should have never played any sport because it will be a meaningless distraction and you should be good at calculating margins on mundane things like clocks and astro-turf. Once you have done this, your life will be a merry go-around. Look at what some of our finest sports administrators have achieved? They are wealthy; they are powerful; some of them are even in the Cabinet and some have even taken the trouble of going to jail all for the cause of better sports in India. You must follow these iconic role models and change the imprint of Indian sport. Try and avoid cricket though. Never go to bed with an elephant for you never know when the pleasure will end and the pain begin. Finally, there are other ways of getting rich too but they are neither quick nor are they unmitigated fun. You could if you really want to be Gandhian, become a teacher who doesn’t do private tuition.  You could also be an honest professional in a fine company but then when you retire you will have to move to some old-age home in Benares. You could also become a lawyer or for that matter a judge but then why would you want to take the trouble of yeoman public service? Just imagine 2013 to become your meal ticket to a life of earning without working. There is no better pleasure than that and you will always have the last laugh to the bank that one day you might in any case rob. Have a splendid illegitimate and unworthy 2013.

Courtesy- http://www.telegraphindia.com/archives/archive.html

More is not always better while investing to save tax

Most salaried employees are running around to make last minute investments to save income tax and provide the proof of investments to the employer. This is because most companies ask their employees to submit the proof of their investments in January to avoid deduction of higher taxes from the salary. Last minute tax planning is an age old practice that forces tax payers to make hasty, and often wrong, decisions.

Typically, some individuals invest more than the required amount to save taxes. They also end up parking money in wrong products in the process, which may have an adverse impact on their cash flows and return prospects. It is not surprising that the insurance industry do most of its business during the tax- saving season between January and March every year.

"Often we tend to buy products or make investments without doing the due diligence on our total tax structure. Having a tax plan in place at the start of the financial year will help you make better decisions and even reduce the burden on financials at the end of the financial year," says Nitin Vyakaranam, founder & chief executive officer, Artha Yantra, a financial planning firm.

A SMALL 80 C BASKET

Tax planning is all about Section 80 C for many individuals. They believe they are claiming all tax break if they invest Rs 1 lakh in some of the usual investment tools like public provident fund, national savings certificates, tax planning mutual fund scheme and so on.

But what tax payers don't account for is the employees' contribution to provident fund, children's school tuition fees and the principal repayment of housing loans also qualify for tax deduction under Section 80 C, which is capped at an overall limit of Rs 1 lakh. 

If you invest anything over and above Rs 1 lakh in ELSS, life insurance, PPF or NSC, it does not give you an extra tax benefit. It is just that your money gets locked in for a certain period which can range from 3 to 15 years in the above mentioned products.

For example, EPF contribution and life insurance premiums are covered under Section 80C apart from the principal repayment of housing loans. That means most regular employees can invest only a few thousands extra under Section 80C. For example, if your EPF contribution is Rs 5,000 per month, it would exhaust more than half of Section 80 C. Add your life insurance premium and you will know how little you can save under the section.

"Typically, your existing investments would include your contribution to EPF, life insurance premiums, housing loan repayment, stamp duty and registration fees paid, children tuition fees, etc. 

If the sum of all these exceeds Rs 1 lakh, then you don't need to invest further as the deduction is capped at Rs 1 lakh," says Vaibhav Sankla, director, H&R Block, India.

However, if the sum of your tax-saving investments is less than Rs 1 lakh, then you may consider investing the balance amount for additional tax benefits.

For example, if your existing investments are to the tune of Rs 60,000 then you can still make additional tax saving investments of Rs 40,000 (Rs 100,000 minus Rs 60,000). "But the tax saving on the additional investment would be Rs 4,000 only. 

In such cases, many tax payers would rather opt to pay income tax of Rs 4,000 than blocking Rs 40,000 in a tax-saving scheme," says Sankla.

Courtesy-http://economictimes.indiatimes.com/personal-finance/tax-savers/tax-news/more-is-not-always-better-while-investing-to-save-tax/articleshow/18027366.cms

Final letter of Ratan Tata to the employees

In a beautifully worded letter, outgoing chairman Ratan Tata in his final letter to the employees called upon them to face the challenges ahead with grit and determination. The humble industrialist expressed his gratitude and asked for his employees' support for his heir Cyrus Mistry.

Dear Colleague,

As 2012 comes to an end, let me wish you and your family all the best for the New Year. I hope that 2013 and the future years bring you good health, peace of mind and great happiness.

This is also the last time that I write to you prior to my retirement as the Chairman of the Tata Group and I want to convey to you how privileged I have been to have had the opportunity of leading this great Group over the last two decades through good times and bad

Whatever has been achieved has only been possible because of the amazing spirit, the dedication of each one of you and the enormous support and faith reposed in me, for which I am deeply grateful and appreciative.

I feel immensely proud of the manner in which the employees and the companies have come together in facing crises from time to time. These have included adverse market conditions, natural calamities like earthquakes and tsunamis and gruesome acts of terrorism.

The memories of personal sacrifices, loyalty and individual acts of heroism will always remain in my memory, to reinforce the great sense of pride I have in having been a member of this team. We today are a $100 billion Group in revenues.

Over the past 20 years our revenues have grown about 20 times and today 58% come from overseas operations. Our brand has emerged as the 45th global and the number one Indian brand. Our products and services are present in 85 countries.

We therefore have every reason to feel proud and feel confident in facing the challenges ahead. The difficult economic environment that we face in the current year will most likely continue through most of the next year.

We will probably see continued constraints in consumer demand, over-capacity and increased competition from imports. There will therefore be great pressure on our companies to reinvent themselves in terms of business processes and to dramatically reduce costs, to be more aggressive in the market place and to widen our product range to better address consumer needs. We will also need to contain our borrowings and work hard to retain our margins.

This environment would once again call on you for your support, your commitment and your dedication to achieve success in these somewhat difficult times. This seemingly gloomy picture however will be a passing phase.

I feel confident that the robust growth that India has shown over the past several years will be re-established and the strong fundamentals in the country will result in India once again taking its place as one of the economic success stories of the region.

The Tata Group will undoubtedly play an important role in the continued development of our country, providing leadership in various industrial segments in which they operate and living by the value systems and ethical standards on which our Group was founded. The future growth of the Group will be led in the coming years by Cyrus Mistry.

I am sure that he will receive from you the same support, the same commitment and the same understanding that I have enjoyed over the years. Tatas are a Group where I feel proud to have belonged and proud to have been associated through the years. I wish the Group, Cyrus Mistry and each of you great success in the years ahead. I hope the Group grows and shines in the coming years.

Yours sincerely,

Ratan N Tata, chairman, Tata Sons