Jan 31, 2010

COMPANIES CONCERN HOW TO PROTECT PRIVATE DATA ONLINE

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This Thursday (January 28) was observed as the Data Privacy Day by the United States, Canada and 27 countries of the European Union that accord as much importance to personal data security online as to privacy in general.
It was also a day when several huge corporations — some of which are under the scanner for their privacy policies — renewed their pledge to safeguard private data of millions of its users.
In a scenario of increased information sharing online, especially on social networks, it becomes important to step back and look at not only the safeguards on personal data online but also whether online information sharing requires any etiquette.
Some companies have started systematic monitoring of online activity, especially on social networking sites such as Orkut and Facebook, of their employees to an extent where they consider online data “professional data;” and hence ask them to show some restraint.
Earlier this month, Facebook’s young billionaire-CEO Mark Zuckerberg said: “People have really gotten comfortable not only sharing more information and different kinds, but more openly and with more people. That social norm is just something that has evolved over time.”
It was both in defence of Facebook’s new controversial privacy policy, which has received flak from several quarters, and also a commentary on whether the notion of privacy itself no longer exists the way it was a few years ago.
While the U.S., Canada and some European countries have explicitly laid out Data Protection Acts and agencies monitoring them, in India the issue falls under the Information Technology Act, and some of the prosecuting powers are vested with the office of Industry Computer Emergency Response Team (CERT-In) working under the Information and Technology Ministry.
N. Vijayashankar, a cyber law expert, says most of the rules and regulations of data security, as they exist in the American and European countries’ data protection Acts, have been incorporated in the revamped Information Technology Act of 2008.
India not having a separate privacy law still will mean that online users disgruntled with misuse of private data have to find ways under other Acts to get justice, he says.
There have been a lot of concerns on what the big companies such as Google and Facebook will do to safeguard online data. But another aspect of data privacy is also about what individuals voluntarily disclose on social networks. Often on Facebook and LinkedIn, people unwittingly disclose professional information that could end up either with those who must not get it or even in the hands of hackers.
In one recent instance, a software service provider in Chennai was looking for investments and one of its senior executives put out the information on his LinkedIn profile. It was brought to the notice of the CEO, and the information was asked to be pulled out. “It would have reflected badly on the company had the sensitive information reached the attention of competitors. On a social network, such news goes viral immediately,” said one of the representatives of the company, speaking on condition of anonymity.

Jan 30, 2010

RESERVE BANK HIKES CASH RESERVE RATIO (CRR)

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RESERVE BANK HIKES CASH RESERVE RATIO (CRR)
In a move to contain rising inflation, the Reserve Bank of India (RBI) hiked the Cash Reserve Ratio (CRR) — the portion of deposits that commercial banks are required to keep with the central bank — by 75 basis points from 5 per cent to 5.75 per cent.
“As a result of the CRR increase, about Rs.36,000 crore of excess liquidity will be absorbed from the system,” said RBI Governor Subbarao, while addressing a press conference here on the Third Quarter Review of Monetary Policy 2009-10, on Friday.
“We hiked the CRR without hurting growth,” said Dr. Subbarao. “There is sufficient liquidity in the system,” even after the withdrawal of Rs.36,000 crore from the banking system.
Two stages
The CRR increase would be in two stages: the first stage of increase of 50 basis points will be effective the fortnight beginning February 13, 2010 followed by the next stage of increase of 25 basis points effective the fortnight beginning February 27, 2010.
The RBI left all other indicative lending and borrowing rates unchanged.
Bankers “indicated that the monetary measures announced by the Reserve Bank may not put immediate pressure on lending rates,” Dr. Subbarao said.
The RBI also upped its economic growth projection for the end of current fiscal to 7.5 per cent from its earlier estimate of 6 per cent.
It estimated that inflation will touch 8.5 per cent by March-end from its earlier projection of 6.5 per cent in October.
“However,” said Dr. Subbarao, “on the assumption of a normal monsoon and global oil prices remaining around the current level, it is expected that inflation will moderate from July 2010.”

 The Reserve Bank of India (RBI) on Friday tightened the monetary policy by raising the Cash Reserve Ratio — the portion of deposits that commercial banks are required to keep with the central bank —- by 75 basis points to tame rising inflation.
This increase in CRR from 5 to 5.75 per cent would absorb Rs.36,000 crore of excess liquidity from the system.
However, the RBI retained indicative interest rates, including repo rate and reverse repo rate — the rates between the RBI and the commercial banks — at their current levels. As a result, commercial banks are unlikely to raise lending rates from the current levels.
More challenging
“This time around policy decision was much more complex and challenging,” said RBI Governor D. Subbarao, while addressing a press conference here on the Third Quarter Review of Monetary Policy 2009-10, on Friday. He said there was sufficient liquidity in the economy even after sucking out Rs.36,000 crore from the banking system. “We hiked the CRR without hurting growth,” Dr. Subbarao added.
The RBI expects three major outcomes from the policy action: Reduction in excess liquidity will help anchor inflationary expectations; the economic recovery process will be supported without compromising price stability; and the calibrated exit from expansionary monetary policy will align policy instruments with the current and evolving state of the economy. The central bank upped its economic growth projection for the end of current fiscal to 7.5 per cent from its earlier estimate of 6 per cent. It also estimated that inflation would touch 8.5 per cent by March-end from its earlier projection of 6.5 per cent in October.
However, on the assumption of a normal monsoon and global oil prices remaining around the current level, it is expected that inflation will moderate from July 2010, said Dr. Subbarao.
This moderation in inflation will depend on several factors, including the measures taken and to be taken by the Reserve Bank as a part of the normalisation process.
Banks felt that credit growth prospects remain favourable going forward. They emphasised the need to expand their capital to sustain their lending operations in future. Banks indicated that they have reduced their lending rates responding to earlier monetary easing by the RBI. Consequently, “their net interest margins have come under pressure. Non-performing assets (NPAs) are expected to increase, particularly from the restructured assets.”
Bankers also informed that if the government borrowings next year are large, they could put pressure on resources and interest rates as credit is expected to pick up significantly.
Banks were concerned about their growing exposure to the infrastructure sector and suggested that policy intervention is required from the government and the RBI to address the issue of the asset-liability mismatch and exposure in their balance sheets.

FIXED DEPOSIT VALUE CALCULATOR

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FIXED DEPOSIT VALUE CALCULATOR

FIXED DEPOSITS:
As the name suggests it's an investment in which one has get the fixed amount of interest on its deposit.It's the investment for very less risky person who wants their money in very safe hands.The fixed deposit is made by almost every bank & it's the really a safe investment from other means of investment like equities,debentures,mutual fund etc.But one has to know that it's also has very fixed amount of interest like in India the interest rate is as follows
MAXIMUM RATE OF INTEREST IS FOR 1 YEAR DEPOSIT:
SIMPLE PERSON--------9 %
SENIOR CITIZEN --------9.5%
The interest on fixed deposit is calculated on compund interest rate means the one who invest in fixed deposit will get interest on interst after a specific time on investment. In india generally the specific time is quaterly basis.like one has invested 1000 rs. on 12% interest. if the specific time is 1 month he will get first month interest 10 rs. & the second month the principle amount would be 1010 & the interest would be 10.10.
How to calculate this compuned interest on investment: It's very easy i m publishing a calculator for it just do download it & simply enter principle, rate of interest, time & specific time you will get all the details regading your investment.

Jan 29, 2010

ADJUSTMENTS OF ADVANCE TAX IN RESPECT OF FRINGE BENEFITS FOR ASSESSMENT YEAR 2010-11

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ADJUSTMENTS OF ADVANCE TAX IN RESPECT OF FRINGE BENEFITS FOR ASSESSMENT YEAR 2010-11
CIRCULAR NO. 2/2010.
Dated 29/01/2010
F. N0.385/05/2010-IT (B)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
Sub: Adjustment of “Advance Tax in respect of Fringe Benefits” for
Assessment Year 2010-11 against “Advance Tax” – matter regarding.
……….
The Finance Act, 2005 introduced a levy namely Fringe Benefit Tax (FBT)
on the value of certain fringe benefits as contained in Chapter XII H (Sections 115
W to 115 WL) of Income Tax Act, 1961. By the Finance (No. 2) Act, 2009 a new
Section 115 WM was inserted to abolish the FBT with effect from Assessment
Year (A.Y.) 2010-11. Consequently, benefits given to employees are taxed as
perquisites in the hands of employees in terms of amendments to Clause 2 of
Section 17 of Income Tax Act, 1961. However, during the current Financial Year
2009-10 some assessees have paid “advance tax in respect of fringe benefits” for
Assessment Year 2010-11. In such cases the Board has decided that any
installment of “advance tax paid in respect of fringe benefits” for A.Y. 2010-11
shall be treated as Advance Tax paid by assessee concerned for A.Y. 2010-11.
The assessee can adjust such sum against its advance tax obligation in respect of
income for A.Y. 2010-11 or in case of loss etc claim such payment as refund as
advance tax paid in A.Y. 2010-11.

2. This circular may be brought to the notice of all officers in the field for
compliance.

(Ansuman Pattnaik)
Director (Budget)

Jan 28, 2010

Notification S.O. No. 66(E) OF INCOME TAX

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Notification S.O. No. 66(E) OF INCOME TAX
Notification S.O. No. 66(E)
Notification of the Government of India, Ministry of Finance, Department of Revenue (Central Board Of Direct Taxes), number 94/2009 dated 18.12.2009 bearing S.O. 3245(E) and published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), dated 18th December, 2009

[TO BE PUBLISHED IN THE GAZETTE OF INDIA,
EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
Department of Revenue
(CENTRAL BOARD OF DIRECT TAXES)
CORRIGENDUM
New Delhi, the 12th January, 2010
INCOME-TAX
S.O. 66(E).–In the Notification of the Government of India, Ministry of Finance,
Department of Revenue (Central Board Of Direct Taxes), number 94/2009 dated 18.12.2009
bearing S.O. 3245(E) and published in the Gazette of India, Extraordinary, Part II, Section 3,
Sub-section (ii), dated 18th December, 2009-
(i) at page 15 of the Gazette Notification, in first line of para 1, for “sub-section (2),
read clause 2;
(ii) at page 20 of the Gazette Notification, in sixth line of clause (B) of sub-rule 2, for
amount attributable to official use of the vehicle provided that the following
conditions are fulfilled, read “amount of charges met or reimbursed by the employer
as reduced by such higher amount attributable to official use of the vehicle provided
that the following conditions are fulfilled;
(iii) at page 21 of the Gazette Notification, in first line of sub-rule (7), for “clause (viii) of
sub-section (2), read “sub-clause (viii) of clause 2;
(iv) at page 23 of the Gazette Notification, in second line of clause (v) of sub-rule (7), for
credit care, read “credit card;
(v) at page 24 of the Gazette Notification, in first line of clause (i) of sub-rule (8), for
clause (vi) of sub-section (2), read “sub-clause (vi) of clause 2; and
(vi) at page 25 of the Gazette Notification, in first line of sub-rule (9), for “clause (vi) of
sub-section (2), read “sub-clause (vi) of clause 2.
2. The other contents of the Gazette Notification shall remain unchanged.
[Notification No. 02/2010 / F.No.142/25/2009-SO(TPL)]
(VIMAL ANAND)
Under Secretary to the Government of India

AMENDMENTS IN SECTION 80G OF INCOME TAX ACT

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AMENDMENTS IN SECTION 80G OF INCOME TAX ACT
 Notification S.O. No. 67(E).
In exercise of the powers conferred by Explanation 4 to section 80G of the Income-tax Act, 1961(43 of 1961), the Central Government amendments in the notification of the Government of India, Ministry of Finance, (Department of Revenue), Central Board of Direct Taxes, vide S.O. 1246(E), dated the 29th November, 2002

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II,
SECTION 3, SUB-SECTION (ii)]
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 12th January, 2010
INCOME-TAX
S.O. 67(E).– In exercise of the powers conferred by Explanation 4 to section 80G of the Income-tax
Act, 1961(43 of 1961), the Central Government hereby makes the following amendments in the
notification of the Government of India, Ministry of Finance, (Department of Revenue), Central Board of
Direct Taxes, vide S.O. 1246(E), dated the 29th November, 2002, namely:-


2. In the said notification, after item (xxxvii), the following items shall be added, namely: -
“(xxxviii) Baseball
(xxxix) Fencing
(xl) Handball
(xli) Ice Hockey
(xlii) Karate
(xliii) Kayaking and Canoeing
(xliv) Netball
(xlv) Sepak Takraw
(xlvi) Snooker
(xlvii) Soft Tennis
(xlviii) Taekwondo
(xlix) Triathlon
(l) Winter Games (Skiing and Ice Skating), and
(li) Wushu”


3. The assessment years for the items (xxxviii) to (li), for the purposes of the said section, shall be
2010-11 and subsequent assessment years.
[Notification No._03/2010 _/F. No. 149/64/2009-SO(TPL)]
(Vimal Anand)
Under Secretary to the Government of India

DEPRECIATION CALCULATOR

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DEPRECIATION CALCULATOR

  • Depreciation is a non cash expense. It reduces the market value of different types of assets. building,furniture,fan,car,scooter,television etc lose their value due to wear n tear n use.. It means in what price we have purchasedthese assets the market value decreases with time. The market value decreases due to wear n tear,age or obsolescence.

Depreciation calculator

But to calculate depreciation is very hard and very complex sometimes as we dont know what should be and how to calculate the depreciation.
Now a excel based depreciation calculator is available here in which you dont need to calculate the depreciation manually. While using it , there is cloumn of Disposal , in a first column , we have to enter amount of disposal of assets which were sold out of the assets purchased/balanced as on 30 sep.
To Download the DEPRECIATION CALCULATE GO TO:-
DEPRECIATION CALCULATOR

Jan 27, 2010

INCOME TAX DEPARTMENT PLACED ROBUST METHOD FOR ISSUING REFUND

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INCOME TAX DEPARTMENT PLACED ROBUST METHOD FOR ISSUING REFUND
Refund Fraud scamsters Identified. Swift action by the Income tax Department to put in place a robust method of issuing refunds

No.402/92/2006-MC (05 of 2010)
Government of India / Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
***
New Delhi dated 25th January 2010
DRAFT PRESS RELEASE
On or about 12th January 2010, an officer in the Income Tax
department, Mumbai, noticed that refunds had been issued from his
jurisdiction without his knowledge or approval of his higher authorities. He
immediately brought the matter to the notice of his superior officers.
2. On internal inquiry by the Income Tax department, it was found that
User Ids and Passwords of certain officers had been fraudulently used to
generate refunds in some cases. Upon detection of the fraud, the following
actions were taken by the Income Tax department to contain the damage:-
(i) Stop payment orders were issued. As a result, refund outgo in at least
two cases could be prevented.
(ii) Investigation and search action was undertaken by the Directorate of
Income Tax (Investigation), Mumbai to detect the bank accounts to
which the refunds had been credited and the beneficiaries.
(iii) I-T investigators have identified the bank accounts, beneficiaries and
some of the scamsters involved.
(iv) Mumbai police and CBI Mumbai have been informed.
3. Further actions being taken to prevent the recurrence of such frauds
are as follows:-
a) All high value refunds issued during the current financial year will
be cross-verified.
b) The system of handling high value refunds will be replaced with a
more robust and foolproof system.

CRR,REPO RATE AND REVERSE REPO RATE LIKELY TO INCREASE IN COMING MONETARY POLICY

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CRR,REPO RATE AND REVERSE REPO RATE LIKELY TO INCREASE IN COMING MONETARY POLICY
Ahead of the Reserve Bank’s quarterly monetary policy, RBI  is likely to signal interest rate hikes to suck out liquidity from the market and check prices from spiraling further.  Reserve Bank may also raise the amount banks need to park with the apex bank (CRR) by up to 50 basis points.  Reserve Bank could raise the short-term borrowing (reverse repo) rate by 25 basis points. Reserve bank is likely to hike cash reverse ratio by up to 50 basis points.
The Reserve Bank will announce the third quarter review of the monetary policy on January 29 amid speculations that it may signal an interest hike to tighten money supply and check rising prices. There is inflationary pressure and the wholesale price inflation is likely to reach 8.5 per cent by the end of the current fiscal.
The wholesale price-based inflation rose to 7.31 per cent in December compared to 4.78 per cent in the previous month. Besides, food inflation is also way above the comfort zone at over 16 per cent for the third week of January. The RBI in its monetary policy review in October has revised the overall inflation forecast to 6.5 per cent by March-end from 5 per cent earlier.

Jan 25, 2010

NEW PROVISION OF TDS WILL BE APPLICABLE FROM 1ST APRIL 2010

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NEW PROVISION OF TDS WILL BE APPLICABLE FROM  1ST APRIL 2010
CBDT has notified that the new provision relating to tax deduction at source (TDS) under the Income Tax Act 1961 will become applicable with effect from 1st April 2010


Press release is as under:-



No.402/92/2006-MC (04 of 2010)
Government of India / Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
***
New Delhi dated 20th January 2010
PRESS RELEASE


A new provision relating to tax deduction at source (TDS) under the Income Tax Act
1961 will become applicable with effect from 1st April 2010. Tax at higher of the prescribed
rate or 20% will be deducted on all transactions liable to TDS, where the Permanent Account
Number (PAN) of the deductee is not available. The law will also apply to all non-residents
in respect of payments / remittances liable to TDS. As per the new provisions, certificate for
deduction at lower rate or no deduction shall not be given by the assessing officer under
section 197, or declaration by deductee under section 197A for non-deduction of TDS on
payments shall not be valid, unless the application bears PAN of the applicant / deductee.


2. All deductors are liable to deduct tax at the higher rate in all transactions not having
PAN of the deductees on or after 1st April 2010. In order that there is no dispute regarding
quoting / non-quoting of PAN or accuracy thereof, the law requires all deductees and
dedutors to quote PAN of deductees in all correspondences, bills, vouchers and other
documents sent to each other. All deductors are, therefore, advised to intimate their
deductees to obtain and furnish their PAN so as to avoid TDS at a higher rate. All deductees,
including non-residents having transactions in India liable to TDS, are advised to obtain PAN
by 31st March 2010 and communicate the same to their deductors before tax is actually
deducted on transactions after that date.


3. The procedure for obtaining PAN is simple, inexpensive and quick. Application for
PAN can be filed in Form 49A to National Securities Depository Ltd. (NSDL) or Unit Trust
of India Investor Services Ltd. (UTIISL) or their intermediaries. Non-residents can apply
through the local embassy / consulate of India. Applications can also be filed, paid for or
tracked online through the Internet on the following web-sites:-
http://incometaxindia.gov.in/
https://incometaxindiaefiling.gov.in/portal/index.jsp
http://www.tin-nsdl.com/
http://www.utitsl.co.in/
4. The Central Board of Direct Taxes (CBDT) has issued Notification No.94/2009
relating to taxation of perquisites / profits in lieu of salary and Circular No.1/2010 for the
guidance of tax dedutors for salaries. These documents are available on the department’s web
site at http://incometaxindia.gov.in/

TDS LIMIT FOR TAX DEDUCTION

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TDS LIMIT FOR TAX DEDUCTION
When the income tax exemption limit for senior citizens is enhanced to Rs. 2.40 lakh, the TDS limit is still kept very low at Rs. 5,000 for NBFCs (non-banking finance companies) and Rs. 10,000 for banks. Senior citizens who are non-assessees are forced to be alert and be cautious in submitting form 15H in time as banks recover income tax at source without any intimation to the investors.
It is not an easy task to get the refund and to complicate the issue further, Unique Transaction Number is made mandatory, though it is kept in abeyance at present. Further, it is now stated that if PAN is not provided, tax will be deducted at 20 per cent. TDS limit may please be raised to Rs. 50,000 to help the middle-class senior citizens.
The plea of senior citizens certainly deserves attention. The limit for tax deduction at source should have been correspondingly increased so that there is no deduction of tax only to be refunded in most cases. In fact, revision is necessary not only in the case of senior citizens but also for others in view of increase in exemption limit.
As for the punitive rate of deduction of tax at source, where PAN is not given, it overlooks that Form 60 substitutes PAN, so that it is not necessary to overload the system with Permanent Account Numbers of persons, who are not likely to have any prospect of liability. Form 60 gives all particulars necessary for the identification of the payee, so that the requirement of PAN, where it is not statutorily required on the part of the taxpayer, cannot justify substitution of normal rate of tax deduction by a punitive rate. In fact, Sec. 139A requires PAN only on specified conditions relating to turnover of income. Many persons, who make investments, may not fall either within the turnover limit of Rs. 5 lakh, unless they are either charitable institutions or employers liable for fringe benefits tax or any other class of person, so far notified under this section. The normal rate should apply, where either PAN is cited or Form 60 is available so as to spare not only the citizens but also the system.

Jan 23, 2010

INCOME TAX DEPARTMENT GIVING HIGH LOOK TO TDS COLLECTION

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INCOME TAX DEPARTMENT GIVING HIGH LOOK TO TDS COLLECTION
The Income Tax department is giving special attention to tax deducted at source (TDS) as it aims to turn in the highest ever collection from the segment this financial year. During the last five years, the contribution from TDS had gone up from 33 per cent to 38.5 per cent of the net direct tax collection with an annual average growth of around 25 per cent.
“The TDS collections are being monitored. Special attention is being given to this source of revenue collection and the Commissioners of Income Tax have been asked to achieve the highest ever collections, ” a senior I-T officer said.

All the TDS directorates have also been asked to turn in maximum collections from their areas, the officer said.
Finance Minister Pranab Mukherjee, in a conference recently had expressed hope that the high growth rate in TDS collections would not only to be maintained but further accelerated.
The employers and deductors will also be notified by the department that they can seek any help in case of doubt regarding TDS collections from local assessing officers, the officer said.
The government is expecting direct tax collections this fiscal to reach the target of Rs 4 lakh crore.
Till December, the direct tax collection stood at Rs 2.50 lakh crore, an 8.5 per cent growth over the corresponding period last year.

GRATUITY CEILING LIMIT WILL BE 10 LAKHS FOR PRIVATE SECTOR

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GRATUITY CEILING LIMIT WILL BE 10 LAKHS FOR PRIVATE SECTOR
The Government on Friday said there was “near unanimity” among all stakeholders to raise the ceiling of payment on gratuity for private sector employees from Rs 3.5 lakh to Rs 10 lakh and hoped a decision in this regard will be taken before the forthcoming Budget session. “We have already prepared legislation and it remains to be approved by the Cabinet,” Labour Minister Mallikarjun Kharge said.
After attending a meet of State Labour ministers here, he told reporters that consultation with various stakeholders on the issue have been going on for quite sometime now. Minister of State for Labour Harish Rawat indicated that the proposal could be approved before the Budget session. “There was some opposition from certain members in Karnataka but they have been sorted out now. There is near unanimity to implement it,” he said.
The Government nod will bring parity between government and private sector employees in enjoying equal gratuity benefits. The Sixth Pay Commission recommendation had raised the limit for Central government employees. Trade unions and other bodies have been pressing for its implementation at the earliest.

Jan 22, 2010

INDIA NEED A GOOD NOMINATION SYSTEM

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INDIA NEED A GOOD NOMINATION SYSTEM
Every person has absolute right over his property during his lifetime other than those tied up as joint family property or a trust property or over which he has a right limited to his life.

In the application form for opening an account in Senior Citizens Saving Scheme, the investor will have to disclose the name of nominees, affix their photographs and also obtain their signatures. The Government introduced this scheme as a major relief to senior citizens to lead a peaceful life, but asking them to declare openly the nomination details along with photos and signatures may take away their peace completely. It is always advisable to register the nominations as a secret document.
The authorities might have experienced certain difficulties while identifying the correct nominees for releasing the payment but the investor should not be made to suffer.
If the investor decides at a later stage to change the nomination or donate the proceeds to any institution, he/ she may land into problems with undesirable consequences, while it may even endanger the safety of their life.
Every person has absolute right over his property during his lifetime other than those tied up as joint family property or a trust property or over which he has a right limited to his life. It is for this reason even a Will can be changed. It is only the last Will which will have effect. It takes effect only on the death of a person. A Will may be kept secret from the beneficiaries so that the testator may live in peace during his lifetime without the beneficiaries questioning his distribution of wealth among them.
However, in the case of investments, where nomination is made, the requirement asking for their signature and/ or their photographs would tantamount to disclosure to beneficiaries of such nomination even during the lifetime of the investor.
The law is that a nominee only receives the amount as representative of the estate of the deceased, unless such nomination is supported by a Will. It is only assignment which makes the assignee entitled to the same as his own.
It is true that nomination may also be changed during the period of investment without disclosing the reason for the change.
The practice of getting consent from nominees with proof of their identity is more convenient for institutions, which accept deposits and other investments. It should be possible to give an option for the investor to give the nomination without the nominees’ signature/ photographs but with enough details of relationship and identification of the nominee/s.
S. RAJARATNAM

INFLATION RATE MAY REACH TO 9% BY MARCH END

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INFLATION RATE MAY REACH TO 9% BY MARCH END
NEW DELHI: Even as food inflation eased marginally to 16.81 per cent for the week ended January 9 from 17.28 per cent in the previous week, the overall inflation based on the Wholesale Price Index (WPI) is likely to be in excess of nine per cent by the end of the current fiscal.
In the event, in its monetary policy review on January 29, the RBI will have to undertake a balancing act on changes in key rates, taking into account the need to sustain the overall growth momentum while reining in inflation which is currently driven mainly by higher prices of essential commodities such as pulses, sugar, potato, onion and other vegetables.
Having slumped to sub-zero levels and staying in the negative territory for quite some time owing to the slowdown on account of the global financial crisis, the WPI-based inflation started inching up during the second half of 2009 to touch 7.3 per cent in December. During the period, the spurt was mainly owing to food inflation which soared to a 10-year high of close to 20 per cent during the second week of December 2009.
Although food inflation has started dipping from its peak, pegging the overall inflation level for the fiscal year at higher than all other previous official estimates by the government and the Reserve Bank of India (RBI) adds a new disturbing dimension to the crucial issue of price rise. This is because the projection by Mr. Sen indicates the possibility of a fresh bout of food price inflation which, economic analysts fear, may eventually seep into the manufacturing sector.
This adverse impact, according to Chief Statistician of India and Statistics and Programme Implementation Secretary Pronab Sen, would be on account of a likely crop failure in the wake of the erratic monsoon that is likely to show up by the end of March. “Unless something dramatic happens on agri prices, it [overall inflation] would probably be over nine per cent,” he said.
Source- THE HINDU

Jan 21, 2010

THERE WILL BE NO UNIFORM HOME LOAN RATE CUT- BANKS

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THERE WILL BE NO UNIFORM HOME LOAN RATE CUT- BANKS
Driven by angry mortgage borrowers, RBI has once again nudged top banks to charge lower home loan rates to old customers instead of just Using the lower interest rates to pull new borrowers. But lenders continued to resist the proposal, citing cost mismatch.

The contentious issue cropped up when CEOs of large banks met senior RBI officials on Thursday to suggest possible measures that the central bank could consider for the January 29 monetary policy. 

At the meeting, RBI deputy governor KC Chakrabarty reminded bank chiefs that the regulator had earlier voiced its concern over banks’ inability to pass on the benefit of lower interest rates uniformly to all customers. It has been a common refrain among home loan borrowers that while banks are slow to pass on a rate cut, they are quick to hike either the loan term or the EMI (or equated monthly instalments) when rates go up. 

Under present circumstances, old borrowers continue to pay more since their rates are linked to the benchmark prime lending rates, which most banks have not changed since April 2009. But since then, banks have come out with lower lending rates and new schemes to target new borrowers, leaving old customers feeling that they got a raw deal. 

Bankers present in the meeting argued that since the incremental cost of fund had softened, they could charge lower rates only to new customers while old customers had to pay more as old funds were raised at a higher cost. Countering this, the regulator said reduction in incremental cost of funds also brings down the average cost of fund for a bank which should then be in a position to offer the new, lower lending rate to old as well as new borrowers. 

Some banks said offering the same rate to all could spark legal feuds since interest spreads (over or below the PLR) varied from customer to customer, each of whom sign separate loan contracts with banks. 

Besides, Mr Chakrabarty, RBI deputy governor Subir Gokarn and executive director Deepak Mohanty were present in the meeting. Among bankers, the meeting was attended by SBI chairman OP Bhatt, ICICI Bank CEO Chanda Kochhar, Canara Bank CMD AC Mahajan, Bank of Baroda CMD MD Mallya, Punjab National Bank CMD KR Kamath, Union Bank of India CMD MV Nair, MD of HDFC Bank, Aditya Puri, India CEO of Standard Chartered Bank, Neeraj Swaroop and Citibank India CEO Mark Robinson. 

Some of the bankers took the opportunity to spell out how their financials could come under strain. The state-owned bank chiefs told RBI officials that profits would come under pressure next fiscal due to the outgo on higher salary as well as pay arrears of the last two years. Besides, banks would have to pay higher interests on savings account deposits from April 2010. 

Banks asked RBI whether they could amortise the wage payment over five years. As per the agreement between employees and bank managements, banks have to pay 17% higher salary from November 2007, which will translate into a cumulative annual outgo of Rs 4,815 crore for public sector banks.

Jan 20, 2010

THERE WILL BE FEWER CASES IN SCRUTINY OF INCOME TAX

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THERE WILL BE FEWER CASES IN SCRUTINY OF INCOME TAX
Good news for all of you.


If you’re worried about what questions your income tax officer will ask about your returns, you can relax a bit. The department has decided to take up fewer tax returns for scrutiny this year. The Central Board of Direct Taxes had issued an internal circular in December 2009, asking commissioners to select fewer cases for scrutiny.
“Now, only 10-20 cases per range can be selected for scrutiny,” said RK Singh, chief commissioner of income tax, Mumbai. He said this notice reduces the number to barely 5% of the original number of cases scrutinised.
An assessing officer can scrutinise tax returns up to September 30, 2010 for income earned between April 2008, and March 31, 2009. Singh hinted that the new instructions would reduce the interface between the income tax department and taxpayers, thus curbing corruption.
It is learnt that currently more than 1,000 cases are selected for scrutiny in each range headed by a commissioner. “Each I-T officer has 200-300 cases for scrutiny. It overburdens all — the taxpayer, the income tax department and us,” said a chartered accountant.
But this doesn’t mean you can get away without paying tax. “In the coming years, the cost of tax evasion is going to increase,” Singh said.
“If information is not reported by you then agencies such as banks, insurance companies and the National Securities Depository Ltd (which issues PAN cards) can give us the information,” Singh added.

Jan 19, 2010

CHANGES IN DELHI VAT RATES w.e.f 13-01-2010

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Delhi government changes the VAT rates from 13-01-2010 and cabinet nodded for this rile.
now the VAT rates changed 4% to 5% on all the items on which earlier the rate was 4 % changed to 5 %.

Jan 18, 2010

CERTAIN ACTIVITIES NOT AMOUNTING TO MANUFACTURE-SERVICE TAX CIRCULAR

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CERTAIN ACTIVITIES NOT AMOUNTING TO MANUFACTURE-SERVICE TAX CIRCULAR
SERVICE TAX CIRCULAR
Reference has been received from field formations stating that though certain activities including connectorising, testing, repacking and relabeling of feeder cables, cutting of HR/CR coils into sheets or slitting into strips do not amount to manufacture, such processors are taking Cenvat credit and justifying their Cenvat availment on ground that they are paying duty on final products.
4.   Trade & Industry as well as field formations may be suitably informed.
3.   In view of above, following instructions are issued:-
(i)  In cases where the process undertaken by an assessee indisputably does not amount to manufacture, the department should inform the assessee about the correct legal position and advise him not to pay duty and not to avail credit on inputs.
(ii)  If the assessee has already paid duty, and in a situation where there is no manufacture as held by the Courts subsequently, and facts of the case are covered by the provisions of Section 5B of the Central Excise Act, 1944, the assessee is at liberty to approach the Central Govt. for issue of appropriate notification for regularization of the Cenvat credit availed.
2.  The matter has been examined.  As per the provisions of Rule 3 of the CENVAT Credit Rules, 2004, read with Rule 6, credit of duty paid on the inputs is allowed only if these inputs are used in the manufacture of a final product. The Board vide circular dated 26.09.07 issued from F.No.93/1/2005-CX3, had clarified that if the process does not amount to manufacture, duty is not required to be paid and hence no Cenvat credit of duty paid on inputs is admissible. Attention is also invited to the provisions of Section 5B of the Central Excise Act, 1944, where an assessee, who has paid excise duty on a product under the belief that the same is excisable, but subsequently the process of making the said product, is held by the Court as not amounting to manufacture, in such cases, the Central Government may issue an order for non-reversal of such credit in past cases.

INDIA AND FINLAND SIGNED REVISED DOUBLE TAXATION AVOIDANCE AGREEMENT(DTAA)

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INDIA AND FINLAND SIGNED REVISED DOUBLE TAXATION AVOIDANCE AGREEMENT(DTAA)
Revised Agreement and Protocol signed between the Republic of India and the Republic of Finland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (DTAA)



No.402/92/2006-MC (03 of 2010)
Government of India / Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
***
New Delhi dated the 15th January 2010
PRESS RELEASE
A revised Agreement and Protocol between the Republic of India and the Republic of
Finland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect
to Taxes on Income (DTAA) was signed by Sh. S.S.N.Moorthy, Chairman, CBDT on behalf of
Government of India and Ms Terhi Hakala, the Ambassador of Finland to India, on behalf of
Government of Finland.

2. As per the revised Agreement, withholding tax rates have been reduced on dividends
from 15 percent to 10 percent, and on royalties and fees for technical services from 15 or 10
percent to a uniform rate of 10 percent. Lowering of withholding tax will promote greater
investments, flow of technology and technical services between the two countries.

3. The revised Agreement also expands the ambit of Article concerning Exchange of
Information to provide effective exchange of information in line with current international
standards. The Article inter-alia provides that a Contracting State shall not deny furnishing of
the requested information solely on the ground that it does not have any domestic interest in that
information or such information is held by a bank etc. An Article for Limitation of Benefits to
the residents of the contracting countries has also been included to prevent misuse of the DTAA.

4. Other features of the revised Agreement are:-
a) Provisions regarding Service PE has been included in the Article concerning PE.
b) Paragraph 2 to Article 9 has been included to increase the scope for relieving double
taxation through recourse to Mutual Agreement Procedure (MAP).
c) A new Article on assistance in collection of taxes has been added to ensure assistance in
collection of taxes when such taxes are due under the domestic laws and regulation.
d) The time test for Independent Personal Service has been extended from 90 days or more
in the relevant fiscal year to 183 days or more in any period of 12 months commencing
or ending in the fiscal year concerned.

5. The revised DTAA will enter into force after completion of internal processes in both the
countries.