Monday 15 October 2012

Due date of Service Tax return for April- June’2012 extended to 25-11-2012

Due date of filing of Service Tax returns for the period 01-04-2012 to 30-06-12 has been extended from 25-10-2012 to 25-11-2012

Rule 7 of the Service Tax Rule,1994 – Returns – Extension of Time Limit to file return in form ST3

ORDER No 3/2012 (F.NO.137/99/2011-ST), dated 15.10.2012

In exercise of the power conferred by sub-rule (4) of rule 7 of the service tax rule, 1994, the CEBC hereby extends the date of submission of the return of the period 1st April 2012 to 30th June 2012, from 25th October,2012 to 25th November’12.

The circumstances of a special nature which have given rise to this extension of time are as follows:

(a)           ACES will start releasing the return in Form ST3 in a quarterly format, shortly before the due date of 25th October, 2012.

(b)           This will result in all assesses attempting to file return in short time period, which may result in problems in the computer network and delay and inconvenience to the assesses.

Sunday 14 October 2012

Investment Options for a Non Resident Indian (NRI)


NRI want to invest in India and with increase in liberalization, more and more opportunities are available for investment in India. With the growth of Indian Companies and Global Acquisition made by Indian firms in last two years, many sectors   emerged as an investment option in India such as real estate etc.

In this discussion we shall first discuss the process to be followed by NRI for investment and the area’s where NRI can make investments.

Bank Accounts

One of the first things you should know as an NRI is that your existing bank accounts are no longer valid. The Foreign Exchange Management Act (FEMA) requires you to inform all the banks where you have an account, be it savings or deposits, about your changed residential status.

The banks will then classify your account as NRO (Non-resident Ordinary). Except for the change in nomenclature, there is nothing new about the account. You can continue using it as before. Payment of EMIs (Equated Monthly Installment) can go on. You can also hold the NRO account jointly with a resident. But the balance in the NRO account cannot be remitted outside India.

If you want the funds in your account to be freely repatriable outside India, an NRE (Non-Resident External) account would be ideal. This account will be maintained in rupees and any debit or credit of foreign exchange will be converted into rupees.

It cannot be opened jointly with a resident but you can allow a resident to operate it on your behalf.

For example, you can authorise your local relative or friend to make local payments or even remit money to you through this account by giving him / her a power of attorney.

Investment options

NRIs can invest only in five asset classes in India — bank deposits, stocks, mutual funds, real-estate and insurance. You can also invest in government securities and company deposits. But you cannot invest in PPF (Public Provident Fund), or bearer instruments such as NSC (National Savings Certificate) or Kisan Vikas Patras once your residential status changes.

Though you are barred from making any fresh investments, existing ones can be left undisturbed. However, they cannot be extended beyond maturity. You can continue to make periodic contributions to the existing PPF account even when you are abroad through your NRE or NRO account. When the investments mature, the proceeds will be credited to the NRO account.

Banks allow NRIs to invest in deposits through FCNRB (Foreign Currency Non-Resident (Banks) accounts. These are term deposits and can be maintained in some currencies such as the US dollar, pound sterling and yen etc. The funds in this account can be repatriated.

Equity Investments

With the stock markets on a roll, you are welcome to join the party. As an NRI, you are allowed to invest to your heart’s content in both stocks and mutual funds.

While you can continue investing in IPOs (Initial Public Offers) unmindful of your NRI status, there are some procedures to be followed when investing in the secondary market. All along, as a resident, you would have used a demat (dematerialized shares) account to buy and sell shares.

Now, this demat account has to be closed and the shares are to be transferred to a new NRO Demat Account. After this, you can either continue to hold those shares or sell them.

Although an NRO account means that funds are non-repatriable, the Reserve Bank of India allows funds from the sale of financial assets to be remitted outside India after some paperwork. Hence, wherever you are, you can enjoy the proceeds from the sale of shares.

To invest from abroad, you need to open a fresh NRI PINS (Portfolio Investment Scheme) demat account. PINS is a scheme of the RBI under which NRIs can buy and sell shares by routing them through their NRE / NRO account. (An NRE account is preferable, since you can freely transfer the funds abroad after selling the shares). Speculative transactions are not encouraged under PINS. Hence, you need to take / give delivery of shares.

For mutual fund investments, there are no procedural changes. Money can either be remitted from abroad or moved out of your NRE / FCNR accounts maintained at a local bank.

The redemption or the dividend proceeds will be credited to the same account. Again, investments can be made both on a repatriable and on a non-repatriable basis.

For these purposes, the PAN card you obtained when you were a resident will hold good. You need not apply afresh.

Insurance and Real-Estate

Presently, NRIs can invest in life insurance policies in India without any limit on the cover. Some companies offer foreign-currency denominated policies and also allow you to pay the premium in foreign currency.

You can also invest in residential and commercial property in India without obtaining any special permission from the RBI.

Investment in agricultural land/plantation property/farm house is, however, not allowed.

Endowment versus money back Policy


Selecting insurance products can be confusing. There are products like unit-linked insurance plan (Ulip) where the policyholder can choose to invest in different securities and get market-related returns. Then, there are plans that promise to return a fixed sum.

However, there have been two kinds of plans that have been popular with every person seeking insurance – endowment and money back plans. And there is a confusion that exists on the difference between the two. Here’s a primer:

Plans that return money during the policy tenure are money-back policies. These plans, usually, give a fixed percentage of the sum assured periodically. In a 15-year policy and sum assured of Rs 10 lakh cover, these plans could give 10 per cent of the sum assured on completion of three years, 15 per cent after six years and so on.

Endowment plans, on the other hand, pays the entire money only when the policy matures. This includes products that offer the entire premium back and policies that have part assured returns with bonus on policy Maturity.
Endowment Policy Vs Term Insurance

Term Insurance Vs Endowment Insurance


In today’s market insurance product are bought and sold for saving, investment and tax saving purpose by large no. of people. This is how people are misguided, the actual and correct meaning of the life insurance is to protect your dependent from uncertainties i.e ‘Death’ of earning member of family. When something happens to the earning member of the family, the insurance is supposed to provide financial support to dependents so that they can lead a normal life.

Therefore while you choosing any product of Life Insurance Co, one important question should come to your mind. Whether Sum Assured (S.A.) is enough to satisfy your dependent’s need?

Every individual in his life takes a insurance policy to protect the interest of his family. But, the really important question is that the S.A. justified for dependent’s need?  Just calculate the total premium and total S.A for yourself. Do you really think your dependent will survive whole life with S.A. amount which you have taken?

For Example to explain you: If you have only one dependent and you have taken insurance policy having S.A. of Rs. 10 lacs and if something happens to you then the nominee will get Rs. 10 lacs. If nominee put this money in bank fixed deposit having annual interest of 9%. The nominee will get interest of Rs. 90,000 per year. Please think whether your dependent will be able survive with this sum of money?

Now, question will come to your mind, How do we achieve financial security for our dependent in our absent?

Answer to above question is very simple. You can protect interest of family by increasing S.A. of your policy to Rs. 20 lacs, Rs. 30 lacs, Rs. 50 lacs or a higher sum of money, this call will be individual’s call based o no (s) of dependent.

But again important question arises. If one think of increasing S.A. considering insurance as an investment opportunity and takes any endowment policy, this decision will land him/her to pay very high annual premium i.e for e.g if we consider best selling LIC’s Jeevan Anand policy then annual premium for age of 25 yr individual is Rs. 53,000 (approx).

Do you think it is worth paying such a higher premium?, and Do we have any insurance product for higher S.A. with less premium?

The policy with a higher S.A. and less premium is called TERM INSURANCE POLICY.

What is a term insurance policy?

Term insurance is the purest insurance product at the cheaper policy premium where the nominee gets the sum assured amount at the death during policy year and there are no benefits like bonus or loyalty additions at the survival of life assured at the maturity. The beauty of this product is the high S.A. with much lesser burden of premium amount as compared to any endowment policy.

We are going to demonstrate how does a term insurance is better as compare with a popular endowment scheme. The analysis below also shows you how keeping insurance and investment separate gives better returns.

Scenario 1

You buy LIC Jeevan Mitra Endowment policy with following specifications:

Age of the policy bearer: 25 years

Term: 15 years

Annual premium: Rs 69,829

Sum assured Rs 10,00,000

Total premium paid over 15 years: Rs 10,47,435

Amount you get if you outlive the policy term after 15 years: 16,00,000 (it includes sum assured of 10 lacs and annual bonus of Rs 40,000 per year for 15 years)

 

Scenario 2

You buy LIC Anmol Jeevan Term policy with following specifications:

Age of the policy bearer: 25 years

Term: 15 years

Annual premium: Rs 2,356

Sum assured Rs 10,00,000

Total premium paid over 15 years: Rs 35,340

Suppose the person puts the difference of Rs 67,473 (69,829 - 2,356) in secure and guaranteed return product PPF (Public Provident Fund) with a public sector bank every year.

Amount you get from the insurance policy = 0

The amount you will get from the safe PPF = Rs 20,93,063 (approx)

 

If you invest this amount in an equity linked product for 15 years the returns will be even better (But this again depends on risk taking capacity of individual).

 

What it tells you is that mixing insurance and investment is not a wise thing to do. You can do much better by separating the two as shown in the example above. Of course no insurance agent will advise you to do this since it’s a question of their livelihood. You have to ask hard questions and do your own analysis.

 

Conclusion

I am not suggesting you to have term insurance with PPF account instead of endowment policy as explained above. But, I strongly recommend you to have term insurance policy for your dependent. You should always take insurance for others not for yourself.

 
Note: Kindly share with others if information is found to be usefull.

Endowment vs Money Back Policy
 

Monday 8 October 2012

SBI Launched Personal Accident Cover for Just Rs.100

SBI Generl Insurance launched an amazing Personal Accident Insurance Offer offer for it’s Saving Account Holders:-

Just pay Rs. 100 annual & Get Rs. 400,000 Personal Accidental Insurance.

Each permanent Indian residence having Saving Bank Account with SBI and ages betwen 18 years to 65 years can take policy of 4 Lakhs for a nominal annual premium of Rs.100. The insurance provider is SBI General.

Policy covers loss of life due to accident.

Some of the major exclusions are:
a. Suicide & Self Inficted Injury
b. HIV,AIDS
c. Persons enrolled in any branch of police, paramilitary, military & armed forces of any Country, whether in peace or war.
d. Accidents under influence of Alcohol, Drugs, or other Intoxicants
e. Participation in Riot, Felony, Crime or Civil Commotion
f. Learning or operating any Aircraft.
g. War, Civil War, Invasion, Insurrection, Revolution, Act of Foreign Enemy etc,
h.  Nuclear Damage
i. Adventure & Dangerous sports
j. Child Birth & Pregnancy
h. Wilful Participation in Illegal act or any Violation or attempted violation of the Law or Resistance to arrest.

For further list of exclusions please refer to the Policy Wording

The process is quite simple: 

1. Visit your SBI branch and fill up a form that will permit them to deduct Rs.100 from your savings account.

2. Within a couple of days the policy document (which is a nothing but a single sheet of paper) and a receipt for the paid premium can be collected from the branch.

3.While collecting the same, you need to fill up the nominee details on this policy document.

Money

Dollars : At symbol paperweight on a pile of 100 dollar bills  Stock Photo

Money

Money as the word sound is what very essential in everyone lifes. In today's world the very popular phrases " life is a bed of roses" have no meaning in real term without money. Though there are also other factors which are required for leaving a great life but money is essential amongs them. It is thus rightly said "Money Money Money sweeter then honey".

Dollars : Piggybank Woman Stock PhotoIn our coverage, we shall be trying to bring for our reader, different financial aspects and solutions, which could help them out in their daily financial problems. We shall be also discussing on various financial tools and solutions available in market which helps our reader.

Our team of writers consist of professionals viz. Chartered Accountants, MBA's who are capable enough cater the needs of our readers.
For any suggestion on financial issues we can be reached at souravchh@gmail.com. and on user request we shall defiantly try to resolve   issue through coverage in our site.


How to find out Generic value of Medicine


Not with respect to the usual topics related to finance covered through this blog we would like to share some useful information which we came across. We are just sharing the facts it might be useful tips to somebody.
We too request to share as many as you can so that can help other to take benefit out of this:

How  to find out composition of a medicine and pay as per their generic value:

Medicines are prescribe by our doctors by their brand name and not by their generic name, and what we actualy pay is lot more than its generic value.

Follow these simple step to SAVE your hard earned money:

1. log on to www.medguideindia.com
2. Click 'Drugs'
3. Click on 'Brand'
4. Type the brand name which you are using (e.g. Metocard XL (50mg). The site will also help help you with drop down menu) & click on 'Search'.
5. Click on 'Generics', it will display the ingredients of the tablet.
6. Click on "Match brands with above constituents"
7. Don't be surprised to see that same drug is available at very low cost also, and that too by other reputed manufacturer. e.g Metocard XL 50 is for Rs. 62 & same drug by cipla (Mepol) is avilable Only @ Rs. 7.00.

If you are convienced, pl share with your near and dear ones  .

Wednesday 3 October 2012

Charging of Service tax on Railway Ticket and refund of service tax on cancellation of ticket issued on or after 01.10.2012


Levy of Service Tax on Railway Passengers Travelling in Ac Classes/First Class from 1st October 2012

 

No Service Tax to be Levied on Tickets Issued Prior to 1st October 2012

 

In Case of Cancellation of Tickets Issued on or after 1st October 2012, the Applicable Amount Including Service Tax to be Refunded by Railways along with refund amount.

 

The Ministry of Railways has made partial modification in levy of Service Tax on the fare of passengers travelling in AC Classes/First Class from 1st October 2012. As per the corrigendum issued by Ministry of Railways on 28.9.2012, there are following changes:

 

(i) Service Tax amounting to 3.708% on the total fare of passenger services in :

(a) AC First Class

(b) Executive Class

(c) AC-2 tier Class

(d) AC-3 tier class

(e) AC Chair Car class

(f) AC Economy class

(g) First Class

is leviable from the 1stday of October 2012. It has been clarified that the Service Tax would be collected on the tickets issued/bookings made on or after 01.10.2012. Service Tax is not leviable on tickets issued prior to 01.10.2012 and hence will not be collected on board the trains.

 

(ii) In case of cancellation of tickets booked by the passengers on or after 01.10.2012, the applicable amount including refundable Service Tax amount will be refunded by Railways as per Railway refund rules and Finance Ministry guidelines.