Just About Money: 2009

Latest Income tax News from India

Find here below the latest income tax news from many sources....

1.

Taxability of non-resident: Yet another U-turn by CBDT

Economic Times - ‎Nov 13, 2009‎

Lately, the Central Board of Direct Taxes or CBDT (which is the highest ranking executive authority for income taxes in India) has withdrawn several of its ...

2.

Gold touches all-time high

Chandigarh Tribune - ‎Nov 7, 2009‎

Pooling of capital gains funds to buy a single property is a grey area and approval of the same would depend upon the Income Tax officer's discretion. ...

3.

IT dept plans to make names of habitual tax defaulters public

Financial Express - ‎Nov 8, 2009‎

New Delhi: Tax defaulters beware. The income tax department is considering publishing the names of habitual tax defaulters with large tax demands pending. ...

How you can cut your tax liability

Rediff - ‎Oct 28, 2009‎

Certain investment options have been provided in the Income Tax Act, 1961, which, when exercised, can help in reducing tax liability. ...

Loan puzzle

Calcutta Telegraph - ‎Nov 1, 2009‎

So, any income from investment of the gifted amount will be clubbed with your income and you shall have to pay income tax thereon. ...

Difference between Mens Brain and Womens Brain

I know this a totally unrelated subject of this blog and the whole idea as such but i just couldn't hold my self from posting this excellent video about the difference in Men's Brain and Women's Brain. You really have to see this to believe....

Why you should avoid taking a loan

Many of us fall into a debt trap just for the fact the easy availability of debt/loans. We saw something in the market and it says you can get it financed easily so we take a loan, we have a travel plan and instead of saving up for it we take the easy route out by just taking a loan. Getting Married want a dashing ceremony easy take a loan. And at the end of it all we see that most of our income is going into paying those loans like the EMI for the House, EMI for the Car, for the refurnishing of the house and all other kinds of loan we can come up with. The overall impact - you tend to save less, your always thinking about money, your retirement kitty is down and all those things with a lot of tension. We should

1. Be very conservative about taking a loan.

2. A loan should be taken for which we can afford paying the EMI. It should not be more than 20% of our monthly income.

3. If we are planning to take a loan for marriage, we can either delay the big day or just plan something we can afford.

4. A loan for just refurnishing you house is not a sensible thing to do. We can maybe just have furniture we can afford.

5. Avoid as far as possible to keep any credit card debt. This is the biggest sin of them all.

6. Personal loans should be avoided as far as possible, since they have a very high interest rate and we generally tend to take them for expenses we can avoid.

Related Posts

My Investment Strategy

Money Saving Tips

What to do with Surplus Money

How to make a family Budget

Fixed deposit / Term Deposit Interest Rates

I heard on the news the other day that banks are revising the deposit interest rates for the fixed / term deposits and i was actually looking for a deposit to be made. So different banks have different interest rates for fixed deposits (Term Deposits) and it gets very complicated if you start to look for the best interest rate in the market, its very difficult to go to each bank and find out the best interest rates. I have made a list of all the interest rates presently on my Google docs page and am sharing it with everyone and will hopefully update it as i get more information. The as on date interest rates for fixed deposits / terms deposits can be found on the this link....

Post Office Investment Schemes

One very good friend of mine today asked me about the Post Office Investment Schemes, so i thought why not share the information with everyone. So here it is in brief about all the Post office schemes....

1. National Savings Scheme - I have been investing in these certificates for some time now. They are issued by Department of post, Government Of India and are available at all post offices in the country. It is a long term safe savings Option for the investor. It is actually also a tax saving scheme which also provides reasonable secured as per the provisions of the Income Tax Act, 1961. The duration of a NSC scheme is 6 years. More features of the Scheme can be found here.....

2. Kisan Vikas Patra - I have recently invested in this scheme(KVP), it basically doubles your money in 7 years and 3 months and you can also do a premature withdrawal. It does not provide tax saving benefit. Also available at all major Post throughout India. The rate of return is 9.75 per cent, compounded annually. More Features of the Scheme Can be found here.....

3. Monthly income scheme (MIS) - This is one scheme i am planning to invest in just for the heck of getting a monthly income. Its an ideal scheme for retirees and you will see a lot of them have invested in them just to get the monthly payment of interest income. It is meant for investors who want to invest a sum amount initially and earn interest on a monthly basis for their livelihood. is meant to provide a source of regular income on a long term basis. More Features of the scheme can be found here.....

4. Recurring Deposit - I have one of these running for my son, i invest a monthly sum into this scheme and at the end of the period of five years, i will get a lump sum amount. It is basically a systematic way for long term savings, and is one of the best investment option for the low income groups. More Features of the scheme can be found here....

Video on tips on Why you should use a budget

Found this great video on the youtube regarding " How to Budget Personal Finances ; Why you should use a Budget"

Cost of Living in Mumbai - Last Part

Further to Part 1 and Part 2 of Cost of Living in Mumbai, here's the final part for the same...

3. Home (Food and groceries) – A couple living in Mumbai could get a monthly bill of 10000 INR to 15000 INR per month on groceries alone. I am listing down a few costs here below just to show you the living costs in Mumbai for Groceries….

Milk (1 Ltr.) – 35 INR,
Butter (500 gms) – 85 INR
Eggs 12 (large) – 28 INR
Rice (Long Grain) – 50 INR
Sugar (1 Kg White) – 25 INR
Corn Flakes (Packet of 375 gms) – 90 INR
Mineral Water (1 ltr.) – 15 INR
Tea Bags (Pack of 25) – 30 INR
Coke (1.5 Ltrs) – 45 INR
Coffee (Instant 125 gms.) – 118 INR
Ketchup (340 gms) – 58 INR
Marmalade/Jam (370 gms) – 80 INR
Chicken (whole Fresh 1KG) – 120 INR
Table Salt ( 500 gms) – 15 INR
Potatoes/Tomatoes/Onions (1KG) – 20 INR to 25 INR
Apples (1 Kg) – 135 INR
Grapes (1 Kg)/Pineapple(can 500 gms) – 100 INR
Lamb Chops ( 1kg) – 250 INR
Laundry Detergent(2.5 Kg) – 250 INR
Dishwashing Liquid(500 ml) – 60 INR
Toothpaste (120 gms) – 34 INR
Shampoo ( 200 ml) – 75 INR
Soap ( bar 150 gms) – 28 INR
Shaving razors (pack of 5) – 20 INR
Beer (Local can 330 ml) – 45 INR
Scotch Whiskey(0.75 ltrs) – 1000 INR

4. Utilities – The largest provider of landline telephone is the state run MTNL which also provides internet, GSM and CDMA mobile phone service. There are also many private players in the landline services like Tata, Reliance, Airtel etc. The average monthly rental for a land line phone is 375 INR, some free calls are included in this cost. You can purchase both CDMA and GSM type phones here. CDMA phones can be directly bought from the service providers like Reliance and Tata Indicom an average phone can cost from 2000 INR, the cost of making a call is as cheap as 0.50 INR depending on your plan. You can buy your GSM phones from Nokia, Samsung etc. and the cost of a SIM card is 90 INR for a lifetime incoming facility free. The energy cost for a couple for a month staying a 1000 sqft apartment could be 2000 INR. Internet for a 2MBPS ADSL connection can cost 700 INR/month.

5. Clothing – You will find all Major brands here including Levi’s, Lee, Adidas, Marks and Spencers, NEXT etc. The cost of Women’s shoes is 850 INR (you could also get them cheaper at 150 INR but then the quality is really bad). Men’s Shoes can cost INR 1000 and a Men’s Suit starts from 6000 INR and a pair of jeans can start from 550 INR. Women’s dresses can start at 1150 INR and a nice Indian Suit can cost 2500 INR.

6. Cars and travel – You can hire a taxi for 13 INR/km, while the fare for local City buses for 3Kms is 5 INR and you can hire a Chauffer driven car for 1000 INR for the whole day limited to some Kms for 8 hours. You can travel by the local trains the life line of Mumbai for 1000 INR monthly pass. You can also buy a car – The Suzuki Maruti Hatchback Swift costs about 500000 INR and the sedan Honda City can start from 900000 INR. You can also take a loan on the car which as an annual interest of 9.5% to 11 %. Being a very crowded city it is better to buy a small car, you can get around faster and also parking problems are solved.

7. Miscellaneous Expenses for living in Mumbai – A visit to the doctor can cost you 225 INR for a general physician to 1000 INR for a specialist. The Domestic help can cost INR 3000 for cooking and cleaning and a driver for the car can cost 7000 INR to 9000 INR. The fee for fitness club per annum can cost 13500 INR. The web Café for 30 minutes is 15 INR.

Conversion Rate at the time of writing the blog -

1 USD = 49 INR
1 Euro = 70 INR

Related Post

Cost of Living in Delhi

Cost of Living in Mumbai - Part 1

Cost of living in Mumbai - Part 2

How to make a family budget

Cost of Living in Mumbai - Part 2

After my last Article Cost of Living in Mumbai - Part 1, here is a continuation.Buying a property is whole different ballgame. Mumbai is a costly city to buy a house of your own and the costs can be a real strain on the budget. You can get a loan from any bank for the same but the present interest rate is bit too high although you can get a tax benefit.

The Chart above gives an idea about the prevailing property rates (Source Times of India).

And then there are service apartments available in Mumbai, the apartments are usually fully furnished with basic amenities and are usually equipped with a kitchen. For a short term stay they are an excellent option since you save money compared to the rent you would pay in a hotel and you can cook your own food. You can get a medium service apartment at the rate of 4500 INR per day to a good one at 15000 INR per day.

2. Eating Out – If you are the kind of person who likes to eat out a lot and try out the local cuisines then there are a lot options available in Mumbai. You could eat a normal Indian breakfast for as low as 15 INR with a cup of tea for 5 INR. Eating out in a medium sized road side restaurant could cost you from 150 INR per person to 400 INR per person. A good restaurant could put you back by 3000 INR for a dinner for two. It all depends on what you want to eat. You can buy a book called the Times Food Guide which comes for approx. 195 INR and has all the restaurants listed along with the cost of food for two people. Usually all good restaurants accept Credit cards. Eating out in a fast food joint for two could be as low as 160 INR for two. I am really tempted to list down a few famous budget places here to eat –

Moshes (located in Cuff Parade) – Serves Continental, Israeli and mid east style food. A Meal for two could be above 1000 INR.

Leopold ( Located in Colaba) – Although its not a very trendy place but everyone goes there atleast once. And the food is not costly either ( 400 INR for two)

Pasta & Pizzeria Area (Located in Churchgate) - Cost: Rs. 400-500 for two
Now this place has one of the most brilliant locations in Mumbai …bang on marine drive…

Cha Bar at Oxford Book stall Area (Located in Churchgate) - Its USP, read book sitting in good surroundings, sipping whatever kind of tea u want , reading a new pick from Oxford’s book collection.

Swati Snacks Area (Located in Tardeo Road) - Cost: Rs. 350-400 for two. This place is must visit atleast once in ur gastronomic pilgrimage

Café Madras (Located in Matunga) - Now this place has the best Dosas and idlis one can have and all this wont cost more than Rs. 100-150 for two…

Café Brittania (Located in Fort. & near Flora Fountain) - Now this is the place which if one goes by food only will realize still stands out for its Parsi Fare……

5 spices (Located in Fort. & near Flora Fountain) - Cost : Rs. 250-300 for two. Now this place is the ultimate definition of Economy + Quality + Quantity combo. This Chinese eatery might be considered a bit indianized but once u order and see the generous portions they serve and how it tastes….

Conversion Rate at the time of writing the blog -

1 USD = 49 INR
1 Euro = 70 INR

Related Posts

Cost of Living in Delhi

Cost of Living in Mumbai - Part 1

Cost of living in Mumbai - Last Part

How to make a family budget

Cost of Living in Mumbai - Part 1

Well after the article Cost of Living in Delhi, the next best thing would be to right about the Cost of living in Mumbai. The Living costs in Mumbai are certainly more as compared to the living cost in Delhi. Mumbai (Formerly Bombay) is the financial capital of India, hosting the headquarters of the Reserve Bank of India, the Bombay Stock Exchange, the National Stock Exchange, large Indian companies like Reliance, Tata Group, Godrej etc. Downtown South Mumbai is considered to be the nerve center of of the Indian economy. Mumbai is the capital of the State of Maharashtra.

Mumbai is also the hub of the entertainment industry of India, known as Bollywood (Hollywood of India). The epicenter of the Hindi Movie industry, its got all the major television, satellite networks and the production houses along with large studios. You could probably spot a filmstar or a television actor while walking through Mumbai.

First and foremost real estate –

1. Cost of Real Estate – Anytime Anywhere the largest cost factor for the living cost is the cost of the real estate, whether you are thinking of renting/leasing or just buying. realestatemumbai.com has put up the rates for renting of most of the localities on there website and probably you can go through it to get the rates.The range of costs is very extreme for a 2 BHK starting 5000 INR in Western Suburbs and Navi Mumbai to upto 250000 INR in South Mumbai. So actually depending on your preference of location you can either spend a lot and get the location preference or compromise on the location and actually get a cheap flat. Remember the traffic in Mumbai is horrible and the choice of your location should actually depend on two main factors your place of work and your children’s school. Since if either of you has to travel a lot through the traffic in Mumbai its going to get to your nerves. And also the rains actually sink some parts of Mumbai in water so be careful not to take a home in the ground floors. From the same website, I have taken the below costs for a 2 BHK –

South Mumbai

Colaba – 100000 to 200000 INR
Church gate – 75000 to 150000 INR
Opera House – 40000 to 70000 INR
Marine Drive – 65000 to 100000 INR

Western Suburbs

Bandra West – 60000 INR to 150000 INR
Andheri West – 25000 INR to 50000 INR
Goregoan West – 20000 INR to 35000 INR
Vasai – 10000 INR to 14000 INR
Virar – 5000 INR to 10000 INR

Central Mumbai

Byculla – 40000 INR to 70000 INR
Mahim – 45000 INR to 70000 INR
Sion – 35000 INR to 40000 INR
Wadala – 30000 INR to 50000 INR

Easter Suburbs

Chembur – 20000 INR to 40000 INR
Ghatkopar/Kurla – 20000 INR to 30000 INR
Powai/Vikhroli – 25000 INR to 35000 INR
Thane East/West – 12000 INR to 20000 INR

Navi Mumbai

Vashi – 15000 INR to 30000 INR
Belapur – 12000 INR to 20000 INR
Airoli – 15000 INR to 20000 INR

Apart from the monthly rent, the landlords in Mumbai prefer a large security deposit and sometimes even prefer to get 12 months advance rentals. If your company has a policy to lease the home in the companies name, it would be preferable that you do so through the company since you can negotiate better and also get a waiver on the advance rentals and hefty security deposits.

Conversion Rate at the time of writing the blog -

1 USD = 49 INR
1 Euro = 70 INR

Related Posts

Cost of Living in Delhi

Cost of Living in Mumbai - Part 2

Cost of Living in Mumbai - Last Part

How to make a family budget

Preserving your Career

In today’s world the most important thing is about preserving and helping your career. About keeping your job. About developing new skills to be multi functional in case you are laid off. To tell you the truth I actually started this blog as a hobby and a way of testing my writing skills, also in the back of mind was an alternative source of income (which of course I am yet to find out). But honestly it’s not a good time to be in now a days, working for anyone has its own risks and rewards and with all this recession talk you never know what can happen next to you. Here are a few pointers I found on the net…

Network – I bet you have been hearing this a lot recently, with all those social networking sites like Facebook, Orkut, Linkedin etc. Its not difficult to start networking, you just have to get around doing it.Networking is a very wide term and doesn’t necessarily have to be through the Internet only, you can maybe just pick up the phone and say Hi, to all those important people that you have known through out your career and are now just a phone number in your phone book.

Work On your Language skills and writing skills, especially if you are planning on relocating or or not working in your hometown. The Language helps you communicate better and the writing skills help you to grow within the organization and also can open up a whole new horizon for you.

Polish your resume – Get professional help, available through all major job portals like Naukri and Monster for writing your resume if you think you are not getting the attention from the companies which you think could be interested in your skills.

Make a list of all the things that you did to help the company you work for. This can help you during your appraisal sessions and also can be useful to present to the HR in case you think you can move to some other more important department within the organisation. It can also help you when you are going for an interview for a new job, many prospective companies like to hear your contribution to your present employer is.

Spend time reading – Reading about new skills, reading about your own line of work, reading about current affairs and anything that you think could be useful to strike a conversation with an unfamiliar person or just help you understand your job better or maybe find ways to do your job better. A well-informed person is always appreciated.

So go on be careful about what you do, and save your career from becoming redundant.

Life’s Goals

Money Mistakes

Did not file Income tax returns yet

I have come across several cases where the people have not filed their income tax returns on the 31st of July. They keep asking is it necessary to file ITR? What to Do now? How to go about it?

Now lets see if I can explain this, firstly YES it is necessary to file your income tax returns if you income is above 1.5 Lakhs and 1.85 lakhs respectively for men and women. And as per Section 234(A, B, C) of the income tax act, Anyone who has some tax liability but has failed to file returns will be required to pay 1 percent of the total tax liability every month till the time tax return is filed.

Now comes the big question what to do now, well let’s see…

1. All your tax liability has been deducted at source and you have Form 16 issued by your income source for example your employer then you can file your returns till March 31 of the next year (eg. - Mar 31 2010 for this year) without any penalty. However if you miss this deadline then you have to pay a fine of Rs. 5000/-.

2. You still have tax to be paid, and then you will be charged a penalty of 1 percent per month till the time you pay it. For Example you had to pay an income tax of Rs. 3000/- as on 31st March 2009 but some how you missed paying it then you can do so by paying a penalty of 1 percent per month i.e. Rs. 30/- till you pay the tax. So if you pay the tax on 31st September 2009 then your penalty will be of Rs. 60/- for 2 months (Calculated from 31st July 2009), which can be paid. And you can file your tax return by 31st March 2010.

3. If you forget to file your returns before the end of the Assessment year i.e. March 2010 for this year, then you will have to add another Rs 5000/- as penalty. For example if you file your returns in May 2010 for the above example, then your total tax payable will be Rs. 3000/- plus Rs. 5000/- (Penalty) plus Rs. 300/-(Interest).

Then there is the question of losses. Basically if you have faced some major loss in your business or sale of shares, which you want to carry forward to be set off in later years, then filing the income tax returns is extremely necessary. And do not forget that filing of Income tax return is not just an obligation but also a very important proof of income, which can be used for getting bank loans or applying for foreign travel Visas etc.

It is better late then never, so go ahead and just file your returns.

Related Posts

How to select a Tax saving fund?

Ways to Cut Taxes and Save Money

Tax Saving in figures

Why Do you need a PAN Card?

Which Income tax form to fill?

How to file income tax returns Online?

My Investment Strategy

I have been writing a lot about where and how to invest and why to invest. But today I am going to tell you about my investment strategy. I like to diversify, if you talk to any professional financial Consultant, he will tell you that diversification is the key to any successful portfolio. A concentrated portfolio, can be of very high risk, since if at anytime god forbid the stock or the investment goes down, its going to take down your entire portfolio with it. Let me tell you about my Portfolio –

1. Stocks – I have invested across sectors like banking, IT, Power, Infrastructure etc., I hold stocks in at least two companies in each of the sectors. But one mistake that I have done of course is that presently I hold a very small portfolio and have just a few shares in each of the companies, which should be avoided. This way any gain in any sector does not help the overall portfolio. Well I am planning to correct that shortly.

2. Debt – I have bought things like KVP, NSC, and Bank FD’s etc. Invested in PPF account and also have a EPF account that my employer holds (Yes I work).

3. Gold – I have invested a little money in Gold ETF and have also bought physical gold in the form of a coin very recently as an investment.

4. Land - Well yet to make any significant investment in this part of my portfolio although have invested a small amount of money in a yet to be developed colonies but am planning on buying atleast one property shortly.

5. Mutual Funds – I have invested in only two Mutual funds through an SIP route, since I mostly like to manage my own money although many people tell me I should get more exposure through this channel. Lets see in the future.

6. ULIP’s – Unit Linked Insurance Plans is another investment strategy that I have adopted, wherein I have bought one ULIP and make a monthly deposit in the same.

7. Insurance – OK this is where I am focussing presently since I have come to believe I am underinsured. Although I have a couple of Endowment plans and the ULIP mentioned above, I sincerely believe in term Policy only and am planning to increase my investment in the same since that secures my family’s future.

Well that’s about it about my confession, I don’t know how many people like my investment strategy or what they have to say about the same but presently I am happy about it except for a few glitches here and there which I plan to fix very soon. Keeping my fingers crossed. Do write to me what you think about the same.

How to make a family budget

Explaining the new Pension Scheme

What to do with surplus money

Tips for Cutting Costs

Money saving tips

Way to Cut taxes and Save Money

Define the term EMI

EMI

It is a short form for Equated Monthly Installment. This is the amount paid monthly by a borrower on a monthly basis to the bank or any other lender.

It basically has two components -
1. the portion of the principal amount
2. the interest portion for that month

Normally in the start of the loan repayment period the largest part of the EMI is from the interest part but as you keep paying the premium the Interest portion keeps getting paid off and the principle is the larger portion of the EMI.

I personally feel that banks do this so that in case you decide to payoff the loan earlier or as they call it foreclosure you have to pay some penalty on the principal amount and with maximum principal still remaining to be paid off the penalty also becomes very hefty.

But then thats my opinion, whats yours.

How to file Income tax returns Online

The Website of the income tax department allows to file the returns online. Its a very simple technique. Income Tax Department has introduced a convenient way to file these returns online using the Internet.

Every new user has to register at this website in order to avail the e-Filing facility. After completing the registration process and logging in, the user may download the software tools (this is and excel file) from the download section. Based on all the relevant information the required ITR Form should be filled using the software provided. The software would generate the XML format of the return which should be uploaded on this website. On successful transmission of the return a receipt will be generated in the form of a provisional acknowledgment.

If you have digital signature you can complete the submission but if not you can print the acknowledgment and send it to the tax authorities.

The web site is for individual tax returns is "ITR filing"

Video on how to fill ITR1 form part 2

It seems like the last video i posted on how to fill ITR1 form for filing income tax returns, was incomplete and i found a second video as well for the same on you tube as well. And of course i would like to thank the original publisher here too i.e. www.raagvamdatt.com

Video on how to fill ITR1 form

I found this video on youtube which describes the filling of ITR 1 form for filing personal income tax returns. It claims on you tube "Step by step instructions that guide you about filling the Income Tax Return Form 1 - ITR1 before filing it. It's really simple".

Thanks to the original publisher www.raagvamdatt.com of course.

Budget Highlights - 2009 -10

I really wanted to give some budget highlights on my blog for direct taxes since they impact us the most...

§ Exemption limit in personal income tax raised by Rs. 15,000 from Rs. 2.25 lakh to Rs. 2.40 lakh for senior citizens; by Rs. 10,000 from Rs. 1.80 lakh to Rs. 1.90 lakh for women tax payers; and by Rs. 10,000 from Rs. 1.50 lakh to Rs. 1.60 lakh for all other categories of individual taxpayers.

§ Deduction under section 80-DD in respect of maintenace, including medical treatment, of a dependent who is a person with severe disability being raised from the present limit of Rs. 75,000 to Rs. 100,000.

§ Surcharge on various direct taxes to be phased out; in the first instance, by eliminating the surcharge of 10 percent on personal income tax.The effective maximum marginal rate is 30.99%.

§ Sun-set clauses for deduction in respect of export profits under sections 10A and 10B of the Income Tax Act being extended by one more year i.e for the FY 2010-11.

§ Fringe Benefit Tax on the value of certain fringe benefits provided by employers to their employees to be abolished wef AY 2010-11.

§ Scope of provisions relating to weighted deduction of 150% on expenditure incurred on in house R & D to all manufacturing businesses being extended except for a small negative list.

§ Businesses to be incentivised by providing investment linked tax exemptions rather than profit linked exemptions.Investment linked tax incentives to be provided, to begin with, to the businesses of setting up and operating ‘cold chain’, warehousing facilities for storing agricultural produce and the business of laying and operating cross country natural gas or cude or petroleum oil pipeline network for distribution on common carrier principle.Under this method, all capital expenditure, other than expenditure on land, goodwill and financial instruments to be fully allowable as deduction.

§ Minimum Alternate Tax (MAT) to be increased to 15% of book profits from 10%.The period allowed to carry forward the tax credit under MAT to be extended from 7 to 10 years.

§ Commodity Transaction Tax (CTT) to be abolished wef 1.04.2009.

§ Donations to electoral trusts to be allowed as a 100% deduction in the computation of the income of the donor.

§ Deduction u/s 80E of the Income Tax Act allowed in respect of interest on loans taken for pursuing higher education in specified fields of study to be extended to cover all fields of study, including vocational studies, pursued after completion of schooling.

§ To mitigate the practical difficulties faced by chartitable organisations, anonymous donations received by charitable organisations to the extent of 5% of their total income or a sum of Rs. 1 Lakh, whichever is higher, not to be taxed.

§ Scope of presumptive taxation to be extended to all small businesses with a turnover upto Rs. 40 lakh.All such taxpayers to have option to declare their income from business at the rate of 8% of their turnover and simultaneously enjoy exemption from the compliance burden of maintaining books of accounts. As a procedural simplication, they are also to be exempted from advance tax and allowed to pay their entire tax liability from business at the time of filing their return.This new scheme to come into effect from the financial year 2010-11.

§ Tax holiday u/s 80-IB (9) of the Income Tax Act, which was hitherto available in respect of profits arising from the commercial production or refining of mineral oil, to be extended to natural gas.This tax benefit to be available to undertakings in respect of profits derived from the commercial production of mineral oil and natural gas from oil and gas blocks which are awarded under the NELP-VIII round of bidding.The section to be retrospectively amended to provide that “Undertaking” for the purposes of section 80-IB(9) will mean all blocks awarded in any single contract.

§ New Pension System (NPS) to continue to be subjected to the Exempt-Exempt-Taxed (EET) method of tax treatment of savings.Income of the NPS Trust to be exempted from income tax and any dividend paid on this Trust from Dividend Distribution Tax.All purchase and sale of equity shares and derivatives by the NPS Trust also to be exempt from Securities Transaction Tax.Self employed persons to be enabled to participate in the NPS and to avail of the tax benefits available thereto.

Highlights of the last budget that effect you and me

Compare New and Old Income Tax Slabs 2008 - 2009

Cash or Finance for buying a Car

Which Income tax form to fill?

Still Confused about the type of form you need to fill up for income tax returns. Well Individuals have three types of forms they can file depending on the source of income.

ITR-1 For individuals having income from salary, pension and interest earned in the financial year
ITR-2 In addition to the above income sources, income from capital gains, income/loss from house property and income from any other source
ITR-4 For all individuals having income from a business or profession

How to make a family Budget?

Well everyone needs to budget and that's what i am trying to create for my family right now, the budget needs to be based on the income. Will depend on whether your family is a single income or a double income family, you always need a budget to work on. A family budget is usually like a personal budget just in a bigger perspective. Here are some ways to make a budget...

1. First and always first for any budget determine the total income.

2. Second - Determine what needs to be paid like bills, Home Loan payments, Car loan payments, school fees etc.

3. Don't spend needlessly like eating out everyday, try taking lunch from home or only go out to eat once a month. Analyze all your extra expenditures.

4. Make a excel file showing all the expenditures and incomes just like a bank statements.

5. Try to optimize your savings versus expenditures figures in the consecutive month till you have reached a figure where your amount of savings is more than expenditures.

Related Posts

Tips for Cutting Costs

Money saving tips

Way to Cut taxes and Save Money

Money Saving tips from Google

Why do you need a PAN Card?

Many people have asked me this question? It is actually ignorance on the part of some of the people to the importance of a PAN card. The salaried class is ofcourse most aware that to purely out of a necessity by the employer for Tax deduction at Source but most of the other people are just purely ignorant Let me first define the PAN Card -

PAN - A ten Digit alpha numeric number issued by Income tax department.

Who Must have a PAN?

i. All existing assesses or taxpayers or persons who are required to furnish a return of income, even on behalf of others, must obtain PAN.

ii. Any person, who intends to enter into financial transaction where quoting PAN is mandatory, must also obtain PAN.

iii. The Assessing Officer may allot PAN to any person either on his own or on a specific request from such person.

Now the main Question, Why do you need a PAN?

It is necessary to quote the PAN in documents related to the following transactions:

Sale or purchase of immovable property valued at Rs 5 lakh or more. If there are co-owners (buyer or seller), the PAN of both the owners will have to be mentioned. If a nominee holds the property, the PAN of the legal owner must be mentioned. The PAN should be disclosed in the document pertaining to purchase or sale of the property.
Sale or purchase of a motor vehicle requiring registration other than two-wheelers. This does not include vehicles running on fixed rails or special vehicles for use only in factories or in other enclosed premises or vehicles of less than four wheels with engine capacity of not more than 25 cc.
A time deposit of more than Rs 50,000 with any banking company and deposit of more than Rs 50,000 with post-office savings bank. This requirement is not mandatory when investing in post-office National Savings Certificate or Kisan Vikas Patra, and the PAN will be required only if the time deposit exceeds Rs 50,000.
Contract of sale or purchase of securities exceeding Rs 1 lakh in value, including shares, bonds, debentures, derivatives, units and government securities.
Cash payment of Rs 50,000 or more for purchase of bank drafts, pay orders or bankersÕ cheques during any one day.
Cash payment exceeding Rs 25,000 in connection with travel to any foreign country (fare or purchase of foreign currency).
Application for installation of telephone, including cellular telephone.
Payment to hotels and restaurants against bills exceeding Rs 25,000 at any one time.
Opening a bank account.
Application for issue of a credit card.
A cash deposit of Rs 50,000 or more with any bank during any one day.
Payment of Rs 50,000 or more to a mutual fund for purchase of units or to a company for acquiring its shares or to a company/institution for acquiring its debentures/bonds or to RBI for acquiring bonds.
Minor intending to open time deposit or bank account should quote the PAN of either father or mother or guardian in whose hands income is likely to be clubbed.

A lot of reasons there huh but remember you really do need a PAN card. Its easy. Its not that difficult to get either, Got this website "http://www.utitsl.co.in".

Related Posts

How to select a Tax saving fund?

Ways to Cut Taxes and Save Money

Tax Saving in figures

Investment Opportunities

How to start and run a low cost business

Here are some tips to help out some new business to start a low cost business and run a office by keeping a very tight fist. It is important in times such as these to keep a tight fist on the expenditures while starting a new business...

1. Try working out of the home, may be you can use the existing phone lines and your old computers. You could even be using the old furniture lying in that store of yours.

2. If you are planning to set up a website, look for some bargains available on the net on the domain name and hosting plans. Some times you get really cheap options.

3. Keep a tab on the Utility bills like Electricity and phone bills. For mobile communication within your business like talking to your employees, take a plan from a single carrier for all the employees which offers free calls within a group.

4. Try using Open Source Software's which can be freely downloaded from the Internet for your software needs instead of spending heavily on Licensed SW's.

5. Buy those all in one printers where you can get photocopier, Fax, printer and scanner in one. This way you don't have to invest separately in different devices.

6. If you are doing some international calling try using the millions of VOIP services like skype, they usually end up being cheaper.

7. Always work on a budget, this way you will be able to control costs.

8. If you have to travel, plan it well in advance this way you can save on cost of air tickets by booking them in advance.

9. Try using budget hotels or self service hotels, these can cut costs a lot. Or if you have a fixed destination that you need to travel to each time, negotiate with the hotel for the rates.

10. Try finding some relative or friend who can help you out with legal, taxation and financial problems. You might be able to save instead of hiring professionals.

Money Saving Tips from Google

Money saving tips i found on Google are a great way to help spenders like me

1. Go to the shopping center with your belly full, this way you wont buy too many things since you are not too hungry.

2. Remove unnecessary load from your car. less load can improve the fuel efficiency.

3. If you have an impulse to buy something you should wait for 48 hours and then see if its still there.

4. Always turn off the lights once you leave the room.

5. Technology gets cheaper every three months. So when ever a new product is launched and you think you really want it wait for some time and then see it might be available cheaper.

6. Reuse Paper, this can be ecofriendly and save money.

7. Utilize the Online bill pay facility at your bank, this way you save trip to the billing counter and also save on paper.

8. Get organized and avoid missed payments of the bills and credit cards.

9. If you are living in a rented accommodation try living nearer to the office, this way you can save cost of commuting and all the hassle that comes with it.

10. Eat Out less. Yes that does save money.

Related Posts

Tips for Cutting Costs

Money saving tips

Way to Cut taxes and Save Money

Money Mistakes

About New Pension Scheme

This is continuation with my last post regarding the new pension scheme...

ACTIVE CHOICE

Under the Active Choice, you can make a decision on how your money will be invested. There are basically three choices and how each choice you make invests your money is explained below.

AUTO CHOICE

Also known as the Life Cycle Choice fund, basically for people who do not want to be make the decision on how the money is invested and would rather let a system handle the same. Under this Choice it basically divides your investment under the three asset classes shown above based on your age bracket. The details are shown below….

Charges for investment are detailed below….

So go ahead and make and save for your retirement.

Explaining the New Pension Scheme

Defining Salary Structure - Part 1

Defining Salary Structure - Part 2

Defining Salary Structure - Last Part