How you can avoid paying Capital Gain Tax – Invest in NHAI’s 54EC Capital Gains Bonds

Capital gain arising out of sale of Long term assets such as land, building etc can be invested in capital gain bonds issued by NHAI up to 50 lakh per annum within 6 month of the transfer of the capital long term asset. This investment is open for all assessee and only the capital gain amount to be invested not the whole of the net proceed from sale /transfer of the capital asset. Capital Gain Tax exemption is available under Section 54EC of the Income Tax Act.


The following table shows the full details
Credit Rating “AAA/Stable” by CRISIL and “ AAA(ind)(Affirmed)” by Fitch Ratings
Face Value Rs. 10000/- per Bond
Issue price Rs. 10000/- per Bond
Minimum application size One Bond of Rs. 10,000/-
Maximum application size Five Hundred Bonds of Rs. 10,000/- each (Rs. 50,00,000 ) subject to fulfillment of other conditions as specified in Income Tax Act.
Mode of Subscription 100% on application
Deemed Date of Allotment Last day of each month for application money cleared and credited in NHAI’s collection account
Transferability The Bond are non-transferable, non-negotiable and cannot be Offered as a security for any loan or advance
Maturity 3 years from Deemed Date of Allotment
Interest payment Annual
Coupon rate 6% annually
Redemption Bullet, at the time of Maturity after 3 years
Trustee Syndicate Bank, 6, Bhagwan Dass Road, New Delhi-01
Availability of the prospectus and application form Across the country with Union Bank of India/IDBI Bank and Selected Branches of other Bank as details in IM,NHAI Offices, Selected SEBI Registered Category-I Merchant Bankers
Bankers All the Branches of Union Bank of India/IDBI Bank & Selected branches of HDFC Bank, Canara Bank, Punjab National Bank & Syndicate Bank. For details of bank branches please refer Information Memorandum (IM).
Ceiling Rs.1900 Crore
Date of Allotment At the last day of every month
Date of Start 01.04.2011
Date of Closure 31.03.2012
Applicable Laws Income Tax Act 1961 and NHAI Act
Registrar M/s Beetal Finacial & Computer Services (P) Ltd, "Beetal House",3rd Floor, 99, Madangir,Behind Local Shopping Centre, New Delhi-110062 , ph. 011-29961281-83, Fax - 011-29961284,Email- nhaibonds@gmail.com
TDS No TDS from domestic investors

Donate u/c 80G of Income Tax Act, and get Tax Deduction

Most of the tax payers are not much familiar with Section 80G of Income Tax Act. There are two aspects one you are helping the needy poor people and at the same time your tax liability will be reduced to the extent of amount you donated (in some cases). Section 80G of the Income Tax Act offers a tax deduction for donations to certain prescribed funds and charitable institutions. Any person or ‘assessee’ who makes an eligible donation is entitled to get tax deductions subject to certain conditions. This section does not restrict the deduction to individuals, companies or any specific category of taxpayer. The extent of deduction is either 50% or 100% of the contribution, depending on the charitable institution donated to. Donations to certain institutions, the aggregate deduction is limited to 10% of the “Adjusted Gross Total Income”. So, in such cases, even if you do make a donation larger than 10% of your Adjusted Gross Total Income, the donation amount eligible for claiming a deduction would be capped at 10% of the Adjusted Gross Total Income. The Adjusted Gross Total in this case, is the gross total income minus long-term capital gain, short term capital gain and all deductions u/s 80C to 80U except any deduction under this section.

Only donation made to prescribed funds and institutions qualify for deduction: All donations are not eligible for tax benefits. Tax benefits can be claimed only on specific donations i.e. those made to prescribed funds and institutions.

The donation may be paid either out of taxable or exempted income.

Only donations made in cash or cheque are eligible for deductions Donations in kind do not entitle for any tax benefits. For example, during natural disasters such as floods, earthquake, and many organizations start campaigns for collecting clothes, blankets, food etc. Such donations will not fetch you any tax benefits.

a) Donation to Foreign Trust - Donations made to foreign trusts do not qualify for deduction under this section.

b) Donation to Political Parties – the assessee cannot claim deduction for donations made to political parties for any reason, including paying for brochures, souvenirs or pamphlets brought out by such parties.

c) For donations made to Indian Olympic Association, any association notified u/s 10(23) for development of infrastructure for sports or games, or for sponsorship of sports or games, only a company is eligible for deduction.

d) Donations made to not all charitable institutions qualify for a deduction. Here is a list of approved charitable institutions and funds that qualify for a deduction.

e) Donation made by NRI: - NRIs are also entitled to claim tax benefits against donations, subject to the donations being made to eligible institutions and funds

Donations with 100% deduction without any qualifying limit:

Prime Minister’s National Relief Fund

National Defence Fund

1. Prime Minister’s Armenia Earthquake Relief Fund

2. The National Foundation for Communal Harmony

3. Approved university or educational institution of national eminence

4. The Chief Minister’s Earthquake Relief Fund, Maharashtra

5. Donations made to Zila Saksharta Samitis.

6. The National Blood Transfusion Council or a State Blood Transfusion Council.

7. The Army Central Welfare Fund or the Indian Naval Benevolent Fund or The Air Force Central Welfare Fund.

Donations with 50% deduction without any qualifying limit.
1.Jawaharlal Nehru Memorial Fund
2.Prime Minister’s Drought Relief Fund
3.National Children’s Fund
4.Indira Gandhi Memorial Trust
5.The Rajiv Gandhi Foundation

Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income
1.Donations to the Government or a local authority for the purpose of promoting family planning.
2.Sums paid by a company to Indian Olympic Association

Donations to the following are eligible for 50% deduction subject to 10% of adjusted gross total income
1.Donation to the Government or any local authority to be utilized by them for any charitable purposes other than the purpose of promoting family planning.

In order to claim deduction, it is mandatory for the donor to furnish a proof of payment towards the eligible fund or institution. A stamped receipt is issued by the recipient trust in this regard, which must be attached by the assessee along with the income tax returns.

The receipt must include the following details.
•Name and address of the trust
•The name of the donor
•The amount donated, mentioned in words and figures
•The registration number of the trust, as given by the income tax department under section 80G, along with its validity period.

Tax benefits cannot be claimed without the above mentioned details and document.

Donations deducted from salary - Employees can claim deduction u/s 80G provided a certificate from the Employer is received in which employer states the fact that The Contribution was made out from employee’s salary account . .

There are many trusts in India engaged in charitable activities. In order to ensure that only contributions to genuine trusts entail a tax benefit, the government has brought in registration of trusts. Thus, before you donate, check to see, if the trust you are donating to is registered and has the tax exemption certificate, which is popularly known as the 80G certificate.

Direct Tax Code (DTC) to come into force from April,2012 – Finance Minister

Finance Minister Pranab Mukherjee on Wednesday expressed the hope that the Direct Taxes Code ( DTC), which seeks to modernize tax laws in the country, will come into force from April 1, 2012.



Shri Mukherjee said that this conference addresses on important theme namely, “Tax and Inequality” which is a central concern for effective governance and just functioning of a modern welfare nation-state. He stated that the intricate relationship between growth and inequality poses challenges for the formulation of tax policy in both developed, as well as developing countries. Shri Mukherjee said that on the one hand, progressive tax policy is a means to address growing inequalities in incomes and wealth and on the other hand, it provides resources to address the structural issues in inequality and poverty. He said that it facilitates the implementation of public programmes and expenditure policies for capacity building of the less fortunate individuals and communities within countries. At the same time, tax policy has implications for incentivizing economic activity, savings, production or consumption, and hence growth. It is thus a vital instrument of public policy and has to be carefully used, the Minister said.





The Finance Minister said that the policy makers need to make difficult choices about how tax systems can best support growth and help in creating fair and equitable societies. He said that principles of horizontal and vertical equity are important if a tax system is to be seen as fair. Shri Mukherjee said that tax administration, which includes mechanisms to register taxpayers, collect revenue, enforce compliance and provide redress when required, also has a direct bearing on fairness of tax policy. The Minister said that a good tax policy if not administered properly may result in a distribution of the tax burden very different from that which would occur if the tax code was administered effectively.







Shri Pranab Mukherjee said that there is much that we can learn from each other’s tax systems, working experience and the best practices and there is also a need to collaborate and align and make our tax systems speak to each other as we get integrated and the cross-border economic transactions multiply. He stated that the deliberations in the conference would contribute to that process. Informed policy making leads to better tax policy and tax administration and better tax policy and effective tax administration leads to better lives for our citizens, he said.







The Finance Minister said that the issue of the tax reforms was at the heart of the process of economic reforms and liberalization that India embarked on in the early 1990s and we had come a long way since then. He said that the tax reforms though gradual have been systemic in scope, particularly when we consider the proposals currently awaiting implementation. The reforms have covered both the direct taxes as well as the indirect taxes. Shri Mukherjee said that the proposed Direct Taxes Code brings together the policy initiatives on the direct taxes and is slated to come into force from the next financial year. Similarly, he stated that we are moving towards an economy-wide generalized value added tax system of goods and service taxes at all levels in the country. The Finance Minister said that the tax reforms have been directed at:







· Simplification of tax system and its administration;



· Rationalization of tax rates;



· Broadening of tax base;



· Special focus on sunrise area of taxation like transfer pricing and international taxation;



· Strengthening tax information exchange network with countries/ jurisdiction;



· Improvement of tax administration;



· Better tax payer services and reduction in cost of compliance;



· Robust dispute resolution mechanism; and



· Focused enforcement on high net worth individual tax abuse practices and high revenue risk.





Shri Mukherjee said that an efficient tax system is a fundamental requirement for sustained development of any nation. Taxes underwrite the capacity of a nation to implement its development and welfare goals, he said. The Finance Minister said that it is a means to promote equity in the distribution of gains from economic growth in a country like India. He stated that we have adopted a progressive personal income tax to address the inequality and our progressive direct tax policy has resulted in a ten-fold increase in direct tax revenue from USD 8.62 billion in the fiscal year 1996-97 to US 87 billion in fiscal year 2010-11. The Finance Minister said that more importantly, the composition of our tax revenues has altered significantly in favour of direct taxes which now account nearly 60 per cent of our total tax revenues. We have tried to address the issue of gender inequality and old age vulnerabilities by providing some tax relief to women and old people, he said.





Shri Mukherjee said that tax evasion undermines the intended benefits of a progressive tax policy. He said that the problem is compounded by illicit outflow of money from emerging economies and developing countries. Global financial integrity has estimated such annual illicit outflows averaging between USD 725 to 810 billion from these countries. The Finance Minister said that the Indian Government has adopted a five pronged strategy to deal with issues of tax evasion and black money which includes:



· Joining the global crusade against black money;



· Creating an appropriate legislation framework;



· Setting up institution for dealing with illicit money;



· Developing systems for implementations; and



· Imparting skill to the manpower for effective action.







In his concluding remarks, Shri Mukherjee said that the strategy has started showing result. However, resolution of these issues requires international co- operation and alignment of tax systems for better cross-border compliance, he added. The Finance Minister said that the complexity of cross border transactions is on a rise and presents a serious challenge to tax administrators in practicing and bringing equality. The opacity of tax systems in some of the jurisdiction is adding to the challenges. There has been some movement on these issues in response to the initiative by G-20 but we need to pursue this to its logical end, he said.







Speaking on the occasion, China’s Vice Minister of Finance, Mr. Wang Jun said that at the crucial moment of world economic and social development, it is of great importance and significance for people from the world financial and tax communities to gather together, share their experience and wisdom to make their contributions to a more balanced global economy, more equitable international community and more harmonious human society.



Deputy Managing Director, IMF, Mr. Min Zhu said that the IMF had been focused on the issues of inequality and poverty for many years, across the range of their activities. He said that in its surveillance and program work, IMF has long highlighted, to give just one example, that the benefits of the huge fuel subsidies in many countries go overwhelmingly to the richest, and that there are better ways to help the poor.



Also present on the occasion were Minister of State for finance (Revenue), Shri S.S. Palanimanickam and Minister of State for Finance (Expenditure, Banking and Insurance), Shri Namo Narain Meena

The importance of Home insurance

Home insurance is as important as Life Insurance … why?


Your home is perhaps your single largest investment in your life and your housing loan may be secured against it. If your home is uninsured and some damage was happened to it due to fire or other natural calamity, then not only have you lost your home and largest investment, but you are still faced with paying back the loan amount in full. We may not be able to afford a second home or even have the resources to rebuild our existing home in case of any loss. That’s where home insurance can be a very useful instrument to safeguard our belongings. Our home, its content and other risks associated with it can be made completely secure with a good home insurance policy. Clearly, not many people are faced with seeing their home burn down but damage and loss to your home can occur in many ways. Storms, gas explosion, vehicle accident and flood may spring to mind. But don’t forget that a thief will probably damage your house whilst gaining entry or might cause damage to your doors or decorations whilst searching your home. They may even try to steal all valuable items like jewellery, cash, electronic items etc. For many that would mean financial disaster. Home Insurance avoids such risks.



Of course since the home is a very costly affair forming almost 75% of our entire life time savings, it is indeed necessary that such a valuable asset as your own home be kept safe from all harm. Every homeowner knows how important it is to have a home insurance policy. Losing one's home or property to fires, floods, earthquakes and other natural and man-made disasters can be devastating. Since no homeowner can pinpoint exactly when something tragic or unavoidable will happen to his or her home and property, it is all the more reason to be prepared. A home insurance policy gives a homeowner some protection and sense of psychological relief. A good home insurance policy in place will protect you from disaster and other unfortunate events that may befall your home and property. Not only does home insurance protect you financially, it also protects you psychologically since having a good home insurance policy gives you peace of mind and sense of security.

The only way to ensure this to take out an insurance policy on your home whereby should disaster strike, the insurance policy gets into action to recreate your home or pay for the damages, whatever is stipulated in the contract or insurance policy between the insurance company and the homeowner. With an insurance policy in your pocket, all is safe. Yes, to a major extent it will be, but now you need to know that it is important to choose a good insurance company who can back you regarding your house in times of trouble. A good insurance company that take a reasonable premium and delivers great service and is accessible round-the-clock to take care of your queries before and after purchase of the insurance policy.

Home insurance covers the homeowner in case of total loss of home or property caused by a disaster. In short, home insurance protects a homeowner from damages caused by "acts of God." Check your home insurance policy and see if it covers your home under the "all risks" clause. In simple terms, the "all risks" clause means that as long as the policy is intact, it will cover your home and property in the policy in any circumstance, with the exception of those circumstances that are in the exclusion clause. To illustrate, under the "all risks" clause, your home is covered for damages caused by fires, earthquakes, theft, flood etc. If the policy doesn't include riot damage in its "all risks" clause, it means that your home insurance will not cover damages to your home caused by riot. The provisions for home insurance vary from insurance company to company.

Taking out an insurance policy on your possessions is always recommended. In the event of natural disasters, accidents, thefts and the like where you are not responsible for the damage or theft of your valuables, it is the insurance policy that can come to your rescue. That means you insure you goods to the value that you purchased them and pay a premium every year to the insurance company for a specified period and the insurance is there to take care of our goods, should the unexpected happen. To save and set by for the future in today's world is not all that easy because of the competition for jobs, the lack of employment, the rise in prices that double to our wages, etc. Hence it is indeed necessary that if we are to purchase something of great value like a vehicle or a home or precious jewelry, we look into insuring them for the future. In this way our money is seldom lost, even when damage or the unexpected strikes and leaves us seemingly empty of our valuables.

Householders or homeowners insurance, commonly known as home insurance, is the type of property insurance that covers private homes and various contents in it against a variety of risks. This insurance policy combines various insurance protections such as losses arising due to damage to one’s home and/ or its contents, loss of personal belongings or possessions of the homeowner and liability arising out of accidents that may happen at home. The policy document clearly lists down what will and what will not be paid in case of any unforeseen event. Broadly, the home insurance policy covers the building structure and contents, loss due to burglary/ theft, loss of jewellery or valuables, baggage loss, damage or loss of domestic and electrical appliances, damage to electronic equipments and other belongings like Pedal cycles, etc. You can also insure the contents of your home against loss due to burglary and /or housebreaking or any attempted burglary. Jewellery kept in Locked Safe within the Home premises can also be covered

The cost of home insurance usually depends on the cost one would incur to replace the house or its contents as covered under the policy and additional insured riders.

The policy is usually divided into various sections

· Fire and Allied Perils like lightning, Acts of God, riot and strike, etc

· Burglary and housebreaking including larceny and theft

· All risks

· Plate Glass

· Breakdown of domestic appliances or any accidental loss to them

· T.V. Sets, VCR, Audio system, Music Players, DVD players

· Pedal Cycles

· Baggage - either due to accident/ damage or while travelling

· Accident injury which causes death or total/ partial disablement

· Public/ Third Party Liability

If you own the building or house, you may purchase the householders' insurance policy for it. In case your tenants want to insure their belongings, they have to purchase a separate policy for their belongings.

Top Ten Tips for avoiding insurance claim rejection

At some stage during our life, most of us will need to make an insurance claim or be involved in an insurance claim settlement. If you follow few simple steps and precautions on your part can ensure a smooth and hassle-free claim settlement and, thus, provide all the intended financial support to the family and loved one at the time when it is needed the most in your absence.
The purpose of this article is to provide you with insurance claim help and to educate you about the insurance claim process. You will learn the important parts of an insurance claim and what all the precautions you need to take to get a speedy insurance claim settlement without much difficulty. The life insurance settlement is how the beneficiary receives payment of the death benefit. If all information on the policy is correct and it is in force when the policyholder dies, a life insurance provider cannot deny a life insurance claim. Since they are contractually obligated to pay, the only thing they can do is to withhold the benefits you are entitled to by delaying payment. This is where the insurance company assesses your insurance claim and determines whether they will pay out as per the conditions specified in your insurance policy. It is extremely important that you are honest and accurate in your statements for all life insurance claims. If you misrepresent the truth in any way, this is considered fraud and your claim will automatically become void, leaving you without recourse or reimbursement for your loss.
1) First of all ensure to provide correct details at the time of filling up the insurance policy application A material misrepresentation/ providing of wrong information is any distortion of facts given to the insurance company by the policyholder. This could be anything from concealment of the truth like hiding your existing illness or providing incorrect date of birth or giving any wrong information such as income level, occupation, residential status (Resident Indian or Non-Resident India etc) at the time of applying for the insurance policy. In order for the insurance company to deny coverage, the material representation must cause a significant difference in the amount of risk sustained by the policyholder. However, many life insurance providers will cite a misrepresentation that has nothing to do with the assessed risks or cause of death to avoid payment. So ensure to provide correct details at the time of filling up the insurance policy application. Otherwise your loved one will suffer in your absence.

2) Nomination - Nomination is a right conferred on the holder of a Policy of Life Assurance on his own life to appoint a person/s to receive policy moneys in the event of the policy becoming a claim by the assured’s death. The Nominee does not get any other benefit except to receive the policy moneys on the death of the Life Assured. A nomination may be changed or cancelled by the life assured whenever he likes without the consent of the Nominee.
Ensure nomination exists in the policy for easy settlement of claims.
Please ensure to nominate someone you wish to pass on the benefits after your death. If the nominee dies during the tenure of the Policy, the Life Assured should nominate another person in place of the deceased Nominee under section 39 of the Insurance Act.
a) What happens if there is no nomination on death of the LA (Life Assured) or what happens if both the LA and the Nominee expires in the same event?
Such claim is considered as Open Title claim. In such an eventuality a “Succession Certificate" or “Probate of will” will have to be submitted by the Claimant. A Succession Certificate is issued on application by a competent court on the question of the right to the property of the deceased. The Succession Certificate should specifically provide for disbursement of policy monies. If, however, the deceased has left a will, a probate of the will is required along with the copy of the will.

b) What if there are two or more nominees, how will the Policy Monies be paid?

The claim will be paid to nominees according to the percentage declared in the proposal. A joint discharge will have to be given. Alternatively all the nominees can give a joint discharge for payment of claim benefits in favor of one nominee, in which case the claim proceeds would be made in the name of the designated nominee

3) Ensure your beneficiary designations and static details are updated with insurance companies on a regular basis. This would ensure prompt claim settlement in the unfortunate event of death of the Life Assured.
4) Pay premiums regularly - This would ensure that Policy is in force. A lapsed policy would mean no death benefits payable to the nominee. Also, if continuing premium payments is not possible due to any reason, the insured should inform the insurance company before the policy lapses. Most insurance companies take into account genuine circumstances and make necessary provisions like making the policy a paid-up policy to help the customer
5) Keep a record of all your insurance policies and make a file of it. Maintain record of the Insurance Agent/ Insurance Company with their address and contact particulars. Ideally share this information with your loved one and educate the loved one on the process to lodge a claim. It is the responsibility of the beneficiary to inform insurance company about the claim. Inform your beneficiary or immediate family members about the policy you have taken.
6)Keep your policy pack safely.
7)It is very important to read through the Proposal form and submit factual details at the proposal stage and provide genuine documents at the time of buying a policy. In order to ensure that your claim does not get rejected, please ensure the following: Ensure that you read and answer all the questions correctly and accurately to the best of your knowledge. Ensure that you have disclosed all material facts to the Company. In case of any doubt as to whether a fact is material or not, the fact should always be disclosed also ensure that all the documents submitted by you (E.g. Age Proof, Income Proof etc) along with the proposal form are genuine. Don’t leave this responsibility to the agent, after filling up the insurance proposal form, verify once again and ensure that, all details provided in the form is correct. In normal case people used to entrust this job with the Insurance agent and they will just sign.

8) Upon receipt of your policy document, please perform the following checks - Go through the copy of your signed proposal form enclosed along with the policy document, review and ensure that all the static and other details have been recorded correctly and accurately in the policy document, In case you come across any discrepancy, please take up with the insurance company and get discrepancies corrected immediately to avoid future complications.

9) Revival of lapsed policy – If the policy has lapsed, it can be revived during the life time of the life assured, so please ensure to revive the lapsed policy to avoid future complications.

10)Loss of Policy Document – The policy document is an evidence of the contract between the Insurer and the Insured. Hence the policy holder should preserve the Policy Certificate till the contracted amount is settled. Loss of Policy Document should be immediately intimated to the Insurance company and obtain duplicate documents as soon as possible.

Understand the difference between term life insurance and whole life insurance
All life insurance involves a contract between an insurance provider and the policyholder. Upon the policyholder’s death, the insurance company pays a sum of money to the policyholder’s family. After the period of contestability in a life insurance application has passed, the contract cannot be canceled by the insurance provider for any reason.
There are two main types of life insurance: Term life insurance provides an agreed-upon amount to the insured’s beneficiaries only if the policyholder dies during the length of time specified in the policy. In contrast, whole life insurance remains in force until the policyholder’s death.

How to calculate Wealth Tax

Wealth tax is not a very important or high revenue tax in view of various exemptions. Wealth tax is a socialistic tax. It is not on income but payable only because a person is wealthy. Wealth tax is an annual tax like income tax. It is another type of direct tax by which tax is imposed on individuals coming within its purview. Pensioners, retired persons or senior citizens have not been accorded any special benefits under this Act. The valuation date for wealth tax computation is 31st March, The twelve months immediately before the computation date is considered as previous year for which wealth tax is calculated. Net wealth means taxable wealth. It means the amount by which the aggregate value of all assets (excluding exempted assets) belonging to the assessee on the valuation date including assets required to be included in the net wealth, is in excess of the aggregate value of all debts owed by the assessee on the valuation date which have been incurred in relation to the taxable assets. The wealth tax needs to be paid at the rate of one per cent (1%) of the amount by which net wealth exceeds Rs. 30 lakhs. No surcharge or education cess is payable.

The direct tax code (DTC) is expected to come into force with effect from 1 April, 2012. In it, there are lot of changes proposed and one among them is the enhancement of wealth tax exemption limit from the current Rs. 30 lakh to R. 1 crore, so everyone will, therefore, need to review their tax situation next year once the DTC comes into play.



The liability to pay tax in the case of an individual depends upon his residential status and nationality. Residential status is decided as per the provisions of the Income-tax Act

The scope of liability to wealth tax is as follows:
a.In the case of an individual who is a citizen of India and resident in India, a resident—HUF and company resident in India;
Wealth tax is chargeable on net wealth comprising of
i.All assets in India and outside India;
ii.All debts in India and outside India are deductible in computing the net wealth.
b.In the case of an individual who is a citizen of India but non-resident in India or not ordinarily resident in India, HUF, non-resident or not ordinarily resident in India and a company non-resident in India;
i.All assets in India except loan and debts interest whereon is exempt from income-tax under section 10 of the Income-tax Act are chargeable to tax.
ii.All debts in India are deductible in computing the net wealth.
iii.All assets and debts outside India are out of the scope of Wealth Tax Act.
c.In the case of an individual who is not a citizen of India whether resident, non-resident or not ordinarily resident in India:
Same as in (b):

The credit balance in a Non-resident (External) Account is exempt from wealth tax provided the depositor is a person resident outside India as defined in the Foreign Exchange Regulation.



Taxable assets under the Wealth Tax include

· Residential house or commercial building or Guest house

· Automobiles

· Jewellery, bullion, utensils of gold, silver, or other precious metals;

· Yachts, boats and aircraft;

· Urban land located within specified limits; and

· Cash in hand in excess of Rs.50, 000/-

Assets exempted from Wealth Tax

· Property held under a trust or other legal obligation for any public purpose of a charitable or religious nature in India subject to the satisfaction of the stipulated conditions;

· House occupied for the purpose of business or profession;

· One house or a part of house used for residential purpose;

· Property held under a trust

· Assets held as stock-in-trade in business;

· Urban land on which construction is not permissible;

· Co-parcenary interest in a Hindu Undivided Family (HUF);

· Certain specified government bonds;

· Resurgent India Bonds;

· NRI Bank Account Deposits and FCNR Deposits; and

· Assets belonging to Indian repatriate.

Deemed Assets
Assets as specified above and belonging to the non-resident are included in computing the net wealth. In some cases, certain assets which do not belong to the non-resident are included in his net wealth when they are held or are transferred with the intention to avoid wealth tax. These are referred to as deemed assets, which include:

· Assets transferred by one spouse to another;

· Assets held by a minor

· Assets transferred to a person or an association of persons;

· Assets transferred under revocable transfers;

· Assets transferred to close relatives;

· Interest of a partner in a partnership firm;

· Self-acquired property converted into joint family property;

· Gifts made by mere book entries; and other assets which would otherwise belong to the non-resident.



Wealth tax is levied on the ‘net wealth’ which means that from the aggregate of all assets (including deemed assets but excluding exempt assets) the value of debts owed on the valuation date shall be deducted subject to the satisfaction of the following two conditions viz. Only debts which are ‘owed’ on the valuation date are deductible.

Debts should have been incurred in relation to those assets which are included in the net wealth of the assessee



Every person is required to file a return of net wealth in form prescribed by Income Tax Authorities from time to time if his/her net wealth or net wealth of any other person in respect of which he is assessable under the Act on the valuation date is such an amount as to render ‘ him liable to wealth tax. The dates of filing the return are the same as under the Income-tax Act for filing returns. Where wealth tax is payable on the basis of return to be furnished

Why Retirement Planning is important?

When we ask about the life after retirement, some people answer this very casually, they have not even thought about their life after retirement. This type attitude is not good; everybody must agree one fact that, retirement is a reality that will happen today to tomorrow. In any case, you can’t escape from this. Everyone grows old. It’s inevitable. The question is, will you be ready when retirement gets here? We all know it’s coming, but unfortunately, few of us are adequately prepared for its arrival. There are several things we can do to prepare for retiring, even if that important day is far away.

The relevant question here is, how you will live after your retirement ? What will be your main source of Income? Whether the money you saved is enough for the rest of your life? How you are going to fund for any unexpected contingencies? What sort of help you expect from your children?. The only one answer for all the above questions is to plan for retirement well in advance and start savings according to the plan and predefined asset allocation to achieve the retirement/financial goals.

When making your retirement plans you have to consider several things. First, why am I planning? What is your motivation, reason for planning? Also, what plans are out there? There are many paths to the same goal. Finally, of those paths, which one is right for you?

It's never too early to start saving and investing for a comfortable retirement, and those who wait until late in life face additional problems. The good news is that it's never too late to start putting money away for retirement. Even if you are nearing your retirement years, every rupee you put away is one more rupee that can work for you in your retirement years. You can enjoy a great retirement even if you start late, but it's important to control your risk and put away as much as possible in the intervening years.

Why should I plan?

You might be thinking, why should I think about retirement now? I’m young and fit, I can think about it later. This thinking can be a costly and financially dangerous mistake. Everyone should be looking to the future and planning for the day that they will no longer want or be able to work to earn a livelihood. The fact is, average life expectancy in the India is around 75-80 years. Most people will retire well before that age (most of the cases 55-60 years). So you need to plan in advance to find sufficient money to lead a comfortable life for another 20-25 years after retirement.

Furthermore, those individuals who think Government Pension Plans will be enough to take care their after their retirement life, they are fooling themselves. That program was never intended to and never will take the place of good planning, for employer or employee. There will always be a need to supplement this government program. Individuals who plan their retirement are able to supplement this base income with other sources that greatly improve income potential over the course of a retirement. Basically they need an inflation adjusted return. Nobody can predict the financial situation or inflation figures after 20-25 years. So we have to be extra cautious in all our retirement planning process, asset allocation, re-allocation or periodical review of resources according to the changes in the financial market, economic situation, return expectation, increase in the medical expenses, changes in inflation data and changes in the family situation, government taxes etc.



a) The first step in the retirement planning is to decide your retirement age i.e, at what age you wish to retire in other words how many years you have to work until you are ready to retire. The longer you have to save and invest before retiring, the better off you will be.

b) Review your budget carefully to get an idea of how much you are likely to spend in retirement. You need to consider so many aspects while reviewing your budget as discussed in the previous paragraph.

c) Prepare an estimate of your retirement benefits which you are going to receive from your employer as retirement benefits also the expected amount of monthly pension.

d) Estimate how much of a monthly shortfall you are likely to have between the retirement benefits you will receive and what you expect to spend in retirement. Before retiring, you should strive to save enough to meet that shortfall.

e) Use a retirement calculator to determine how much you will need in assets to generate the monthly income you expect to need in retirement. If you search in internet you can find free retirement calculators in various websites

f) Use the number of years until retirement as your guideline when choosing your investment mix. Never invest money in the stock market, Sector specific mutual fund schemes or similar risky financial instruments that you expect to need within the next three to five years. You might be some times forced to sell these investments at a loss, if the market is down at the time need the money. So avoid investment in risky assets for short term.

g) Invest money you expect to need within the next five years in safe investments, such as Mutual Fund schemes investing in bonds and government securities, government bond or other public sector company bonds, bank term deposits etc. Those money require after five years can be invested in direct stock market (selected performing stocks with expert advice), Equity based Mutual Fund Schemes, Company FDs, Commodities like Gold, Silver, Post Office Savings Schemes like, Post Office Monthly Income Schemes, National Savings Certifies, Public Provident Fund (PPF) etc. When you select Mutual Fund Schemes, select schemes having a minimum 3-5 years consistent performance track records and also avoid investing in NFO (New Fund Offers)

h) Keep sufficient money liquid in the savings bank accounts or other liquid schemes for contingency purposes.

i) Invest in good selected Retirement Insurance Plans. Before investing in a retirement plan, please find answer to the following questions; how flexible is the plan? How flexible do you need to plan to be? Looking at issues like early withdrawal of dividend or principal or the possibility of loans for hardship or other life events is essential when weighing the pros and cons of each plan. Retirement Plans offered by life insurance companies are bundled products, offering the benefits of both insurance and investment (I never recommend Insurance products for retirement planning) . A typical retirement plan has two phases.
The first is the accumulation phase, during which you pay premiums and the money accumulates through the tenure of the plan. The accumulated money is then invested in securities approved by the Insurance Regulatory and Development Authority (IRDA), the insurance regulator. These products are designed to protect the value of your principal while at the same time supposed to provide you with steady returns (don’t expect huge returns form insurance products). The accumulation stage is followed by the vesting age, which is the age when you start getting payouts from the investment. This can be selected by you. The vesting age in most plans is 40 to 70 years. The period when a person gets pension is also called the annuity phase. During this phase, in most of the plans there is an option to withdraw up to certain percentages of the accumulated amount in one go. The rest is paid as pension. In the immediate annuity option, a person can pay in lump-sum, instead of over the years, and start getting income immediately. The frequency of payments received can be monthly, quarterly, half-yearly or annually. Presently so many retirement plans are available in the market offered by almost all insurance companies. You have to be very careful in selecting the insurance company as well as the insurance plan. While selecting the insurance plans, please keep in mind that, this is a long term investment made out of your hard earned money. You can’t afford to lose it.

j) Avoid the temptation to maximize yield at the expense of safety. Nearing retirement, you do not have as much time as a younger person to make up market losses. Avoid reaching for yield in junk bond funds and similar risky investments

k) As you go through the decision making and planning process you need to keep your goals in the forefront and decide what is going to be the best way to get there. There are many retirement planning sites on the Internet with a wealth of knowledge to share. Some of these websites that charge for their services. A bit of savvy searching should lead you to a site to fit your needs and help you meet your goals.

We all want to be comfortable as we get older. No longer can we depend on employers to help us ensure that we will be financially stable as we age. We must take the initiative to make sure that we are taking care of our tomorrow by a bit of careful planning today.

In case you are not experienced enough to plan your retirement properly, it is recommend to take the help of an expert Financial Planner. He will definitely prepare a good retirement plan for you after carefully studying your financial situation and retirement goals.

How to get Income Tax Refund

A tax refund is a refund on taxes when the tax liability or the amount of tax to be paid is less than the amount of taxes paid by the individual. However, you can also claim a tax refund in case the taxes were deducted because you did not declare your tax savings investments details to your employer or the bank deducted tax at source on Term Deposits where the interest income on a particular financial year exceeds Rs. 10,000.00 but you don’t have any other taxable income. For salaried individuals, it is possible that that the company deducted excess tax because you did not declare any of your tax savings investments to the employer. In such a case, a tax refund may be helpful. Towards the end of the financial year, most of us are dogged with the thoughts about filing investment declaration, filing tax returns and basically save as much money as possible from being deducted as tax. Once the formalities are completed, we think little about any tax refunds. Tax refunds are something that a few of us might get and a few of us might not. To be prepared it is prudent to know some basic information about tax refunds.

There is an incentive for taxpayers who file their income-tax returns electronically — they will get their refunds normaly within 1-2 months time. To speed up refunds and encourage electronic filing of tax returns, the Central Board of Direct Taxes has promised expeditious refunds. The wait for refunds in the case of physical tax returns may ranges between 5-10 months. CBDT want tax-payers to file electronically as that helps in faster processing of refunds. The verification of the paper tax returns filed is a tedious process that also delays tax refunds. This has become a bigger issue with the rising refunds. E-filing ensures that tax payers' information on income, taxes and refunds are uploaded in the tax system instantly and tax computations are processed on a real-time basis. Income-tax authorities send data to State Bank of India/other banks which in turn issues refund orders directly to tax-payers under the refund banker scheme. As notified by the Income Tax authorities, the small salaried tax-payers having annual income of Rs 5 lakh who will not be required to file tax returns if they do not have refund claims. Such tax-payers will not be required to file return unless they have tax refund.

If you do not want to wait for a long time to get your tax refund, you need to make sure that you do tax planning as early as possible. You need to assess your tax liability and if need be, take additional help from a tax expert. You also need to invest or save money according to the assessment of your tax liability. Finally, if you are a salaried individual, you need to declare your tax savings investments and other incomes details to your employer so that they can deduct the correct amount of tax from your salary.

To see whether you are eligible for a tax refund, you need to file your tax returns or check the Form-16 that you receive from your employer if you are a salaried individual.

The tax return will show the amount of refund (if any). In case if the tax return already shows that you are getting a tax refund you need not apply for it. The tax return cheque/refund order directly comes to the address mentioned on the Return of Income document filed with the Income Tax department. Tax refund can also be credited directly to your bank account which needs to be mentioned on the tax return. In a situation where you think that you forgot or did not have the proper documents to show the investments made, a Revised Return of Income needs to be submitted. The Income tax department has recently started an initiative where you can check your tax return status online.
Individual tax payers can track their income tax refund online using the following link https://tin.tin.nsdl.com/oltas/refundstatuslogin.html

Tax refund needs to be claimed with one year of the last day of assessment year.

If you do not receive your tax refund within a reasonable time (may vary from case to case) which normally is within a maximum of one year from the date of filing the tax return, you can either visit the tax department's office for the follow up of the refund or you can write a letter (along with the copy of acknowledgement of the tax return) to the concerned Income Tax Assessing Officer. If it is still not redressed then you may write a letter to the jurisdictional Chief Commissioner of the Income Tax with a copy to the Grievance Cell and the concerned Income Tax Officer. This letter may be accompanied by the copies of previous letter/s written to the Income Tax Assessing Officer and a copy of the tax return filed. In case you have tax refund, it is recommended filing your tax returns electronically (E-filing) to avoid the delay in getting the refund orders

Rupee posts biggest single-day loss in 1-1/2 month

The rupee posted its biggest single-day loss in a month and half on Wednesday, hurt by broad dollar gains against major currencies, while weak local shares bogged down by a Moody's downgrade of the banking system also added to the downward bias.

Traders said demand for dollars by a large corporate and for defence-related payments also weakened the unit.

The partially convertible rupee closed at 50.1750/1850 per dollar after hitting 50.1825, a level last seen on Oct. 21, and 1.4 percent weaker than its previous close of 49.4750/4850.

This is the rupee biggest one-day fall since a 2.5 percent decline on Sept. 21, which was its biggest fall in nearly three years.

"The equity markets turned negative and euro came off pushing the rupee lower," said N.S. Venkatesh, treasurer at state-owned IDBI Bank.

He expects the unit to trade in a range of 49.50 to 50.50 over the next couple of weeks.

The unit moved in the wide range of 49.3950- 50.1825 per dollar in the day, with traders cautious ahead of a market holiday on Thursday.

The main 30-share BSE index ended down 1.18 percent at 17,362.10 points -- its lowest close in two weeks.

Financials led the decline after ratings agency Moody's lowered its outlook on the country's banking system, citing slowing growth and concerns about asset quality.

The euro was at $1.3643, compared with $1.3770 when the rupee closed on Tuesday, while the index of the dollar against six major currencies was at 77.460 points versus 76.948 points.

The euro fell against the safe-haven U.S. dollar and Japanese yen on Wednesday as the euro zone's escalating debt crisis saw investors such as macro funds step up sales of the single currency after Italy's 10-year bond yield hit 7 percent.

"There was steady import-related dollar buying today by corporates, oil companies and defence firms," a dealer with a private bank said.

Oil is India's biggest import and refiners are the largest buyers of dollars in the local currency market.

Dealers said the rupee was likely to continue to weaken in the near term with the broad trend towards safe-haven assets including the dollar because of euro zone and trade deficit issues.

"A breach of the 50.20 level would push the rupee down to 50.50 with the next target then being 52.00," said Ashtosh Raina, head of foreign exchange trading at HDFC Bank.

Trade deficit in October is seen at $19.6 billion, the highest in four years, the country's trade secretary said on Tuesday, citing provisional data. At this rate, the trade deficit for the year could breach $150 billion, Rahul Khullar said.

The one-month onshore forward premium was at 25.25 points from 24.75 points on Tuesday, the three-month was at 65.25 points from 65 and the one-year was at 167.75 points from 178.75.

One-month offshore non-deliverable forward contracts were quoted at 50.17, at par with the onshore spot rate.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange were at 50.35, on the United Stock Exchange they were at 50.3225, while on the MCX-SX they were at 50.3125. The total volume was at $3.64 billion.

How to calculate Gift Tax

High value gifts were a safe mode to show one's love to others financially. But the tax authorities have made rules to tighten the provisions related to gifts. In fact the rule has become so strict to end the high value gifts people normally used to make to escape from paying tax. The rule thus effectively prevents money laundering in the in the name of high value gifts. Gift tax in India is regulated by the Gift Tax Act which was constituted on April 1, 1958. It came into effect in all parts of the country except Jammu and Kashmir. As per the Gift Act 1958, all gifts in excess of 25,000, in the form of cash, draft, check or others, received from one who doesn't have blood relations with the recipient, were taxable.
The change in the rule related to gifts says that the receiver has to pay tax for receiving any gift valued at Rs 50,000 and more. The 'any gift' clause means that not only cash but all gifts of any value. So if someone receives a gift of a house worth Rs 20 laky, then he/she is automatically in the highest income bracket and has to pay 30% + surcharge on value of the house as tax.
According to the law, individuals can receive gifts from the following sources:
• Relatives or Blood Relatives
• At the time of Marriage
• As inheritance
• In contemplation of death

Gifts Exempted from Tax
There is exemption for gifts received from certain people. The gifts that one receives from relatives on the occasion of marriage, the gifts receives from parents and grandparents, the gift received by a daughter-in-law from her parents-in-law, and gifts received by way of a will and inheritance are exempt. The gifts received by a son-in-law from his parent-in-law will be taxed.
A Non-Resident Indian can gift to his/her parents in India from their NRE (Non-Resident External) account without their parents suffering any tax.
The gifts received in the names of one's minor children will be clubbed with the parents' income for taxation purpose. Also the tax authorities alert in saying that, in case of both parents having income, clubbing will be done with that parent who is earning more. So one cannot hide under the cover of their minor children receiving the gifts.
Not only gifts, but any real estate deal done for values lower than the state governments fixed rates, will also be taxed. Here the tax will be charged on the difference between the state government's rate and purchase price. The tax needs to be paid by the buyer of the property.
Movable properties outside the country, unless the donor
a) Individual: is an Indian citizen, who is originally a resident of India, or
b) No-individuals resident of India during the year of gift
c) Out of balance gift by NRI (Non-Resident Indian) in his Non-resident account.
d) Foreign currency gift of convertible foreign exchange, remitted from overseas by an NRI to a resident relative.
e) Foreign exchange asset gifted by NRI to his/her relatives.
f) Special Bearer Bonds, 1991.
g) Saving certificates issued by the Central Government (notified as exempted).
h) Capital Investment Bonds up to ` 10, 00,000 per year.
i) Relief Bonds gifts by an original subscriber.
j) Gifts of Certain bonds from the NRI to his/her relatives, which are subscribed in foreign currency (specified by the Central Government).
k) Gift to government or any local authority.
l) Gifts to any charitable institutions.
m) Gifts to notified temples, churches, mosques, gurudwaras and other places of worship.
n) Gift to children for educational purpose (Reasonable amount).
o) Gifts by an employer to its employees in the form of bonus, gratuity or pension.
p) Gifts under will.
q) Gifts in contemplation of death.

Health Insurane Plan from SBI - Hospital Cash’

SBI Life Insurance has recently launched a health insurance plan called ‘Hospital Cash’. It provides fixed daily allowance for every day of hospitalisation, irrespective of the hospital bill. The plan is also available online. In case the insured is admitted into an ICU, twice the amount of fixed daily allowance is allowed. The plan is available for a fixed policy term of three years and has flexibility of premium payment, including annual, half-yearly and quarterly. It is offered for sum assured (SA) of Rs2 lakh to Rs5 lakh. The fixed daily allowance can range from Rs2,000 to Rs5,000. The ICU benefit varies from Rs4,000 to Rs10,000. A mediclaim policy reimburses only the expenditure incurred on the treatment of an illness at a hospital. There are several other expenses which mediclaim policies do not reimburse—travel, attendant’s lodging, loss of income (for patient and/or attendant), pre-hospitalisation diagnostic tests, medicines, etc, that can run up to as much as 30%-40% of the total treatment cost. The Hospital Cash plan—no substitute for mediclaim—is a supplement for these extra expenses.

Hospitalisation due to pre-existing diseases is not covered for the first two years of policy. The benefit illustration specifies annual premium of Rs3,240 for a healthy 32-year-old opting for Rs3 lakh SA which means fixed allowance of Rs3,000 per day for hospitalisation, subject to a maximum of 100 days (renewable till the age of 75). By way of comparison, the Bajaj Allianz General Insurance Hospital Cash 60-day plan (renewable up to the age of 65) offers daily allowance of Rs2,500 on premium of Rs1,985, while Tata AIG General Insurance HealthCare Level 4–180-day plan (renewable up to the age of 54) offers daily allowance of Rs3,000 on premium of Rs4,086.

How to verify TDS -Form 26AS details online

What is Form 26AS?
Form 26AS is a consolidated tax statement issued under Rule 31 AB of Income Tax Rules to PAN holders. This statement with respect to a financial year will include details of:
a) tax deducted at source (TDS);
b) tax collected at source (TCS); and
c) advance tax/self assessment tax/regular assessment tax etc. deposited in the bank by the taxpayers (PAN holders). Form 26AS details are available only from Financial Year 2005-06 onwards

It is the rule of Income Tax Act is to deduct tax at source (TDS) for certain type of income eg. In case the interest income earned on a bank deposit for a financial year exceeds Rs. 10,000.00, bank will deduct tax at source. In case your salary for a particular financial year is above the minimum taxable limit, your employer will deduct tax from your salary. When you deposit the advance tax or the self assessment tax with designated banks, Banks upload challan details to TIN (Tax Information Network) on a T+3 basis after the realization of the tax payment cheques .On the day after the bank uploads the details of self assessment/advance tax to TIN it will post these details into your Form 26AS. Actually we don’t know, whether the amount deducted as TDS is credited in Government Account (Income Tax). However, the Form 26AS will provide the complete details regarding the tax amount remitted to Government Account on your PAN. In case you do not find your tax deducted details in the Form 26AS, immediately you need to follow up with the bank or the employer or deductors. This could be because the bank has made error in data entry. You should take up the matter with your bank for rectification of amount or other details.

Every person/ entity that has deducted or collected tax at source is required to deposit the tax to the government account through a bank. Banks will upload this payment-related information to the TIN (Tax Information Network) a central system. These deductors are also required to file a quarterly statement to TIN giving the details of their TDS (Tax Deducted at Source)/TCS (Tax Collected at Soruc). The TIN central system will match the tax payment-related information in the statement with the tax receipt information from the banks. If both of these match TIN will create a comprehensive ledger for each PAN holder giving details of the tax deducted/collected on its basis by every deductor who has filed the statement.

How is Form 26AS useful for you

a) The credits available in the tax statement confirm that:
a) the tax deducted/collected by the deductor/collector has been deposited to the account of the government;
b) the deductor/collector has accurately filed the TDS/TCS statement giving details of the tax deducted/collected on your behalf;
c) bank has properly furnished the details of the tax deposited by you.

In future you will be able to use this consolidated tax statement (Form 26AS) as a proof of tax deducted/collected on your behalf and the tax directly paid by you along with your income tax return after the need for submission of TDS/TCS certificates and tax payment challans along with income tax returns has been dispensed with by the Income Tax Department (ITD). However as of now for claiming the credit for tax deducted/collected at source you may be required to enclose TDS/TCS certificates (Form 16/16A) issued to you by the deductor.

The following are the are the possible reasons for no credits in Form 26AS?
The possible reasons for no credit being displayed in your Form 26AS can be:
a) Deductor/collector has not filed his TDS/TCS statement;
b) You have not provided PAN to the deductor/collector;
c) You have provided incorrect PAN to the deductor/collector;
d) The deductor/collector has made an error in quoting your PAN in the TDS/TCS return;
e) The deductor/collector has not quoted your PAN;
f) The details of challan against which your TDS/TCS was deposited was wrongly quoted in the statement by the deductor or wrongly quoted in the challan details uploaded by the bank.

To rectify these errors you may request the deductor:
a) to file a TDS/TCS statement if it has not been filed;
b) to rectify the PAN using a PAN correction statement in the TDS/TCS statement that has been already uploaded if it has made an error in the PAN quoted;
c) to furnish a correction statement if the deductor had filed a TDS/TCS statement and had inadvertently missed providing your details or you had not given your PAN to him before he filed the TDS/TCS return;
d) to furnish a correction statement if the deductor had filed a TDS/TCS statement which had mistake in the challan details;
e) to take up with the bank to rectify any mistake in the amount in the challan details uploaded by the bank.

visit the web site https://www.tin-nsdl.com for more information.

HAPPY DIWALI TO ALL FRIENDS

Etihad Airways offers 40% discount on fares

Etihad Airways has slashed up to 40 per cent off its regular air fares for the month of May, the airline said in a statement on Sunday.

The Abu Dhabi-based carrier said the promotion, which applies only to economy class, was not linked to a slump in global oil prices nor was it a response to Emirates' decision earlier on Sunday to remove a fuel surcharge on all its airfares.

"Fuel prices remain volatile and we continue to monitor the situation closely to ensure we remain competitive," a spokesperson for Etihad said.

Commodity prices, including crude oil were sent tumbling last week, following the death of Al Qaida leader Osama Bin Laden.

"Last week we were recognised as the Middle East's Leading Airline at the region's World Travel Awards, so we are very excited to offer these sale fares to complement the win, designed to help all our UAE based customers choose their perfect holiday or short break during May," said Hareb Al Muhairi, Etihad Airways' vice president of UAE sales.