And its’ time to budget yourselves with Budget 2013-14

At the first glance, the budget this year may appear harmless to the middle class, but make no mistakes, it will bite the common man in more than one way. Of course, if you read the fine print! Let’s examine what some of the things he has given….

·         P. Chidambaram announced a tax credit of Rs 2,000 for persons with income up to Rs 5 lakh. He said, it will benefit 1.8 crore tax payers entailing a revenue sacrifice of Rs 3,600 crore.

·         Securities Transaction Tax on mutual fund redemptions reduced from .25 percent to .001 percent. In the equity futures segment, STT would be brought down to 0.01 per cent from 0.017 per cent. Little relief for those who invest in Mutual Funds and shares

·         First home loan from a bank or housing finance corporation upto Rs. 25 lakh entitled to additional deduction of interest upto Rs. 1 Lac. Apart from the current deduction of 1 Lac 50 Thousand. Congrats to those who are yet to buy their first home!

·         Income limit for the tax-saving Rajiv Gandhi Equity Savings Scheme is raised to Rs. 12 Lacs from Rs. 10 Lacs. This benefit is now extended for 3 years from the current provision of 1 year. Good news for those who do not have a demat account or never traded in shares or bought mutual funds through a demat account.

Now, lets’ examine what all he  has taken away…

·         Buying a Nice House? Pay 1% more - Property transactions skewered; TDS of one percent where transaction exceeds Rs.50 lakh. Sorry, a nice home would now be little expensive!

·         Pay more to eat – As it will cost you 12% more due to service tax on all air conditioned restaurants regardless of whether or not they serve alcohol. Convince your family to have a good meal but at a non – air conditioned restaurant!

·         Nice way to recover the so called revenue sacrifice - Ten percent surcharge on income exceeding Rs.1 Crore (Rs.10 million/$180,000) a year; only 42,800 people have declared such income, very surprising! However, Chidambaram did a good job by trying to recover a decent portion of what he gave by way of Rs.2000 tax credit to 1.8 Crore tax payers.

·         Pay more to watch - Finance Minister has doubled the import duty on set-top boxes to 10 per cent making them costlier. The four metros are now compulsorily digitised for cable connections

·         Pay more to talk - smart phones or phones priced more than Rs.2,000 will now become pricier with the sharp rise in excise duty to 6 per cent from 1 per cent

·         Pay more to travel - Diesel will see a sustained rise in price if global oil prices do not retreat as the allocation made for fuel subsidy is also lower which means that the Centre is moving towards freeing prices of petroleum products. Remember, your rail travel has already become costlier courtesy the railway budget.

·         Pay more to cook – With freeing prices of petroleum products, the cooking gas might prices are set to rise..

·         No real savings – Effective tax saving of 6.47% for those who earn upto 5 Lacs as the FM has allowed a tax credit of Rs. 2000, but this is not real courtesy the growing inflation. To make it more effective, FM should have enhanced the Tax bracket instead of offering a paltry Rs. 2000. Let’s compare the personal Tax scenarios of current and next FY –

Individual	Income Level 500,000	Income Level 5,000,000	Income level 11,000,000
Tax for FY 2012-13	30,900	1,369,000	3,223,900
Tax for FY 2013-14	28,900	1,369,000	3,546,290
Effective Tax savings	2,000	Nil	NA
Effective Tax savings	6.47%	0.0%	NA
Additional Tax burden	NA	Nil	322,390
Additional Tax burden	NA	0.0%	10%

Therefore, whatever Chidambaram’s famous poet Thiruvalluvar says "Kalangathu Kanda Vinaikkan Thulangkathu Thookkang Kadinthu Seyal" (which means,"What clearly eye discerns as right, with steadfast will and mind unslumbering, that should man fulfil.") For Aam Aadmi it is a budget with some pain and hardly any gain

This article was also published in "Chatterpiller", the newsletter of Carma Connect
https://carmaconnect.in/newsletters/2013/03/17/finger-food-9/

Investors can now search for financial advisors through Advisorkhoj.com

AdvisorKhoj is a website that brings together investors, distributors and AMCs. Its founder Pradip Chakrabarty shares his plan on his new venture in an interview with Pallabika Ganguly. What is advisorkhoj.com? Advisorkhoj is an on-line directory to help investors locate financial advisors and distributors across the country. The idea is to create a one-stop portal where investors can search for all types of financial advisors such as investment advisors, insurance, tax planning, financial planning, shares and commodities, etc. The portal will help advisors to grow their clientele. The beta version of the portal has been launched and it will be fully operational in two weeks. The portal is our attempt to bring the three stake holders – investors, advisors and manufacturers, on to a single platform. The advisors can propagate and promote their business, manufacturers can showcase their concepts and products and investors can avail these services and products through a credible financial advisor or distributors in their neighborhood. What prompted you to launch such portal? For the past few years, financial advisors are facing a lot of regulatory challenges. Moreover, the market has also been volatile for quite some time. Today media portrays, most of them as commission earning agents. Therefore, I felt the need to make it clear to media and investors that the little financial penetration that exists in the country is only due to the financial advisors. So, I launched a website which showcases the expertise of licensed financial advisors. How will it benefit distributors? This is the only virtual platform that is meant to help distributors to reach masses. By listing on the site, distributors benefit in several ways: Advisors can list complete range of services offered by them, like from preparing PAN Cards to financial planning, will writing and so on. In addition, advisors can talk about their services and list their achievements in their‘bio page’ for the investors to see. Most importantly, it will create a ‘pull’ as the investor will search the advisors and seek their services. What is your business model? Our business model is based on subscription fee. The basic registration ‘Madhyam’ service is free for advisors where an advisor can display his education qualifications, experience, team size and office photograph.  But advisors can only get access to investor’s contact details as well as upgrade their profile by adding investor’s experience video by availing any of the three paid service – ‘Uttam’ for Rs 499 per annum (p.a), ‘Atyuttam’ for Rs 1499 p.a. and ‘Sarvottam’ for Rs 4999 p.a. Each level of subscription will entitle the advisor to a different set of value added services. How can advisors register on the portal? Advisors can register themselves in three ways: Online registration – advisors can go to our portal – www.advisorkhoj.com and register online. For mutual fund advisors a special link has been created… the moment a mutual fund advisor enters his/her ARN No. a verification code will be sent to his/her mobile. The advisor only needs to enter the verification code and he/she is registered! Telephonic registration - financial advisors can call on 08880009939 or give ‘missed call’ on our helpline number 08067730036 and our call centre team will get in touch with them and help them to register on our portal. Write to us with their complete profile details at register@advisorkhoj.com How will it benefit investors? Oh, that’s a really a good question and I would like to show you certain statistics. Google analytics show that more than half million Indians, on a monthly basis, search for advisors who offer investment products, tax advice, financial planning, mutual funds and other financial products. But, investors end-up seeing links of some Indian banks or large corporate distributor, offices of mutual fund and insurance companies. Hardly any IFAs contact details are visible in the search results. Our aim is to bring the portal on the first page of such searches so that all advisor contacts are easily available to investors. Investors get to choose advisors and compare advisors on the basis of experience, awards and qualifications. Investor can also post their queries which will be answered by our expert advisors.  To connect to the advisor the investor can do a City, area and the service or a product based search for the best results. Our administrative team will help the investor to instantly connect to specified advisors through sms and email. After availing the advisor’s service he/she can also rate and review the service provider. What are your other plans for advisorkhoj? Clearly, our plan is to bring all three stake holders on to one platform and our mission is to take financial advisors and distributors to the masses. This mission will not be accomplished unless we bring all the current active advisors (the number would be approx 500,000 across product and service categories) on our portal, enroll new set of advisors from B-15 cities and conduct investment awareness program in tier II and III cities and rural areas. Therefore, all our plans will revolve and evolve around these things apart from our plans to execute certain completely out of the box ideas.  When will the portal be operational? We have done a soft launch of the portal so that advisors can register from next week. Once we have registered advisors across one hundred cities, we will popularize the portal among investors.

Financial Must do’s in 2013

December 21, 2012, we all waited for the world to end. But fortunately or unfortunately the world still exists and so do we. We moved on, bid adieu to 2012 and welcomed 2013. Let us begin this year by marking out what is important to us financially.

 INCOME TAX – An alert to all those who have not filed their Income Tax return for the FY 2011-12. The last date is March 31, 2013. 

To calculate your tax liability log on to:http://law.incometaxindia.gov.in/DIT/Xtras/taxcalc.aspx.

While filing return also check whether you got refunds (if any) for the last FY 2010-11. If not, check the status here https://tin.tin.nsdl.com/oltas/refundstatuslogin.html

RGESS - This year brings to you the Rajiv Gandhi Equity Savings Scheme. New retail investors with annual income of Rs 10 lakh and below are eligible to claim a deduction of 50% on a maximum investment of Rs 50,000. Applicable for those who invest for the first time into equities, Exchange traded funds (ETFs) and Close Ended mutual funds listed on stock exchange and invested only in BSE 100, CNX 100 and blue chip public sector stocks. Shares of PSU firms categorised as Maharatna, Navratna or Miniratna by the central government will be eligible for RGESS. Follow on public offers and IPOs of PSUs will also be eligible (Under sub-section (1) of Section 80CCG of Income Tax Act 1961). Talk to your Tax Consultant to know more.

SIGN UP WITH EPF - It is necessary that you know more about your EPF (Employees’s Provident Fund) account now that it is online! Sign up by clicking http://www.epfindia.com/. This helps you know your current balance etc. thru one time mobile number registration.

CTS CHEQUES - It is time to get a check on your cheque. Cheque Truncation System (CTS), is a project undertaken by the Reserve Bank of India – RBI, for faster clearing of cheques. CTS is basically an online image-based cheque clearing system where cheque images and Magnetic Ink Character Recognition (MICR) data are captured at the collecting bank branch and transmitted electronically.

Based on the experience gained and the benefits that would accrue to the customers and banks, it was decided to implement CTS across the country. Starting April 1st, 2013 only CTS-2010 compliant cheques would be accepted for clearing. Check, whether your bank has sent you the CTS compiled cheques. 

Read more on http://www.facebook.com/pages/Advisorkhojcom/549617321720586

UNIFORM KYC - Effective 1st Jan12, the Market regulator the Securities and Exchange Board of India (SEBI) announced introduction of uniform forms and documents for the purpose of customer identification by different market intermediaries like stock brokers and mutual funds, a step intended to bring uniformity to the process.

With a view to bring about uniformity in securities markets, it has also been decided that the same Know Your Customer [KYC] form and supporting documents shall also be used by all captioned SEBI registered intermediaries.

Those who have done their Mutual Fund KYC prior to 1st January 2012, should get their IPV (In-Person-Verfication) done immediately else they will not be able to invest in Mutual Funds (apart from existing folios). Therefore, contact your Mutual Fund Advisor and get it done. However, if you have it already, you can check the status of your KYC at https://www.cvlkra.com/kycpaninquiry.aspx (if you have done from CDSL) or athttps://kra.ndml.in/ (if you have done from NSDL)

INCOME TAX CONCESSION TO EMPLOYERS UNDER NPS: For those who are Entrepreneurs or Owner of Companies, please note that The Finance Act, 2011 amended section 36 so as to provide that any sum paid by the assessee as an employer by way of contribution towards a pension National Pension System (NPS) to the extent it does not exceed ten per cent of the salary of the employee, shall be allowed as deduction in computing the income under the head “Profits and gains of business or profession”. Use this as a tool to retain your employees!

This amendment will be effective from 1 April 2012 and will be applicable to the assessment year 2012-13 (for the income earned in the financial year 2011-12) and subsequent years.

NATIONAL PENSION SCHEME – Have you opened your Account yet? Started by PFRDA (Pension Fund Regulatory And Development Authority) it is one of the low cost models for creating your retirement corpus. Please contact one of the service providers and get your account openedhttp://www.camsonline.com/PensionSystemServices.aspx

KNOW YOUR CREDIT SCORE - Your Credit Score is critical to the loan approval process. It provides lenders an indication of how likely it is that you will pay back a loan. The credit information is based on the millions of updates received by CIBIL from its strong member base comprising of Banks, Financial Institutions, State Financial Corporations, Non-Banking Financial Companies, Housing Finance Companies and Credit Card Companies.

Why it is important? By understanding your credit history it enables you to take control of your financial situation, make informed financial decisions and also helps to protect yourself from identity theft.

Get yourselves “your score” before the bank rejects your loan request for a reason which even you are not aware off, example – your old credit card dues which you cleared but still showing as outstanding in the books of the Credit Card issuing bank or some wrong bills raised by the credit card company and not received by you and showing as outstanding! These all are going to minimise your score which affects you overall score. Contact http://www.cibil.com/help-center or http://www.experian.in/consumer/index.html

OBTAIN AADHAAR CARD – Aadhaar is a 12 digit individual identification number issued by the Unique Identification Authority of India (UIDAI) on behalf of the Government of India. This number will serve as a proof of identity and address, anywhere in India. Any individual, irrespective of age and gender, who is a resident in India and satisfies the verification process laid down by the UIDAI can enrol for Aadhaar.

Each individual needs to enroll only once which is free of cost. Each Aadhaar number will be unique to an individual and will remain valid for life. Aadhaar number will help you provide access to services like banking, mobile phone connections and other Govt and Non-Govt services in due course.

Aadhaar will ensure increased trust between public and private agencies and residents. Once residents enrol for Aadhaar, service providers will no longer face the problem of performing repeated Know Your Customer (KYC) checks before providing services. They would no longer have to deny services to residents without identification documents. Residents would also be spared the trouble of repeatedly proving identity through documents each time they wish to access services such as obtaining a bank account, passport, or driving license etc

Locate the nearest enrolment Centre: http://appointments.uidai.gov.in/easearch.aspx

This is just a bird’s view of everything that you need to check and do for your finance during the year. Wishing you all a great year ahead!

This article was also published in "Chatterpiller", the newsletter of Carma Connect 

https://carmaconnect.in/newsletters/2013/01/16/finger-food-7/