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| Posted: 29 Jan 2013 03:35 AM PST Download Mutual Fund Application Forms Call 0 94 8300 8300 (India)
Talk about income tax refunds and you'll find six of 10 people complaining about their share pending for long. There are several reasons for this; growing number of taxpayers, technical problems at the department, and many times, the department is 'slow at work'.
It works like this. Once a return is filed, the income tax (I-T) department verifies the information and processes it, and refunds any excess paid. Ideally, a refund cheque is supposed to reach your mailing address in four months or can be credited to your bank account through the electronic clearing system or ECS.
Says Taxguru.in, the ECS option introduced under the Refund Banker Scheme in 2007 to implement speedy refunds does not cover the salaried taxpayer in Mumbai, though it covers 14 other cities.
But, even in those cities, ECS has not helped much. Neither has the interest penalty of six per cent. As a result, the four-month period stretches to years.
Income tax refund can be delayed if the amount you claim as taxes paid does not match the government's record. Many presume the online record (Form 26 AS as compared to Form 16/16A) is correct, which may not be the case always. Hence, it is advisable to always take a copy of your Form 26 AS and compare it with your Form 16/ 16A. Also as a caution, always check the permanent account number (PAN) you provided at the time of filing returns and other personal details (name, assessment year, and so on) which, if written wrongly, can add to your refund woes.
If you give wrong addresses, you'll have to wait for refunds. And, most don't update the address of correspondence provided at the time of applying for PAN. The I-T department is supposed to credit refunds directly to your bank account in case the amount is less than ~25,000. However, often, even for higher amounts you may just land a cheque to the mailing address given at the time of applying for PAN. So, update your change in address regularly. If possible provide your permanent address, if you live on rent.
You are supposed to give your bank account number and its MICR code for direct credit of refunds. Most taxpayers don't provide the right MICR code, which stands for magnetic ink character recognition, and their refund gets stuck.
If you have an account with a co-operative bank, do remember to say No to the option (at the time of filing returns) where you are asked whether your bank has ECS facility or no. Importantly, from this year onwards you will have to furnish details of tax deducted at source (TDS). If the details in your form don't match the one with the IT department, your refund will not be addressed immediately.
This is how it works. Anybody issuing a TDS certificate, except salary TDS, should download Form 16A from the National Securities Depository's (NSDL) website and give it to the taxpayer. For instance, your bank will give it to you. On the right hand top corner you'll find the six-digit TDS certificate number.
The details can mismatch due to various reasons, such as the TDS deductor writing wrong TDS number or not sending the tax deducted, leading to a delay in your tax refund.
Those having a salary account or bank interest income should also provide Tax deduction Account Number (TAN), mandatory for assessees liable to deduct TDS. Many don't provide one or give awrong number of their employer or bank or any other institutions paying them an income.
The return is considered not filed until the Income Tax Returns Verification (ITR-V) reaches the department's Bangalore office within 120 days of filing returns online.
Then, your refunds can be delayed if it is picked up for scrutiny and there is no one particular reason for it. Refund arising on revised returns will also not be easy to get. Or, if on the back of mismatched assets, your refunds can be delayed. There may be cases where you receive the cheque, but it has expired.
Getting your refund is a lengthy and time-consuming process. You can take it up with the Assessing Officer or Additional Commissioner of Income Tax (A-CIT), which should be sorted in a month or three.
There can be several reasons for the excess amount to get stuck. So, check all information you provide
INCORRECT TDS DETAILS: If the TDS details in your form do not match the data with the income tax department, expect your refund to get delayed. Verify he TDS details online before sending the form
MANYTDS ENTRIES: If there are lots of TDS entries (some taxpayers can have up to 70-80 entries), your assessment might take a little longer. Obviously, the refund also gets delayed
WRONG TAN: If you are a salaried individual or earn interest income, not providing TAN can also delay your refund. It is advised to provide your employer or bank's TAN
WRONG MAILING ADDRESS: Though direct credit of refunds has removed this problem to a large extent, there are some who give incorrect addresses and then wait for refunds
INSUFFICIENT BANKDETAILS: You are supposed to give your bank account number and its MICR code for direct credit of refunds. If there is an error, your refund gets stuck
NOT SUBMITTED ITR-V: The return is not filed until the ITR V reaches the CPC in Bangalore. Don't expect any refund if the ITR-V has not been filed Here's what you can do Any defective filing from your/I-T department side has to be solved by a rectification letter. If the issue is cleared, you will get your pending refund If there are no defects, you need to write a letter, along with copies of returns, to your AO, informing him of delayed refund If there is no response in 10 days, write another letter to the A-CIT, attach a copy of the letter to the AO No response? Take it up with the Grievance Department, with copies of letters to both AO and A-CIT Visit the AO and A-CIT if need be Take the RTI route for an update on your refund
Happy Investing!!
We can help. Call 0 94 8300 8300 (India)
Leave your comment with mail ID and we will answer them OR You can write back to us at prajnacapital [at] gmail [dot] com --------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms Best Performing Mutual Funds
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| Points to consider while buying insurance plan Posted: 29 Jan 2013 02:36 AM PST Call 0 94 8300 8300 (India) CHOOSING the right insurance policy for family and for oneself has become crucial in the times of complicated financial markets and various other unexpected events.
All investors are very sure about all their investments especially related to fixed deposits, small saving schemes and others investments. But when it comes to insurance they are not very certain about their insurance needs and what kind of insurance they will be requiring.
The different types of covers on offer are: Pure term insurance: Pure term life insurance offers insurance cover for life for certain period of time. However, the cover offers no maturity advantages but on the demise of the assured in the specified term, the total amount insured is completely given to the kin. These are the cheapest insurance covers available as they cover only the risk of death and have no investment component attached to them. Endowment Policy: A life insurance agreement structured to be paid the total amount after a certain maturity period or on the event of the assured demise is known as an endowment policy. The policy offers financial safety for a specified tenure. The purchaser pays premiums for a specific tenure and continues to stay protected for that particular tenure. Unit linked insurance plan: Ulip is also a product, which is a combination of insurance and investment. The only thing being, the investment component is as per the investor's wish unlike an endowment or a money-back plan, where the company decides where to invest. Money-back policy: Money-back policy is the alteration of endowment plan. The basic difference lies in the maturity advantages that are paid by the company at the end of specific tenures while the life cover continues for the entire term.
If it is a Ulip then one needs to compare and consider the charges of similar plans offered by various insurance companies.
The cost benefit ratio of the policy relies on many factors such as what is insured, what's the cost paid to avail the investment facility and what are the benefits that come along with it. One way to quantify the cost-benefit ratio is to calculate the internal rate of return (IRR) one earns from the policy. IRR basically is calculated on the basis of cash outflows (premiums paid) and cash inflows (maturity amount or an annuity). The best way to demystify the returns from any insurance policy apart from a term plan is to first compare the premium with the term insurance rates. Then deduct the proportionate amount, that is, the equivalent term insurance rate from the total premium paid. The rest is your investment component. Calculate the IRR on this net premium. For traditional plans, like endowment or money back plans this rate might come to about 8 per cent on an average. For Ulips the returns will depend on the asset class chosen by you. But these are just the gross returns. Your actual returns decrease because of mortality charges and various other charges. As per the track record, the traditional plans have given an average net IRR of hardly 6 per cent. Insurance by itself is not an investment and if you consider it as the only investment, you are seriously losing a lot of money, especially to inflation.
Happy Investing!!
We can help. Call 0 94 8300 8300 (India)
Leave your comment with mail ID and we will answer them
OR
You can write back to us at PrajnaCapital [at] Gmail [dot] Com
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| Posted: 29 Jan 2013 01:48 AM PST Download Mutual Fund Application Forms
In India, We can invest in Gold in India as Gold funds of funds. Two mutual funds are offering these type of funds in India. An investor in India can invest in these funds run by DSP Black rock and AIG investments in India. Both the companies offer more or less similar schemes. To buy and sell Gold fund of funds is like buying and selling Mutual fund units. No complication in buying and selling these funds. Any one having a Demat account in India can buy and sell these funds. These World Gold Funds are listed in NSE and BSE. So you can buy the units of these Funds from the Stock markets in India in secondary market. The only thing to remember before investing in these funds, is the risk profile of the Fund. The return offered by these funds are more. So the risk profile of these funds will also be more. These funds are suitable for those who can absorb risks. When compared with other investments in Gold like Gold ETFs or e-Gold, the fluctuation in the unit price is more. So only those investor who can tolerate risks should invest in these scheme. World Gold Fund run by both companies more or less invest in Global or overseas mutual funds which invest in Gold and Gold mining companies and physical Gold and other debt instruments. Since these funds invest in mining companies which are listed in stock markets overseas, the risk profile will be more. Normally when the price of Gold booms, the chances of returns getting better than the returns offered by Gold ETFs or e-Gold in India. Now let us compare and analyse the two Gold funds or Gold fund of funds in detail. -------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms Best Performing Mutual Funds
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