Prajna Capital |
- E-File your Tax Returns
- Over draft will attract foreclosure charges
- Liquid Funds - A good option to save money
| Posted: 04 Jul 2014 05:22 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
With July 31 being the last day for filing income- tax returns, tax assesses need to start getting their returns ready electronically.
In the last few years, things have become quite easy due to the e- filing process. E- filing is mandatory for taxpayers with an income of over ₹ 5 lakh a year. But before that you need to know the changes in the return form this year. Changes in return forms are brought about almost every year.
What's new?
There are some changes that one needs to keep in mind. For instance, form Income Tax Returns – 1 or ITR- 1 has space for first- time home buyers to claim deduction under section 80EE. Those who took a home loan between April 1, 2013 and March 31, 2014 can claim an additional deduction of ₹ 1 lakh on the housing loan interest paid, that is, they can claim tax benefit for interest repaid up to ₹ 2.50 lakh instead of ₹ 1.50 lakh. However, the loan amount for this should be ₹ 25 lakh or less. The new form ITR- 2 requires you to divide capital gains into several categories, based on the nature of the capital gains and the asset sold.
You will also have to furnish details of exempt allowances under Section 10. ITR- 2 asks for information on house rent allowance ( HRA), leave travel allowance ( LTA), tax paid by employer on non- monetary perks and other allowances. Till last year, you only had to mention the sum total of all such tax- exempt allowances.
Non- corporate taxpayers were given an option to claim refunds through cheque or credit into bank account. With an intention to expedite and align the refund process with processes applicable to corporate taxpayers, the new forms have done away with the option of claiming refunds through cheque. Accordingly, going forward, all taxpayers will now receive the legitimate tax refunds directly into their bank account. Hence, ensure you submit the correct bank details.
Non- corporate taxpayers claiming deduction for bad debts are now required to disclose their Permanent Account Number ( PAN) in tax returns of every debtor whose quantum of bad debt exceeds ₹ 1 lakh.
TDS details
Before you get down to filing your tax return, check if the tax paid by you has been correctly credited. Check you tax credit statement or Form 26AS to know the same. Salaried individuals should match the TDS details in their Form 16 with those in the Form 26AS. Form 26AS is available on the I- Tax departments portal. Check if the tax deposited reflects in Form 26AS. Also, pay the outstanding tax amount, if any, at the earliest.
Is it the right form?
The form to be used for filing your tax return is equally important. Choosing the wrong form will lead to your returns getting rejected.
The simple ITR- 1 is the most used tax form, but many assesses may not be using it correctly. Last year, the Central Board of Direct Taxes ( CBDT) had made it mandatory for taxpayers to use ITR- 2 if their exempt income exceeded ~5,000 a year
Where to file returns?
You can file returns either through the income tax ( I- T) department's website
How to e- file returns?
Register with the tax filing site you choose and fill in your details. There are various packages available with these sites.
ITR - 1 OR SAHAJ USE IF YOU EARN FROM[1]Salary or pension [1]Interest income [1]Rental income ( one house) DON'T USE IF [1]Exempt income is more than ₹ 5,000 a year [1]Earn other income from lottery or horse- racing [1]Incurred loss under income from other sources [1]Have any assets in a foreign country [1]Claim tax benefit under foreign treaty
ITR - 2 USE IF YOU EARN FROM[1]Salary or pension [1]Capital gains [1]Rental income from more than one house [1]Income from interest, other sources including lottery, horse- racing [1]This is not for businessmen or professionals
ITR - 3 USE IF YOU EARN FROM[1]Salary, pension, bonus, interest income, commission, capital gains [1]Rental income from one or more houses, carried forward losses [1]Income from interest, other sources including lottery, horse- racing [1]Not for sole proprietorship firms
ITR - 4 USE IF YOU EARN FROM [1]Proprietary business, profession, commission
ITR - 4S OR SUGAM USE IF YOU EARN FROM [1]Business income ( turnover less than ₹ 1 crore) [1]Business covered under presumptive tax laws DON'T USE IF [1]Self- employed [1]Made capital gains [1]Made gains from lottery or horse- racing [1]Earn commission from agency business [1]Income less than 8% of the turnover of your business [1]Income from speculative business
You can log into the I- T department's e- filing website by confirming your mobile number and email address. And if the same mobile number or email address is used for more than four taxpayers, it insists that you need to give a separate mobile number or email address. You cannot transact at all on the portal unless you carry out such change. This is a recent recommendation from CBDT [1]He sites his own example. Nayak needs to file more than five returns — his own, for his wife, mother, mother- in- law and the Hindu undivided family ( HUF) of which he's the karta, as the executor of a will, as partner of a partnership firm, and so on [1]Nayak's mother and mother- in- law do not have email addresses. They are not even SMS savvy, so there's no point giving their mobile numbers. Neither my HUF nor the estates of the will have any email addresses or mobile numbers," he says. While Nayaks could be an exceptional case, many could be faced with similar situations if they need to file returns for their parents or in- laws or both [1]Similarly, if a non- resident India has to file I- T returns, he will have to maintain an India number and a foreign number. Reason: The I- T departments e- filing website does not accept foreign mobile numbers. Such individuals will have to maintain India numbers for family members too in case they need to file returns in India [1]Then, you should be careful about how you have named yourself across financial documents. For instance, the I- T department website is supposed to recognise you through the name given in your Permanent Account Number ( PAN card). But sometimes if the name in your bank documents or any other official statements is even marginally different, you may be seen as a different individual,
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
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 Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap Funds Invest Online
E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF             | ||
| Over draft will attract foreclosure charges Posted: 04 Jul 2014 04:38 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
Over draft will attract foreclosure charges
Last month, the Reserve Bank of India ( RBI) directed commercial banks to do away with foreclosure charges on all floating rate term loans sanctioned to individuals. This comes as a major relief to retail borrowers given that foreclosure penalties are in the range of two to five per cent of the outstanding amount on such loans until now. Car loans, personal loans, loans against property, gold loans, two wheeler loans and education loans are some of the popular retail loans.
This move comes two years after the RBI abolished pre- payment penalties on floating rate home loans. The directive on home loans was a relief to all home loan borrowers as it opened up possibilities to refinance existing loans from another lender at lower rates or just prepay their loans entirely, ahead of time, without incurring any penalties. It is pertinent to note that the recent directive on floating rate retail loans is not all encompassing. Let us see if you stand to benefit.
Individual borrowers
While the RBI's directive to do away with pre- payment penalty is applicable to all types of floating rate loans, it is forcibly applicable only for individual borrowers. By definition this would also include sole proprietors. But if the borrower is a partnership firm, company or a Hindu Undivided Family, then banks are not obliged to pass on the benefit of no foreclosure charges. Even where the main borrower is an individual and the coborrower or guarantor is a non-individual, the benefit would not accrue.
Floating rate term loans
Interest on your loan could be floating, semi- fixed or fixed rate. Only floating rate loans stand to benefit under the new regime. Prepayment penalty, if part of your contract, would still be applicable on semi- fixed loans till such time they automatically attract a floating rate of interest during their life cycle, as stipulated in your loan agreement.
Overdraft facilities would also fall outside the ambit of this recent relaxation, as only term loans are presently covered.
The enclosed table lays out various types of loans provided by banks and the pricing methodology followed. Public sector banks have moved entirely to floating rate pricing for their suite of retail loans. Private sector and foreign banks tend to price their shorter tenor loans ( generally up to five years) as fixed rates and longer tenor ones ( which could go up to 15 years) as floating rate.
Borrowers of PSU banks like State Bank of India or Punjab National Bank would be able to save on pre- payment penalties on all the above mentioned loan categories, with immediate effect. It is possible that your prevailing loan contract does not provide for such penalties, as these banks have been moving to a penalty free regime over the past few years. On the other hand, borrowers from private sector and foreign banks ( for loans that are fixed rate loans), would still need to pay a foreclosure charge, where their loan agreement requires them to do so.
Existing loans and fresh loans
This latest directive by RBI brings in uniformity, greater transparency and brings new as well as existing borrowers on the same plane. In other words, the pre- payment waiver directive will benefit existing borrowers as well as new borrowers. So you are within your right, if you meet the criteria explained above, to seek nil pre- payment charges with immediate effect, thanks to the regulatory diktat. Needless to say that new loan contracts will not have a provision for pre- payment penalties, for individual borrowers of floating rate term loans from banks.
Banks, NBFCs and HFCs
At the moment, only commercial banks have been directed to offer this advantage to their customers. Borrowers of Non- banking Finance Companies ( NBFCs) and Housing Finance Companies (HFCs) will not be able to claim relief from pre- payment penalties, if their loan agreement provides for such charges to be paid. This is a departure from the past, when National Housing Bank ( NHB) had asked all HFCs to provide the benefit of nil pre- payment charges on home loans to their borrowers. One can only hope that RBI might instruct NBFCs as well and that the NHB could follow suite with HFCs, to extend these benefits to their customers as well.
Retail loans have been an area of growing interest in the new millennium.
Ever increasing demand, decent margins, improving credit performance, lower cost with improvements in technology and processes, etc have made this category a focus area for lenders.
Increasing competition and regulatory scrutiny have driven customer friendly practices like clarity on terms and conditions, better collection practices, lower interest rates, festival offers with lower or nil processing fees, improved customer service and much more. Pre- payment penalties have been a bug bear for customers and lenders have been relaxing this as the regulatory position and intent was made clear two years ago, with the home loan category ( having the largest share of retail loans).
It is common to find loan offers from private sector banks which might have fixed interest rates, to provide for nil pre- payment penalty after the first six or 12 months. For instance, Bajaj Finserv, an NBFC, has made nil pre- payment a selling point for several of their retail loan categories. HSBC has take the recent RBI directive as a clear signal of intent and extended the benefit of zero foreclosure charges to nonindividual borrowers as well under their loan against property scheme. In the coming months, we could expect similar steps from a slew of lenders, as borrowers begin to demand such concessions.
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
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 Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap Funds Invest Online
E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF      | ||
| Liquid Funds - A good option to save money Posted: 04 Jul 2014 01:45 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
Liquid Funds - A good option to save money
Most people in their 20s experience a sense of financial freedom when they receive their first pay cheque. Typically, they do not know what to do with their hard-earned money and the immediate urge is to start spending as it is the first time they have seen some funds of their own. Also, very often, they keep their funds idle in a savings bank account.
Unfortunately, letting money remain idle in a savings bank account is usually a passive decision, that is it happens because we take no decision. The same money can be invested in liquid funds to gain greater returns and, at the same time, we do not have to compromise on liquidity. In short, liquid funds can be used as a "supplement" to a savings bank account.
T h o u g h l i q u i d funds do not guarantee that there will be no erosion of capital, the chances of capital loss are extremely negligible as income is generated primarily on interest accrual. They are the least risky and least volatile category of mutual funds. For example, if you had invested in a liquid fund and held the investment for one month anytime during the past five years, you would have made a minimum return of 5.67% per annum and a maximum of 9.15% (data as on June 16, 2014).
Despite the de-regulation of interest rates on savings bank accounts by the RBI, only a few banks offer 6-7% per annum, with most still offering just 4%.
Thus, liquid funds offer an extremely good option to park funds.
In the current high interest rate scenario, liquid funds, as a category, delivered returns of 10.13% and 9.76% for financial years 2013 and 2014, respectively. In fact, the minimum return given by any liquid fund during these financial years was 6.98% for 2013 and 7.29% for 2014, which is still much higher than the 4% interest rate offered on your savings account (see table `Earning Higher Returns').
This, in our opinion, is the first step a youngster needs to take before getting into full-fledged investments. This will enable a young person to cultivate the habit of saving and slowly progress to wards investments from debt to equity in a gradual manner.
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
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 Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap Funds Invest Online
E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF     |
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