Mahatma Gandhi May Help us on Fake Currency Notes

It may appear weird but its Mahatma Gandhi again who may help us get out from another problem of national concern- fake currency notes.
Apart from following the official guidelines issued by the Reserve Bank of India on how to identify fake currency notes there is another quick and easy observation you may make while accepting cash - especially currency of higher denominations.
On each currency note, Mahatma Gandhi's image appears to two sides. One of which is visible as outline on the left hand side in white watermark portion when seen in light. In a genuine currency note, you will find the Father of the Nation smiling while he is in a serious or angry appearance in a fake note.

Tax Savings Tips for Salaried People

As the last phase of the financial year is approaching we can see a number of tax saving tips being published. What I can observe in those tips that most of them don’t address to the needs of salaried people. For example- spreading income among family members is not an option for salaried people which however is the top choice among those tips. Below are some of the tax saving and planning tips that would specifically be beneficial to the salaried -

1.Choose the Right combination of Flexible Compensation Plan - As soon as your HR manager gives you the CTC (Cost to Company) amount, it is most important to use the right combination of different heads of salary income. This alone could save a substantial amount of tax.
Among others the golden rules for this purpose include –

• Ascertain the right amount of House Rent Allowance (HRA). If you are residing in a rented house then you get the benefit of the amount of rent paid. This is calculated on the basis of your salary and HRA. It’s important to allocate the sufficient amount to HRA to get maximum benefit.
• First exhaust the maximum amount allowable as tax free allowances like transportation, children education allowance etc. However the amounts involved here are not big but still its good to save even a penny.

2.Invest full allowable amount in Tax saving schemes – Upto Rs. 1 lakh invested in schemes available under section 80C of the income tax act can be claimed as a deduction from income for calculating taxable income. These schemes include LIC premium, National Saving Certificates (NSC), Mutual Funds, Provident Funds, Repayment of Principal amount of Home Loan, Bank Fixed Deposits (Specific), Children’s Tuition Fee etc. Often we miss this point and end up investing a lesser amount.

3.Know about section 80D – There is hope beyond Rs. 1 lakh under section 80C. You can deduct an amount upto Rs. 15000/- for mediclaim premium paid for yourself, spouse and children. Also an amount of Rs. 20,000/- is allowed for payment of mediclaim premiums for dependent parents above 65 years of age. Always remember not to pay mediclaim premiums in cash.

4.Home Loans – The amount of interest paid on home loans is allowed as deduction from income. However, the following facts are to be considered:

• If you are residing in the same house then the maximum amount allowed as deduction is Rs. 1,50,000 and the loan was taken after March 1999.
• If the loan was taken before March 1999 and you reside in the house then only Rs. 30,000 are allowed.
  You can also get a rebate of amount upto Rs. 20,000 on the home loan interest under section 88. Further the principal portion of loan installment repaid is allowed as a deduction from income under section 80C.
  

Image: taxation.guide

Also Read:

• Tax Saving Investment Options for 2009
• How Do We Get Tax Benefits of Rs. 33,990 on Insurance Policies?
• PAN Holders- View Your Income Tax Credit Status Online
• Online PAN Verification- Step Taken to Check PAN Frauds
• Why You Should Choose Tata Motors Fixed Deposit Scheme for Investment?

After ICAI its ICSI's Turn to Unveil Their Logos

It seems that the Premier Accounting Institutes of India are fast recognising the strength of making brand value. Not many days before it was ICAI who unveiled its logo to be used by its members. Now, The Institute of Company Secretaries of India (ICSI) has released its new logo. The institute has in fact released two logos, one reads 'CS' to be used for its members and the other one which reads 'ISCI' is the logo of the institute. Also the institute has decided that the letters 'CS' are to be used by its members as a prefix to their names.
ICSI's Concept behind the logos-

'CS'- A compact unit in itself, with the central arrow of growth and excellence , it represents stability and integrity , which are hallmark of the profession.
Set in a sober deep blue colour , it represents a very confident and upright professional.

'ICSI'- The new logo of ICSI is a strong , bold and cohesive wordmark , where four different elements(alphabets) come together to create a complete picture. The logo set in deep blue colour represents a multifaceted professional with a high degree of integrity and stability . "Connecting for a collective growth " is the core of the logo , visually depicted in the upward arrow formed by the letters "C" and "S" . The simple and elegant masthead with bold fonts lend it an air of authority and stability. The holistic perception of the identity reflects soft edges with a sharp interior.

ICAI to Organise Placement Programme for Experienced Chartered Accountants

The ICAI is organising Career Ascent from 23 – 25 January ’09. This is basically an extension of the regular placement programmes being organized by the institute for the placement of fresh chartered accountants.
The event is expected to be beneficial to both the corporates who will have access to experienced candidates and also the candidates who will be able to meet and explore better employment opportunities. ICAI has ensured that the information of the candidates will be kept confidential during the entire event.
Career Ascent will be for chartered accountants who had passed their final exams in November 2007 or before and have more than one year of industry experience. The minimum salary package is proposed to be Rs. 5 lakhs. ICAI is expecting more than 100 companies from varied sectors to participate in the event.
Registration and other details are available on http://www.cmii.icai.org/ and http://www.icai.org/

ICAI Goes Tough on CPE Compliance

The Institute of Chartered Accountants of India has decided that the names of such members who do not complete the required CPE credit hours, be not included in any panel that is forwarded by the Institute, on or after 1st January, 2009, to any regulators or other authorities. In the case of a firm, if any partner/paid assistant has not completed the requisite CPE credit hour for the year 2008, the names of such partners/paid assistants will not be included while considering the eligibility criteria and this fact will also be stated in case the firm is otherwise found eligible after excluding name(s) of such partner(s)/paid assistant(s).
The institute had made it mandatory for all its members holding Certificate of Practice (COP) (except senior members above 60 years of age or those who are residing abroad) to complete the (Continuing Professional Education) CPE credit hours requirement which is as follows:
1. at least 90 CPE credit hours in each rolling three year period starting from the calendar year 2008, of which 60 CPE credit hours should be of structured learning.
2. minimum 20 CPE credit hours of structured learning in each year.

Do all PAN Card Holders Need to File Income Tax Return?

Many of us believe that if we have a PAN then it is compulsory for us to file your income tax returns. However it is not true.
You only need to file your income tax return if your Gross Total Income is more than the exemption limit notified by the finance ministry for that year. For example if you are a male below 65 years of age and your gross total income in the financial year 2008-09 is upto Rs. 150,000 then you don’t need to file your return. Only if your income is above Rs. 150,000 you need to file your return. Also it is not necessary to continue filing returns once you have filed a return. It is your Gross Total Income for that year that decides whether you should file a return or not.

Here Gross Total Income is the actual income earned and should not be confused by net income derived after deducting benefits received under the Income Tax Act.

Also Read:

• Individuals- How to file your Income Tax Returns Electronically?
• PAN Holders- View Your Income Tax Credit Status Online
• Online PAN Verification- Step Taken to Check PAN Frauds
• How to read your Income Tax PAN?

Your Transactions that Income Tax Department Checks

The Income Tax Department in India receives annual information return from banks, financial institutions etc that gives the details of various high value transaction done in a year. There is a prescribed range of transactions which have to be mentioned in the return along with the PAN of the person who made the transactions. Following are the transactions that are reported to Income Tax Authorities :-

1. Cash Deposits in Bank Accounts - Cash deposits aggregating to ten lakh rupees or more in a year in any savings account of a person maintained in that bank.
2. Credit Card Transactions - Payments made against bills raised in respect of a credit card, aggregating to two lakh rupees or more in the year.
3. Mutual Funds - Payment of an amount of two lakh rupees or more for acquiring units of a Mutual F.
4. Debentures or Bonds- Payment of an amount of five lakh rupees or more for acquiring bonds or debentures issued by a Company or institution.
5. Shares - Payment of an amount of one lakh rupees or more for acquiring shares issued by a Company.
6. Immovable Property - Purchase or sale of immovable property valued at thirty lakh rupees or more.
7. Reserve Bank of India Bonds - Payment of an amount or amounts aggregating to five lakh rupees or more in a year for bonds issued by the Reserve Bank of India.

If you have incurred such transactions, the income tax department may scan your income tax returns to see if you mentioned enough income in previous years to fund such transactions and may even call you to explain the transactions’ details. However there is nothing to worry or scared about in doing large amount transactions but be sure that you have enough documentation to explain the transactions.

Also Read:

• Tax Saving Investment Options for 2009
• PAN Holders- View Your Income Tax Credit Status Online

How to Choose the Right Investment Plan?

We often receive phone calls from various financial institutions marketing for their investment plans. While at the first go the investment plan appears to be very much attractive with guaranteed high returns (often quite more than that offered by banks’ fixed deposits). Although some of the plans do actually perform that well but most of them don’t live up to our expectations- or we can say that we expected something that the plan was not even offering. This is sometimes because of our carelessness in studying the details and sometimes because of technical words and data presented by the representatives that are hard to be understood by a layman. But we can always ask them a few simple questions and adopt the following procedure that would guide us in choosing the right investment plan:-
1. Set your priorities – You should be clear as to the type of investment you are willing to make. If you have saved money for insurance, don’t go for just another investment scheme because it is offering very good returns. Ask the representative for schemes that match your priority. They always have the best scheme for everyone’s needs.
2. Ask clearly whether the returns offered are guaranteed or not - Almost every scheme that offers guaranteed returns has this fact clearly mentioned in its brochure. If this is not mentioned, the returns might not be guaranteed. Remember, there is a lot of difference in giving high returns over a past period and guaranteed returns.
3. Ask for the Lock-in period – Sometimes, investment plans offering good returns have a long lock in period which is not explicitly disclosed in their plan details. Be sure whether you are ready to put you money for such a long time. Also ask for the penalties and charges for withdrawing your money early. This would enable you to determine the right amount to invest. May be an amount which you would not require regularly in near future.
4. Get the details of Tax Incidents on Income – Be sure to ascertain that whether the income generated from the investment in tax free or not. Often a 10% tax free return is actually more beneficial than a 14% taxable return.
5. Note down all the benefits of the plan – Although all the benefits will be explicitly available in the brochure but it is always better to have them arranged at one place for evaluation. Sometimes some of the benefits mentioned may not be beneficial to you. For example, the plan has section 80C benefits on investments made. But since you had already invested Rs. 1 Lac under 80C benefits this is not useful for you.