Money Mazics

GST Rates Structure 2017

2017-05-29T22:42:00.000+05:30

The GST council has lifted the veil from GST rates across goods and services that will be applicable on different goods and services. GST council has made the much-awaited announcements around tax rates on various categories of goods. There has been a hype around these rates for a while and now these rates are finally in the public domain.

As soon as the GST rates were announced a huge wave of curiosity hit across industry and trade bodies. Everyone is evaluating their position as a result of this change.

The GST slabs are pegged at 5%, 12%, 18% & 28%. According to the latest news from the GST council, the tax structure for common-use goods are as under:

GST Rates Structure

Tax Rates	Products
5%	Edible oil, sugar, spices, tea, coffee (except instant) Coal (instead of current 11.69%) Mishti/Mithai (Indian Sweets) Life-saving drugs
12%	Computers, Processed food
18%	Hair oil, toothpaste and soaps (currently at 28%) Capital goods and industrial intermediaries (big boost to local industries)
28%	Small cars (+1% or 3% cess) Consumer durables such as AC and fridge Luxury & sin items like BMWs, cigarettes and aerated drinks (+15% cess) High-end motorcycles (+15% cess) Beedis are NOT included here

In addition to the above, a few other items were mentioned in the Council’s announcement of rates. These items, and the applicable rates on them are as follows:

Sugar, Tea, Coffee and Edible oil will fall under the 5 per cent slab, while cereals, milk will be part of the exempt list under GST. This is to ensure that basic goods are available at affordable prices.

The Council has set the rate for capital goods and industrial intermediate items at 18 per cent. This will positively impact domestic manufacturers as seamless input credit will be available for all capital goods. Indeed, it is time for “Make In India”.

Coal to be taxed at 5 percent against current 11.69 per cent. This will prove beneficial for the power sector and heavy industries which rely on coal supply. This will also help curb inflation.

Toothpaste, hair oil, and soaps will all be taxed at 18 percent, where currently they are taxed at 28 percent. Most of the cosmetics and fast moving consumer goods (FMCG) brands should get the benefit of this tax reduction.

The ‘mithai’ from the neighbouring sweet shop might lose some of its flavour as Indian sweets will now be taxable at 5 per cent. If you have a sweet tooth, this could hurt your pocket a wee bit in the coming days.

Plus, it was announced that:

for restaurants serving alcohol, the tax bracket will be 18 per cent

education, healthcare are going to be exempted from GST

services on Non-AC restaurants will be 12 per cent.

Please be informed….

How to recognize Easy Money and Fast Money Making Ponzi Schemes

2016-02-21T17:17:00.000+05:30

Making quick money or easy money is the dream of many a people and organizations and due to this ambition, lots of schemes are launched. Everybody wants to be rich and famous and for that various schemes have been introduced. In the past quite innovative schemes like chit funds, plot ownership, teakwood scheme, collective money schemes have been devised to make easy money.

Keeping the trend going, one such scheme has been introduced in the shape of Freedom 251 mobile phone scheme which has taken the world by storm. This appears not only fishy and unbelievable but also such ponzi scheme will make the owners of the company rich and famous. However the scheme also exposes the vulnerability of the general public.

Now whats the scheme all about….?

One non descript company appears out of nowhere with an offer for selling a smartphone on an unbelievable price of Rs 251 with features which can make many other existing smartphones look pale in comparison. The offer was to book the phone online for an initial period and to be delivered after some months or so. To make it appear transparent and genuine, popular and senior political leaders and ministers were invited to launch the scheme.

Lacs of people hit the website of the company to book the phone online and the successful buyers were assured to provide a link for submitting personal details for deliver and payment later.

How the company will dupe the buyers..?

The company will collect money form lacs of people with a promise to provide dirt cheap smart phone at the cost of Rs 251 after four months of booking. General public with the curiosity of owning a smartphone would not mind paying such a paltry sum. The financial mathematics of the scheme by the company is like this:

Cost of the phone- Rs.250

No of bookings- 50 lacs

Total money collected by the company- 50lacs*250=125 Crores

Period of delivery-6 months

(All figures approximate)

Now if the money collected by the company is deposited in the bank with a minimum interest rate of 6.5% for 6 months, the company will earn approximately 4 crores interest in 6 months without any hitch.

This can be understood by the following illustration:

Source-Images

Even if due to any reason, either by Govt. action or other regulating agencies, the company is forced to refund back the public money, still it will retain the interest earned on the deposit amount. And keeping in view our legal system, it will take years for people to get their money back.

There are instances that Owners and CEOs of many such companies are not caught and not proved guilty for long time. You must be knowing the famous people who have not refunded the public’s money even after ordered to do so.

Therefore, before subscribing to such schemes it is advisable to go through the details and viability of such dubious schemes. One needs to apply their own mind and take necessary precaution in money duping schemes.

Even though such ponzi schemes have come and gone but poor people still get lured by such money making schemes whenever they are launched.

Jeevan Jyoti Bima Yojana- PMJJBY and Suraksha Bima Yojana-PMSBY

2015-05-06T22:11:00.001+05:30

Jeevan Jyoti Bima Yojana (PMJJBY) and Suraksha Bima Yojana (PMSBY), two of the most prominent social security insurance schemes declared in the Union Budget, will be launched by the Prime Minister on 9th May 2015. This would be a path breaking initiative towards providing affordable universal access to essential social security protection in a convenient manner linked to auto-debit facility from the bank account of the subscriber.

The two insurance schemes to be launched namely, Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) would provide insurance cover in the unfortunate event of death by any cause / death or disability due to an accident. The convenient delivery mechanism of the schemes is expected to address the situation of very low coverage of life / accident insurance and old age income security products in the country.

Benefits of the Scheme under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

PMJJBY will offer a renewable

One year life cover of Rupees Two Lakh to all savings bank account holders.
Available in the age group of 18 to 50 years extendible up to 55 years,
Covering death due to any reason,
Nominal premium of Rs.330/- per annum per subscriber.
The scheme would be offered / administered through LIC or other Life Insurance companies.

Benefits of the Scheme under Pradhan Mantri Suraksha Bima Yojana (PMSBY)

PMSBY will offer a renewable

One year accidental death cum disability cover of Rupees Two Lakh (Rupees One Lakh for partial permanent disability) to all savings bank account holders.
Available in the age group of 18 to 70 years.
Nominal premium of Rs. 12/- per annum per subscriber.
The scheme would be offered / administered through Public Sector General Insurance Companies (PSGICs) or other General Insurance companies.

In short the schemes being launched by the prime Minister are offering risk coverage of Rs 4 Lakhs on payment of premium of Rs 342/- per person per year. This kind of coverage is not available anywhere else and that too without any medical checkups and any conditions therof. Thought the Aadhar Number is desirable but in case Aadhar Number is not available, the benefits of insurance cover will not be denied to anyone.

How Do Banks and Housing Finance Companies Decide on the Loan Amount?

2015-04-26T16:20:00.000+05:30

As you prepare to buy a new home or intend to build your dream home, more often than not it is the financial aspect that calls for a closer scrutiny. The market is flooded with different kinds of home loan schemes, each one seeming to be more attractive than the others and it is herein that a prospective customer must lay emphasis on. As the risks in offering a home loan is higher, the loans carry a higher interest rate and a bigger down payment. But what are the criteria banks adopt to offer you a home loan to enable you o buy it.

Usually, most banks and housing finance companies give home loans up to a maximum of 85% of the cost of the house. The 15%, sometimes called 'seed money' or 'equity', will have to be provided by the loan applicant. The amount, for which the applicant is eligible, is determined by the age, income, number of dependents, monthly outgoing and repayment capacity. This varies from case to case.

Joint Home Loans | Benefits Of Co-Applicants

The Bank/HFC assesses your repayment capacity while deciding the home loan eligibility. Repayment capacity is based on your monthly disposable / surplus income (which in turn is based on factors such as total monthly income / surplus less monthly expenses) and other factors like spouse’s income, assets, liabilities, stability of income etc. The main concern of the bank is to make sure that you comfortably repay the loan on time and ensure end use. The higher the monthly disposable income, higher will be the amount you will be eligible for loan.

CIBIL Credit Score For Credit History & Loans

Typically a bank assumes that about 55-60 % of your monthly disposable / surplus income is available for repayment of loan. However, some banks calculate the income available for EMI a payment based on an individual’s gross income and not on his disposable income. The amount of the loan depends on the tenure of the loan and the rate of interest also as these variables determine your monthly outgo / outflow which in turn depends on your disposable income.

Banks generally fix an upper age limit for home loan applicants. Only if you qualify in there criteria for giving loans, you can go for a home loan to build your dream house.

Wage Revision for PSU Banks Officers at 15% Increase

2015-02-23T21:00:00.000+05:30

Long awaited wage revision for Bank employees and Officers has been finally settled with 15 % pay rise. The wage revision agreement reached between UFBU and IBA on 23rd February, 2015, which can be considered as breakthrough in over 28 months old overdue wage revision for bankers. Now the Bankers will have two Saturdays off in a month in addition to the wage rise. The wage revision will be implemented with effect from November 2012.

There are 27 public sector banks in the country with a combined employee strength of about 8 lakh. There are about 50,000 branches of these banks across the country.

Cost Inflation Index for the Year 2014-15

2014-09-07T20:01:00.001+05:30

The Central Board of Direct Taxes (CBDT) has revised a value for the cost inflation index for 2014-15 vide Notification No. 31/2014, Dated: June 11, 2014. The Cost Inflation Index helps reduce the inflationary gains, and the index is useful for income-tax assesses in the computation of tax on long-term capital gains.

Cost Inflation Index-

Sl. No.	Financial Year	Cost Inflation Index	Sl. No.	Financial Year	Cost Inflation Index
1	1981-82	100	17	1997-98	331
2	1982-83	109	18	1998-99	351
3	1983-84	116	19	1999-00	389
4	1984-85	125	20	2000-01	406
5	1985-86	133	21	2001-02	426
6	1986-87	140	22	2002-03	447
7	1987-88	150	23	2003-04	463
8	1988-89	161	24	2004-05	480
9	1989-90	172	25	2005-06	497
10	1990-91	182	26	2006-07	519
11	1991-92	199	27	2007-08	551
12	1992-93	223	28	2008-09	582
13	1993-94	244	29	2009-10	632
14	1994-95	259	30	2010-11	711
15	1995-96	281	31	2011-12	785
16	1996-97	305	32	2012-13	852
33	2013-14	939	34	2014-15	1024

Long Term Capital Gains computation :

LTCG = Full value of consideration received or accruing - (indexed cost of acquisition + indexed cost of improvement +cost of transfer)

Indexed cost of acquisition =Cost of acquisition x CII of year of transfer /CII of year of acquisition

Indexed cost of improvement =Cost of improvement x CII of year of transfer /CII of year of improvement

Tax liability on LTCG with Indexation is to be taken at 20%

Capital Gains Account Scheme: Key Features & Tax Benefits

2014-08-31T20:59:00.000+05:30

The profit that arises on the sale of any property is referred to as Capital Gains and is chargeable to tax. But Govt also provides for various schemes for saving tax on such capital gains under Section 54, 54B, 54D, 54F etc.

However, as per the provisions of these sections, the amount is required to be reinvested in specified investment types before the specified period. However, if the due date of filing income tax returns falls before the expiry of the specified period, the amount of capital gains is required to be invested temporarily in the Capital Gains Account Scheme which can be easily withdrawn at the time of investment in the specified instrument.

Capital Gains Account Scheme

As per the Income Tax Act, the taxpayer is allowed some time (2/3 years) to invest the capital gains in specified instruments. However, in many cases the due date for filing income tax returns for the year in which the capital gains arises is before the expiry of the specified period.

To avoid such issues, the income tax act prescribes that the taxpayer should deposit the amount of capital gains in the capital gains account scheme on or before the due date of filing of income tax returns which can be easily withdrawn at the time of investment in the specified instrument.

Features of Capital Gains Account Scheme

The Capital Gains Account Scheme was introduced in the year 1988, and as per the Capital Gains Account Scheme the amount of capital gains to be claimed as an exemption should be either be re-invested or deposited in the Capital Gains Account before the due date of filing of returns.

The Govt has notified 28 banks which can open the Capital Gains Account on behalf of the Govt. All branches of these 28 banks except Rural Branches are authorised to open the capital gains account.

There are 2 categories of Capital Gains Account which are as follows:-

Capital Gains Account -Type A – Savings Account: This is like a normal savings account and the interest payable on this account is the same as the interest paid on normal savings account by that bank.

Capital Gains Account -Type B – Term Deposit Account: This is like a fixed deposit wherein the amount is deposited for a fixed period of time. The interest rate on this account is equivalent to the interest paid on fixed deposits by the bank. As Type B accounts are same as Fixed Deposits Account, any withdrawl from this type of account attracts a penalty for pre-maturity withdrawl.

The interest paid and pre-maturity penalty levied varies from bank to bank and is different for different banks.

Capital Gains Account Type A is advised when the amount of capital gains is to be used for construction of a house as the amount would be required to be withdrawn in various stages. Type B Term Deposit Account is advised when the amount of capital gains is to be utilised for purchase of a house.

Capital Gains Account Type B is also of 2 types – Cumulative and Non-Cumulative. Under the cumulative option – the interest is re-invested and the total amount is paid at the time of the completion of the term period or at the time of withdrawl (whichever is earlier). Under the non-cumulative option, the interest is paid at regular intervals and is not reinvested.

OPENING OF CAPITAL GAINS ACCOUNT

To deposit the amount in the capital gains account, the taxpayer would first be required to apply for opening the account by making in application in Form A. He would also be required to submit the following documents along with Form A – Proof of Address + Copy of PAN Card + Photograph.

Type A Account can be converted into a Type B Account and vice-versa on an application made by the taxpayer in Form B.

WITHDRAWL FROM CAPITAL GAINS ACCOUNT SCHEME

The amount deposited in the Capital Gains Account can be withdrawn by making an application in Form C. The amount so withdrawn has to be utilized within 60 days from the date of such withdrawal and only for the purpose of such withdrawal. The unutilized amount should be re-deposited immediately.

For subsequent withdrawal, the application is required to be made in Form D by detailing the manner/purpose for which the previous withdrawal has been utilized.

Many Banks don’t issue any cheque book for the capital gains account and amount as the amount is to be withdrawn not using a cheque but by furnishing an application in Form C/ Form D.

OTHER FEATURES OF CAPITAL GAINS ACCOUNT

Only Individuals and HUF are allowed to open capital gains account.
The amount deposited in the Capital gains account cannot be offered as a Security for any Loan/ Guarantee.
The Interest on such account is not tax-free and TDS is also liable to be deducted from such account as per the provisions of the income tax act.
The taxpayer can also appoint nominees to this account by making an application in Form E. Such nomination can also be cancelled by making an application in Form F.
To close the Capital Gains Account, an application in Form G is required to be made. In case of the death of the depositor, such application would be required to be made by the nominee/legal heirs in Form H.
The approval of the income tax officer who has the jurisdiction of the depositor is also required at the time of making an application for the closure of the account.

If the amount deposited in the capital gains account is not utilised for the specified purpose before the expiry of the specified time, the amount of capital gains not utilised would be chargeable to tax as capital gains in the financial year in which the time period expires.

With inputs from www.charteredclub.com

Ways to Save Money for your Retirement

2014-06-08T14:15:00.001+05:30

Retirement is expensive. To maintain your standard of living when you stop working, it is estimated that you will need at least 100 percent of your pre-retirement income with inflation or more. Retirement planning is about managing your money today so that you can make the most of your retirement period. Your retirement plan should balance your needs, wants and the reality of your finances. So take charge of your financial future. The key to a secure retirement is to plan ahead for your retirement.

A strategy for how you save today can make a big difference in how much money you will have after your retirement. A solid retirement saving plan charts out methods of creating retirement income and creates a roadmap to help ensure that your money will last as long as you do.

To start with these are the ways to save money for your retirement-

Have a saving mindset

You should designate an amount of your pretax income to contribute to your retirement savings on a monthly or bi-weekly basis and have it taken out of your salary, just like your taxes. It's easiest to save money when you don't have it in your hands; you're effectively taking the decision of whether to save that money out of your control.

Start saving, keep saving, and stick to your goals

If you are already saving, whether for retirement or another goal, keep going! You know that saving is a rewarding habit. If you're not saving, it's time to get started. Start small if you have to and try to increase the amount you save each month. The sooner you start saving, the more time your money has to. Make saving for retirement a priority. Devise a plan, stick to it, and set goals. Remember, it's never too early or too late to start saving money.

Cut your unnecessary expanses

Usually when we are working and earning good money we tend to indulge in purchase of goods and luxuries which may not have a long term use. Therefore it is necessary to assess before buying anything whether you will actually need it. This way not unnecessary expenditure can be curtailed but also it will contribute to your savings for your planned goals.

Put money into an individual retirement plan

You can put up to 5000 a year into an Individual Retirement Plan; you can contribute even more if you are 50 or older. You can also start with much less. IRPs also provide tax advantages. The tax treatment of your contributions and withdrawals will depend on which option you select. IRAs can provide an easy way to save. You can set it up so that an amount is automatically deducted from your savings account and deposited in the Individual Pension Plan.

Investment in stocks is best for long-term growth

Stocks have the best chance of achieving high returns over long periods. A healthy dose will help ensure that your savings grows faster than inflation, increasing the purchasing power of your nest egg.

Contribute in employer’s pension schemes

The best method to save money for your retirement planning is to join the retirement options provided by your employers and contribute to it as much as possible. The options provided for retirement are usually much deliberated upon and offer the best returns on your savings. Moreover it is easy to handle and safe investment for the retirement.

Invest in a second house

Investment in a house can be a sure shot success method for savings for your retirement planning. The returns on real estate investment have been stupendous over a long period of time. In your working life, you should consider investing in a second house if you already own a house for accommodation. Owning a second house will provide you with a cushion for your retirement as it can be disposed off any time to meet your unexpected financial needs.

Protect against risk with an insurance policy

If you were to die unexpectedly during your working years, your family would not only suffer the loss of your income for day-to-day needs, but also the nest egg you would continue to build for retirement. Life insurance can provide for both your family’s current lifestyle as well as your survivor’s plans for retirement. The permanent life insurance you use to protect your loved ones can be another possible source of income in retirement. Permanent life insurance accumulates cash value that grows tax deferred. If you no longer need the full death benefit after you retire, you can access that cash value to help supplement your retirement income.

Avoid over-diversification of savings

You want to diversify among different asset classes and underlying investments to manage risk, but if you are duplicating the same investments with numerous vendors, you’re probably overpaying fees and that can impact your bottom line.

Revisit your investment strategy

Look for ways to get a little more growth without more risk than you can tolerate. If you choose only the most conservative investments for your retirement savings, your savings may not grow fast enough to give you the income you need after you retire.

Follow the sound and prudent methods of savings and investment for retirement planning and enjoy the sunset days of retirement.

5 Best Saving Options for Single Parents

2014-05-26T22:39:00.000+05:30

Usually there are two parents for children to take care and one of them is the bread winner for the family as a whole. Under double income families with sufficient savings and investments, it is quite convenient to maintain the usual activities of the household. What if you are the only parent in your family to look after your kid or kids? What are the ways in which you can adopt best saving options for single parents?

Things can go wrong if there is no savings or proper financial planning for the kids in case there is demise of the last or sole bread winner. Nobody thinks of any eventuality but if proper financial planning is done, you can save your children form many hardships if a prudent line of actions is drawn for their future. We all have a limited amount of funds, and the needs are rising day by day, and you don't know what urgent need appears up anytime. So, for those situations, we must have some ready funds, saved, to be utilized. Therefore we need to know what are the best saving options for a single parent.

Keeping in view the various financial issues involved in providing for the children, listed below are the 5 best savings options for a single parent.

Insurance

First and foremost, one should take a life insurance policy. A Life Insurance plan ensures that your family is financially secure even if tomorrow you are no longer around to care for them. Life insurance is a unique investment that helps you to meet your dual needs - saving for life's important goals, and protecting your assets against risk. Life insurance provides money typically to beneficiaries after a loved-one who has life insurance dies. There may be many types of insurance policy but for a single parent to provide for protection against unexpected eventuality, buying a term life insurance policy is an affordable alternative to costly conventional savings oriented life insurance policies.

Buy a House

Secondly, the best saving option for a single parent is to buy a house in order to provide for shelter and financial security to the dependent in case of the death of the parent. This is definitely one of the best saving options to create wealth indirectly. If the financial position of the family is strong, then the house can be bought otherwise you can buy a house by availing home loan to buy property. Buying a house serves dual purpose-savings as well as investment and keeping in view the tax benefits and other perks associated with home loan, you can create huge wealth in future for the security of the dependent.

Investment in Pension Plans

Pension is an arrangement for which people have to invest in their working life. There are hardly any companies that provide for Pension Plans today and even if they do, how many actually stick on to the same job for long to be eligible for the same? Retirement is a stage for which people do not want to think in their early working life. But if you are a single parent and have to look after the dependents then planning to save in pension options is a must. That’s why investment in pension plans needs to be planned for well in advance so that the corpus is ready by the time you plan to retire or in case of the loss of the bread winner.

Fixed Deposits

Fixed deposits as they are known because of their tenure are a safe savings cum investment option that must be resorted to by people with dependents particularly single parents. Fixed deposit is the most handy liquid tool for meeting out unexpected emergencies-be it breakdown of household goods, medical emergencies or unexpected travel. Fixed deposit or term deposits are a safe investment for which you can apportion a small amount every month on a SIP basis and deposit it as fixed term deposits for future use.

Systematic Investment Plan (SIP)

Systematic Investment Plan (SIP) is another smart financial planning tool for a single parent to create a corpus, by investing small sums of money every month, over a period of time. SIP is a method of investing a fixed sum, regularly, in a mutual fund scheme, ETF or direct purchase of stocks. SIP allows one to buy units on a given date each month, so that one can implement a saving plan for themselves. SIPs also help in availing benefits of compounding allowing investment to grow at a fast pace.

These are some of the options which should be resorted to by single parents in order to provide for the maintenance of their dependents. Even if there are no emergencies, still saving on a regular basis can go a long way to build sufficient corpus for their wards.

Save Spend or Invest- How to Manage your Money?

2014-05-14T22:55:00.001+05:30

When you start earning, money starts pouring in and the most vital question about money that becomes important is how to manage your money? The Personal finance education needs to start young in life as it is the basics of future. At every stage of your lives, when you earn money, you will be faced with 3 choices: save, spend, or invest. How you earn money and the way in which you implement these decisions will evolve with different phases in your life. Save, spend or invest- how you manage your money is the most important aspect of your financial planning for a prosperous future.

A person who puts a portion of his pay cheque in a savings bank account of fixed deposit is fundamentally a saver. He may think of himself as an investor but from the point of this choice- Save, spend or Invest- how to manage your money? ,he is not. He objective is to withdraw the money many years from now and spend it. At that point he may become an investor because his objective will change towards getting an income from his money, but until then he is a saver because he gets no income.

Why should you Save Money?

An investor saves money to invest it and get an income stream. A good investor can obtain more risk-adjusted income from his savings than a poor investor. But the question is why should you save money?? The main reasons are:

Happiness or peace of mind

Saving money is one of the best habits people can take to increase happiness. A regular saving habit increase the satisfaction level of the person and give them a peace of mind as the cushion of having money to meet the family and personal expanses is quite important. If you have no money, it is not possible to meet out you necessary expenditure for today or tomorrow.

Fulfill your Dreams

Saving is the biggest tool to realize your dreams. If you want to make your dream come true like buying a house or a bigger car or most importantly going on travel to your choicest place, it is a must to save money. The biggest regret people have is that they did not save the money to fulfill their desire at the right time. In order to realize your dreams, start saving money early.

Emergencies

We hope that emergencies won’t happen, but we all know that they do. A family member can develop a health issue, you might need to make an emergency trip, you may have a car to get repaired suddenly, severe weather could flood your house or you may have to pay for any other unforeseen expense. Any of these emergencies can be expensive, and we are likely to encounter some sort of emergency from time to time. So why not be prepared rather than potentially become another victim of an emergency.

Why should you spend?

Spending is the act of disbursing the money you earn. You can’t save all the money you are earning as money is required to meet many daily expenses and to sustain. Whether to buy food, household goods, house, furniture and consumer durables as well as luxuries like car, fancy clothes, travelling, all this can be done only if you spend money. But while doing so it should be kept in mind that money is not everlasting and should be spent wisely.

Why should you invest?

Investing is the art of building wealth (financial or personal), before you write a cheque, whether it be to your bank or your broker, be honest with yourself about what is motivating you to make that financial commitment. The only way to attain financial security is to save and invest over a long period of time. Investing is to make your money work for you. You should invest because:

Your money earns money

Someone pays you to use your money for a period of time. You then get your money back plus “interest.” Or, if you buy stock in a company that pays “dividends” to shareholders, the company pays you a portion of its earnings on a regular basis. Now your money is making an “income.”

You buy something with your money that could increase in value

You become an owner of something that you hope increases in value over time. When you need your money back, you sell it, hoping someone else will pay you more for it.

Finally, when you start earning, learn the best habit of saving early, spend wisely and invest your money prudently to build wealth and be financially secure in future.

Some Things You Need To Know About Life Insurance

2014-05-04T17:56:00.000+05:30

Life insurance is an important financial tool that could benefit you at many different stages in your life. A Life Insurance plan ensures that your family is financially secure even if tomorrow you are no longer around to care for them. Life insurance is a unique investment that helps you to meet your dual needs - saving for life's important goals, and protecting your assets against risk . Life insurance provides money typically to beneficiaries after a loved-one who has life insurance dies.

Advantages of Life Insurance are enumerated below…

Life Insurance provides risk cover

Life today is full of uncertainties and in this scenario Life Insurance ensures that your loved ones continue to enjoy a good quality of life against any unforeseen event like your absence if you are the person on whom everybody depends..

Life Insurance is planning for life stage needs

Life Insurance not only provides for financial support in the event of untimely death but also acts as a long term investment. You can meet your goals, be it your children's education, their marriage, building your dream home or planning a relaxed retired life, according to your life stage and risk appetite. All the traditional life insurance policies i.e. traditional endowment plans, offer in-built guarantees and defined maturity benefits through variety of product options such as Money Back, Guaranteed Cash Values, Guaranteed Maturity Values.

Life Insurance is protection against rising health expenses

Life Insurers through riders or stand alone health insurance plans offer the benefits of protection against critical diseases, accidental benefits and hospitalization expenses. This benefit has assumed critical importance given the increasing incidence of lifestyle diseases and escalating medical costs.

Life Insurance builds the habit of thrift

Life Insurance is a long-term contract where as policy holder, you have to pay a fixed amount at a defined periodicity. This builds the habit of long-term savings. Regular savings over a long period ensures that a decent corpus is built to meet financial needs at various life stages.

Life Insurance is safe and profitable long-term investment

Life Insurance is a highly regulated sector. The regulatory bodies, through various rules and regulations ensures that the safety of the policyholder's money is the primary responsibility of all stakeholders. Life Insurance being a long-term savings instrument, also ensures that the life insurers focus on returns over a long-term and do not take risky investment decisions for short term gains.

Life Insurance is best for retirement planning

Life Insurance is one of the best instruments for retirement planning. The money saved during the earning life span is utilized to provide a steady source of income during the retired phase of life.

Life insurance gives protection plus savings over a long term

Since traditional policies are viewed both by the distributors as well as the customers as a long term commitment; these policies help the policyholders meet the dual need of protection and long term wealth creation efficiently. Traditional policies offer an opportunity to participate in the economic growth of the country without taking the investment risk. The investment income is distributed among the policyholders through annual announcement of dividends/bonus.

Life Insurance provides facility of loans without affecting the policy benefits

Policyholders have the option of taking loan against the policy. This helps you meet your sudden, unplanned life stage needs without adversely affecting the benefits of the policy they have bought.

Life Insurance is eligible for tax benefits

Insurance plans provide attractive tax-benefits for both at the time of entry and exit under most of the plans.

Life insurance is a tool for mortgage redemption

Insurance acts as an effective tool to cover mortgages and loans taken by the policyholders so that, in case of any unforeseen event, the burden of repayment does not fall on the affected family.

In this way, life insurance offers several advantages not available from any other financial instrument.

What are the Advantages of Term Life Insurance Policy?

2014-04-27T15:25:00.000+05:30

Term insurance policy provides protection for a specific period of time and generally pays the benefit only if there is demise of the insured person during the “term” or period chosen. Term periods typically range from 1 year to 30 years, depending upon the needs and risk protection horizon of the individual which usually coincides with the active earning life of the person.

Buying a term life insurance policy is an affordable alternative to costly conventional savings oriented life insurance policies. In addition to the affordability part, Term life insurance policies are also flexible, easy to understand, and easy to buy.

Advantages of Term Life Insurance Policy are –

Low Cost or Low Premium Policy

The most important advantage or benefit of taking a term life insurance policy is the low premium you have to pay for it as term life insurance is not like other usual conventional policies. The low premium is due to the reason that the insurance company is charging you the premium only for the mortality risk and not the saving component as is done in conventional policies. Moreover the premium of the policy depends on the term of the policy. Shorter the term, lesser the premium and vice-versa.

Simple to Understand

The term insurance policies are really easy to understand as compared to other complex conventional plans. You pay a low, fixed monthly premium based on the term life insurance policy term length and amount of coverage you choose. The customer is offered insurance cover on the basis of predefined terms and conditions which do not change during the term of the policy

Invest Your Money as You like

With a term life insurance policy, you can invest your hard-earned money yourself as you like. Life insurance companies are often very conservative with how they invest your money. If you are well versed in investing, or good at saving, the extra money a conventional insurance policy costs may not be worth it. Instead, you can buy a more affordable term life insurance policy and invest the money you saved yourself to get the maximum benefits possible.

To Cover Specific Needs like Mortgage Protection

A term life insurance policy is great for covering your short-term financial needs. Term life insurance can serve as mortgage protection for your family due to premature death of the insured. The main breadwinner in a house can buy a term life insurance policy that matches the length of his or her home's loan to protect their mortgage.

No Burden of Continuing the Policy if not Needed

Another advantage of the term insurance policy is that you can discontinue it if not needed without bothering for any procedure. In other words, when you purchase term insurance, it’s sort of like renting a house. All the benefits of usage and staying in continue for as long as you continue paying rent. As soon as your lease expires, you must leave. Even if you rented the house for 30 years, you have no “lien” or value that belongs to you.

Income Tax Benefits

The amount of premium you pay for your term life insurance policy entitle you to get Income Tax rebate in many countries. Therefore if any term life insurance benefit is paid when the insured person dies during the term of the policy coverage, the beneficiary collects the face amount (death benefit) of the policy income-tax free.

A Word of Caution: Never give false information while going for your policy — life insurance companies will investigate before paying. If you do not provide correct information about your habits and health issues, your policy may be considered invalid in case there is a claim and your beneficiaries may not receive any money after you are no more.

Personal Loan - Tips To Get The Best Loan For You

2014-04-22T19:52:00.000+05:30

Whether it is to buy the latest model of smart phone, modify the house to accommodate additions to the family, to fund weddings or need to go on a vacation for which kids have been asking you for long or at all to deal with an unexpected emergency- there are times when we all need to have a large amount of extra cash. And when you are short of this extra cash to get those things, personal loans are one of the methods of making it possible. All personal expenses you want to make can be made by availing a personal loan.

Personal loan is an amount which you can borrow from banks, money landing agencies, credit card companies or from any other authorized or unauthorized organizations on certain decided conditions and interest rates. But it's hugely important to make sure you get the personal loan that's right for you to avoid problems in the future.

Personal loans are one of the most expensive forms of loan available in the market. Choose carefully after conducting due research and understanding of the cost & the benefits involved. So

What are the tips and check points before you go for a personal loan ?

Opt for the minimum required loans

The golden rule of personal loan is that one should take out the smallest loan which you can and arrange to pay it off as quickly as possible. If there is any delay in payment of loan instalments, the loan amount would get compounded along with interest and could create problems in the long term.

Choose a reputed bank or lending agency

While applying for any personal, ensure that you opt for a reputed bank or a lending agency which are customer friendly and do not indulge in malpractices. There have been instances of people who have been burdened by the unfair charges being levied by the unscrupulous organizations. Avoid money lenders for taking personal loan as it can become quite cumbersome to repay the hefty amount of interest.

Know the interest rates in advance before signing the loan agreement

The most important tip for you to get personal loan is the check before hand the interest rate being charged to you. Also ensure that the interest rate mentioned in the loan agreement is the same as discussed with you. Also insist on getting the copy of the loan agreement for the interest rates and the terms and conditions of the loan.

Check the expenses involved

There are usually 2 types of charges that are levied when applying for a personal loan. First, at the time of application which can typically vary between 2-3% of the Loan amount? And secondly, when you prepay your loan i.e., if you pay-up the loan before the loan tenure then, there is a prepayment charge varying from 2-3%.

Check whether loan is subject to any collateral securities?

If the bank or the lending agency is offering you a low rate loan on the basis of any collateral securities like your house or car, the low rate of loan may sound good but if you happen to default on payments, the bank can take over your security, putting you in difficult situation. Therefore avoid any loan subject to collateral and go for pure loan based on your repaying capacity only.

Impact on credit rating in case of any defaults

While applying for a Personal Loan, make sure you borrow within your means or else the repayment will become a long and tedious process which could affect your credit history and credit score if you have outstanding payments. If your credit rating is affected due to defaults in payments, then you may not be eligible to avail necessary loans like home loan or car loans if required.

These are some of the tips for you before opting for a personal loan. Though personal loans are easy to get but if they are not handled properly, these can create an uncomfortable situation for you. Therefore choose your personal loan carefully after conducting due research and understanding of the cost & the benefits involved.

How to Build Wealth through Investment in Tax Saving Schemes?

2014-04-18T16:25:00.001+05:30

Savings and planning is a very much essential task, in today's era for any human being to lead a comfortable financial life. The steps to build wealth through investment are not so different, as lots of savings plans with tax-favorable characteristics that are available to us. Investing is about making your money grow through a plan that suits your need.

The steps to building wealth begin with a clear intention to attain it. After all, accumulating money is not a haphazard occurrence, but a deliberate process. Once you determine that attaining wealth is a priority, focus your energies on maximizing your income, saving a portion of it and investing it for growth. Building wealth also requires you to make decisions on potentially destructive forces that erode wealth, such as inflation, taxes and overspending.

Wealth-building strategies include investing in paper assets such as stocks and bonds, buying income-producing real estate etc., however the best options to build wealth through investment in tax saving schemes are following:

PUBLIC PROVIDENT FUND (PPF)

The Public Provident Fund (PPF) is one of the most popular tax-saving schemes. It can also be a very good investment option for retirement Public Provident Fund (PPF) account is a safe investment option with attractive interest rates and returns that are fully exempted from. Public Provident Fund (PPF) is one of the most popular savings-cum-tax-saving instruments in India. The PPF scheme serves as an excellent long term savings option. At present, PPF is one of only three exempt-exempt-exempt (EEE) investment schemes available in India.

INVEST IN SINGLE PREMIUM POLICY

With single-premium life insurance, the cash invested builds up quickly because the policy is fully funded. The main benefit of life insurance is to leverage funds to create an estate that can provide for survivors in case of any eventuality.

NATIONAL SAVING CERTIFICATES (NSC)

National Savings Certificate are issued by the Post Office and help in savings in the right direction. NSC offers assured returns and tax benefits.The National Savings Certificate (NSC) is a popular and safe small savings instrument which can be used to create wealth since NSCs do not have a limit of how much you can invest. What's more, interest earned on NSC investments up to Rs 1 lakh is tax free. You read that correctly. NSCs offer you the possibility of earning up to Rs 1 lakh without paying tax whatsoever. This is because NSC is the only saving scheme wherein not only the initial deposit, but also the interest for the first five years, out of its term of six years, is eligible for a deduction under section 80C.

PURCHAHSE OF REAL ESTATE BY AVAILING HOME LOANS

This is definitely one of the best options to build wealth but not utilized properly. The growth in house property prices has been 5 times in last 10 years. You can use this method by availing home loan to buy property. Usually the EMI for housing loan is 1% of the loan availed. If you calculate the net outgo keeping in view the tax benefits and other perks associated with home loan, you can create huge wealth in no time.

SYSTEMATIC INVESTMENT PLAN (SIP)

Systematic Investment Plan (SIP) is a smart financial planning tool that helps you to create wealth, by investing small sums of money every month, over a period of time. SIP is a method of investing a fixed sum, regularly, in a mutual fund scheme, ETF or direct purchase of stocks. SIP allows one to buy units on a given date each month, so that one can implement a saving plan for themselves. SIPs also help in availing benefits of compounding allowing investment to grow at a fast pace.

EQUITY LINKED SAVING SCHEMES (ELSS)

ELSS is a type of diversified equity mutual fund which is qualified for tax exemption under section 80C of the Income Tax Act, and offers the twin-advantage of capital appreciation and tax benefits. ELSS funds are one of the best avenues to save tax under Section 80C. This is because along with the tax deduction, the investor also gets the potential upside of investing in the equity markets. Also, no tax is levied on the long-term capital gains from these funds. Moreover, compared to other tax saving options, ELSS has the shortest lock-in period of three years.

STOCKS

When you purchase stocks, or equities, as your adviser might put it, you become a part owner of the business. This entitles you to vote at the shareholders' meeting and allows you to receive any profits that the company allocates to its owners. These profits are referred to as dividends. However share market is volatile and you may gain or lose your money.

MUTUAL FUND

An investment vehicle that allows you to invest your money in a professionally-managed portfolio of assets that, depending on the specific fund, could contain a variety of stocks, bonds, market-related indexes, and other investment opportunities.

TAX FREE BONDS

Tax Free Bonds are tax free because interest earned from them does not form part of the total income. When you sell the bond on the exchange, you will have to pay capital gains tax, though. The post-tax return you earn on this bond is better than what you would have earned for a fixed deposit. The coupon on these bonds are linked to the government securities market, where the prevailing economic uncertainties have pushed up yields.

INVESTMENT IN GOLD

Investment in gold is a good option for both long term and short term time period. It is observed that investment in gold has provided almost 24 percent yearly returns in the last 10 years. There are various options to invest in gold like gold bricks, ornament and gold ETFs and lately the Gold Schemes from Jewellers.

EXCHANGE-TRADED FUND (ETF)

ETFs are funds – sometimes referred to as baskets or portfolios of securities – that trade like stocks on an exchange. When you purchase an ETF, there are a number of advantages of Investment in Exchange Traded Funds- (ETFs) as you are purchasing shares of the overall fund rather than actual shares of the individual underlying investments. An ETF holds assets such as stocks, commodities, or bond and ETFs are popular world over with less risk and much scope for returns on investment.

ULIPs

Unit-linked insurance policies (UILPs) have both life insurance and investment components. Your premiums are used to pay for units in investment–linked fund(s) of your choice. Some of the units you buy are then sold to pay for insurance and other charges, while the rest remain invested.

INVEST IN REAL ESTATE INVESTMENT TRUSTS (REITs)

If buying real estate is a bit expensive you might consider investing in Real Estate Investment Trusts (REIT), a public company that owns and manages a lot of real estate such as apartments, shopping malls, and office buildings. Though it is not really available in India right now but in other countries if you are interested in real estate investments, you can buy shares of REIT stock and not worry about managing your own buildings.

These are some of the methods to build wealth which can be used by you depending upon your financial goals and long term financial planning. Though all the options to build wealth through investment in tax saving schemes are not best suited to all but you should go for the one or more options which can cater to your needs to achieve your financial goals.

7 Important Factors in Choosing the Right Life Insurance Policy

2014-04-13T10:37:00.000+05:30

Life risk cover i.e. financial protection to the family in case of an unforeseen event- say death, illness, disability on account of accident, etc –is the main purpose of taking an insurance policy. In order to meet various socio-economic needs of different people, it is suggested that every individual should plan their insurance products based on the human life value of the life assured.

What are the important factors in choosing the right life insurance policy is based upon different needs of the different people. Though insurance is seen as a ‘compulsory savings’ leading to creation of wealth which can be utilized for education/marriage of children; for old age provision; for construction of house; etc. but policies are also taken to get exemption from Income Tax and to assign these to financial institutions as collateral security while availing different type of credit facilities including housing loan.

Therefore while choosing the right life insurance policy; following factors need to be given a thought:

Do You Need Life Insurance?

Nothing could be more devastating to a family than to lose the bread winner prematurely. While the emotional impact is huge, the impact on finances can be equally overwhelming. A way of understanding the magnitude of the risks involved is to consider how much you earn a year and multiply it by the number of years to your retirement. Ignoring insurance means that you have made a decision to live with the risk.

The alternatives to properly insuring your life may be either inadequate or impractical. Saving to provide an emergency nest egg may not accumulate enough funds in time. Relying on Social Security will provide at best a basic survival income. Life insurance may be the only efficient way of creating the ready funds to replace your ‘life value’.

Check Your Financial Position

In the initial phases of earning life, people are careless about making provision for the life ahead. They want to enjoy and have fun with all the money they have. Those who are born with silver spoon in their mouth may not think about financial planning but not all are so blessed. Another key factor in deciding the life insurance policy is to check your own financial status whether you family can sustain the loss of income in case of sudden stoppage of regular income.

Check Your Assets and Liabilities

Your current assets and liabilities would help you assess how much insurance you would need. One should keep in mind that there should always be a balancing factor for the assets you are creating by availing mortgage etc or by raising other liabilities. If it is not binding upon you to pay for the assets you have like house, car etc, then no insurance cover is necessary but if you have raised loans then it is necessary to have your Net Worth checked. More liabilities than your assets means indicate that you should go for a right life insurance policy.

How Much Life Insurance Do You Need?

The most important factor that comes into mind is the question that how much life insurance do I need. This can be decided by calculating your current income. The first general rule about how much life insurance you need to buy is to take your income, multiply it by 10 and that will then determine how much you should buy.

Another way you can determine how much you need to buy is dependent upon the style of living the family has become used to. Life insurance, is not just a lump of cash, it represents food on the table, a comfortable home, a school of choice for your kids, a reliable car – everything that makes up your lifestyle. For that amount of insurance to decide, you should know how much you want your wife to have as an annual income in case something happened to you. Then take that number and divide it at least by 5% thinking that if she invested the money she could earn at least 5% and that should get her that number.

How Long of a Term Do You Need?

Individual insurance needs change with every stage in life. However, the known fact is that the earlier one buys a life cover, the cheaper it works out for him. So buying life insurance even if you are currently a young professional is a wise option. Typically, you’re going to see 10-year, 20-year, and 30-year policies. Depending on your situation, your age, how long you plan on living for, how much debt you have will determine how long of a term you should go for.

Who will be the Beneficiary of Your Insurance Amount?

The money received in lieu of your life should not become financial windfall for those who do not deserve it. You should think before taking a life insurance policy whether someone is going to suffer in case of loss of your life like wife, kids or old dependent parents etc. as funds are required to pay out large debts such as a mortgage, and the balance invested to provide an ongoing income for the family. But if none of these are going to be the beneficiaries, think twice before opting for an insurance policy.

Which is the Right life Insurance Policy?

Currently most of the insurance companies are providing different insurance plans according to the diverse needs of the public. Mainly, you can choose a Term Plan, Whole Life Plan, Endowment Plan, ULIP and Pension Plan as per your needs and financial conditions

How To Select the Best Term Insurance Plan

Finally, it is good to review your income changes and needs periodically and checking regularly the insurance arrangement , to ensure that you’re getting the most out of your life insurance policy.

Last Date for Filing Income Tax Returns is 31-03-2014 : e-file Your Tax Returns

2014-03-26T21:46:00.000+05:30

Last date for income tax return filing for 2013-14 is approaching fast. For those who had not filed their income tax returns during the year, 31st March 2014 is the last opportunity to file tax returns online. You can file your tax return for the Asst Year 2013-13 and 2013-14 without any penalty and minimize payment of interest.

As such , from the current Assessment Year 2013-14, it has become mandatory to e-file your tax return for income above 5 lacs.

Usually to file tax returns, some people tend to take the help of consultants, tax return prepares(TRP) and practicing CAs but it is worthwhile to know the bit of procedure about filing IT returns electronically.

The type of return forms which are required to file your income tax return, can be understood from the list as following:

Types of Income Tax Return Forms:

ITR 1: For Individuals having Income from Salary / Pension, Income from One House Property (excluding loss brought forward from previous years) / Income from Other Sources (Excluding Winning from Lottery and Income from Race Horses)]

This form CANNOT BE USED by an individual if income for FY 2012-13 includes:

Income from more than one house property or
Income from Winnings from Lottery / Race Horses or
Income from Capital Gains, which are not exempt from tax or
Income from Agriculture in excess of Rs. 5000/- or
Exempt Income (includes exempt amount of Conveyance Allowance, HRA, Other Exempt Allowances, Maturity amount of Insurance etc. ) in excess of Rs. 5000/- or
Loss under Head "income from Other Sources" or
Person claiming benefit of Foreign Tax paid u/s 90, 90A or 91 or
Income from Business or Profession or
A resident having any asset located outside India or signing authority in any account located outside India.

ITR 2: This form is applicable for Individuals and HUFs having Income from:

Income from Salary/Pension;
Income from House Property;
Income from Capital Gains;
Income from Other Sources

This form should not be used by an individual or HUF whose income includes income from Business or Profession.

ITR 3: For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship.

ITR 4: This form is applicable for an individual who has income from business/profession.

SUGAM -ITR 4S: This return form is to be used by an Individual/HUF having income from:

Business income where such income is computed in accordance with special provisions referred to in Section 44AD and 44AE.
Income from one house property (excluding loss brought forward from previous years)
Income from Other Sources (Excluding Winning from Lottery and Income from Race Horses)

ITR 5: For Firms, Co-operative Banks, Co-operative Societies, Limited Liability Partnerships (LLP), Associaltion of Persons (AOP), Body of Individuals (BOI) and Artificial Judicial Persons.

ITR 6: This form is applicable for a Company.

ITR 7: This form is applicable for a Trust.

ITR 8: This form is used for filing only Fringe Benefit Tax Return.

ITR V: Acknowledgement Form for all ITR Forms except ITR 7.

TDS on purchase of Property of 50 lacs

Avail the last minute chance for filling income tax return online to avoid imposition of penalty and interest.You can also check the status of tax return subsequently and for that you can login to Status

New Bima Bachat Plan-No 816 – Insurance with Fixed Deposit Benefits

2014-03-10T23:54:00.000+05:30

New Bima Bachat Plan, Table No 816 has been recently introduced as fixed deposit scheme by LIC. New Bima Bachat is a single premium money back policy meant for people looking for options to save money which is offering attractive returns and benefits. In addition to being a single premium investment plan, it has an in built provision of the risk coverage of the investor which offers financial security and assurance to the policy holder and his family

A policy with dual benefits, as it is known is suitable for the benefits of investors who are keen to have safe option along with value addition to their returns.

Main features of the New Bima Bachat plan are:

Example:

Suppose “A” aged 30 years takes a policy of 9 years term for 2 Lakh Sum Assured, pays a premium of Rs 1,41,634, his periodical benefits will be:

Benefit paid on 3rd year = 30,000

6th year = 30,000

9th year = 1,41,634 (Return of Premium)

Total = 2,01,634

Loyalty Addition = 72,000 @ 4% of Sum Assured (Assumed)

------------------

Grand Total = 2,73,634

Hence return on investment = 273634/141634 =10.35% Per Annum

(Actual yield will depend upon the tax slab of the investor after tax)

Investment in New Bima Bachat Plan with an added advantage of insurance element is one of the best option available as a fixed deposit and a good measure to save money.

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How to Save Interest On Your Credit Cards Balance?

2014-03-08T21:05:00.000+05:30

You have received the credit card bill for the smartphone purchased last month and the payment of the bill has become due. If you are not having enough money to pay, you are given an option to make payment of minimum amount due instead of the total bill by the card provider. Most of the buyers who use credit card to purchase high priced goods face this situation once in a while.

If you prefer to live on credit cards spending and don’t know the ins and out of credit cards, you are more likely to jeopardise your financial planning as the higher rate of interest charged for the unsecured credit card debt is going to cost you dearly.

There is no doubt that Credit card is an easy alternative of carrying cash for shopping as well as for emergency purpose, but if you do not use your credit card wisely and falter on timely payments, it can spoil your personal credit reports.

Tips to Save Interest On Credit Cards Balance

Credit card interest can become very costly burden, so knowing how to avoid it is important. Whether you’re new to credit cards or an experienced one, these tips can help you save money :

Use Interest Free Periods

Most credit cards offer interest free periods on purchases from the date of purchase to pay your bill. This can be a great way of saving money on interest if you are buying an expensive item. The grace period usually varies between 45 to 55 days depending on the card you have. To avail this, you need to check the billing cycle i.e. the period of your bill. The interest free period will usually start on the first day of the new billing period and if effectively used it can give a benefit of interest free payment upto 55 day on your purchases.

Pay Off Your Balance Debt

If you wish to save money on credit card interest, most important thing to remember is to pay off your balance in full at the end of each month. While it can be easy to only pay the minimum amount payment, you will only be paying off the interest and not your actual debt. Most credit card companies are charging hefty interest rates from 24% to 36% annually on the balance debt in your card. When you pay off your balance, you won’t have to worry about interest accumulating – and your credit card will be all the more healthy and improving your personal credit history.

Always Make Your Payments On Time

It is always advisable to make payment of your credit card bill on time and at least two days before your payment due date in order to get your payment cleared. By this way you can do lot of savings on credit card balance as all the credit card issuers charge interest on balance as well as late payment fees which is usually quite high. You should know that credit card companies are not gaining from those customers who are paying on time but those who miss their payment due dates.

Pay Off the Highest Interest Rate First

In addition to making minimum payments on all cards, pay more on the card with the highest interest rate, so you pay off the total amount on that card first. Then work your way through your other cards. This will save you the most money.

Pay Off the Smallest Debt First

Keep making minimum payments on all cards, and pay more on the card with the smallest debt, so you pay off the total amount on that card first and make it debt free.

Balance Transfer Credit Cards

If you are having a couple of cards and are not comfortable of paying the credit card debt in one go, one way to start on paying off your credit card debt is with a balance transfer credit card. These days almost all the credit card issuers are offering balance transfer facility to the existing card holders. By transferring the balance of your existing credit card with a new balance transfer card, you will pay less interest, and can start paying off more of your debt and increase savings. Try to choose a balance transfer card that offers the lowest interest rate for the longest period of time.

Attractive Offers

There is a wide range of introductory offers available on many credit cards for purchase of expensive consumer items. If you want to save money on interest, check out intro offers on purchases. With this type of offers on card, you will pay low or no interest on purchases for a certain period of time. As with balance transfer offers, be sure to pay off your debt before the offer period ends.

Choose Low Interest Credit Cards

Always try to find the cards which have no frills attached to it such as rewards points and complimentary insurances. They are usually a cheaper way of getting credit especially if you tend to carry forward your balance month-to-month.

Close multiple Cards

Finally, stop using all of your credit cards except one, and try to only use it for emergencies. Keeping many cards may tempt you to make purchases on impulse which you may not need and add to your debt. Dispose off the card by cutting it up and close the account by contacting your card provider. This is important because if you just cut up the card , you may still have to pay fees, even if you are no longer using the card.

By using above tips, you can do a lot of savings on your interest payment and increase your personal credit report to improve your personal credit history for your future financial transactions.

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Cost to Study Abroad

2014-03-01T22:44:00.000+05:30

Are you planning to study abroad in the coveted institution ?? Have you got any scholarship from any university for studying in a foreign country? Have you received any offer for study abroad from any University under educational exchange program? If the answer to any of these is Yes, then you ought to know the pros and cons of shifting to a different country for studies mainly the cost of studying abroad.

There are many factors that should be considered before you take a decision for studying abroad. Not only the issue of relocating to an unknown land is involved but the most important and crucial one is the cost factor as to how much money you may need to bear the cost for studies abroad in the specific country. Cost is obviously a factor students need to consider when selecting a programor deciding whether or not to study abroad.

What are the Funding options for Cost to study abroad?

As far as funding for studying abroad is concerned, there are usually two types of funding option:

One, where the study programme is sponsored by the institution under exchange programme or scholarships,
Second, when you have to bear the entire cost form your own personal savings or educational loans.

Read this for educational loan : Taking A Student Loan ? Be Careful!

Here we will be discussing only the second part i.e. when you have to bear the entire cost form your own personal savings or educational loans taken to save tax.

How much does it cost to study abroad?

How much it costs to study in another country can vary a lot. It depends on a few major factors, including the type of program, the duration and the location. There are various types of cost involved in your decision to go for studying abroad:

Traveling cost: Travelling cost is the most important component of the total education budget for the students. Since this is not a one time expanse and you may have to visit your place of residence twice or thrice during the total study duration, it can prove to be burden and substantial cost.

Travel Insurance cost: Before your embark on a journey to the destination country, you are required to take a travel insurance to safeguard yourself from the unexpected loss of baggage and other belongings. Depending on the country profile, the cost of travel policy may be different for each country escalating the cost of study abroad.

Travel vaccination cost: In many countries, rather all, vaccination for certain types of sickness is mandatory which can add up to the total cost.

Administrative fees for the institution for joining: All the foreign institute have their own administrative fees structure which is to be paid by all the students before joining the course of study. The fee may vary for different institute and Universities.

Type of course you are joining: The cost of studying abroad depends on the type of course you have joined. If it is a medico, technical, engineering or research based programme, the cost of study will be different and heavy.

Tution fee: The amount of tuition fee depends on the course you are pursuing and can vary from course to course and duration of the study.

Study material cost: As it depends on the course of study, the cost will go high if you have to purchase study material and books for reference.

Housing expanses: Housing is one of the basic expenditure while studying abroad. The cost will differ if you rent a house, take a paying guest accommodation or get a student hostel. This can add substantially your cost of study.

Cost of living for the period of stay: The day to day living expenditure like food, clothing, hobbies etc form a major portion of your cost for studying in a foreign country.

Transportation cost within the city or place or residence: You need to travel from your place of residence to the place of study as well as other sundry travelling will add up to your total cost.

Communication cost: When your are staying away from your family, you would like to be in contact with your near and dear ones. So the cost of keeping in touch like phone, internet and other snailmail can add up to your cost of study abroad.

Entertainment expanses: It is not possible to have all work and no play. So the cost of entertainment has to be factored in.

Loan interest cost for the educational loan taken if any: If you have taken an educational loan, then EMI for the loan is definitely going to increase your cost for studying abroad.

Loan amount taken for studying abroad: After all the cost taken into account, the principal loan amount taken stands to be repaid which again the most burdensome cost. Since it to be repaid after your studies are over, it should be factored in total cost.

Cultural issues: Cultural issues also may add to the cost of studies as you have to follow the lifestyle and other norms of the place of study which may compel you to shell out extra money. Though you can curtail your expanses and Save Money, but you cannot altogether avoid such expanses.

Costs due to the climate of the place of study: The cost can also add up depending upon the specific country. In cold weather countries, or with uncomfortable climatic conditions, you may need to buy expensive clothes and other essential items to safeguard yourself in those circumstances.

The list is not exhaustive and there may be several other cost which involve emotional agony, loss of familial ties and disenchantment from the country of origin etc which cannot be enumerated in financial terms but which carry equivalent importance in terms of cost for studying abroad.

Press Release by AIBOC Regarding Wage Comparison with Govt Employees!!!

2014-02-24T22:33:00.000+05:30

AIBOC has released a Press release in the captioned subject and requested to circulate among public and employees of other sectors. Dated 21/02/2014

A CASE FOR SALARY REVISION

FOR 10 LAC BANK OFFICERS AND WORKMEN IN BANKING INDUSTRY

Historically, salary revision for bank officers from Assistant Manager to General Manager is being done at industry level by IBA once in five years and so far nine Bipartite Settlements have taken place and Joint Notes were signed between IBA and representatives of Officers’ Organisations.

The four Officers’ Organisation have submitted a combined Charter of Demands to IBA on 30th

October 2012, before the due date for the commencement of negotiation for the 10th Bipartite Settlement which was due from 01.11.2012.

Even though one and a half year have passed, no forward movement has taken place with regard to our Charter of Demand except an understanding arrived at on two issues Viz. 1) Date of Effect from 01.11.2012 and 2) Merger of DA at 4440 points.

This time, it has been consciously decided by IBA and Unions that the negotiation will be on Salary components only and its impact on Superannuation Cost will be borne by the banks. Accordingly, IBA has decided to offer salary increase on Payslip Components (Basic Pay, DA, HRA, CCA and Annual Medical Aid) as against Total Establishment Expenses hitherto being followed.

Having settled for 17.50% on Total Establishment Expenses ( higher quantum) during last Bipartite, IBA has made an initial offer of only 5% salary increase on “pay slip component”

(lower quantum) which was enhanced to 9.5% after a Strike Call and finally improved the offer by 0.50% i.e. from 9.50% to 10% on 27th January 2014. Since the offer of 10% amounting to Rs.3150 Crore was lower than the last settlement commencing from 01.11.2007 amounting to Rs.3300 Crore and IBA was not willing to negotiate further on load factor, we were forced to go for 48 hours strike on 10th and 11th February 2014.

PARITY ON SALARY WITH CENTRAL GOVERNMENT EMPLOYEES :

Salary Revision for Central Government employees will be effected based on Pay Commission recommendations once in ten years and their present salary is as per Sixth Pay Commission recommendations. Before 1979, bank officer’s salary used to be higher than the Group “A” officer of Central Government. To have a parity with Government employees, Pillai Committee was constituted in 1979 and as per the Committee’s recommendations the pay scales of bank officers were rationalised and made at par and aligned with Pay Scales of Government Officers. Such parity was distorted to the disadvantage of bank officers by implementing 4th, 5th and 6th Pay Commission Recommendations at much higher levels and the salary difference at all levels is alarmingly high. To quote, the bank officers’ gross pay slip amount at initial stage is about

Rs.30700/- as against Rs.56400/- for Government officers. Similar differences exist at different stages in the hierarchy. It has caused serious impact on the quality of recruits in a highly sensitive sector like banking which involves dealing with public money.

Many State governments have adopted 6th Pay Commission recommendations and many Public Sector Undertakings have also adopted them as bench mark for salary revision which has created a huge gap between the bankmen on one hand and government employees and PSU employees on the other.

Even though the Seventh Pay Commission is due from 01.01.2016 only, the Government has approved composition of Commission well before its due date to decide about the pay structure of Central Government employees which will be revised after the report is submitted by the 7th Pay Commission with effect from 01.01.2016. (This in addition to the provision of 50% merger of DA with Basic Pay during the intervening period) The comparative scales since 1979 are as under:-

Year	Group-A Officers of	Scale-I Officer in a
	Govt. of India	Bank
Prior to 1979	Rs.450/-	Rs.500/-
In 1979	Rs.700/-	Rs.700/-
In 1986	Rs.2,200/-	Rs.2,100/-
(4th pay commission from 1987)	Rs.8,000/-	Rs.7,100/-
In 1996	Rs.12,500/-	Rs.10,000/-
(5th pay commission from 1997)
In 2006	Rs.15,600/- + GP	Rs.14,500/-
(6th pay commission)	Rs.5,400/- Total Rs.21,000/-

YEOMEN SERVICE RENDERED BY PUBLIC SECTOR BANKS :

The Nationalisation of major commercial banks in July 1969/1982 was one of the bold decision taken by the then Prime Minister Mrs. Indira Ghandhi just to prevent concentration of wealth in private hands and mobilize more resources for economic development and chanalize the same to the needy / neglected Sectors of Indian economy namely Agriculture , Small and Village Industries etc.

Consequent to nationalization, Public Sector Banks have done a commendable job in enhancing the penetration level of bank branches in remote villages, Financial Inclusion, implementation of various schemes of the Government etc. The number of bank branches has gone up from 8262 to 74200 branches as of 31stMarch 2013 with more presence in rural India.

The priority sector lending was given more thrust as a part of social objectives which has helped to uplift the rural poor. To fall in line with global standards, nationalized banks also adopted Prudential accounting norms, Income recognition and Asset Classification and became strong and healthy. Apart from undertaking the Social Banking, the Public Sector Banks are equally competitive at International Banking landscape.

Public Sector Banks operate in a disciplined manner by observing compliance of regulatory requirements and in fact it was because of this that the Indian banks have emerged relatively unharmed from the recent global financial crisis.

The ten lac officer and workmen employees of banking sector have actively involved in nation building by effectively implementing national agenda of employment creation and economic & Industrial growth and enjoy lot of respect and popularity particularly in Rural & Semi Urban areas.

PRESENT OFFER :

In all the previous settlements, salary increase was given as a load to Total Establishment Expenses and presently we have been offered salary increase on Fixed Pay Components. If the percentage increase is offered on Total Establishment Expenses, the total quantum will be more when compared to Fixed Pay components as explained below.

Total Establishment Expenses	Payslip component

Rs.56292 Crore	Rs.31503 Crore

Offer of 10% on Rs.56292 Cr	10% on Rs.31503 Cr

Quantum available Rs.5629 Cr	Quantum offered RS.3150 Cr

IBA’s present offer of Rs.3150 Crore for one million employees is far below the amount offered during last bipartite settlement. The percentage offer on Fixed Pay Components (Pay slip) has to be improved so as to match with market related salary in view of the following.

The work force of Public Sector Banks are responsible for increase :

1. In the Business Mix of the Public Sector Banks from Rs.53,71,959 Crore during the year 2008-2009 to Rs.102,18,471 Crore during the year 2012-2013.

2. In Operating profit from Rs.45,495 Crore during 2008-2009 to Rs.1,21,917 Crore during 2012-2013.

3. In Net Profit has gone up from Rs.34,382 Crore during 2008-2009 to Rs.50,583 Crore during 2012-2013.

4. In Total Income (interest and other income) has gone up from Rs.3,15,554 crore during 2008-2009 to Rs.6,11,658 Crore during 2012-2013.

5. The Net Profit for the year 2012-2013 is Rs.50,583 Crore after providing for NPA Rs.46,021 Crore due to huge slippages during the year 2012-13 of Rs.1,19,613 Crore. Addition to NPA has affected the net Profit in two ways. It has not generated income and the provision has further drained the income.

Thus it is imperative that bank officers and workmen are adequately compensated due to their growing responsibility, transferability and accountability in order to maintain high standards of honesty and integrity, as their job demands, in highly competitive and sensitive sector of the Indian economy, particularly in view of the following facts:

1. That bank officers who were getting more than government officials earlier, were brought at par with Government officers on implementation of Pillai Committee report in, 1979, are now getting approximately Rs. 20 thousand less than government officials at first stage of the pay.

2. It is pertinent to mention here that 7th pay commission has been constituted for revision in salaries of Central Government employees, whereas Bank employees have yet to catch the salaries they are getting as per 6th pay commission report.

3. There is steep rise in the CPI inflation and the salaries in absolute terms have also been eroded. Consumer price index has already increased by 1501 numbers over 4440 which was prevailing on 01/11/2012 i.e. the level at which IBA has agreed to merge the DA with basic pay.

4. The productivity per employee, the business per employee and branch and profitability of the public sector banks has enhanced many folds.

5. There is a danger of pouching of the existing young and trained staff of the Public Sector Banks by the new generation Private Sector Banks and Foreign Banks which will emerge as per new Banking Policy.

(HARVINDER SINGH) GENERAL SECRETARY

What are the Best Alternative Sources of Income

2014-02-22T19:49:00.000+05:30

Almost everyone desires to make more money to achieve his financial goals in life. If you are wondering how your colleague at work, who earns the same salary as you, has bought a new house, car and other expensive amenities even when you are struggling to manage your finances somehow, chances are your colleague has utilized his or her time and knowledge smartly to generate passive sources of income.

But the idea of taking on a second job or even third one can sound a little cumbersome. After all, if you’re already short of time, you cannot take up more responsibilities. But making more money, or multi-streaming your income doesn’t have to be quite as overwhelming as it first sounds. By generating alternative passive income you can achieve financial freedom and flexibility through the creation of alternative sources of income that can complement your salary income.

Building multiple streams of income is no longer a luxury, it has become a necessity for all individuals whether employed or professionals. In the current situation of widespread unemployment and mounting job losses, depending on their only source of income from their job can be a risky way to live.

The list below details a few alternatives sources of income:

Earn Higher Interest on Your Savings

One of the easiest ways to increase your passive income is to shift your savings to a bank that pays a higher yield on your savings. Although it doesn’t sound like much (especially in this low interest environment), little things do add up and eventually interest rates will rise.This is also important to

Invest in Dividend Paying Stocks or Funds

If you’re looking for current income, investing in the dividend paying stocks (or dividend funds) is a good way to earn money regularly. Pay particular attention to those companies that have long histories of increasing their dividend payouts each year. This is also important to know what are The Best Ways To Control Your Finances

Rental Income

Generating rental income from house and real estate can reap huge benefits. If you buy a house at rock bottom prices and put it out on rent and your rental income is substantially more than the EMI you pay each month, then you have made a killing. If you have no loan/mortgage on the house then all the rental income can be used for either living expenses or saving for long term goals.

Start your own blog or website

Owning a blog or website is big business these days in cyber world. For those who don’t understand, blogging is simply an art of writing short articles about various sources of interest and publishing them online. Blogs can be about your personal life, the society, politics, entertainment, gossip or a combination of all of them. All you need is a computer, phone, laptop or tablet. You earn money from blogs when you have a lot of visitors.

Provide Consultancy

As a lawyer, accountant or engineer working full time, it is not unlikely that your services may still be required on an ad hoc basis. You can provide these services at your spare time upon request in exchange for a decent fee.

Be an Insurance Agent

Insurance Agency is one of the most profitable assignment offered by the insurance companies. You can have a licence to sell insurance products, selling life insurance policies, general insurance and annuity products. This will not only serve the people’s interest but will also be providing an extra source of income to you.

Be a Real Estate Agent

If you’re willing to put in the time and have an interest in real estate , why not become a real estate agent? This can bring good financial rewards, depending on how hard you work it, and how good you are in communicating.

Part time Teaching or Coaching

Teach a class, or offer coaching and consulting services, to help other people do what you already know how to do. For example, if you’re a writer, offer to be a writing coach to graduate students who are writing their dissertations. Web consultant and online marketer earn a substantial income from intranet-based training courses. .

Work as an Editor

You can also offer to edit papers or provide tutoring for a course you already had success in. Many printing houses need freelancers to edit their articles. You can also write reviews of events and If you’re a tech whiz, offer to review and comment on latest computer Apps.

Write Articles and books

If you’re a writer it seems perfectly natural to start writing your own articles and books. It’s now easier than ever. You can write articles for websites, blogs and paid reviews and can earn extra money.

Start an online business

The likes of Facebook, Google and Amazon are all online businesses. Online businesses make money through advertisements on the websites, commissions or selling a product or service. To make money from an online business, you must either have a forum where people regularly interact, sell products or services people need etc. Most successful online businesses started from people’s bedrooms.

Be a virtual assistant

Virtual assistants are people who are employed to remotely work from home or in any location that is not your typical office place. All you need is a laptop, Internet and telephone. It’s increasingly getting popular as a source of earning income for stay-at-home mums.

Become a paid Chauffeur on weekends

If you have passion for driving and you want to earn an extra buck, then professional driving can be considered to generate extra money. Though this is a kind of low key assignment but If you have the strength to work an extra day or two, then why not try ? These days many high profile person prefer to hire part time Chauffeurs .

Plasma Donation

Consult your physician first and if you’re cleared you might be paid handsome amount for each donation. In some countries you get rewarded for donation of plasma but not in all countries Generally, you are allowed to donate up to two or three times per week in the U.S.A.

These are some of the alternative sources of income to compensate your regular income and live comfortably as depending on the only source of income from your employment cannot be viable in current scenario.

If any other important source has escaped attention, kindly share your valuable ideas.

Car Prices Slashed: Is It the Right Time to Buy your Dream Car

2014-02-21T22:47:00.000+05:30

Price of cars and two-wheelers in India were set to come down after Finance Minister P Chidambaram announced a reduction in excise duty on small cars, motorcycles and scooters from 12 per cent 8 per cent.

This has proved to be a major relief to all the auto companies in the red, as the industry could see a pick-up in sales with major manufacturers reducing prices up to a maximum of six per cent.

On reduction of excise duty on passenger cars in the Interim Budget, the country’s biggest carmakers Maruti Suzuki India and Hyundai Motor India (HMI) reduced prices across product portfolios.

While Maruti’s price reduction ranges between Rs 8,502 and Rs 30,984 across models, Hyundai slashed prices by between Rs 10,000 and Rs 1,35,300. The petrol variant of Maruti Swift will be cheaper by Rs 15,000-Rs 17,000 and the diesel one about Rs 20,000-Rs 24,000.

The entire benefit of the excise duty cut is being passed on to customers for the full range of models as stated by Maruti in a statement.

Alto hatchback will be cheaper by Rs 8,502, SX4 by a maximum Rs 30,984, Celerio Rs 13,615, Alto K10 Rs 11,304, Omni Rs 8,698, Eeco Rs 10,881, WagonR Rs 12,578, A-Star by Rs 13,482, Estillo Rs 12,148, Ritz Rs 15,130 and Ertiga Rs 18,747.

Honda Cars India, Volkswagen, Mahindra & Mahindra (M&M) and Fiat also announced price cuts.

Hyundai’s Santa Fe will be cheaper by Rs 135,000. Volkswagen reduced the price of Polo by a minimum Rs 18,000 and that of Jetta by a maximum Rs 51,000.

M&M reduced prices of its passenger vehicles between Rs 13,000 and Rs 49,000. The company also lowered prices of its premium sport utility vehicle Rexton by up to Rs 92,000.

Remaining carmakers are expected to reduce prices in the next couple of days.

However the cut in duty will be applicable up to June 20, 2014, when the new government is likely to present the full year budget.

So decide whether this is the right time to buy your dream car.??

Provident Fund's Minimum Pension of Rs 1000 approved by EPFO Trustees

2014-02-06T20:51:00.001+05:30

Finally, the Trustees of retirement fund body Employees' Provident Fund Organisation (EPFO) have approved the proposal to provide a monthly pension of minimum Rs 1,000 to all the members, a decision that will immediately benefit all the concerned pensioners. Presently, there are about 44 lakh pensioners. Out of this, 27 lakh get less than Rs 1,000 a month.

Pensioners are expected to get benefit with effect from April 1, 2014.

The Labour Ministry's proposal on giving a minimum monthly pension of Rs 1,000 under the EPS-95, run by the Employees' Provident Fund Organisation (EPFO), had been pending for a long time as the government would have to make fund provisions for the purpose.

Now the Finance Ministry has approved the proposal for providing a minimum monthly pension of Rs 1,000 under the Employees Pension Scheme 1995 (EPS-95) run by EPFO.

To know the funding pattern and how the pension is calculated see Pension provision in Employees Provident Fund (EPF) Scheme

As per the directions of the Finance Ministry, the Central Board of Trustees (CBT), the apex decision making body of EPFO, also decided to raise the monthly wage ceiling to Rs 15,000 from Rs 6,500 by recommending an amendment of the EPF scheme, 1952, so that more workers can be brought under its various social security programmes. At present, workers getting basic wages, including basic pay and DA, of up to Rs 6,500 are covered under the ambit of EPFO.

According an EPFO official, the labour ministry will soon move proposal before the Union cabinet for its approval for the Rs 1,000 minimum monthly pension.

This new amendment in pension provision will pave the way for inclusion of many employees who were earlier omitted out of the benefits due to low level of eligible wages.

Consumer Price Index and Inflation : Current India Inflation Rate in 2013

2014-02-01T22:58:00.000+05:30

Inflation is described as continuously rising prices, or the continuous fall in value of the money viz. Dollar or Rupee. The inflation rates are based upon the consumer price index (CPI). The Consumer Price Index is a measure of the average price which consumers spend on a market-based “basket” of goods and services.

Inflation based upon the consumer price index (CPI) is the main inflation indicator in most countries. The CPI inflation rates in the table are presented both on a monthly basis, compared to the month before, as well as on a yearly basis, compared to the same month last year.

The data required to arrive at the CPI is collected by the authorised designated agencies through a scientific sampling of prices on about 80,000 items (good and services). They gather, record and update the data monthly, which serves to track and measure price changes in the Consumer Price Index (CPI).

Does the CPI reflect spending trends with price change?

The Consumer Price Index does not include spending habits or trends for anyone living in rural areas, those in the Armed Forces, or those in institutions, like prisons. Specifically, the CPI includes data on the spending habits of two population groups:

All urban (U) consumers, and
Urban wage (W) earners and clerical workers

The Bureau of Labor Statistics (BLS) in USA reports that the all urban consumer group represents about 87 percent of the total U.S. population.

What goods and services are included in the CPI ?

There are more than 200 categories for all goods and services which are tracked to measure the CPI for a particular period and these are placed within following major groups:

Food and Beverages: meat, milk, beer, wine, snacks, etc.
Housing: rent of primary residence, owners’ equivalent rent, fuel oil, bedroom furniture, etc.
Apparel: cloths like pants, shirts, sweaters, etc.
Transportation: vehicles, airline fares, gasoline, etc.
Medical Care: hospital services, drugs, medical supplies, glasses, etc.
Recreation: TV, pets, movies, pets, etc.
Education and Communication: college costs, telephone services, computer software, postage, etc.
Other: smoking products, haircuts and other personal services

The CPI does not include savings or investment items, like stocks and bonds or real estate.

Inflation in India

The inflation rate is based upon the consumer price index (CPI). The method of declaring inflation based on CPI can be illustrated with the following two overviews:

The annual inflation by year for India - comparing the December CPI to the December CPI of the year before and
The average inflation by year for India - the average of 12 monthly inflation rates of a calendar year

Average rate of inflation in India

As per statistics, Provisional annual inflation rate based on all India general CPI (Combined) for December 2013 on point to point basis (December 2013 over December 2012) is 9.87% as compared to 11.16% (final) for the previous month of November 2013. The corresponding provisional inflation rates for rural and

urban areas for December 2013 are 10.49% and 9.11% respectively. Inflation rates (final) for rural and urban areas for November 2013 are 11.66% and 10.53% respectively.

The average rate of inflation in India was 9.87% % in the year ending December 2013.

Inflation or price rise is a constantly changing phenomenon and the variables contributing in the Consumer Price Index also change according the socio-economic profile of the populace comprising of the particular territory at a given time and the political situation and other factors.

Demat Account: Benefits of Holding Shares in Digital Form

2014-01-22T22:29:00.000+05:30

Buying shares is one of the best ways to boost your asset building method. To add to the ease, share trading has long become a part of the digital world. With the emergence of online trading, buying shares and adding them to your portfolio just happens at the click of a mouse.

Maintaining physical certificates for each share is a thing of the past. Today you can maintain shares in electronic form in your dematerialised account, popularly known as Demat account. Demat stands for dematerialization. A single Demat account can be used by an investor for multiple security transactions. While online trading account enables you to buy and sell the shares, the Demat account is instrumental in holding those securities. Also there is no compulsion of maintaining a specified minimum number of securities in the Demat account i.e. it can be ZERO balance account.

Dematerialization is the process of converting physical financial instruments such as share certificates, mutual fund investments, and bonds into electronic form. A Demat account is similar to a bank account. When you receive your bank statement, you will see 2 columns – deposits and withdrawals of money and balance money in the account on the last day of the statement.

The benefits arising from Demat Account:

Holding your investments in Demat form is easy and convenient.
You don’t have to face the problem of losing investment certificates or receiving forged certificates.
Transferring securities becomes easy.
You incur lower costs associated with transactions when compared to physical buying and selling of securities.
You receive bonus shares and share splits automatically.
Changes in personal details viz communication address and bank account number etc will apply to all the securities held and need not be done separately..

Process of opening a Demat account involves 4 easy steps:

Select a broker , bank or any financial intermediary who is a DP (Depository Participant) i.e. one registered with the National Securities Depository Ltd. (NSDL) and the Central Depository Services Ltd. (CSDL).
Fill up the account opening form provided by the DP
Furnish the required documents like proof of address and identity
Providing the original PAN card during account opening

Major facilities provided by the Demat account are:

Transfer and settlements of shares: If you are selling securities, you have to provide a delivery instruction slip; if you have purchased securities, a receipt instruction slip or one time standing instruction for credit has to be provided.

Benefits of corporate actions: Non-cash corporate entitlements like bonus and rights issue can be directly credited to the Demat account.

Dematerialisation and rematerialisation of shares: You can convert your physical securities into electronic form or vice-versa through the Demat account. For dematerialisation, you need to provide the physical share certificates along with a Dematerialisation Request Form (DRF) for each scrip as permitted by NSDL.

Pledging for loan: You can also opt to avail of loan against shares by pledging shares held in your demat account.

However, these accounts are subject to the following charges like Annual Maintenance Charge levied on a fixed basis, Demat and Remat Charges, Debit Transactions based on the value of the transaction, Failed / Rejected Instruction and Pledge Charge/Invocation charges based on the value of securities.

With everything taking place in the virtual world, Demat account enables you to trade in shares in a safe and secure way with no risk of forgery, theft, misuse or destruction and you can also access the details of your account online anywhere anytime.