Effective-dates-of-various-provisions

Friday, August 7, 2009 5:53 PM By Livemail

INCOME TAX

1. 01-04-2009 - Advance Tax Limit Increased to 10000 from 5000.

2. Wealth Tax Limit Increased: The recommended amendment will apply for the value of net wealth as on 31st March, 2010 and will apply in relation to assessment year 2010-11.

3. 01.04.2011 - Amendment to Section 44AA – Maintenance of Accounts

4. 01.04.2011 - Amendment to Section 44AB – Audit of Accounts

5. 01.04.2011 - Section 44AD Substituted – Presumptive Income

6. 01.04.2011 - Amendment to Section 44AE – Income from goods Transport.

7. 01.10.2009 - Amendment to Section 50C – Value of Capital asset transferred

8. 01.10.2009 - Amendment to Section 56 – Transactions without consideration of more than Rs. 50,000/-

9. 01.04.2003 - Amendment to Section 80A – Deductions

10. 01.10.2009 - Amendment to Section 80G – Charitable Institutions

11. 01.04.2008 - Amendment to Section 80IA – Power Generation

12. 01.04.2000 - Section 80IB – Tax Holiday

13. 01.10.2009 - Section 90 Substituted – DTAA –

14. 01.10.2009 - Amendment to Section 92C – Transfer Pricing – Arm's Length Price

15. 01.04.1998 - Amendment to Section 115JA – Deemed Income

16. 01.04.2001 - Amendment to Section 115JB

17. 01.10.2009 - Amendment to Section 131 – Discovery, Inspection etc – “Dispute Resolution Panel” included

18. 01.06.1994 - Amendment to Section 132 – Search and Seizure – Additional Commissioner Empowered

19. 01.10.2009 - Amendment to Section 139A – PAN – “Quarterly” removed

20. 01.04.1989 - Amendment to Section 147 – Reassessment – Scope enhanced

21. 01.10.2009 - Section 194C Substituted – TDS – Payment to Contractors

22. 01.10.2009 - Amendment to Section 194I – TDS – Rent

23. 01.10.2009 - Amendment to Section 200 – Quarterly Returns gone – Periodicity to be prescribed

24. 01.10.2009 - Amendment to Section 201 – TDS failure

25. 01.10.2009 - Amendment to Section 203A – Quarterly Statement is no more quarterly

26. 01.10.2009 - Amendment to Section 206A & 206C – Quarterly to unspecified period

27. 01.10.2009 - Amendment to Section 246A – Dispute Resolution Panel

28. 01.10.2009 - Amendment to Section 253 – Appeal to ITAT – Dispute Resolution Panel

29. 01.06.2007 - Amendment to Section 271 – Concealment of Income

30. 01.04.1988 - Amendment to Section 271B – Provisional Attachment

31. 01.10.2009 - Substitution of Section 282 – Service of Notice – Courier and Email recognized

32. 01.10.2010 - New Section 282B – Allotment of Document Identification Number

33. 01.10.2009 - New Section 293C – Power to Withdraw approval

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What is Special in RBI Credit Policy.....?

Monday, August 3, 2009 10:23 AM By Livemail

RBI didn’t bring any changes in the key policy rates. By considering the economic recovery from the global downturn, it kept its short-term rates and cash reserve requirement unchanged. The RBI said it would continue with a policy of easy money while the outlook remained uncertain, reassuring a bond market that must absorb a record 4.51 trillion rupees ($94 billion) in government borrowing this year as we expect fiscal deficit to reach 6.8 percent of GDP. It said once a recovery had happened, it would be ready to reverse some expansionary measures to keep a lid on inflation. The central bank (RBI) said it would actively manage liquidity to prevent government borrowing from increasing private demand for credit.

RBI left its lending rate (Repo) unchanged at 4.75 percent, its lowest in nine years, and its reverse repo rate at 3.25 percent (this is the rate at which RBI absorbs surplus cash from the banking system). Both rates were last cut by 25 basis points in April 2009.
 
The RBI kept the cash reserve ratio (CRR), the amount of funds banks have to keep on deposit with it, unchanged at 5.0 percent. It was last cut by 50 basis points in January 2009. At the same time Statutory Liquidity Ratio (SLR) also kept stable at 24%
 
Key Policy Rates

Particulars
Rates
Bank Rate
6%
Repo Rate
4.75%
Reverse Repo Rate
3.25%
Cash Reserve Ratio (CRR)
5%
Statutory Liquidity Ratio (SLR)
24%

Highlights of RBI credit policy
Following are the highlights of RBI Credit Policy.
 
·         Bank rate retained at 6%
·         Repo rate unchanged at 4.75%
·         Reverse repo rate unchanged at 3.25%
·         Cash reserve ratio unchanged at 5%
·         Statutory liquidity ratio (SLR) unchanged at 24%
·         Inflation is forecast at 5%
·         Negative inflation only a statistical phenomenon
·         Main concern on balance between liquidity and inflation
·         GDP is forecasted at 6%
·         More scope for cutting rates by commercial banks
·         Money supply may grow 18% this fiscal
·         Policy will help to ensure enough commercial credit
 
Asia's third-largest economy grew 6.7% in the last fiscal. In previous three years the growth was 9 percent and more. Private sector economists expect growth between 5.8 and 7.2 percent this year. Wholesale prices are below last year's levels, it is largely because of the huge fall in oil prices. In July 2008 it was at all-time peaks. But consumer price inflation floats near 8 percent. The central bank said it was unlikely that growth momentum would pick up before the middle of the current fiscal year, but said it expected fiscal and monetary stimulus measures to boost domestic demand in 2009/10.

RBI’s main concern is on balance between liquidity and inflation. To make sure the liquidity RBI is going to increase money supply by 18% in this fiscal. The projected inflation for the year is 5%. This policy will also help to ensure enough commercial credit. The central bank said that commercial banks have scope to lower deposit and lending rates. This will help the borrowers to gets loans with reduced rates.
 
RBI has mentioned that there is more scope for cutting rates by commercial banks. But this might adversely affect the private sector banks because from the last few months the gap between the deposit rates and the lending rates continue to be far higher and increasing. Banks which have relatively smaller operations may face pressures from the deposit side. Most of the banks believe that the rate cut cycle is over and RBI will hint at an exit strategy by the end of 2009.

As all the rates have kept unchanged stock market didn’t have much effect from the new RBI policy. It does not change anything really for the stock market to look forward to or feel disappointed.
 
RBI’s decision to keep the interest rates unchanged is a big boon for Real Estate sector since interest rates are at an all-time low. There is enough liquidity in the market, the credit off-take lending is slow, so the bankers will definitely look at providing ways and means to provide stimulus to the economy.
 
 

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Financial Planning

10:18 AM By Livemail

Financial planning is the process of meeting life goals through a proper planning and management of finances. Financial planning helps us to translate our dreams and aspirations in to reality.    
 
It also helps us to provide meaning and direction to our financial decisions.
Financial planning has to be done in a proper way, so that it can be implemented effectively.The important steps to be followed while planning our finances are,


-Analyse your dreams and aspirations

-Establish the goals

-Analyse your financial status

-Analyse your emotional status

-Develop a plan for achieving the goals

-Implementing the plan

-Monitoring the plan

Analyse your dreams and aspirations
All of us have got lot many things to do in life, Moreover we are all dreaming of doing the same at the earliest .But normally we do not realise the possibilities of these dreams. In India most of the people have not analysed these dreams and the ways of realising the same.

Establish the goals
Now you have to translate your dreams and aspirations in to money. Define the time frame within which you should be able to realize your dreams. The time frame may depend on your personal goals or family goals or both together. If you think, it is difficult to meet all your goals within the specified time frame, prioritize your goals based on urgency and importance. All goals need not necessarily relate to wealth accumulation only. There could be protection goals as well.

Analyze your financial status
Analyzing financial status includes,
- An inventory of assets and liabilities (including securities holding, debts, insurance, etc)
- A description of the present arrangement for distribution of assets at death
- Estimates of your income and expenditure
- Details of your insurance coverage
Once you analyze all these relevant information of your own, you will come to know where you do stand and what your needs are.

Analyze your emotional status
Emotional status is very important, while designing a financial plan for you. It will decide your strength to take risk or not. It will throws light on your hopes, fears, values, attitudes, preferences, biases and non-financial goals.

Develop a plan for achieving your goals
The plan, which you design, should take your present financial situation to the achievement of the objectives. A comprehensive financial plan should contain an analysis of all pertinent factors relating to your financial status.

Components of a good financial plan
- your personal data
- your goals and objectives
- identification of issues and problems
- assumptions
- your balance sheet/net worth for the financial year
- cash flow management
- income tax planning
- risk management/insurance planning
- investments planning
- estate planning

A well drawn plan must be tailored to you specific goals, situation and circumstances. If additional expertise is required, you should consult with a specialist in that field to help you design the overall plan. There is more than one more way for your financial goals to be achieved. If you want to try with other ways, you can first analyze the advantages and disadvantages of each strategy. The plan should be specific. It should list what you have to do? When and with what resources?

The plan format should be such that you can easily understand and evaluate. Only once you decide that the plan well suits to your needs, you can go to the next step.

Implementing the plan
Merely designing a plan, no matter how sound, does not constitute financial planning. A financial plan is useful to you only if it is put in to action. You have to ensure that the implementation is carried out in the manner and in accordance with the plan designed.

Monitoring the plan
Periodic reviews are the best form of monitoring. Of course, you should keep flexibility for a review if circumstances warrant. Following are three aspects to look at in a review:-
- the performance of what has been implemented,
- changes in the personal and financial situation and objectives,
- changes in the environment (regulations, financial, economic)
If you are on track to meet your financial goals nothing else needs to be done. If that is not the case, a revision is necessary. Revision process will involve the same above discussed steps but will take lesser time.

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How to Read an Insurance Policy Document...???

10:15 AM By Livemail


Insurance Policy
Insurance Policy is a well defined contract document which clearly illustrates the terms and conditions, premium, extent of coverage, deductions under different heads, etc. of an insurance contract. It is completely a legal paperwork in which all possible details are mentioned. The policies are the basic framework of an insurance contract, the entire contract between the client and the insurance company is based on this policy. It is the backbone of the whole contract. In case of default by any one of the party, he would be subjected to legal consequences.
 
Insurance Policy can be of various types such as Life insurance, Medical Insurance or General insurance. The fact is that more than 80% of the people/ policy holders are not able to understand the technical terms/ terminologies used in the offer document and in the policy document. People blindly believe the words of insurance agents, this helps them to misguide the people and to sell them wrong products so that they can earn more commission. 
 
Major aspects covered under Insurance Policy
Following are the major aspects covered under an Insurance Policy;
 
·         Type of Insurance (Life, Medical or General)
·         Purpose of the Insurance
·         Premium Amount
·         Assured amount of money to be reimbursed by the insurance company at the time of maturity or in case of certain loss.
·         Parameters issued by the specific applications
·         Coverage limit of the plan/scheme
·         Requirements to be fulfilled for initiation of the plan/scheme, etc.
 
In this article we will give you a brief about the important terminologies used in insurance policy. This will help you in analyzing the scheme by reading the offer document. If you are able to understand the concepts then no one can cheat you by misinterpreting the terms and conditions of the scheme. Primary objective of IndianMoney.com is to make all Indians financially literate so that no one will be cheated by others in financial matters. We are always happy to clear your queries on Financial Products such as Insurance, Mutual Funds, Demat a/c, Bank a/c, Bank loans, etc.

Terminologies
Following are the important Terminologies used in Insurance.
 
1.    Age limits: Predetermined minimum and maximum ages below and above which the company will not accept applications or may not renew policies.
 
2.    Annuity: It is a scheme under which certain amount is paid at yearly/ half yearly/ quarterly/ monthly intervals.
 
3.    Annuity Plans: These plans contribute for a "pension" to be paid to the policyholder or his spouse. In the event of death of both of them during the policy period, a lump sum amount is provided for the next of kin.
 
4.    Beneficiary: The person or entity (e.g. corporation, trust, etc.) named in the policy as the recipient of insurance proceeds on the event of death of the insured.
5.    Bonus: Bonus is the amount added to the basic sum assured under a with-profit life insurance policy.
 
6.    Claim Amount: It is the amount payable by the insurer under a policy during the time of a claim
 
7.    Days of Grace: Policyholders are expected to pay premium on due dates. A period is 15-30 days is allowed as grace to make payment of premium; such period is known as days of grace.
 
8.    Death Benefit: A payment made to the beneficiary on the death of the insured person.
 
9.    Deferment date: It is the date on which the deferment period ends.
 
10. Deferment period: Period between the date of subscription to an insurance-cum-pension policy and the time at which the first installment of pension is received.  
 
11. Grace Period: A specified period after a premium payment is due, in which the policyholder may make such payment, and during which the protection of the policy continues.
 
12. Gross Premium:it is the premium paid by the policyholder.
 
13. Guaranteed Addition: Guaranteed additions are calculated at a rate per every thousand of sum assured. They are added to the basic sum assured and are payable on admittance of claim. This benefit is allowed only for the year for which premiums are paid.
 
14. Insured: The person whose life is covered by an insurance policy.
 
15. Loyalty Additions: The loyalty addition is given upon the maturity of the policy. It is a small percentage of the sum assured. In other words, loyalty addition is the difference between the performance of the insurance scheme and the guaranteed additions.
 
16. Maturity: The date upon which the face amount of a life insurance policy is paid to the policyholder.
 
17. Nomination: An act by which the policyholders authorizes another person to receive the policy money. The person so authorized is called Nominee.
 
18. Life Assured: Life Assured refers to the person whose life is being insured.
 
19. Nominee: Nominee is the person who is authorized by the policy holder to receive the policy money on settlement of claim.
 
20. Premium: It is the regular periodic payments that a policy holder makes to an insurer in exchange for the insurer's obligation to pay benefits on the occurrence of a contingency.
 
21. Policy: Is the legal document that has the terms and conditions of the insurance contract.
 
22. Policy Period: The period during which a Policy contract covers contingency.
 
23. Premium Waiver Benefit (PWB): Premium waiver benefits are the benefits, which can be availed under children's policies, wherein the future premiums payable up to vesting date are waived in the event of death of the proposer before the vesting date.
 
24. Paid-up Value: Paid-up value is the reduced amount of sum assured paid by the insurer in case of discontinuation of the payment of premiums after paying the full premiums for the first three years.
 
25. Premium: Premium is the amount paid to secure an insurance policy.
 
26. Proposal Form: It is a form, which is to be completed for securing an insurance policy.
 
27. Proposer: Proposer is a person who proposes the insurance policy.
 
28. Risk: The obligation assumed by the insurer when it issues a policy is known as risk.
 
29. Rider: A provision attached to a policy that adds benefits not found in the original policy or that changes the original policy.
 
30. Sum Assured: Sum assured is the amount that an insurer agrees to pay on the occurrence of an uncertain event.
 
31. Surrender Value: Surrender value is the amount payable to the policyholder on termination of insurance contract before maturity.
 
32. Survival benefit: The payment of sum assured to the insured person, which has become due by installments under a money back policy.
 
33. Underwriting: The process of selecting risks for insurance and determining in what amounts and on what terms the insurance company will accept the risk. In simple terms the process of evaluating and selecting risk is known as underwriting.
 
34. Vesting Bonus: It is the Bonus, which the insurer announces after evaluating its assets and liabilities, and that is added to the sum assured under a policy.
 
35. Vesting Date: This is the date from which the life assured i.e., child (in child plan) becomes the absolute owner of the policy.
 
If you are able to understand all these concepts, you don’t need the help of an Insurance advisor/agent to understand the features of a Policy and you yourself can be your advisor. Use this article as a reference material to analyze the offer document or Insurance Policy.

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