Bank fixed deposit is one of the most popular investment product. It is liked by many, especially the conservative investor. Reasons being high liquidity and lower risk along with a fixed return. But have you ever thought about the fact that a higher exposure to FD eats into your returns big time because, one- it is not tax free and two- it cannot beat inflation.
Indians conventionally have been parking their money majorly in bank deposits or even postal deposit schemes. Due to the lack of awareness about equity and for a desire to protect their principal investment and returns, deposits are considered safer options.
In the past, it may have been fine to invest in FDs. But given the upgrade in lifestyles, it has become tough for people to manage expenses by continuing investments in the same old-fashioned low returns bearing financial products. That too needs an overhaul. Investor fail to realise that their returns are being compromised on account of their fear or need of safety. This does not allow their money to grow at a faster rate.
The first big dent that FD returns do to you is the tax you pay on it. Investors often look at the gross rate of FD return, rather than the net post-tax returns. So, even if a bank FD is offering say 7.50% returns and if your total income is already more than Rs 10 lakh in a financial year, then you would end paying 30% tax (excluding cess) on this return. So, your net returns would be only 5.25% (that is, 7.50% – 30% tax). This happens because your FD is subject to your normal slab of tax rate. This single disadvantage should keep you away from investing in FDs. Rather, you should focus tax planning which can help you save the tax on FDs. The same can then be invested elsewhere to earn better returns.
The second big turn off is the inflation rate. Your FD returns will only be able to match or hover around the inflation rate. In fact, it is already established that FDs returns cannot beat inflation. The typical inflation rate may range from say 6 to 7%, but that does not take in to account your lifestyle inflation that is, the change in your standard of living, emergent or sudden expenses, things you spend your money on such as, foreign travel, gadgets, apparels, etc, which were not there earlier or were nominal. Given the lifestyle and other higher expenses on education, medical, etc, your money has to work harder than you think and beating inflation is no longer a choice but a necessity.
Given that there is a growing concern about banks going bankrupt, due to issues like bank scams and rising non-performing assets, even the safety part of FDs is no longer valid. In fact, you be aware that only Rs 1 lakh of your FD investment is insured by the government.
The most important thing is to do a comprehensive financial planning to meet your financial goals. This will help you figure which goal requires which combination of financial products to invest in. So, focus on investing in a good mix of products offering higher returns, more tax efficiency and the capacity to beat the inflation evil. Invest in FDs only if you are in a stage of your life when you seek very safe return, say post retirement. But a young investor can take higher risk and invest more in other assets such as mutual funds or stocks that offer higher returns.
‘One Belt One Road’ (OBOR): An external challenge to India’s economy and security
In recent times China has emerged as a strong player in this new unfolding global system.
It has launched a new initiative called One Belt and One Road initiative. The aim of the OBOR project is to create an economic land belt and marine link to redirect Chinese capital to develop infrastructure and trade capacity of ASEAN, Europe, Central Asia, and Africa.
The concept of OBOR is based on certain principles where the broad aim is to establish multi-dimensional and multi-tiered connectivity to tap the market potential of the region’s leading countries to aggressively undertake job creation and promotion of consumption. It has the plan to involve more than 60 countries in the project and also plans to negotiate a free trade agreement with all of them, the entire OBOR.
China Pakistan Economic Corridor (CPEC)
The China –Pakistan relations, over a period of time, have evolved to the extent that some scholars aptly call Pakistan, China’s Israel. Today, china clearly believes that Pakistan has a core part to play in its transition to global power and lies at the heart of China’s plan for ports and railways and for oil and gas. The CPEC comes at a time of growing geopolitical ambition of china, being partly a strategic gambit. One of the important aims of CPEC is to bolster the Pakistani Economy by addressing the Key infrastructure constraints in Pakistan.
In March 2015, China’s National Development and Reform Committee announced the OBOR initiative. The CPEC is part of OBOR and was formalized in April 2015 between Pakistan and China. This concluded with around 51 memorandums of understanding with a total investment of 46 billion dollars. CPEC has emerged out of the Chinese principle of co-operative mechanism with different parts of the world to increase its trade. It has identified the China-Pakistan Economic Corridor and Bangladesh-China-India–Myanmar(BCIM-EC) as the key initiatives broadly associated with OBOR.
India’s official position is that CPEC passes through the Pakistan Occupied Kashmir(PoK), which is a disputed territory, and land that has been illegally occupied. India asserts that China has not shown any understanding of India’s sovereign claims and thereby it will not be part of the OBOR. Again for India, OBOR is a national initiative of China to enhance its connectivity all over to ensure that it is able to sustain its low-cost manufacturing programme which is declining due to rising domestic wages in China. This is by integrating itself to global value chains.
India has now to decide whether it would allow political differences to prevail over economic interaction.
First ATM installed at more than 11000 feet above sea level at Kedarnath
The Uttarakhand chief minister of the double engine government Trivendra Singh Rawat has today inaugurated the ATM service at the historic Kedarnath Shrine precincts at more than 11000 ft altitude, after it was washed away in the massive ecological disaster of June 15. This is the only ATM in the entire Kedarnath valley.
Thanks to the untiring efforts and dedicated commitment of Uttarakhand government for having taken the pains to finally to get the ATM installed at the ancient Kedarnath Shrine after protracted five years, where more than two lakh pilgrims and tourists visit every season to pay their revered obeisance to Baba Kedarnath in His historic shrine established centuries ago.
Even the prime minister Narendra Modi visited this Kedarnath about four to five times after the dreaded ecological disaster for paying obeisance to Lord Shiva at Kedarnath and also directed the state government to expeditiously carry out the reconstruction work in the Kedarnath Dham precincts.
A massive budget was also allocated for the complete facelift of this historic shrine.
If we measure the approximate number of visitors at this historic shrine taking an average of one lakh visitors every season, the figure would come to more than five lakhs. One can imagine how much inconvenience the visiting pilgrims were confronting in the absence of an ATM. The earlier available ATM was washed away in the heavy deluge on June 15/ 16 2013 that killed thousands of pilgrims from all over India who’d converged for Lord Kedar’s darshan.
We remember the news of this ATM being damaged due to the high-velocity tides and currents and of the deluge of the Chora baari lake also known as Gandhi Sarovar in June 2013.
On the day of this deluge and afterward, wads of notes were seen floating far away in the river which was finally picked up by some Sadhus who tried to siphon them off clandestinely but were caught carrying the wads of notes collected by them floating in the water.
Finally, the government of Uttarakhand realized this inconvenience to pilgrims and opened the only ATM at Kedarnath Shrine. The chief minister Trivendra Singh Rawat jubilantly inaugurated it. Better late than never, after more than five years in 2019 we have the ATM again after it was washed away in 2013.
In a tweet, today along with the pictures of inauguration of this new ATM the chief minister Trivendra Singh proudly tweeted: Harsh ka vishay hai ki Kedarnath Dham mein pehla ATM aaj se shuru ho gaya hai. @ HDFC _Bank dwara sthapit ATM se shradhaluon ko badi raahat milegi. 2013 ki aapda mein Kedarnath mein maujud ATM bah gaya tha.
Matter of pleasure to announce that a first ATM has been installed at Kedarnath shrine. The HDFC ATM will be of immense help to pilgrims. In 2013’s disaster the Kedarnath ATM washed away in the deluge.
Dr. Ashutosh Karnatak is the new CMD of GAIL ( India) Ltd
Gas Authority of India Limited with its headquarter based in New Delhi’s Bhikaiji Cama Place has nominated its new Chairman Cum Managing Director. Dr. Ashutosh Karnatak earlier serving as Director project GAIL since 2014 has today taken over charge as the new CMD of this highly profit-making organization. The earlier CMD Mr. Tripathi has retired.
Mr. Ashutosh Karnatak carries behind him a rich experience of 37 protracted years in the hydrocarbon sector and is also concurrently serving as Director ( Projects) in GAIL.
As per the financial projections till February 2019 the state-owned gas distribution company GAIL ( India) Limited jumped in the third quarter profit beating market estimate, buoyed by a surge in revenue from its natural gas marketing segment says a TOI report published in February. According to the report, the profit for the quarter ended then on December 31 last came to a whopping 16.81 billion rupees i.e. 234.32 million dollars compared with a profit of 12.62 billion rupees last year as per the GAIL’s projections.
According to the Refinitiv Eikon data quoting TOI report sixteen analysts on average estimated the company, which also engages in the transmission of petrochemicals and liquefied petroleum gas, posted a profit of 15.51 billion in a quarter.
The TOI report of Feb 2019 further says that GAIL’s revenue from operations surged 37.3% to 197.89 billion rupees. Similarly, it’s gas marketing segment which accounts for more than 3, 4th of the total revenue enhanced to a whopping 46%.
Along with Dr. Ashutosh Karnatak who took charge as CMD GAIL, Dr. Kulbhooshan Baluni also took charge as Director IIM Kashipur and Professor Padhy as Chairperson of IIM Kashipur Campus, Dun today. Mr. KC Pandey of Awaj Suno Pahadon ki and Uttarakhand Journalists Forum extended their heartiest congratulations to all of them for their enlightened future.
Dr. K. C Pandey a renowned entrepreneur of Uttarakhand and social activist congratulated Dr. Karnatak on assumption of the charge as new CMD GAIL at his Bhikaiji Cama place office by presenting a bouquetin person.
A post-graduate from IIT Delhi Karnatak graduated in electrical engineering from HBTI Kanpur. He is credited for developing an innovative project monitoring and controlling technique ARJUNA and a capability-building model. He accompanies with him a 39 years experience in Oil and Gas sector who joined GAIL in 2014 and reached its top slot just in a span of 4 and a half years.
Benefits of filing ITR (Income Tax Return) even if you are below taxable limit
ITR Receipt is an important document
Having an ITR receipt is important because it is more detailed than Form 16, entailing your income and taxation along with revenue from other sources.
Use as address proof
ITR receipt is sent to your registered address, which can serve as residential proof.
Helps the bank loan documentation process easier
Being a diligent income tax filer makes it easier for banks to assess your source of income when you apply for loans like an auto loan, home loan, personal loan, etc.
“Banks usually ask for copies of tax returns filed for previous 2-3 years at the time of applying for the loan to ascertain the income capacity of the individual. Hence, to apply for loans a tax return would be required to be filed”.
Avoid penalties or scrutiny from the tax department
From FY 2017-18, up to INR 10,000 would be levied for non-filing of ITR. This black mark will remain for years to come.
For a hassle-free visa application procedure
At times visa authorities ask for copies of past tax returns, hence to apply for a visa a tax return would be required to be filed. Embassies, especially those of US, UK, Canada, etc. when processing your foreign visa application, are particular about your tax-compliance.
To buy an insurance policy with a higher cover
If insurance companies have reasons (non-compliance) to believe that you are a tax-evader, they will not give you policies with more cover.
When employed, your employer will deduct TDS on your income. However, if you have made investments that are tax deductibles, it reduces your taxable income. So, the TDS deducted can be refunded, but only if you file your return. The same holds true for TDS deducted by any other sources.
Makes life easier for freelancers and independent professionals
Freelancer or self-employed people don’t have Form 16. This is the only document they have to show that he has filed the ITR. Without this, they can face funding issues and transactional problems.
Experts say that if one plans to start their business and need to fill a government tender or two for the same, they will need to show their tax return receipts of the previous five years. This again is to show your financial status and whether you can support the payment obligation or not.
However, this is no strict rule. It may vary depending on the internal rules of the government department. Even the number of ITRs required can vary.
Credit Card Processing
Banks can reject your credit card application if you haven’t filed your ITR.
Compensate losses in the next financial year
Unless you file the ITR, you cannot recompense your expenses/losses in the previous financial year to the current. As per the income-tax provisions, if tax returns are not filed on time, unadjusted losses (with some exceptions) cannot be carried forward to future years. Hence, to ensure that the losses are carried forward for future adjustment, a tax return would be required to be filed.
Helps to avoid extra interest
If you don’t file ITR, the belated return could lead to extra interest at 1% per month for the remaining tax payable by you. For example, banks would deduct tax from interest on fixed deposits exceeding a certain threshold. To claim a refund of tax deducted by the bank (if any) on the interest income, a tax return would be required to be filed regardless of the taxable income.
This helpful article curated from the web.
Have we registered our brand name yet?
The brand name is the very soul of the company. With the rise in the number of brands in India, the likelihood of the brand name being stolen has increased. Therefore, it is high time that we take measures to protect our brand name through Trademark registration.
Why we should consider trademark registration?
1. Because the brand name is the very identity of our product or service.
2. Because a brand name makes the customers recognize our product among many.
3. Because with trademark registration, we can deter the infringers from stealing our mark.
4. Because trademark registration gives a monetary value to our mark
5. Because trademark registration opens the door to business expansion through licensing.
This important article curated from the web.
It’s a pro people budget says PM Modi
DPIIT summons food aggregators like Zomato, Swiggy over predatory pricing
The Department for Promotion of Industry and Internal Trade (DPIIT) has summoned food aggregators including Swiggy, Zomato, Foodpanda and Uber Eats over restaurants complaint of them engaging in deep discounting. The dispute between restaurants and food aggregators has been going one for almost a year.
DPIIT has called meeting to resolve offline restaurant concerns, which is quite similar to what offline retailers had with e-tailers, said an official aware of the development.
The meeting will be attended by food aggregators and restaurant associations, including the Federation of Hotel & Restaurant Associations of India and National Restaurant Association of India. It will be chaired by DPIIT secretary, Ramesh Abhishek.
Govt will try to address the restaurants issues through mutual discussion and find equal growth opportunity for the industry, reportedly said officials.
Commerce and industry minister, Piyush Goyal, had earlier warned e-comm firms, in almost similar cases, to avoid hurting small businesses through their predatory pricing practices. Goyal had categorically said that the government will not allow small retailers and kirana shops to be wiped out.
The restaurant associations have time and again complained against food aggregators harming their business through making consumers discount addicts.
Two months ago, restaurants had complained, about the impact of deep discounting offered by food aggregators, on their business. Through predatory pricing food aggregators are forcing restaurants to drop prices, restaurants said.
Food aggregators have also indulged in running their own private labels, who are eating away their businesses and using consumer behaviour data to consolidate their business, they added.
In January, over five hundreds of restaurants had complained to the CCI.
Delhi High court restrains Hotelier Association from calling for ban on Oyo Rooms
The Delhi High court has restrained the Hotelier Welfare Association from issuing any notices to hoteliers and service providers calling for a ban on or seeking to boycott the hotel services provided by Oyo Rooms.
The ex-parte interim injunction order was passed by a vacation Bench of Justice Jayant Nath in a suit by the owner of Oyo Rooms, Oravel Stays Private Limited (plaintiff) against the Hotelier Welfare Association (defendant).
The Court was informed that the plaintiff is in the business of standardizing unbranded budget hotels, bed and breakfast and guesthouses through online and offline channels.
It was further explained that the plaintiff enters into business arrangements with the service providers or hotelier, in which the service provider or hotelier permits the plaintiff to have full control over pricing, booking brought in by the hotel, publishing room tariffs on its website and/or mobile application at any point in time etc.
It was the plaintiff’s grievance that the defendant had been illegally conspiring and colluding with other similar hotelier associations such as Budget Hotel Association of Mumbai to coerce the plaintiff into submitting to their unwarranted, illegal demands.
Pursuant to the various statements, notices/letters issued by the defendant, several hoteliers had expressed their apprehension in continuing their business-relation with the plaintiff, the Court was further informed.
The Court also perused one such notice allegedly by defendant association, calling upon all hotels to support a nationwide protest against OYO by boycotting and blocking OYO rooms from June 20.
The conduct, the plaintiff argued, had halted its business and could also potentially impact more than 1,35,000 bookings across India.
It was also pointed out that the defendant was earlier the business partners of the plaintiff but have now formed an association and have been acting against the plaintiff.
After hearing the plaintiff, the Court concluded that a prima facie case had been made out against the defendant for an ex parte injunction order.
The Court thus restrained the defendant from issuing notices or calling other hoteliers/service providers to boycott the plaintiff in any manner whatsoever till further orders.
Oyo Rooms was represented by Senior Advocate Neeraj Malhotra, briefed by a team of Advocates from IndusLaw Sandeep Grover, Mohit Chadha, Pankhuri Bhardwaj, Tarang Aggarwal, and Kshitij Parashar.
- The matter will be heard next on August 8
Mindtree gives three board seats to L&T, Subroto Bagchi resigns
Mindtree’s board has appointed three L&T senior leaders including chief executive officer and managing director executives S N Subrahmanyan. Engineering major L&T, whose target is to up its stake in the mid-tier IT services companies to more than 66%, has got three seats on Mindtree’s board.
The Board of Directors and the Nomination and Remuneration Committee on Thursday approved the appointments of S N Subrahmanyan, J D Patil, Senior Executive Vice President for L&T’s defence business and Ramamurthi Shankar Raman, chief financial officer, L&T as non-executive directors, the company said in a filing.
These appointments will be effective July 16 subject to shareholders’ approval.
Co-founder Subroto Bagchi has resigned from Mindtree’s board. The company said Bagchi, who is retiring on July 16, did not offer himself a reappointment.
The Bengaluru-headquartered IT firm has also approved the appointments of Prasanna Rangacharya and Deepa Gopalan Wadhwa as independent directors on the board.
Paytm to dole out incentives for merchants at kirana stores
In a move to make deeper inroads in the country, digital payments company Paytm on Thursday announced to push cashback from peer-to-peer UPI transactions to offline merchant payments at retail kirana stores.
The company is aiming to partner with almost 20 million retail kirana stores, enabling them to accept all digital payment modes including UPI, wallet and cards.
“Paytm will invest money in offline merchant expansion instead of driving incentive led P2P transactions. Our offline merchants create high-frequency usage and an important use-case for Paytm consumers,” said Deepak Abbot, Senior Vice President, Paytm.
UPI P2P payments are mostly done by users to receive some extra money. On Paytm, the UPI users are already the ones who have been using a large host of Paytm services for a long time and don’t nerd cashbacks to make payments.
“To further help merchants get better access to capital and provide more financial security Paytm will invest on lending and insurance, rather than on P2P payments,” the company said in a statement.
Through its payment ecosystem, Paytm has already created a network effect with over 5 billion transactions in 2018-19.
It also claims to have 12 million merchant partners accepting payments through Paytm QR, which accepts all digital payment instruments like UPI, wallets, cards and netbanking.
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