PAN of landlord mandatory for claiming HRA exemption

If you are a salaried taxpayer claiming HRA(house rent allowance) deduction, watch out. The central government has lowered the exemption limit for reporting the rent received. Salaried taxpayers claiming HRA exemption and paying a rent of over Rs 1 lakh per year have to give landlord'sPAN (permanent account number). Till now, if the total rent paid was less than Rs 15,000 a month there was no need to submit the landlord's PAN details. The new rule effectively lowers the rent limit from Rs 15,000 a month to Rs 8,333 per month for claiming HRA exemption without making any disclosures.

"Further, if annual rent paid by the employee exceeds Rs 1,00,000 per annum, it is mandatory for the employee to report PAN of the landlord to the employer," the Central Board of Direct Taxes said in its latest circular. "In case the landlord does not have a PAN, a declaration to this effect from the landlord along with the name and address of the landlord should be filed by the employee," it said.

Though incurring actual expenditure on payment of rent is a pre-requisite for claiming deduction under section 10(13A) of the I-Tax Act, it has been decided as an administrative measure that salaried employees drawing HRA up to Rs 3,000 per month will be exempted from production of rent receipt.
Source : Times of India

Sensex closes at all-time high of 21,034

The BSE benchmark sensex on Wednesday surged nearly 105 points to close at all-time high of 21,033.97 on heavy foreign fund inflows in bluechips, amid speculation that the US Fed would maintain its monetary stimulus when they conclude a meeting today.

Continuing gains after Tuesday's 359-point rally following the RBI policy, the sensex shot up by 104.96 points, or 0.50 per cent to 21,033.97 — eclipsing the previous record close of 21,004.96 on November 5, 2010.

The 30-share bluechip index's intra-day high of 21,206.77 was hit on January 10, 2008.
Bharti Airtel zoomed by 5.23 per cent after the company posted better-than-expected operating performance. Other contributors to the sensex were ITC, ICICI Bank, HDFC, Dr Reddy's Lab, TCS and Bajaj Auto.

"Continued buying from FIIs and greater risk appetite of investors at higher levels is leading to this rally," said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio.

The wide-based National Stock Exchange index Nifty rose by 30.80 points, or 0.50 per cent, to 6,251.70, after touching the day's high of 6,269.20. Also, SX40 index, the flagship index of MCX-SX, closed 69.68 points up at 12,514.81.

Brokers said the trading sentiment continued to be bullish on expectations of liquidity enhancement after the Reserve Bank of India cut marginal standing facility (MSF) to 8.75 per cent in its monetary policy review on Tuesday.

A firming trend in the Asian region and higher opening in Europe before the outcome of US Federal Reserve's meeting where the $85 billion a month monetary stimulus is expected to be maintained, also influenced the Indian market sentiment.

Foreign funds have continued to buy domestic stocks for 18 straight sessions till Tuesday, encouraging domestic participants to increase bets, experts said.

Sectorally, the BSE Healthcare sector index gained the most by rising 1.19 per cent, followed by FMCG (1.12 per cent), TECK (0.66 per cent), Power (0.51 per cent) and realty (0.47 per cent).

No hidden gold in Unnao, declares ASI

It’s official! Seer Shobhan Sarkar’s dream has deflated and India’s hunt for gold has met an unsuccessful ending. 

The Archaeological Survey of India (ASI) on Tuesday announced that there was no hidden gold in Unnao as claimed by seer Shobhan Sarkar. It has now decided to wind up the excavation, which began on October 18, soon. 

Digging to unearth 1,000 tonnes of gold, said to be buried beneath the ruins of Raja Rao Ram Bux Singh's fort, near Daundia Kheda village, in Uttar Pradesh's Unnao district, had begun amid heavy security. 
Remnants of a brick wall and other debris were found during the excavation, but not treasure. 

Seer Shobhan Sarkar had a dream about presence of a huge quantity of gold and approached his devotee, union Minister of State for Agriculture Charan Das Mahant, and the PMO, following which the survey and excavation were undertaken. 

Preliminary findings suggested presence of "some metal underneath the earth", following which ASI teams decided to proceed with the excavation.
Source : Zee News

‘Aadhaar’ to facilitate paper-less bank account opening

Mumbai, October 24, 2013(PTI): new feature added to ‘Aadhaar’ will now enable the card-holder to open a bank account without any paperwork.
Unique Identification Authority of India (UIDAI), which issues Aadhaar cards, has added the feature in a bid to push for electronic-driven economy.

Explaining the facility, UIDAI chief Nandan Nilekani said a person can walk into a bank branch, tell his/her 12- digit individual identification number (Aadhaar) and walk out with a bank account.

The bank will connect with the UIDAI using an authorised service agent, generally a payment gateway, which in turn connects up with the UIDAI database, he said.

The only detail a customer has to give at the bank branch will be his/her fingerprint impression, Nilekani said.

The facility is safer than the current practice of submitting photocopies of documents, Nilekani said, adding all the work happens electronically at the back-end.

“Fundamentally, all the infrastructure is falling into place now for creating a much more electronic, much more digital cash kind of an economy,” he said, adding it has long- term ramifications, including making the economy cashless.

The authority, set up four years ago with the Infosys co-founder as its head, has rolled out 460 million Aadhaar numbers till now and is targeting to take this to 600 million (half of the country’s population) by early next year.

Using the numbers as the base, it has helped rolling out a host of services, including direct subsidy transfer and person to person fund transfer using mobile phones.

The UIDAI chief said the e-KYC facility launched today has huge “strategic implications”.

Private sector Axis Bank became the first lender to offer the e-KYC (know your customer) account opening facility. One Nitin Shah of neighbouring Thane district became the first person to open his bank account using Aadhaar.

“Anybody can walk into a branch, give his finger prints and walk out with a bank account,” Axis Bank Managing Director and Chief Executive Shikha Sharma said at the launch.

Nilekani said the bank will roll out this facility across all its bank branches in ten days’ time. However, he parried queries on expansion of the facility at other banks.

The idea is to expand the e-KYC facility from here on, he said, adding it is possible for getting an insurance cover and applying for mutual funds using this feature.

Aadhar Card not mandatory for benefits : Supreme Court

The Supreme Court has ordered the government not to withhold any social benefits from those who are yet to get the Aadhar card and not to issue the unique identification card to illegal immigrants. 

"No benefit of service shall be denied on account of non-possession of Aadhar, and no illegal immigrants would be issued Aadhar," a Supreme Court bench said in an interim order on Monday while dealing with a public interest litigation that challenged the scheme's constitutional validity and the indiscriminate manner in which the government was issuing the card. 

The Aadhar or UID scheme, steered by former Infosys Technologies co-chairman Nandan Nilekani, was seen as the first step towards weeding out those undeserving of subsidies. 

Some states such as Delhi had even attempted to make it mandatory for availing subsidies. 

But a SC bench, comprising Justices BS Chauhan and SA Bobde, has thwarted any such attempt when it directed all states and union territories not to link subsidies and social welfare benefits to the possession of Aadhar cards. 

The central government, through Solicitor General Mohan Parasaran and Additional Solicitor General L Nageshwar Rao, said the Aadhar was purely voluntary and denied all the charges raised in the PIL filed by retired Karnataka High Court judge KS Puttaswamy. 

The petition claimed that different governments have linked social benefits to Aadhar which resulted in many people being denied these benefits. It cited several examples such as Maharashtra paying salaries to teachers only into Aadhar card-linked bank accounts and such cards being made mandatory in Jhakhand for registration of marriages. 

"The linkage of Aadhar numbers with various government benefits and services, such as food security, LPG, Provident Fund etc makes enrolment and obtaining of such cards mandatory, falsifying government claims that they were voluntary," it said. 

Represented by senior lawyer Anil Divan, the petition also claimed that Aadhar cards are being issued indiscriminately to all, including illegal immigrants, posing a huge security risk to the country. 

It claimed that a law brought in to implement it had been rejected by a parliamentary standing committee on finance. Hence, the scheme lacked any legislative backing. 

The whole process was rushed through vide an executive order for political ends, the petition alleged. 

The PIL also claimed that the UID was in violation of Article 21, right to life guaranteed by the Indian Constitution, as it was against a person's right to privacy. The process of getting Aadhar entails biometrics such as finger printing and iris recognition. Courts in the US and UK have held collection and retention of such biometric data to be violation of an individual's right to privacy, it said.
Source : Economic Times

Nationwide banks strike on 25 September 2013

The protest is against the Government’s proposal to merge public sector banks. They are also against the merger of Associate Banks with State Bank of India (SBI).
The All India Bank Employees Association (AIBEA) and the Bank Employees Federation of India have called for an all-India bank strike on September 25 to protest against the Government’s proposal to effect mergers among public sector banks. They are also against the merger of Associate Banks with State Bank of India (SBI).

“More and more branches have to be opened by all all banks to reach the people. But the Government’s policy is misdirected. It wants to consolidate the public sector banks while the need is to expand them,” opined the bank staff unions. Criticising the proposed handing over of licences to big industrial and business houses to launch banking operations, the unions said pre-nationalisation, all banks were in private hands and their track-record was only well known to the country.

 It is likely that the banks strike will materialise on 25^th September.

Source : Moneylife

SBI increases base rate to 9.80 per cent, makes loans costlier

The country's largest lender, State Bank of India on Thursday said it increased its base rate, or the minimum rate of lending, to 9.80 per cent, a day ahead of the RBI's policy review. 

"State Bank of India has revised thebase rate by 0.10 per cent from 9.70 per cent per annum to 9.80 per cent," it said in a statement. Retail term deposit rates have been revised upward, it said. 
SBIis the first major state-run bank to hike lending rates after short-term rates rose as a result of the Reserve Bank of India's liquidity tightening moves announced in July. The decision comes on the eve of the mid-quarter review of the monetary policy.
According to watchers, new RBI Governor Raghuram Rajan has been given some room to take an accommodative stance after the US Federal Reserve surprisingly delayed the tapering of liquidity infusion. 

SBI also increased the spreads on auto and home loans by as much as 0.20 per cent, which will affect new borrowers. 

Home and auto loan borrowers typically pay a margin, or a spread, above the base rate, which is arrived at as per the risk and quantum of borrowing. 

The bank has hiked rates for loans under the benchmark prime lending rate, an older system of computing interest rates, to 14.55 per cent from 14.45 per cent. The lending rate hikes are effective from today, it added. 

A senior bank official said the decision to increase rates was taken by the asset liability committee, which met late last evening. 

"There has been an increase in our cost of funds and the pressure will only increase further as we enter the festive season, which increases the requirement for liquidity," the official told media. 

New housing loans under Rs 30 lakh will come at 10.10 per cent as against 9.95 per cent earlier, while interest rates on auto loans will go up to 10.75 per cent, the official said.
Source : Economic Times

Old cheque to continue till the year end

RBI extends deadline for clearing non-CTS cheques
RBI has extended the deadline for clearing such cheques till 31st December this year. This has done in view of the large volume of ‘non-CTS-2010’ format cheques still in circulation. Advising banks to further continue their efforts to withdraw non-CTS-2010 cheques, RBI said new clearing arrangements will come into effect from 1st of January next year.
In a notification issued yesterday(16/07/13), RBI said it will introduce three CTS centres, one each in Mumbai, Chennai and New Delhi for clearing residual non-CTS 2010 instruments.
RBI said the facility will operate thrice a week on Monday, Wednesday and Friday up to 30th April, 2014.
Thereafter, the frequency will be reduced to twice a week up to 31st October, 2014 and further to weekly from 1st November, 2014 onwards.
RBI also asked banks to educate and notify their customers of the likely delay in realization of non-CTS-2010 cheques and modify their Cheque Collection policies.
The Cheque Truncation System or “CTS 2010” is a set of standard benchmarks for issuing cheques that include manyenhanced security features like quality of paper, watermark, bank's logo in invisible ink and void pantograph.

All bank branches to have ATM

Finance Minister asked all public sector banks to open ATM in all branches before March 2014. While opening a branch of PNB, F.M. informed that necessary instruction has already been issued to all CMDs of nationalized banks to implement the same to enable customers to get round the clock service.
Source : PTI

SBI, PNB start charging for SMS alerts

With private sector banks beginning to charge customers for SMS alerts sent to their mobile phones, public sector State Bank of India and Punjab National Bank too have decided to get on to the bandwagon.

SBI, India’s largest lender, will recover Rs 15 (inclusive of service tax) per quarter as SMS alert charges from its customers with effect from the quarter ending June 2013.

Punjab National Bank, India’s third largest public sector bank, will also charge all new as well as existing customers Rs 15 per quarter for SMS alerts for transactions with effect from July 1.

PNB, however, said senior citizen accounts, staff accounts, retired staff accounts, student accounts and basic savings bank accounts for financial inclusion will be excluded from the SMS charges.

In the last one month or so, private sector banks such as ICICI Bank and Axis Bank have notified their clients that they will be charged for SMS alerts.

With telecom companies increasing the bulk SMS charges by about 10 times, banks have no choice but to pass on the increased costs to the customers, said a senior public sector bank official.

Earlier, the bulk SMS charge used to be around 2-3 paise per SMS. But the same has now been jacked up to 20-25 paise per SMS.

OPTION TO EXIT

The official said that if a customer does not want to incur the expense on account of SMS, then he or she can ask the bank to discontinue the service.

However, given the rising incidents of frauds, it is unlikely customers will stop the SMS alert service as it enables them to track activity in their account.

If a fraudulent transaction goes through, then the SMS alert can prevent further damage as the customer can notify the bank immediately and prevent more transactions.

Through SMS alerts, customers can keep track of the credit and debit transactions in their account. Further, customers can get information on cheque books issued to them and return of cheques, if any.

With SBI and PNB taking the lead , other public sector banks too are expected to follow suit.

TDS is mandatory, never indulge in submitting false 15G or 15H declaration

TDS from interest on bank and other deposits are mandatory. If your interest income is more than Rs 10,000/- aggregating in all deposits of a particular branch in any financial year, the bank is bound to deduct TDS @10% on the interest. The rate will be doubled if the assessee fails to submit his PAN to the bank.
I have seen some bank branches where a notice is pasted such as "Submit Form 15G/15H to avoid TDS". This is completely misleading. An account holder can submit Form 15G or 15H(for senior citizens who attained 60 years in anytime in the financial year) only if his total income from all sources does not exceed the threshold limit on which no tax is required to be paid. That means the total income should be non taxable, below Rs 2,50,000/- for senior citizens and Rs 2,20,000/- for others for the current financial year (2013-14).
There is no provision that you declare to the bank not to deduct tax as you undertake to settle it yourself with the authorities. The bank has to deduct tax at source unless you submit form 15G or 15H and that only if you are within the non taxable limit.

Any false declaration in form 15G and 15H may lead to penalty and prosecution. So be careful before sumitting these forms and read the form carefully.
Form 15G and 15H has been modified recently.
Click here to download Form 15G and 15H.

National Pension System gives near double-digit returns

 The National Pension System (NPS) is fetching near double-digit returns, which is at least a percentage point higher than what employees' provident fund or public provident fund(PPF) offer. NPS is a voluntary long-term saving scheme for the private sector but mandatory for those who joined the government from 2004. 

According to the latest data, in case of the private sector, the top performance was on offer for those who had a significant exposure to corporate bonds with all five fund managers — SBI, UTI,ICICI, Reliance and Kotak — offering between 13.4% and 15% over the last one year. Even sinceinception, the returns have been in the 8.89-11.94% range. 

Corporate bonds are followed by government securities where the one-year return has been over 13.5% for all fund managers. For equity, where maximum exposure to shares is capped at 50%, returns over the last one year have ranged between 8.45% and 11.56%. 
The Employees Provident Fund Organization has fixed the interest rate for 2012-13 at 8.5%, while the government has announced that PPF would fetch 8.7% this fiscal. UTI's Retirement Plan, a mutual fund scheme that has been around since 1994, has offered returns of 10.5% since its launch, while one-year return is 8.62%. 

The flip side is that unlike PPF or EPF, the retirement corpus is subject to tax, although the government has promised to amend the law. But if you choose to use the entire amount to buy annuity, you may avoid paying tax. Individuals, who are not part of the government set up, caninvest anything upwards of Rs 6,000 a year under NPS and can withdraw 40% of the amount when they turn 60. The balance 60% has to be used to buy an annuity or a pension plan from aninsurance company that will earn you a monthly income for the rest of your life. 

When it comes to private sector, the scheme was opened in 2009 but has been slow to take off as fund managers have not pushed it too much given the low commission earned by them. As a result, a bulk of the funds, which added up to nearly Rs 29,000 crore at the end of March 2013, came from central and state government employees and NPS Lite, which is meant for low-income groups. 

Here, the returns seem to be even better as equity exposure is only 15%. Latest available data shows that over the last one year, central government employees earned over 12%, and at least 9.67% since inception, depending on the fund manager. For state government employees, one-year returns range between 12.8% and 13.3% (see table). 

Unlike the private sector, for government employees who joined from 2004, 10% contribution to pension fund is mandatory with their employer providing a matching contribution.
Source :Times of India

Govt. slightly reduces small savings interest rate from April 2013

Revision of Interest Rates for Small Savings Schemes With Effect from 1ST APRIL,2013

Based on the decisions taken by the Government on the recommendations of the Shyamala Gopinath Committee for Comprehensive Review of National Small Savings Fund (NSSF), the interest rates for small saving schemes are to be notified every financial year, before 1st April of that year. Accordingly, the rate of interest on various small savings schemes for the financial year 2013-14 effective from 01.04.2013, on the basis of the interest compounding/ payment built-in in the schemes, shall be as under : Scheme Rate of Interest w.e.f. 01.04.2012 Rate of Interest w.e.f. 01.04.2013 1 2 3 Savings Deposit 4.0 4.0 1 Year Time Deposit 8.2 8.2 2 Year Time Deposit 8.3 8.2 3 Year Time Deposit 8.4 8.3 5 Year Time Deposit 8.5 8.4 5 Year Recurring Deposit 8.4 8.3 5 Year SCSS 9.3 9.2 5 Year MIS 8.5 8.4 5 Year NSC 8.6 8.5 10 Year NSC 8.9 8.8 PPF 8.8 8.7

RBI cuts interest rate by 0.25 per cent

In line with expectations, the RBI on Tuesday cut its short-term lending rate by 0.25 per cent to spur growth and revive investment but sounded a note of caution on further easing of rates on account of high food inflation and current account deficit.

“The foremost challenge for returning the economy to a high growth trajectory is to revive investment. A competitive interest rate is necessary for this but not sufficient,” the Reserve Bank said in its mid-quarter review of the monetary policy.

Accordingly, its short-term lending rate or the repo was reduced by 0.25 per cent to 7.5 per cent, making it the second consecutive cut in as many months.

The market was widely expecting a cut by 0.25 per cent due to the deteriorating growth, which is estimated to touch a decade low of 5 per cent and a cooling in the core inflation to a 35-month low.

Expecting the government to begin spending, it left the cash reserve ratio or the amount of deposits banks have to park with RBI, unchanged at 4 per cent.

The RBI, however, stressed that a interest rate cut alone will not be helpful in order to achieve the objective of reviving investment and called for bridging supply constraints and staying course on fiscal consolidation.

Online Term Insurance, the Smart Choice.

Planning for a life insurance ? Want a handsome coverage (sum assured) ? Going to but a conventional endowment policy again ? Please spend a few minutes to read below and then decide.
Why are you buying the insurance policy ? To protect your family in the most unfortunate event or for savings ? 
If it is for protection against any mishap, please go for pure insurance product, I mean the TERM INSURANCE. Here the premium is very low. Some companies have even come with online options with lower premium against high cover.
For an online term policy of a person of 30 years age with a 30 lac cover for 25 years he has to shell out only Rs 3969 a year. If he opts for an extra 20 lac accidental benefit, he has to pay only Rs 4531 per year.
In the other hand , if the same person goes for a conventional policy with same term and coverage, he has to pay Rs 75,637 a year. Of course, in this case he will get his money back after the tenure with bonus. But do you know how much will he get extra on his premium ? It is not more than simple savings interest. Yes, it is true, you cn cross check the simple fact which is not ever explained by the advisor / agent. 
If you want to buy the product for insurance and as well as savings for the future, go for the first option and save the remaining portion which you thought to spend in conventional policy in any savings plan and definitely you will be more wealthy.
Want to know more ? Just click here to view the earlier post.

What is "CTS 2010" (New Cheque) ?

The full form of CTS is Cheque Truncation System.  RBI has decided to launch this system and all banks across India are required to follow RBI guidelines in this regard.  As per RBI guidelines, now all banks have to issue cheques conforming to the CTS 2010 standards with uniform features.

  

How is CST 2010 will be different from earlier system of cheque clearance?

 Under the CTS system, the physical movement of cheques between banks will be elminated.  At present , when you issue a cheque to someone,  he has deposit the cheque in his bank to get credit.  Then  this cheque moves physcially  from his bank to your bank which involves a lot of time and risk.     Now under CTS, instead of physical movement of the cheque, an electronic image of the cheque will be transmitted to the drawee branch / bank.    The presenting bank will  retains the physical cheque.    Along with the electronic image, certain key relevant information is also transmitted, such as date of presentation, presenting bank details, data on the MICR band.

 What is the purpose of CST 2010  or What are the benefits of CTS?

 The new process is being adopted to reduce the scope of frauds as the new standardized cheques will have number of security features.   The system will also help in speed clearance of chequess and thus customers will be able to get faster credit to their accounts.   This will happen as there will be no physical movement of the cheuqes and hence time is saved and risk of loss of cheques in transit are totally eliminated. 

  When will the CTS begin ? :

 RBI has decided that CTS will be effective from 1st April 2013 (earlier it was to start from 1st January 2013, but was postponed as some banks had not completed the job of issuing new cheque books to all the customers)

What are the features of cheques issued under CTS ? :

 (a) Cheque printer details: This is printed on the extreme left hand side of the cheque.  The printer details along with the words ‘CTS-2010’ is mentioned along the area where you tear off the leaf from the cheque book.

 (b) Rupee symbol: The new symbol of the Indian rupee is printed beside the area where the amount in figures needs to be written.

(c) Details of the bank and its logo: The bank details and its logo are printed on the face of the cheque. However, it is printed in invisible ink.

 (d) Signature space indicator: The words ‘please sign above’ are mentioned indicating the space where you will need to sign the cheque.

 (e) VOID pantograph: This is a wavelike design, which is visible to the naked eye and seen below the area where the account number is printed.

The above set of minimum security features would ensure uniformity across all cheque forms issued by banks in the country  which in turn will help presenting banks while scrutinising / recognising cheques of drawee banks in an image-based processing scenario. The homogeneity in security features is expected to act as a deterrent against cheque frauds, while the standardisation of field placements on cheque forms would enable straight-through-processing by use of optical / image character recognition technology.

The benchmark prescriptions are collectively known as "CTS-2010 standard".  Indian Banks Association (IBA) and National Payments Corporation of India (NPCI) are co-ordinating with the banks on implementation of the new standard. Accordingly, the cheques issued are tested and certified by NPCI and only after such cerification the cheques would be issued to the customers.

 What Should Cheque Book Holders Should Do :

(a) You should  ensure that you use only CTS-2010 compliant cheque leaves from April 1, 2013.

(b) You can check if you hold a CTS compliant cheque book by verifying if the cheque leaves have the features mentioned above. You need to apply in your bank for the same and it is available free of cost.

(c) If you have any unused cheque leaves with you, these must be surrendered in your bank.

(d) In case you have given old post dated cheques (like for your Housing Loan or Auto Loan) to some body, you must exchange them with the CTS-compliant cheques immediately.

 RBI has advised that though non CTS-2010 standard cheques will continue to be accepted post March 31,  2013, they will be cleared at less frequent intervals and may incur additional charges.  RBI has advised to preferably use dark coloured ink while writing CTS cheques.