File Your I-T Returns In Spite Of Relief From Return Filing Up To 5 Lakh

Source :Simpletaxindia:july 29.2011



With just two days left to file income tax returns, taxpayers falling in the Rs 5-lakh bracket and earning less than the Rs 10,000 limit, have the option of not filing their returns.


 However, there are a number of reasons why you should file.If you covered under exemption for return filing as your salary is less than 5 lakh then  you can file return return up to 31.03.2012


An Income Tax Return (ITR) receipt is an important document because it is more elaborate than Form 16 — the other important document for salaried individuals. Reason: Form 16 shows salary from only one employer and the tax deducted by it. Whereas, ITR also shows income from other sources also, including investments, which one might not have disclosed to the employer. In effect, is a more realistic depiction of the individual's monetary position.


If you have decided not to file returns on or before July 31, here’s why you should revisit your decision:


Borrowing: While applying for a home loan, many banks make do with your Form 16. But, according to industry experts, if you aren’t getting a loan or not as much as you want, then handing over the last three years of ITR receipts will help. The ITR gives a sense of the borrower’s total income and his/her ability to support the loan repayment.


Nihar Jambusaria, National Head – Tax Advisory Services, BDO India, says: “Home loans can get rejected if banks think your income cannot support it. Here, ITR can help, as your total income is stated there (Form 16 only has income from one employer).”


International travel: “When travelling abroad, consulates ask you to furnish ITR receipt of the last couple of years at the time of the visa interview,” says Homi Mistry, tax partner, Deloitte, Haskins and Sells.


Some embassies may ask for the last three years of ITR, while others may ask for the most recent certificate.


Experts suggest when travelling abroad, whether on a business trip or on a holiday, income-related proofs should be carried along, such as salary slip, Form 16 and ITR receipt. Consulates specify these requirements in most cases.


Government tender: Jambusaria says if you plan to start a business and you need to fill government tender for the same, you will need to show your tax return receipts of the previous five years.


However, this is not a law. This may vary according to the internal rules of the government department and the number of ITRs required may also vary. This again, is to show your financial status and whether you can support the payment obligation or not.


Self-employed: Businessmen, consultants and partners of firms do not get Form 16. And, hence, ITR becomes a must for such individuals, if their income exceeds the basic exemption limit of Rs 1.60 lakh. For any financial transactions, ITR will be their only proof of income and tax payment.


Last, if you have a refund due from the Income Tax Department, you will have to file returns, without which you will forgo the amount.

Indian Bank to raise $500 mn for overseas operations

Source : Daijiworld:IANS:Friday, July 29, 2011 6:27:44 PM (IST)

Chennai-based public sector Indian Bank has decided to raise up to $500 million loan shortly for its overseas operations, the bank's chairman said here Friday.

Speaking to reporters, chairman and managing director T.M.Bhasin said: "The bank board has approved raising up to $1 billion medium term loan. We have conducted the road shows. We will be raising anything between $350-$500 million in the first tranche."

About its utilisation, Bhasin said: "The loan funds will be used for funding our overseas branches in Sri Lanka and Singapore. Our advances there will go up to Rs.2,250 crore."
Speaking to IANS, executive director Rajeev Rishi said the bank plans to have a branch in Hong Kong and three more branches in Sri Lanka.

"We will have around six branches in Sri Lanka. India's assistance for the rehabilitation of Sri Lankan Tamils will be routed through our bank," he said.

Rishi said the bank is chalking out a new strategy for its merchant banking subsidiary while winding up its housing finance and mutual fund subsidiaries.

On the bank's plans for foray into life insurance sector, he said: "We are waiting for IRDA's (Insurance Regulatory and Development Authority) guidelines on bancassurance. Once that is finalised, we will look at options - taking a stake in a life insurance company or be just a corporate agent."

Indian Bank closed the first quarter of the fiscal 2011-12 with a net profit of Rs.406.9 crore and a total income of around Rs.3,030 crore as against Rs.368.14 crore and Rs.2,477 crore earned during the corresponding period of the previous year.

The bank's increase in net profit is largely due to reduction in provisions by Rs.167 crore to around Rs.176 crore during the first quarter as against the provision of around Rs.343 crore made during the corresponding period of the previous year.

Officials told IANS that the reduction in the provisions during the current year's first quarter is owing to reduced non-performing assets (NPAs).

According to Bhasin, the bank, during the period under review, posted a total business of around Rs.192,934 crore (advances Rs.82,509 crore, deposits Rs.110,424 crore) as against Rs.159,027 crore (advances Rs.68,027 crore, deposits Rs.91,000 crore) posted during the corresponding period of previous year.

He said the bank's net interest income rose by 13.9 percent during the period under review to touch Rs.1,030 crore.

Bhasin said the bank's gross NPA to gross advances ratio declined to 0.98 percent from 1.45 percent in 2010-2011.

The net NPA to net advances ratio too decreased to 0.51 percent from 0.76 percent.

HC directs bank to disburse education loan

Source : TNN Jul 29, 2011, 05.04am IST



CHENNAI: A final year student of an engineering college in the city was on Thursday given relief with the Madras high court directing the release of her educational loan halted in the third year of the course.


A petition filed by R Sahana of Rajalakshmi Engineering College said she had applied for an educational loan of 2.2 lakh for four years from the Oriental Bank of Commerce at 55,000 a year. While the prescribed fee was 98,000 a year, the petitioner would mobilise 43,000 herself.


Her parents were co-applicants for the loan as they had obtained a few other loans in their individual capacity for their business. As they defaulted in paying the loan, the bank stopped the educational loan for Sahana in the third year of her course, the petition said.

Inflation & interest rates: A double whammy

Source :Money life :R Balakrishnan:
Inflation is eroding investments and the central bank’s monetary policy regime is preventing money from flowing into avenues of growth 


Inflation is the biggest destroyer of wealth. 


If I had put aside a sum of Rs100, 10 years ago, I would have earned around 7%pa as returns. Today, I would have had around Rs200 in hand. Ten years ago, I could buy dal at under Rs20 a kg or buy a litre of petrol at under Rs25. 


Today, dal is close to Rs100 a kg and petrol is over Rs60 a litre—and climbing. Of course, vegetable and food prices have more than tripled over this time. In essence, what I saved 10 years ago is today worth less than half my original investment.


 Half of my ‘savings’ has been destroyed because I did not spend it. More important, my assumptions of 10 years ago, that what I put aside would suffice for me today, have gone terribly wrong. If I cannot earn additional income (10 years ago, my plan was to stop having to go to work at this stage in my life, presuming that my savings were enough), I have to scale down my expectations or sell off some other assets. 


Inflation is not going to come down anytime soon. To me, the biggest damage has been done because of the increase in interest rates on savings account deposits, by the RBI (Reserve Bank of India). It virtually amounts to the regulator giving up on inflation. I would, in its place, have reduced the savings account deposit rate to zero! 


Until a few years ago, savings account balances beyond Rs1 lakh would not earn interest on any excess amount invested beyond this cut-off level. Today, banks pay interest on the entire balance. The result of this move by the RBI is that people tend to create a higher benchmark in terms of expectation of returns. If the savings rate had been brought down to zero, not many (barring some vested interest groups) would have protested. 


At the same time, it would have had the magical effect of lowering people’s expectations. Today, the savings account interest rate has become a kind of base point of expectation. Naturally, to park money anywhere else, we need higher returns. If the savings interest rate were zero, our expectation of return from other instruments or avenues would have been lower.  


Similarly, the RBI has hiked interest rates across the board. Now, we are seeing 10-year instruments being floated with yields of 12%pa, and higher! It is not as if banks are flush with money and that RBI will reduce credit offtake due to this move.


 In fact, banks do not have enough money to lend. And a company will not stop borrowing for its regular needs simply because the interest rate has gone up by a couple of percentage points. In fact, due to lack of additional supplies coming in, competition is minimal in most industries.


 This gives companies the leeway to pass on the increased burden of higher interest rates to the buyer. Inflation gets worse due to this vicious cycle.


 What will get impacted is capital expenditure. Large projects will get postponed due to high interest rates. 


In this environment, the villain of the piece is retail lending. It continues to grow unabated. Increase of a couple of percentage points in interest rates has not deterred spending. The consumer durables and automobile industries are growing at record rates.


 Most of this growth is on account of credit purchases. Of course, it does help these industries, but these goods are virtually immune to price hikes in today’s environment of unfettered ambition and consumerism. Banks are continuing to grow this portfolio, unmindful of credit quality. The race for market share and the gambler-like urge to keep growing the retail ‘book’ has diverted the focus of banks to size rather than quality. 


Many banks and lenders have outsourced even the critical function of origination of loans to third parties. Obviously, this will result in mounting bad debts. I am seeing consumer portfolios that have gone bad, being sold at 10% (or lower) of the outstanding value to other banks or asset-reconstruction companies. 


Consumer activism and a benign regulatory attitude to defaulters have made it very easy for an individual to default—and not change his lifestyle in any way. Smart borrowers are using this aspect to run up loans, negotiate them after deliberate default and go on with their normal lives. I do not think that the scores from a credit bureau will have much impact in the near term, so long as it is used only as a pricing tool, rather than a denial of credit mechanism. 


Credit is a useful mechanism to bring buyers and sellers together. However, when the number of buyers is more than the sellers, credit will only serve as a tool to push prices up. As the old saying goes, when credit has to be ‘sold’, it will end up as a bad debt.


This cycle will end either by supply catching up with demand or by prices going up to such an extent that, at some point, buyers will vanish, or their numbers will shrink dramatically. Supply does not look like it is going to catch up in a hurry. What is most likely is that we will go through a phase of rising prices. 


To me, this is scary. We will see apparent prosperity, without increase in the number of jobs. We will see fixed-income earners (like pensioners or retired persons) struggle to make ends meet. Income disparities will rise to levels not seen before. Rising interest rates cannot benefit all. Only to those with continuing inflow of money will rising interest rates be of some gain. If I have already locked in my money, I cannot take advantage of rising interest rates. Even if I go through the mutual fund route, I will not gain. As interest rates rise, we will see the prices of assets fall. 


So what do we do? One assumption I would like to make is that the RBI will stop its misguided driving-up of interest rates sooner rather than later. I will accept that inflation in India is going to have a run rate of 8% to 10% annually, given the fact that our combined state and central fiscal deficits will remain in double digits and the base savings rate interest has been raised to 4%. 


I will put in as much of my savings in short-term assets as possible. I will wait for a stock market correction to add to my equities portfolio. But to what extent? Maybe another 20% fall in market indices from this point—or the market remaining at the same levels two years down the road (assuming that average profit growth of listed companies would still be around 15%pa). 


I’ll postpone most of my purchases of consumer durables and push back the buying of my second home. In fact, I will follow the Shakespearean dictum of ‘neither a lender nor a borrower be’. I would look out for fixed deposits or bonds to park some of my money. Liquid funds are back in fashion, with decent returns. I will avoid income funds until I am sure that the RBI is done with jacking up interest rates. 


What I have outlined is perhaps a pessimistic outlook. However, if I can be prepared for this, I can only have positive surprises. I am still not so pessimistic as to believe that we will go all the way to hyperinflation or a severe bout of stagflation. I bank on domestic entrepreneurs to fight their way out of this, rather than expect the Indian government to do anything constructive to correct the situation. Politicians are busy fighting their survival battles... and, unfortunately, economics has no place in that.


The author can be reached at balakrishnanr@gmail.com

President Pratibha Patil declares assets of Rs 2.5 crore on official website

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Source :Money Life Digital team :July 25,2011 02:54 pm

The list of assets has been put up after the chief information officer, ruling on an RTI application, said that it would set a good example if the president declared her wealth and property...


Mrs Pratibha Patil, the President of India, owns assets totally valued at almost Rs2.5 crore, according to information put up on the president's official website. Mrs Patil has voluntarily put up a list of her wealth and property as of 31 March 2011. The information has been put up following a ruling by the chief information officer (CIC) in favour of an RTI activist who sought this information. 


On 21st July, in response to a query by Right to Information (RTI) activist Subhas Agrawal, the public information officer at the president's secretariat said that the list of assets had been put up on the president's website. The list mentions a house, a farmhouse, plots of agricultural land, market investments bank balance and other movable assets, totally worth about Rs2.5 crore. 


Going by the information, Ms Patil owns a lot less than Tamil Nadu chief minister J Jayalalitha whose net worth is Rs51 crore and her predecessor M Karunanidhi who had declared net assets worth Rs41 crore. Both had declared these figures when filing nominations for the state elections in May. Chief Justice of India SH Kapadia has listed assets that he owns and that of his wife to be worth Rs1.09 crore. Home Minister Mr P Chidambaram declared in 2009 that he and his wife have assets totally worth more than Rs20 crore.  


Mr Agrawal had asked for details of the wealth and assets owned bypresident and her family members in August last year. But the information was twice denied to him by the public information officer at the president's secretariat, saying the information was not available, and Mr Agrawal went in appeal. He was also told that there is not legal obligation for the president to publicly declare her wealth. 


During the hearing, the CIC said that the president's relatives are private individuals and hence, do not come under the ambit of the RTI Act. However, if the president voluntarily declares her assets, like otherministers and judges, it would set a good example. 


The CIC made this announcement on 15th June. "The president may set a good example in transparency which others could follow. The commission cannot pass any direction in this regard, as it does not come within the commission's powers as mandated under the RTI Act." Now, Ms Patil has given the information that has been put up on the official website. However, since this is not mandatory, it will have to be seen whether here successor follows her "good example". 


The disclosure of assets has been a bone of contention among administrators of the country. The Election Commissioner, Information Commissioner and Supreme Court judges have all disclosed their assets voluntarily. Vice-president Hamid Ansari has reportedly expressed a similar desire. However, many  Parliamentarians are opposed to the idea. Both the Lok Sabha and Rajya Sabha secretariats have refused to put such details of parliamentarians on the website, quoting rules. 


Mr Agrawal says, "Instead of such voluntary disclosures, it should be made a rule for all members of the legislature, the judiciary and the bureaucracy (at least of the level of under secretary and above) to declare details of their assets and wealth on the respective websites of public authorities"

Voluntary disclosures have sometimes also produced surprises. The Supreme Court's only woman judge Gyan Sudha Mishra shocked the country by listing her two daughters as 'liabilities'. People were outraged when Uttar Pradesh chief minister Mayawati declared assets worth Rs86 crore, which was described as just the tip of the iceberg, given here penchant for garlands of cash, diamond jewellery and now allegations of land hoarding. 

The most hilarious declaration was made by former chief minister of West Bengal, Mr Buddhadeb Bhattacharjee prior to the state elections; he stated that he had no house, no car, no bank balance and only Rs5,000 cash in hand, whereas his wife was worth Rs46 lakh. This is some progress for Mr Bhattacharjee, since 2006, when he declared that he had no cash in hand.