• How and when TDS Deductions can be avoided

    Even though many of us are familiar with tax filing, the process of TDS deduction is still confusing for many. When and where TDS is applicable, what are the procedures to reduce it and how to claim the deducted amount at the time of filing tax returns are few of the queries we have. So, here we discuss TDS deductions with a focus on how and when it can be reduced to help you in everyday life.

    Understanding TDS:

    The Indian tax structure is broadly a two dimensional approach towards payment of tax liabilities. In the first method- self assessment, taxes can be paid voluntarily after evaluation of income during a financial year. In the second method, Tax Deductions at

    Source or TDS, as the name suggests, is the spot deduction of tax from the income source itself, at the time of earning. This is to simplify the taxation procedure for the government and to ensure that the payment making and receiving individual / company is accounting the same without fail.

    TDS is applicable for earnings

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  • EMIs in Credit Card dues

    EMI is a common household term today, as more and more people are availing different kinds of credits to meet their financial needs. The same is applicable to outstanding amounts in credit card dues which the customer may find difficult to pay in one go. Is the EMI facility on credit card payments a good option or does it come with strings attached? Let's first understand what EMIs in credit cards are.

    When you make a purchase using your credit card, you can make its payment by any of the following ways:

    • Make the full payment of the card on the due date
    • Make a part payment and pay interest on the unpaid amount till it is repaid
    • Pay the outstanding amount in EMI

    The third option is when the amount can be paid back to the credit card company in equal parts. EMI in credit card dues thus works like a loan, wherein you pay off the outstanding amount equally during the pre-decided tenure.

    The card issuer usually specifies the conditions that only specific purchases of certain

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  • Is a home saver loan an option for existing borrowers?

    Victor has taken a home loan of around 25 lakhs. He is regularly paying the EMI. Despite interest rate increases and rising inflation, Victor never defaulted. His savings reduced drastically because of increase in EMI. On top of that he had paid off a lump sum amount of Rs.5L as part of his prepayment to help him ease off the strain on his monthly budget with the consecutive hikes that happened the previous year. However, it was all going well till Victor had to spend 3 lakhs for an emergency. He had to run from pillar to post, ask friends & families, and talk to banks. Finally he was able to arrange for funds but it was a very stressful time for him!

    This is not a very uncommon situation. Many of the borrowers can easily identify with such situations where pre-payment of loan puts extra burden on them because it took all their savings leaving them exposed to any emergency situation. Pre-payment of your home loan is a double edged sword. It reduces the future obligation but incurs

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  • Pre-paid gift cards – An ideal gift for the festive season!

    Adhil Shetty, CEO, BankBazaar.com

    Gifting to your loved ones is an essential part of Indian culture and is special. However, it often leaves many of you hassled as you are unable to come up with appropriate gifting ideas. For all those of you who face a tough time in choosing gifts, a pre-paid gift card is an excellent option. Read on to understand more about pre-paid gift cards.

    What is a pre-paid gift card?

    The pre-paid gift card is a smart gifting solution which essentially works like a gift voucher. A pre-paid gift card is a magnetic strip based pre-paid card which looks similar to a credit card or debit card. However, a pre-paid gift card is neither a credit card nor a debit card in entirety. It is not like a credit card as it does not allow the user to accumulate debt on the card. It is also not like a debit card as the amount spent is not linked to the bank account.

    You can purchase pre-paid gift cards from banks by paying the value of the pre-paid card along with any joining

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  • Asset allocation through Systematic Transfer Plan

    Before we understand STP, let's define SIP (Systematic Investment Plan) first. SIP is a disciplined way of investing where investors invest a regular sum every month in mutual funds. SIP is also known as rupee cost averaging and it is the best way to handle volatility in investment. For example, you start to invest Rs 5,000 every month in a mutual fund. If you do it via SIP, this money will be taken from your account every month and invested in the mutual fund that you have selected for SIP.

    STP is a variant of SIP. STP is essentially transferring investment from one asset or asset type into another asset or asset type. The transfer happens gradually over a period.

    STP and its importance

    Systematic Transfer Plan is of two types; fixed STP, and capital appreciation STP. A fixed STP is where investors take out a fixed sum from one investment to another. A capital appreciation STP is where investors take the profit part out of one investment and invest in the other.

    Example of STP

    Suppose

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  • Feeling the pulse of a young India

    By Nelson Vinod Moses, Yahoo India Finance

    Chetan Bhagat's books are like a Salman Khan film — 'blockbuster' written all over them. Has he delivered with 'What Young India Wants'?

    Chetan Bhagat's books are like a Salman Khan blockbuster; you can park your brains in cold storage, just sit back and enjoy the ride. So far, he has been hugely successful. He has sold five million copies with his five works of fiction.

    So why does Bhagat decide to step away from his comfort zone and take a stab at making people think? 'What Young India Wants' (WYIW) is the first attempt at non-fiction by the former investment banker turned writer, and is a stroll into unchartered territory for Bhagat. His brand of fiction might be found wanting in terms of literary value, but they have always passed muster with the masses. WYIW is a compilation of his newspaper columns and public talks, where he makes a brave effort, to interpret the dreams and aspirations of millions of young Indians.

    Bhagat's effort

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  • What happens if you are caught evading tax?

    Individuals have the freedom to self assess income and pay taxes. That doesn't mean you can avoid declaring a particular stream of income to evade taxes and expect to get away with it.

    Tax evasion is an illegal activity which includes not filing income tax returns altogether or misrepresenting the tax payable amount. It is different from tax avoidance, which is a legal activity because tax laws are used to reduce the tax amount payable.

    Income tax returns are scrutinized only if income tax authorities feel that there is tax evasion. If they conclude that you have deliberately concealed income to reduce tax liability, you will be penalized.

    What does scrutiny of income mean?

    Scrutiny essentially means evaluating the income tax return for its authenticity i.e. the income tax assessing officer will go through the returns filed and various other documents such as bank statement, Form 16 among other things to check if there is any mismatch in tax liability assessed by the individual and the

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  • Festival Discounts: Should you take what’s on offer?

    Festival season is a good time for the retailers to appeal to customers with discounts and schemes. The consumers too look forward to avail the discounts on offer. The festival season is considered auspicious for shopping too which adds to its attraction.

    Discounts and schemes

    Festival season discounts comes in two ways; one, the cash discount where the retailer cuts the price by a significant amount and sells cheaper; two, the retailer provides a loan to buy goods at an easy EMI. Typically the interest rate is zero.

    Cash discount is easy to understand and is offered by all retailers, big or small. Buy one, get one free is one such discount. 50% off on your purchase is another type of cash discount. Buy one get 50% off on second item is another type. These types are easy to understand. The discount is also immediate. Hence this is most attractive to consumers.

    Loan discount, EMI facilities, and zero interest rates are generally offered by big retailers because offering such discounts

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  • Maid Economics

    The luck of the draw has allowed me to live in various cities — most recently, Gurgaon and Bangalore. In every single instance, residents of the apartment associations have complained of how maids or drivers or household help in general have raised their prices.

    Or that they leave to take up another job for a marginally higher pay. Or that they become "arrogant", demand advances and bonuses. The response of the employers is to attempt to create rules for the "society" such as:

    a) Provide a chart of pay for activity and tell every household to pay only that much.

    b) Ask for "no-objection certificates" from past employers if any household help attempts to move elsewhere.

    In my opinion, this is the possibly worst response to rising wages. Let me replace the word "maid" by "software engineer". Would we be happy if companies got together and said we'll only pay this much for this job — and no other employer can offer you more? If this actually happens, it could be construed as an attempt to

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  • Builder Floors versus High Rise Apartments

    In today's context innovative options both in the residential units and loan offerings seem to be the need of the hour. The boom in real estate that has been fueled by the ever rising incomes of individuals in India combined with easy access to home loans has brought about such new and innovative options in the residential units. Luxury and lifestyle demand has seen the emergence of elegant builder floors as the preferred choice among many upwardly mobile Indians. This concept of building a three or four level high building over small or medium sized residential plot and then selling each of the floors to independent buyers is gaining rapid popularity in the metros as well as tier II cities across the country. The builder floors can be developed either by established builder, individual land owners or as joint venture of both the parties.

    Basic Differences between Builder Floors and High Rise Apartments

    There are several differences in the basic considerations of builder floors as

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