Emergency Fund.

Even though one of the most significant factors in our life is the state of our personal finances, we rarely spend time on managing them since unlike businesses, we are not accountable to any one for our personal financial goals and results.

We can  make a much larger contribution in every area of our life when our personal finances, investments and taxation are properly planned.

In life you should expect the unexpected, and this is why you need an emergency fund.

• Job loss
• Medical expenses.
• Home repairs.
• EMI’s increasing due to interest rate hike.
• or something you’ve never dreamed off.

Emergency Fund :

• One must keep 3-6 months of living expenses in the emergency fund to meet any future contingencies.
• Depending on your specific situation and whether or not you have children, carry substantial debt and types of insurance coverage will determine what amount is best for you.
• Not only Saving regularly but to Investing that saving.
• Starting early.
• Using tax shelters.
• investment returns should exceed the inflation.

It is important to keep this emergency fund in a place that is fairly liquid so that you can get to the money quickly in the event of an emergency.You can have emergency fund in your saving bank account, bank fixed deposits and liquid mutual funds.You also don’t want to have this money tied into stocks or equity mutual funds because the volatility of the market could cause you to lose money over the short-term.

cheaper petrol

cheaper petrol

If state government follows Goa's example of doing away with sales tax on petrol,
then the fuel will become cheaper by roughly Rs. 15/ltr in metros. 
the reduction will be higher in states where taxing Fuel is at higher rates.


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Income tax slabs FY 2012-2013

The Budget For 2012-13 was presented by Finance Minister Pranab Mukherjee on 16th march 2012.

INCOME TAX SLABS

The basic slab for income tax has been proposed to be raised to Rs. 2 lakhs from the current Rs. 1.8 lakhs. This leads to a savings of Rs. 2,000 for all taxpayers earning between 180,001 to 199,999. The finance Minister has not mentioned the tax slabs for women and senior citizens in his Budget Speech so far but it is awaited.

In addition, the finance minister has created new tax slabs. If your income is between Rs. 200,001 and Rs. 500,000, your tax rate will be 10%. For people earning Rs. 500001 to Rs. 10,00,000 -- the tax rate will be 20% and for people whose income is Rs. 10,00,001 and above the tax rate is 30%.

The finance minister has also said that taxation of unexplained money, credits, investments, expenditures etc, will be at the highest rate of 30%, here the slab of income will not be considered

Income tax slabs FY 2012-2013

General tax payers

Income tax slab (in Rs.)	Tax
0 to 2,00,000	No tax
2,00,001 to 5,00,000	10%
5,00,001 to 10,00,000	20%
Above 10,00,000	30%

Women

Income tax slab (in Rs.)	Tax
0 to 2,00,000	No tax
2,00,001 to 5,00,000	10%
5,00,001 to 10,00,000	20%
Above 10,00,000	30%

Senior citizen (Aged 60 years but less than 80 years)

Income tax slab (in Rs.)	Tax
0 to 2,50,000	No tax
2,50,001 to 5,00,000	10%
5,00,001 to 10,00,000	20%
Above 10,00,000	30%

Very Senior citizen (Above 80 years)

Income tax slab (in Rs.)	Tax
0 to 5,00,000	0%
5,00,001 to 10,00,000	20%
Above 10,00,000	30%

INVEST IN EQUITY AND GET TAX BENEFITS

A new equity scheme called Rajiv Gandhi Equity Saving Scheme is being introduced to promote equity investments. The scheme will get income tax deduction, which will be purely applicable to the new retail investors who will invest directly into equity up to Rs. 50000, with a lock-in period of three years. The investor's annual income should not exceed Rs. 1,000,000. 

Railway minister's gifts of new trains services

The list of new trains

12297/12298 Pune-Ahmedabad AC Duronto (Tri-weekly)
22209/22210 Mumbai Central-New Delhi AC Duronto (Bi-weekly)
19405/19406 Ahmedabad-Yesvantpur AC Express (Weekly)
12567/12568 Saharsa-Patna Rajya Rani Express (Daily)
22101/22102 Manmad-Mumbai Rajya Rani Express (Daily)
19261/19262 Porbander-Kochuvelli Express (Weekly)
22901/22902 Udaipur-Bandra(T) Express (Tri-weekly)
18511/18512 Visakhapatnam-Koraput Intercity Express
57477/57478 Tirupati-Guntakal Passenger (Daily)
58301/58302 Koraput-Sambalpur Passenger (Daily)
59425/59426 Bhuj-Palanpur passenger (Daily)
66302/66303 Ernakulam-Kollam MEMU (6 days a week)
77683/77684 Jalna-Nagarsol DEMU (6 days a week)
77686/77685 & 77688/77687 Kacheguda – Nizamabad DEMU (6 days a week)
77681/77682 & 77679/77680 Falaknuma-Medchal DEMU (6 days a week)
19027/19028 Bandra (T)-Jammu Tawi Vivek Express (Weekly)
12293/12294 Allahabad-  Mumbai  AC Duronto (Bi-weekly)
22454/22453 Meerut-Lucknow Rajya Rani Express (Daily)
13423/13424 Bhagalpur-Ajmer Express (Weekly)
12371/12372 Kolkata-Jaisalmer Express (Weekly)
22451/22452 Mumbai-Chandigarh Express (Weekly)
19407/19408 Varanasi-Ahmedabad Express (Weekly)
15033/15034 Haridwar-Ramnagar Express (Tri-weekly)
66019/66020 Salem-Katpadi MEMU (6 days a week) (Railway Budget 2010-11)
66300/66301 Ernakulam-Kollam MEMU (6 days a week) (Railway Budget 2010-11)
Introduction of Anandvihar-Kathgodam Shatabdi Express (4 days a week)

 

The list of Extension trains:

1. 59803/59802 Nagda-Kota Passenger extension upto Ratlam

2. 19603/19604 Sultanpur-Ajmer Express extension upto Ahmedabad

3. 12965/12966 Udaipur-Gwalior Express extension upto Khajuraho

4. 55007/55008 Hajipur-Thawe Passenger extension upto Kaptanganj

5.12891/12892 Bhubaneswar-Baripada Express extension upto Bangriposi

List of increase in frequencies:

 1. 59025/59026 Surat-Amravati Fast Passenger from 2 to 3 days a week.

 2. 15279/15280 Saharsa-Adarsh Nagar Delhi Express from weekly to bi-weekly

list of Suburban trains:

1       Avadi-Chennai Beach                        

2       Chennai Beach-Gummidipundi                                 

3       Gummidipundi-Chennai Beach                                  

4       Chennai Central-Tiruvallur                             

5       Tiruvallur-Chennai Central   


Extension and increase in frequency of the existing trains will be introduced with immediate effect, as operationally feasible.

(Story source: Press Information Bureau website, Government of India)

Cost Inflation Index - INDIA

CII chart download @ nmpcs

What is Cost Inflation Index (CII)?
CII is a measure of inflation that finds application in tax law, when computing long-term capital gains on sale of assets. Section 48 of the Income-Tax Act defines the index as what is notified by the Central Government every year. Capital gain arises when the net sale consideration of a capital asset is more than the cost. Since “cost of acquisition” is historical, the concept of indexed cost allows the taxpayer to factor in the impact of inflation on cost. Consequently, a lower amount of capital gains gets to be taxed than if historical cost had been considered in the computations.         For example, if a property purchased in 1991-92 for Rs 20 lakh were to be sold  in F.Y. 2008 -09 for Rs 80 lakh, indexed cost = (582/199) x 20 = Rs 58.49 lakh. And the long-term capital gains would be Rs 21.51, that is Rs 80 lakh minus Rs 58.49 lakh.
________________________________________________________

Financial Year	(CII)	Financial Year	(CII)
1981-82	100	1996-97	305
1982-83	109	1997-98	331
1983-84	116	1998-99	351
1984-85	125	1999-00	389
1985-86	133	2000-01	406
1986-87	140	2001-02	426
1987-88	150	2002-03	447
1988-89	161	2003-04	463
1989-90	172	2004-05	480
1990-91	182	2005-06	497
1991-92	199	2006-07	519
1992-93	223	2007-08	551
1993-94	244	2008-09	582
1994-95	259	2009-10	632
1995-96	281	2010-11	711
2011-12 : 785

NMPCS

www.nmpcs.biz

RBI has cut the cash reserve ratio (CRR) to 4.75%

RBI

In a bid to pump liquidity into the banking system, the Reserve Bank of India has cut the cash reserve ratio (CRR) by 75 basis points to 4.75%, effective March 10. The move is expected to inject Rs 48,000 crore into the system.

The CRR is the percentage of the deposits that a bank must not lend, but keep as cash with 

Relief From Scrutiny of income tax returns

income tax scrutiny

The Income Tax Department today said that tax returns filed by senior citizens above 60 years and small taxpayers with gross total income of less than Rs 10 lakh will not be scrutinised in a routine manner.

“It has been decided that during the financial year 2011-12, cases of senior citizens and small taxpayers, filing income-tax returns in ITR-1 and ITR-2 will be subjected to scrutiny only where the Income Tax department is in possession of credible information,”Central Board of Direct Taxes said in a statement.

Appreciating the concerns of these taxpayers and with a view to mitigate their hardships, it said, Central Board of Direct Taxes has reviewed its scrutiny selection procedure.

Senior citizens for this purpose would be individual taxpayers who are 60 years of age or more.Small taxpayers would be individual and HUF taxpayers whose gross total income, before availing deductions does not exceed Rs 10 lakh, it said.

Scrutiny of income tax returns is an important mechanism for ensuring taxpayer compliance and to counter tax-evasion, it said.
The press release in respect of above issued by CBDT is given herebelow for ready reference of our readers:
Please Note :-

Exemption is not available to those who are having business Income or are Having Income from partnership Business.
Income of senior citizen may exceed 10 Lakh.
_______________________________________________________

No.402/92/2006-MC (07 of 2011)

Government of India / Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi dated the 14th March 2011

PRESS RELEASE

Streamlining procedure for scrutiny of income-tax returns

Scrutiny of income tax returns is an important mechanism for ensuring taxpayer compliance and to counter tax-evasion. However, it has evoked some concern from small taxpayers and senior citizens about prolonged enquiries. Concerns have also been raised about selection of the same cases in scrutiny year after year.
Appreciating the concern of these taxpayers and with a view to mitigate their hardships, Central Board of Direct Taxes has reviewed its scrutiny selection procedure. In order to redress the grievance, it has been decided that during the financial year 2011-12, cases of senior citizens and small taxpayers, filing income-tax returns in ITR-1 and ITR-2 will be subjected to scrutiny only where the Income Tax department is in possession of credible information.
Senior citizens for this purpose would be individual taxpayers who are 60 years of age or more. Small taxpayers would be individual and HUF taxpayers whose gross total income, before availing deductions under Chapter VIA, does not exceed Rupees ten lakh.

Relief before Budget

Dr Sanjiv Agarwal

The economic growth is now expected to be marginally over 7 percent, though capital formation and investments have slowed down, global economic and financial conditions are under pressure, inflation has declined but still a cause of worry and fiscal deficit continues to be of concern. In this backdrop, it is no body’s guess as to what the forthcoming budget is going to be.

While many of us may not be directly interested in these macro economic affairs and what budget may have in store, yet there are some pre-budget tax relaxations announced in last few days that would certainly many taxpayers happy.

Senior citizens and small tax payers have reasons to joy. Income tax returns filed by senior citizens (above 60 years) and small tax payers with gross total income of less than Rs. 10 lakh will not be subjected to routine scrutiny but shall be scrutinized only where the tax department is in possession of credible information. This would apply to tax returns being filed in ITR – I and ITR-2 forms by senior citizens and small taxpayers for the financial year 2011-12. Senior citizens for this purpose would be individual taxpayers who are 60 years of age or more. Small taxpayers would be individual and HUF taxpayers whose total income, before availing deductions does not exceed Rs. 10 lakh.

It yet another major relief, individuals upto annual income of Rs. 5 lakh will no longer be required to file personal income tax returns for the current financial year ,i.e, 2011-12. However such a relief comes with few qualification and conditions on eligibility etc.

This exemption from filing tax returns is only for individuals whose total income does not exceed Rs. 5 lakh and total income comprises only of salaries and income from other sources in form of interest not exceeding Rs. 10,000 earned on a savings bank account. Apart from this limit, assessee or the taxpayer will have to inform hisPAN number to employer, disclose savings bank interest income to the employer who should issue a TDS certificate mentioning income, tax and PAN; tax payer should not have paid or have payable any advance tax orself assessment tax, or no refund should be due and that the taxpayer should have received salary only from one employer during the year.

Further, such an exemption applies only to voluntary tax return filing and will not operate when return is required to be filed in response to any notice form the tax office.

In other words, exemption from filing tax returns for financial year 2011-12 is not available to non individual assessees (companies, firms, HUF etc.), assessees with income under other heads of income other than salary or interest on saving bank accounts, incomes exceeding Rs. 5 lakh, refund cases, cases where advance tax orself assessment tax is paid etc.

However, non-filing of tax returns may pose problems for such persons as seeking loan from banks for personal finance needs, housing loan, education loan etc., as the lender institutions generally ask for tax returns.

Further, there are many assessees who do not disclose their all savings but only declare tax savings. In all such cases, exemption will not be available.

The intention of exemption appears to be to reduce compliance burden on employed and small taxpayers. It may relieve a large number of assessees but still, a lot many falling in this category may still opt for filing tax returns.

Access details of your ITR on Mobile

Soon you will be able to access details about your income tax returns (ITR) and its processing on your cellphone. As the income tax (I-T) department is all set to enhance host of taxpayer-related services and shift to a new e-return filing platform in the coming months. The new platform will come with various services, including one which will allow tax payers to check details such as refunds, deductions and tax demands on their cellphone.

Income Tax Returns

The new software, which allows taxpayers to access details of his ITR on smart phone, is being developed with the help of TCS. The new service will be part of the upgraded online return filing portal which will be launched in the next couple of months. The department already hosts services like viewing of tax credits, Annual Information Return (AIR), Tax Deducted at Source (TDS) status, various tax related forms and Tax Return Preparer Scheme (TRPS).“The new platform will also have a new service called ‘Form View’ wherein after filling required details for ITR one can view how the system would process the form and also make corrections if needed which is expected to reduce the errors and rectification applications.

India Income Tax Slabs Fy 2011-12

 General tax payers

Income tax slab (in Rs.)	Tax
0 to 1,80,000	No tax
1,80,001 to 5,00,000	10%
5,00,001 to 8,00,000	20%
Above 8,00,000	30%

 

 Women

Income tax slab (in Rs.)	Tax
0 to 1,90,000	No tax
1,90,001 to 5,00,000	10%
5,00,001 to 8,00,000	20%
Above 8,00,000	30%

 

 Senior citizen (Aged 60 years but less than 80 years)

Income tax slab (in Rs.)	Tax
0 to 2,50,000	No tax
2,50,001 to 5,00,000	10%
5,00,001 to 8,00,000	20%
Above 8,00,000	30%

 Very Senior citizen (Above 80 years)

Income tax slab (in Rs.)	Tax
0 to 5,00,000	No tax
5,00,001 to 8,00,000	20%
Above 8,00,000	30%

Phishing And Fraudulent Refund E-mail Scams

Disclaimer:

• The Income Tax Department does not request detailed personal information through e-mail.
• The Income Tax Department does not send e-mail requesting your PIN numbers, passwords or similar access information for credit cards, banks or other financial accounts.

Advisory:

If you receive an e-mail from someone claiming to be the authorized by Income Tax Department or directing you to an Income Tax website:

• Do not reply.
• Do not open any attachments. Attachments may contain malicious code that will infect your computer.
• Do not click on any links. If you clicked on links in a suspicious e-mail or phishing website then do not enter confidential information like bank account, credit card details.
• Do not cut and paste the link from the message into your browsers, phishers can make link look like real, but it actually send you to different websites.
• Use anti-virus software, anti spyware, and a firewall and keep them updated. Some phishing e-mails contain software that can harm your computer or track your activities on the internet without your knowledge. Anti-virus & Anti-spyware software and firewall can protect you from inadvertently accepting such unwanted files.

Reporting:

• If you receive an e-mail or find a website you think is pretending to be of Income Tax Department, forward the e-mail or website URL to phishing@incometaxindia.gov.in. A copy may also be forwarded to incident@cert-in.org.in
• You may forward the message as received or provide the Internet header of the e-mail. The Internet header has additional information to help us locate the sender.
• After you forward the e-mail or header information to us, delete the message.
• If you receive a phishing mail not pertaining to the Income Tax Department, forward the same to incident@cert-in.org.in

source : income tax india