Category Archives: Personal Finance

Personal Finance

Income tax department adds new column for Indians declaring foreign assets

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The income tax department of India has tightened its norms and has introduced a new column seeking details of the foreign assets in the Income Tax Return forms for the 2012-13. Those tax payers who hold foreign bank accounts or properties will now have to produce details of their foreign assets which include information like the country name address of bank, peak balance during the year and name mentioned in the account, etc.

M Sailo the chief commissioner Income Tax said, “An individual being a resident having assets including financial interest in any entity) located outside India or is a signing authority in any account located outside India shall furnish the return electronically”. For instance if a salaried person is having any form of foreign assets including shares or bond of foreign company then he is required to fill ITR 2 instead of ITR 1.

Apart from the details of the overseas immovable property or any other assets outside India then it has to be disclosed. The then finance minister, Pranab Mukherjee who has now become the President of India had announced in the budget speech that this year new steps will be taken to make compulsory the reporting of assets held by the Indians living abroad.

Personal Finance

Reserve Bank of India to tighten debt restructuring norms

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The loan account monitoring will have to be more vigilant in monitoring a loan account while corporate will have to think twice before restructuring the loan with the Reserve Bank of India. The Reserve Bank of India is now planning the tightening the debt restructuring norms.

A working group of the RBI on restructuring of the loans suggested that the RBI should do away with regulatory forbearance for the restructured assets and the banks should also refrain from converting the debts in to equity. It also suggested that the bank should seek higher sacrifice from the corporate and insists on the promoters guarantee even if the restructuring is on account of the external factors.

The Deputy governor of RBI, Anand Sinha said that the central bank could even do sway with the regulatory forbearance regarding assets classification, provisioning and capital adequacy on the restructuring of loan and advances in line with the norms which are internationally followed. this would even clearly mean that that banks will have to classify an asset as substandard and make provisions on it the moment it is restructured.

However the working group has said that the measure of doing away with the regulatory forbearance could be implemented after a period of two years.

Personal Finance

RBI takes steps to save consumers from exploitative investment schemes

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The first step has been taken by the Reserve Bank of India (RBI) to protect the consumes from the exploitative investment schemes. The RBI has released a National Strategy for Financial on July 16, 2012.

Comments have been invited by the central bank from the stake holders and it hopes that the final guidelines will play a key role in the financial inclusion and inclusive growth, which is one of the top priorities of the government. The RBI said, “It is necessary to quickly formulate and implement a national strategy,” as nearly half of the country’s population is financially excluded.

Financial literacy will help in protecting the society and individuals against exploitative finan cial schemes. Chandra Shekhar Ghosh the chairman and managing director of the country’s largest micro finance firm said “It is easier to do business with educated customers as repayment rate improves with financial understanding”.

Ghosh deals with about 38 lakh ill-informed poor borrowers across the state. RBI in the draft report stressed on the need to impart financial education at the early stages of person’s lifecycle as the rate of school drop out in India is high. Even the Central Board of Secondary Education is likely to take the lead in introducing financial education.

Personal Finance

Banks increase interest rates on long term fixed deposits

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It was expected that there would be a fall in the interest rates of the deposits. But contrary to the expectations, the commercial banks are now seen increasing the interest rates on the fixed deposits of two to three years.

The rate of interest on the fixed deposits of two to three years, three to five years and five years terms of Deutsche Bank has been hiked by 110 to 125 basis points. Now the revised rates of the fixed deposits are 9.25 % for the fixed deposits of two to three years, 9.5% for fixed deposits and 9.5% for five years fixed deposits.

Meanwhile the State Bank of India has also increased its interest rates in the retail deposits of three to five years by 50 basis points to 9%rate of interest per year on June 30, 2012. The Reserve Bank Of India released data which mentioned that the bank deposits mobilization has grew by 14.4 % year on year while the loans grew by 17.8 % year on year as on June 15, 2012.

Bunty Chawla a research analysts from the Shah Investor’s Home said, “The deposit growth of banks as on 18th May 2012 remains below the RBI’s expectations for FY2012-2013, while credit growth better than RBI’s expectations for FY2012-2013”. The recent hike on interest rates is to improve deposit growth.

Personal Finance

E-filing made mandatory for income above Rs. 10 lakh per annum

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The filing of the IT returns electronically has been made mandatory by the CBDT for those individuals with an annual income of Rs. 10 lakh or above. E-filing was introduced a few years back, but just the small tax payers and salaried individuals were using it successfully.

There were certain misconceptions about the e-filing that it is a cumbersome process and that e-filing has more probability of picking up scrutiny which has been cleared with experience. This year the e-filing has been made mandatory for the individuals.

The new process is now becoming a preferred mode for all class of income tax payers. There are also certain changes in the tax filing rules some of which might have a significant impact on the information which has been disclosed.

Income tax e-returns can be filed by downloading the required ITR form from the website. Read the instruction manual carefully. If the individual has an income from salary, pension or rental income from property then the ITR 1 Sahaj has to be filled up. When filing online, the individual has to provide bank account details. Taxpayers who file returns before July 31st enjoys some privileges or else the ITR can also be filed up to 31st of March next year.