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Uncertainty looms over India-EU Free Trade Agreement
SAT to hear RIL’s plea against SEBI today
Get Aadhaar to obtain PAN card now
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Coal India told to continue supply to NTPC
Tax Advice
Why it makes sense to buy insurance early
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Uncertainty looms over India-EU Free Trade Agreement
New Delhi, April 7 Commerce Minister Anand Sharma will meet EU Trade Commissioner Karel De Gucht and other EU officials in Brussels on April 15 but officials doubt whether the talks will break the deadlock between the two sides. If it is not inked at the 13th India-EU Summit, the apprehension in official circles is that the UPA government would hesitate to move further on any of the contentious issues in the proposed accord which could impact its prospects in the General Elections in 2014. Recently, top representatives of India and the EU had met in Brussels to see if the differences could be ironed out. However, the meeting failed to produce any concrete result. India and the EU have been negotiating the FTA since June 2007. The talks were to conclude in 2011 but differences over the level of opening of the market have delayed the accord. India has been seeking a single visa for its professionals on short-term contractual visits to the EU. On the other hand, the EU has been asking for significant reduction in customs duty on cars, wines and spirits in their exports to India. The two-way trade between India and the EU, which stood at $91.3 billion in 2010-11, is expected to more than double to exceed $207 billion by 2015 if the two sides ink the FTA. The FTA will involve slashing of duties on over 90 per cent of the commodities and opening up of the mutual markets for services and investment. A hike in foreign direct investment (FDI) in India’s insurance sector, currently 26 per cent, to 49 per cent is said to be critical to close the much-awaited FTA. The EU has made it clear to India that it would not continue the talks if India failed to provide a commitment on increasing the FDI cap in the sector. EU officials have already warned that if the negotiations, which have missed several deadlines, were not concluded by 2013, then the deal might not get the same attention from Brussels, as the EU would shift its focus to having a much broader and ambitious deal with the US. The India-EU FTA will also be on the agenda during the talks between German Chancellor Angela Merkel and Prime Minister Manmohan Singh, who is travelling to Berlin on April 10 on a bilateral visit. Meanwhile, the CPM expressed concern that negotiations on the FTA with the EU had proceeded without any due scrutiny by Parliament or other democratic institutions. The impact of the FTA on the economic and social fabric of the country would well be deep and long lasting. The agreement was likely worsen the already burgeoning current account deficit and trade deficit, the party added. The differences
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SAT to hear RIL’s plea against SEBI today
Mumbai, April 7 The case was last heard by the SAT on March 14, when the matter was adjourned till April 8. Mukesh Ambani-led RIL had approached SAT after its application to settle the matter through a 'consent mechanism' was rejected by SEBI. Under SEBI’s consent mechanism, companies can seek to settle cases with the market regulator after payment of certain charges and disgorgement of any ill-gotten gains. RIL has challenged SEBI’s decision to reject its plea and also the changes made by the regulator last year in
regulations governing settlement of cases through the consent mechanism, especially those already under consideration. In May 2012, SEBI had tightened the norms for settlement through consent framework. As a result, many cases, including those related to insider trading, are not being settled through this mechanism. On January 3, SEBI published a list of 149 consent pleas, including 16 from entities related to RIL group, which it had found unsuitable for settlement through consent process. These include applications of RIL itself and that of RIL Chairman Mukesh Ambani's close aide Manoj Modi.
— PTI |
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Get Aadhaar to obtain PAN card now
New Delhi, April 7 The Ministry has decided to notify rules in this regard. It is aimed at curbing the menace of fake or duplicate PAN cards which are allotted by the I-T department to taxpayers. "Once Aadhaar is accepted as a valid proof for obtaining PAN, the I-T department will be able to weed out the menace of fake, forging or duplication of PAN cards. "The amalgamation of the databases is in full swing and the ministry will soon notify the rules in this regard," a senior Finance Ministry official said. The Ministry, through the Income Tax department, has already incorporated more than 1.75 lakh Aadhaar numbers in its database since it notified a new form 49A for getting PAN last year. It has been working for nearly three years on the plan of creating a biometric database of taxpayers which it will now achieve by incorporating the Aadhaar data which has been taken on similar lines. The Ministry had last year brought out a new PAN application form - 49A for use of Indian citizens, companies and entities incorporated in the country which allows a applicant to mention his or her Aadhaar number. According to latest data (till December last), more than 16.49 crore PAN cards have been issued in the country.
— PTI |
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FinMin mulls new intel wing to check service tax evasion
New Delhi, April 7 The proposed Directorate of Anti Evasion to check service tax evasion is likely to be set up by the Finance Ministry close on the lines of two other intelligence agencies under it - Directorate General of Revenue Intelligence (DRI) and Directorate General of Central Excise Intelligence (DGCEI), sources said. The Central Board of Excise and Customs (CBEC) has detected service tax evasion of Rs 9,800 crore during April-December period of the last fiscal (2012-13) against Rs 5,000-6,000 crore in the same period of 2011-12. The move to form a new directorate came after rise in the number of services under the service tax ambit, they said. "The number of services under service tax has increased significantly. There is a need to strengthen anti-evasion activities in service tax to ensure proper compliance from service tax assessees. A separate Directorate of Anti Evasion on the lines of DRI and DGCEI for service tax may serve the purpose," according to an official note by
the Ministry. There are more than 100 services, including air travel, eating out at restaurants, staying in hotels, clubs or guest houses, renting of immovable property, rent a cab, health and fitness clubs and outdoor catering among others mandated to pay service tax at the rate of 12 per
cent. — PTI |
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Coal India told to continue supply to NTPC
New Delhi, April 7 Talking to reporters here recently, Coal Minister Sriprakash Jaiswal said, "The supply has not been discontinued. CIL had taken a decision. But instructions have been sent by our ministry that for the time being at least 50 per cent of supply should continue". Earlier, reports had said that CIL had switched off fuel supply to power major in the wake of NTPC holding back payments. The minister also gave assurance that the power producer would release the payments. NTPC has apparently stopped the payments to CIL over dispute of the quality of coal being supplied to power plants. |
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BIZ TALK
Q. As a security leader, what are your views on the threat landscape in India? A. Over the years, security threats have increasingly become targeted and sophisticated. The latest Symantec Internet Security Threat Report XVII revealed that cyber attacks increased by a whopping 81 per cent, with attackers increasingly taking a focused and targeted approach. As broadband penetration improves, attackers are targeting tier-II/III Indian cities, with the report revealing that a 25 per cent of bot infections in the countries have been traced to emerging locations. India continues to be a hub of spam origin, ranking No.1 for spam zombies and a spam rate of 70 per cent. The country also moved up the ranks in terms of malicious code origin, ranking first in this aspect last year. Q. What is the scene in non-metropolitan places and smaller towns like Jaipur, Chandigarh and Ludhiana etc.? A.
Emerging India has become a key economy of the engine today; Small and Medium Businesses (SMBs) are contributing to a growing share of GDP and business is no longer restricted to the metropolitan cities. Technology has had a huge role to play in breaking geographical barriers: A small-scale unit owner in Chandigarh can communicate with a customer in the US with the rise of Internet, mobile and cloud technologies. Chandigarh has been identified as one of the three locations in North India where IT is being encouraged and places like Jaipur, Ludhiana, Amritsar and Faridabad are industrial centres for the state. At an all-India level, Chandigarh ranked fifth among the emerging cities for bot infections. Q. What are the most common ways in which external and internal agents are involved in data breach incidents in these locations? A. Last year, Symantec launched the Internet Security Threat Report (Vol. 17), which revealed a watershed moment in the threat landscape in India: A whopping 25 per cent of bot infections were found in India last year. While Chandigarh ranks fifth in bot infections in India, other places also make it to the top of the list. India faces a huge cyber security threat due to the burgeoning broadband population and those who have leapfrogged to mobile Internet lack awareness and adequate security measures. Chandigarh was among the top locations for phishing origin in India every month. Q. Do information disasters pose a threat in small and medium-sized organisations? A. Businesses today operate in a 24X7 world. Before the day begins, work is already started and they can’t afford even a minute of downtime. At Symantec, we recently surveyed small businesses on disaster preparedness and found that over 90 per cent of respondents are not prepared for disasters/outages. Indian SMBs also experienced an average of five instances of operational outage due to power outages, industrial accidents and IT system failures, lasting an average of 11 hours. How can these businesses ensure that their systems and information are available despite disasters and when these do occur, how quickly can they recover. Showing complete unawareness for the need of disaster preparedness, a sizeable number of respondents (21%) said it never occurred to them to have a disaster recovery plan. The inability to recover data and have a plan in place to backup and archive also means that in the event of theft or any other legal requirement, the organisation has no evidence. Q. Do we see a growing adoption of new technologies in these places? What are the challenges? A. New technologies like cloud computing, virtualisation and mobility offer a realm of opportunities to small and medium-sized businesses. While numerous solutions are available to address IT needs, we found that SMBs hesitate to make these investments owing to factors such as high costs, lack of awareness and skill sets to manage IT effectively and complexity of implementation. Q. What is Symantec’s opportunity in this scenario? A. Symantec in India is focusing specifically on small and medium businesses this year and emerging cities in India which have a high technology adoption rate. Today’s SMBs are looking for speed, ease of deployment and an amazing user experience, which is why Symantec is radically simplifying its SMB product portfolio to make it easier than ever to buy, set up, manage and receive support for Symantec products. Customers using Symantec’s SMB solutions such as Backup Exec SBE and Symantec Endpoint Protection SBE (on premise and cloud) can be up and running within 20 minutes or less, making information protection fast and easy so that customers can focus on innovation and growing their business. |
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Tax Advice Q. I am a retired senior citizen and have a variety of small incomes: A) Income from which TDS is deducted i) Consulting service charges to companies. I am no longer an employee of the company but only a consultant ii) Interest on FDs from banks B) Income from which TDS is not deducted i) Pension and superannuation income ii) Rental income I am not clear on which element of these incomes do I have to pay advance tax. Please advise. I have been paying advance tax on 15th of September, December and March every year based on my estimate on total tax liability but without clarity. — Ashwin Panemangalore A. 1 Advance tax is payable in respect of estimated taxable income for a financial year. The amount of advance tax is computed as under: i. Amount of income for the financial year for which tax is payable is estimated. ii. Income tax payable on such estimated income is computed. iii. The amount of tax so computed is reduced by the amount of income tax which is deductible at source for the financial year. iv. The net amount so arrived at is payable in instalments i.e. 30% of the advance tax by September 15, another 30% of the advance tax by December 15 and balance 40% by March 15. In accordance with the amended provisions of the Act applicable for the financial year 2012-13, a senior citizen who does not have any income from business and profession is not required to pay an advance tax. Tax, if any, payable by such a person can be paid at the time of filing the return. Your total income would include consulting service being an income from profession. You will be liable to pay advance tax in accordance with the method of computation explained herein above. Q. Please clarify whether life insurance premium and tuition fee paid by a father on life insured of his major son qualifies for rebate under Section 80C. — Mahinder Singh Nanda A. A father is entitled to claim the benefit of deduction under Section 80C of the Income Tax Act 1961 (The Act) even if the child on whose life the policy has been taken is a major. The deduction for tuition fee is also available irrespective of the age of the child. The above deductions are, however, allowable within the overall limit of Rs 1,00,000.
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personal finance Throughout your working life, you strive hard to achieve your dreams and offer your family all the comforts that life has to offer. But, have you planned how you will manage your lifestyle post retirement? Retirement planning enables you to continue living life on your own terms and enjoy a good standard of living even after retirement. In the Indian context, retirement planning assumes greater significance due to the following reasons: Absence of mandatory provision for pension: A large proportion of India is self-employed or works in the unorganised sector and doesn’t benefit from any state or employer-sponsored post retirement scheme. Increase in life expectancy: Increasing life expectancy coupled with increasing desire to retire earlier means a longer retirement phase. Rise of the nuclear family system: As per HSBC’s “The Future of Retirement Report - India Fact Sheet” published in 2011, high percentages (32%) of Indians want to live with their children after they retire. This is more than twice the global average. However, the transition from a joint family system to independent nuclear families, especially in urban India, is a reality and Indians need to plan for a financially independent retired life. Increase in cost of living: Rising inflation, growing aspirations for better lifestyles and increasing costs of healthcare make retirement planning indispensable. When should you start planning for your retirement? In order to maintain a good standard of living post retirement, you need to plan for retirement earlier. Let’s take an example: Ramesh invests a total amount of Rs 25 lakh towards his retirement corpus. On the other hand, Vikram invests a total of Rs 50 lakh for this purpose. Despite investing less, by the age of 60, Ramesh accumulates Rs 1.08 crore as compared to Vikram's accumulation of Rs 88 lakh! How did this happen? What Ramesh had in his favour was TIME. He began investing a sum of Rs 1 lakh per annum at the age of 35 years. Vikram, to compensate for lost time, saved five times the amount invested by Ramesh i.e. Rs 5 lakh every year from the age of 50. This is the power of compounding. How to plan for retirement? You can build an ideal retirement plan in five simple steps: 1 Arrive at how much income you would require to live comfortably post retirement. Remember to take into account aspects like inflation, increased medical costs, vacations and gifts for family. Also, eliminate costs like children's education and rent, if you don’t own your home. 2 Establish the amount of corpus you require to generate your desired post retirement income. 3 Determine how much you need to save regularly. Start saving now so that you have time on your side and can enjoy the power of compounding. 4 Select the right retirement plan that enables you to meet your post retirement requirements. 5 Systematically invest a fixed amount every month for your retirement. How to choose the right retirement plan? While you can invest in various instruments for retirement planning, you need to keep in mind that a sound retirement plan should provide returns that can beat inflation in the long term, provide a level of guarantee to safeguard your retirement corpus and ensure that this corpus is accessed only for the purpose of post retirement income. At present, the pension plans offered by life insurance companies and New Pension System (NPS) are two good options for retirement planning. NPS offers a transparent and low charge retirement solution. Life insurance companies too have revamped their pension plans and offer a significantly enhanced proposition to the customer. These pension plans allow you to build up a corpus and live a comfortable life after you retire from work. They are designed such that customers remain invested for the long term in order to accumulate an adequate corpus for retirement. Some products allow customers to choose their investment strategy. Based on the risk appetite, an individual can choose to allocate a part of his corpus in equity, thereby benefiting from potentially superior returns while protecting capital. The accumulated corpus is then utilised to get regular income post retirement. Given the wide array of retirement solutions available, it is important for every individual to plan for retirement and start saving regularly. While awareness levels for retirement planning are high, most of us delay investing for it. Starting at an early age can significantly enhance realisation of your dreams to achieve financial independence in your golden years. The author is EVP & Head Products, Risk and Corporate Strategy, ICICI Prudential Life Insurance. The views expressed are his own
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Why it makes sense to buy insurance early
Why buy young? Premiums at a younger age are lower At a younger age premiums for all types of policies tend to be low. In risk cover policies, since mortality charges for younger age groups are low, the premium amount is lower for a given sum assured for a person with a lower age. Similarly, in savings and investment-type policies, also known as wealth accumulation plans because of a longer policy term, the instalment size will be smaller and advantage of compounding would increase the returns. Normally during a younger age, the period of dependency of the dependent loved ones are relatively longer and at that point income is also not high. Buying a life insurance policy of higher cover is better at a younger age, as one’s human life value is higher because his/her balance span of earning years is relatively longer. When properly bought, one gets adequate cover at a reasonable charge at a younger age which ensures that he/she has acquired ‘peace of mind’ at a reasonable price — one of the main reasons why most of us buy a life insurance policy. Being diagnosed with some disease at a higher age increases premium or may negate acceptance of the application Both the insured and the insurer justly expect a long life and so the premiums are spread out. At an older age, the premium would be higher even though one may be fit due to the relatively lesser number of earning years over which the premiums can be spread. The premium rates spread out the risk over the expected years of life for a particular age group. Moreover, when one delays the decision of buying a life insurance policy, there is always a risk of one being diagnosed with some disease or health condition at a higher age. This may negate acceptance of the insurance application altogether or accept it by charging higher premium. Therefore, it makes better sense to buy it when one is young and fit. A premium once fixed remains same throughout the policy With life expectancy rising, the premiums for a life insurance policy can be very low. Premium once fixed in a life insurance policy remains same throughout the policy duration. Further, at a younger age major health issues are unlikely. So chances of getting a life insurance policy at a younger age are easier. This avoids chances of remaining uncovered during later age should there be a diagnosis of any disease or any other medical problem which are likely to shorten life. Policy may be available without or much medical check-up at a younger age During younger age, most insurance companies provide insurance coverage to customers without any or much medical check-ups. As the age increases, these medical check-ups become mandatory or increase the complexity of acquiring an insurance cover. It might also happen that the applicant may not get cover from any insurance company at later stages of life. Once a company issues a policy to an individual, they cannot refuse a renewal to the customer. So if an insured joins early he will have coverage for lifetime. In mediclaim-type policies, if a customer enrolls in a policy early then he will have coverage for all diseases in later stages of his life when he needs it the most. Insurance can be used as a collateral for loans Furthermore, sometimes one can find oneself in an emergency situation that requires funds that one may not readily have. With some insurance policies you can borrow against the policy if you were to find yourself in a desperate financial situation. Over and above these, most lenders accept life insurance policies as collaterals for mortgages and the fact that at the time of premium payment there is benefit of Section 80C and while receiving back claim monies it becomes exempt under Section 10(10D) of IT Act, 1961 increases the attraction of acquiring a life insurance policy early, even more. The author is CEO, Edelweiss Tokio Life Insurance. The views expressed are his own
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Anand Naik, managing director, sales (India), Symantec, talks to Girja
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There is no right or wrong time to consider buying life insurance as long as you understand the costs and benefits.