The Tribune, Chandigarh, India

	Govt prepared to take tough decisions to check deficits: FM Washington, October 13 Committing to contain fiscal and current account deficits, Finance Minister P Chidambaram has said the government will not hesitate to take difficult decisions to keep them under check. “The government is committed to the path of fiscal consolidation and has drawn red lines for the two deficits (fiscal and current account). We shall not allow the red lines to be breached under any circumstances, and we shall remain within the red lines. We are prepared to take difficult decisions in this regard, should the need arise,” he said. Chidambaram said this during an intervention at the IMF Committee plenary meeting here yesterday. The government proposes to bring down fiscal deficit, an indicator of government borrowing, to 4.8% of the GDP in 2013-14 from 4.9% a year ago. As regards the current account deficit (CAD), Chidambaram had earlier said all efforts would be made to contain it at 3.7% of the GDP or $70 billion in the current fiscal. The CAD, which is the difference between inflow and outflow of foreign exchange, had touched an all time high of 4.8% of the GDP or $88.2 billion a year ago. Admitting that the government policies are directly responsible for the fiscal deficit and current account deficit, Chidambaram said, "necessary measures have ... been initiated to contain the fiscal deficit and the current account deficit.” Going forward, he said, “The commitment is to bring down the fiscal deficit to 3% by 2016-17.” — PTI Chidambaram slams IMF’s projection Washington: Rebutting IMF’s low growth projection of 3.8% for India for the current fiscal, FM P Chidambaram has launched a sharp attack on its methodology of forecast and surveillance framework to gauge the market impact of exit from unconventional monetary policy. “We believe there is a need for reviewing the methodology for growth projections as in the past International Monetary Fund (IMF) projections have often been at divergence with final growth numbers,” he said. — PTI
	Reforms to allow entry of foreign banks soon Washington, October 13 The Reserve Bank of India (RBI) will soon come out with major reforms in the banking sector that will allow foreign banks to enter India in a big way and even take over domestic lenders, Governor Raghuram Rajan has said. “That is going to be a big opening because one could even contemplate taking over Indian banks, small Indian banks and so on,” he told a Washington audience yesterday. The policy framework for the entry of foreign banks in India, Rajan added, would be unveiled in next few weeks. The banking sector reforms, in particular to those facilitating entry of foreign banks in India in a “big way” is part of the five pillars of reforms, including monetary policy framework, which the RBI is going to implement in the next few years, the RBI Governor said. “For foreign banks, if you adopt a wholly-owned subsidiaries structure and we are coming up with details on that in the next couple of weeks, we will allow you near national treatment,” he said. — PTI
	BIZ TALK Polaris eyes unstoppable ride in off-road vehicle market Polaris Industries is a recognised leader in the power sports industry with annual sales of $3.2 billion for 2012. Polaris designs, engineers, manufactures and markets innovative, high quality off-road vehicles, including all-terrain vehicles (ATVs) and the polaris Ranger and RZR side-by-side vehicles, snowmobiles, motorcycles and on-road electric or hybrid powered vehicles. Pankaj Dubey, Managing Director, Polaris India, talks to Girja Shankar Kaura about future and growth prospects of the firm. Q: What is Polaris’ growth strategy in the coming months? What are the market segments it focuses on? A: With changing lifestyle and an increased inclination of people towards sports and adventure, off-road vehicles (includes ATV, side-by-side industry) is gaining popularity. India is an emerging market and we wish to cater to the off-road market and gain the first movers advantage of this untouched market in India. With the launch of our adventure vehicles, we have already kick-started an off-road revolution in India. We offer business opportunities for young aspirants, existing amusement park owners and corporate tycoons who are looking for adventure as a vertical for expansion. For instance, we have set up tracks known as Polaris Experiential Zones for entrepreneurs (PEZ). Currently, we have 17 PEZs spread across the nation. ATV vehicles being a niche segment, we target the HNIs and upper middle-income group with high disposable income. The list of customers includes influential politicians, corporate group such as Adanis, Wadias, Religare and many more. Q: Which segment has contributed maximum to the growth of the company since it stepped in to the Indian market two years ago? A: In the ATV segment, Sportsman 500 and entry-level Phoenix have recorded the highest number of sales in India. While becoming favourite of youth of age 25 years and above, especially businessmen, RZR S 800 has the maximum sale from our side-by-side range of products. Besides ATV, we have launched snowmobiles. Targeting the under-18 age group, we have launched power sports vehicles 'Sportsman90', 'Outlaw 50' and 'Ranger RZR 170' in the country. Q: What milestones has Polaris achieved this year? A: Within two years of existence, having 17 Polaris Experience Zones and 24 Polaris touch points in the country is a great achievement. The journey so far has been exciting. Despite Polaris being the world's No. 1 off road vehicle manufacturer, it was a challenge for us to create market in India. We recently bagged the first commercial order in India from the Gujarat Police for model RZR S 800. In addition, we recently inaugurated our 14th dealership in Lucknow. It was sixth dealership in northern India after New Delhi, Jaipur, Dehradun, Jammu and Ludhiana. The development plays an important role in our growth story, as Lucknow is a key market for Polaris. Q: What is the current market size in India for off-roaders and ATVs? What market-share does Polaris hold? A: Polaris is world's No 1 off-road vehicle company. It further gains an upper edge on account of its vehicles that are completely built unit (CBU) and are manufactured in the US. Though new in India, we are already an established brand in rest of the world. The ATV market in India is witnessing a significant growth and is expected to continue along this trajectory. The current ATV market in India is highly unorganised, but our estimate is 1000+ and we are No. 1 in market share. However, with a strong history in off-road vehicles Polaris is well-positioned to penetrate into this sizeable market on the strength of its global presence, technology prowess, and manufacturing capability. Q: Off-roaders and ATVs as a segment is still at a nascent stage in India, where do you see the industry heading in the next 2-3 years? A: The specialised automobile market is at a nascent stage in India. However, with changing lifestyle and increased inclination of people towards sports and adventure, the off-road vehicles sector is gaining popularity. The last few years have recorded a surge in enthusiasm for off-road experiences and growth in racing culture. The off-road vehicle market is growing in India and is expected to double over the next three years. Q: What are the company's targets? A: We have launched a multitude of products covering various applications in India. Our range of products in the country includes ATV, Ranger and RZR side-by-side vehicles and snowmobiles. Any launch or introduction in India would typically be in accordance with the demand from customers. Currently, our aim is to sensitise the consumers and create a new market for the possible options available in recreational and utility vehicles such as ATVs, side-by-side.
	Investor Guidance Money inherited from mother is tax-free by AN Shanbhag Q. My late mother had nominated me for her fixed deposits in banks and post offices — about Rs 4.5 lakh or so. In her will, she had stated that after her demise the money deposited in bank and post office should be given to me. But she made her will in 1996, while the deposits were made in 2000. Even I had also contributed some money from my PF account to these deposits. I retired in 2006 and got some retirement funds. Being the nominee, the funds from my mother’s account were transferred to my account. Will the money transferred from my mother’s account be added to total income for income tax calculations? — Suraj Juyal A. The money received from your mother’s account represents inheritance and since India doesn’t apply inheritance or estate duty, the entire proceeds will be completely tax-free. However, it would be advisable to keep detailed records so that if the tax department asks for it, you are able to show the trace and proof of the fact that the money was indeed received under your mother’s will. Note that any interest that you may earn out of this money will be fully taxable.
	personal finance Know the dos & don’ts of Forms 15G, 15H Balwant Jain Of late, I have been receiving many queries from readers about the submission of forms to banks so as to ensure that the bank does not deduct tax at source. This write-up might help them to clear their doubts regarding Forms 15G and 15H which banks normally ask depositors to fill in and file. There are different rules as to who can submit the Form 15G and who can submit the Form 15H. There are certain precautions one should take while submitting these forms. When can the bank deduct tax at source? Before I explain as to who can submit Form 15G and who can submit 15H, let us first understand when a bank deducts tax on the interest payable. The bank will deduct tax at source once the amount of interest to be credited in respect of all the fixed deposits taken together exceeds Rs 10,000 in a financial year. This limit of Rs 10,000 is applicable for each branch of a bank and not for all the branches of a bank taken together. So, each branch of the bank will see whether the interest for the whole year on all the FDs exceed the threshold of Rs 10,000. Interestingly, many people are unaware that banks are not required to deduct any TDS on interest credited on your savings bank account even the amount of interest may be very substantial. Note that in case of fixed deposits made for longer duration where the interest will be paid to you only on maturity, the bank will deduct tax at source on the interest accrued for the year even though no interest in fact has been paid to you. Who can submit Form 15G? First and foremost only a person who is resident in India can submit the Form 15G. So an NRI cannot submit this form. Any person other than a company can submit the Form 15G. So an Individual and an HUF can submit it. However it is not in the case of every Individual or HUF, only the individual or HUF, whose tax on the estimated income for the year is nil and the amount of interest income from all the sources does not exceed the minimum exemption limit, can submit the form. So for being eligible for you to submit this form, you need to satisfy both the conditions. In a situation where due to various deductions the tax payable on total income may be nil, but if the total amount of interest income is expected to exceed Rs 2 lakh you cannot submit this form. Who can submit Form 15H? Any resident Individual who is above sixty years of age or completes sixty years during the financial year can submit the Form 15H provided his tax liability on the basis of his estimated income is nil for the financial year though the total amount of interest from all sources may exceed Rs 2.5 lakh, the minimum amount liable for tax. So, only senior citizens can submit this form. What precautions to be taken while submitting Forms 15G and 15H? Please ensure to submit your PAN details to the bank while submitting the Form 15G or 15H. In case you fail to provide your PAN to the bank, the bank will deduct TDS @ 20% against the applicable rate of 10% even if you have submitted Form 15G or 15H. I would advise you to submit a copy of your PAN card by the way of a separate letter and obtain a written acknowledgement for the same. Please obtain an acknowledgement for the Form 15 G or 15H while submitting it. So it is advisable to get the form submitted personally rather than sending it through post so as to ensure proper acknowledgement. What if the bank has already deducted tax before submission of the form? The Form 15G or 15H as the case may be, should be submitted at the beginning of the year so as to avoid a situation where bank has already deducted the tax before you submit the form. However in case the bank deducts the tax in spite of you having submitted the form or before you actually submit the same, the bank will not refund the tax already deducted as the bank would have already deposited the tax with the government. In such a situation the only option available with you is to file your income tax return and claim the amount of TDS as a refund. I hope that from the above discussion it becomes clear that you need to comply certain conditions to be eligible for filing the Form 15G or 15H. Moreover you need to take certain precautions while filing these forms with the bank. The author is CFO, Apna Paisa. The views expressed in this article are his own
	Retire rich with deferred annuity plans Yashish Dahiya Deferred annuity plans are forms of a retirement plan. It is that form of annuity plan or contract that delays payment of income, instalments or a lump sum until the investor elects to receive them. There are two phases in deferred annuity plans. Annuity phase is preceded by a savings phase. This is the basic difference between the immediate annuity plan and deferred annuity plan. Better bet for retirement Deferred annuities are a great way to accumulate money for retirement, particularly if you have many years before retirement. Hence, the deferred annuity plans are suitable mainly for individuals who don’t need immediate pension and have several years till their retirement i.e. they are in their working life span. So in a deferred annuity, an individual has the time to gradually invest and build the corpus in the savings phase. The premiums paid by the investor are invested till the maturity date or vesting date of the plan. Upon maturity, the plan becomes vested and becomes an immediate annuity plan. The period between the date of contract and maturity is called the deferred period. On maturity, the customer has two options, either purchase annuity plan for the entire amount or commute up to one-third of fund value us the remaining two third to the purchase of annuity. Types of deferred annuity Deferred annuity plans are either traditional plans or unit-linked pension plans. The traditional plans are participating or with profit plans, which means they earn bonuses, unlike the immediate annuity plans. There are two types of deferred annuities: Fixed deferred annuity Fixed deferred annuity offers a fixed rate of interest on the principal that is invested for a pre-determined amount of time. The fixed deferred annuity is a low-risk investment that assures the investor of the rate of interest and the amount of money that shall be received at the end of the term. Variable deferred annuity Variable deferred annuities get higher interest based on the performance of the stock market. The variable annuity plan is more risky, but may provide attractable and better returns. Advantages The advantages of deferred annuities are many and these include tax benefits that are associated with such an investment. The interest gained is not taxable in the eyes of a taxman till the time cash inflow starts after an investor exercise its option of receiving annuities from the plan. The investment in the deferred annuities grows at much faster pace than other traditional investments such as commercial deposits, recurring post office schemes etc. Hence, the longer the investment in annuities (savings phase is more) the better the annual receiving payments from the annuities. Below are the other benefits of investment in deferred annuity plans: Deferred annuities help an individual to create a corpus for future needs and create a retirement plan for themselves. The longer the period of annuity the better the investment grows. So, by the time individual needs money and ready to receive payments from the annuity, the investment would have grown well. A deferred annuity is accompanied by life insurance as well. So, an investment in annuity serves dual purpose of investment and insurance, thus an individual does not require investing money in two different financial instruments. A product like ULIP is a typical example serving more than one financial motive. Deferred annuities can be purchased by paying a single lump sum amount or regular contributions towards annuities can be made to develop a retirement corpus which in turn can help an individual fulfiling several motives down the line. Investment in deferred annuities is tax free, no tax is levied on the money that the individual invests, until the time an investor is ready to withdraw it and then it is taxed as an ordinary income. Deferred annuities act as an investment avenue for the businessman as well. As investment in these regular annuity plans is tax free and a typical form of annuity assures guaranteed return along with the interest income as well. One can choose how to receive money after the retirement i.e. an individual can opt for lump sum amount or can receive regular and periodic payments. Hence, deferred annuities are an excellent investment option if the investor is looking to make long-term investments and desires to gain from the tax benefits that an annuity provides. These days, several web insurance aggregators provide annuity calculator with the help of which an individual can plan their investments during their work life span and also get to know their payments from the annuities after retirement. The author is CEO& Co-founder, Policybazaar.com. The views expressed in this article are his own