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personal finance
tax advice |
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How to secure mobile banking transactions
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Your first job & financial planning
Ronak Morjaria
My recommendations to my friends and all others, who have just joined workforce, would go a long way in their financial journey. Save at least 20% of your income
Warren Buffet has said, “Don’t save what is left after spending; spend what is left after saving”. So, you should save at least 20% of your monthly income and then spend on other things that you need and want. The savings can be invested in different asset classes — equity, debt, gold in different investment instruments such as PPF, equity MF SIP, recurring deposit, gold funds, etc depending on your risk appetite and investment time horizon. The younger you are, higher your risk-taking capacity and longer your financial goals. Life insurance
Just after getting your first job, some relative, neighbour, friend or bank relationship manager will definitely approach you for selling you a dud insurance policy. Don’t buy life insurance policy if you do not have any financial dependants. If your family members are financially dependent on you, then you must buy life insurance; buy online term plan equal to 12 times of your annual income. Don’t fall prey to any other traditional insurance policy or ULIP; how much fancy and attractive it may look or sound to you. Health insurance
Check with your parents how much amount of health insurance cover you and your family members have. Looking at the increasing medical and hospitalisation costs, you must have individual health insurance cover of at least Rs3-5 lakh along with a top-up health insurance plan. Buy health insurance cover for yourself and family at the earliest. Not tips, but SIPs for you
Many of you want to make money in stock market and brag about profits that you made by investing in a particular stock when you are enjoying with your friends. Not always a tip of a particular stock given to you by your friend or relative or colleague. So don’t invest in direct equity simply based on a stock recommended to you by someone; investing in direct equity needs a thorough research of the company and the market. So, if you want to make money in stock market, invest in equity MF via SIP (Systematic Investment Plan). Investing via SIP is one of the best ways of investing in equity. The only issue with SIP is that you will find it boring and won’t give you bragging rights since you have to invest a fix amount monthly over a period of at least 8 to 10 years to see a magic figure of returns on your investment. Credit card
Don’t consider credit card as a tool for free money for 45 days. Some of you must be swiping your credit card when you would have used your entire salary before the month-end thinking that you will pay off the credit card dues once you receive your next salary. This is not a good practice, unless you are paying off your dues before the due date. Not paying the credit card dues on time can cost you a penalty of as much as 36% to 48% p.a. interest on the payment dues. Not only you will have to pay the penalty, but it will also affect your credit score, which will affect you when you may actually need to take a housing loan or some other kind of loan. So, it is advisable to use credit cards only in case of emergencies; instead use debit card or cash for your regular expenses. Tax saving
You do not want to pay high tax on your hard-earned money. So, if you have a taxable income, you should invest in tax-saving instrument well in advance and not wait till the year-end. Whether you have an EPF account or not, it is advisable to open a PPF account in your name. Invest in a combination of EPF, PPF and ELSS funds of mutual funds systematically up to Rs 1 lakh for claiming deduction under Section 80C. These are the few things that I outlined for them which they should start doing after getting their next month’s salary. Its not that you should just keep saving for your future at this age of mid-twenties; you should enjoy your life and spend money on things you enjoy. But, simultaneously you should develop a habit of savings and maintain a budget of your expenses. The author is a Research Analyst, ApnaPaisa.com. The views expressed in this article are his own |
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Scholarship, not stipend, exempted
sc vasudeva
Section 10(16) of the Income-tax Act 1961 (the Act) covers scholarship granted to meet the cost of education. In my view, the stipend is not in the nature of a scholarship and therefore, if the amount of stipend received by a person is in excess of the maximum amount not chargeable to tax, such person should file his return of income and pay the tax accordingly. My net wealth exceeds Rs 60 lakh. My yearly income varies between Rs 25 lakh and Rs 30 lakh. I propose to provide a regular income for my children who are very young. I want to provide for them for a period of at least 10 years by which time they should be able to earn their own livelihood. If I make a gift to my minor children, the income arising on the gifted amount would be clubbed with my income and I would, therefore, not be able to save tax on such income. Is there any legal way whereby I can provide for a regular income to my children without attracting the clubbing provisions. — Radha Krishan It would be advisable to create an irrevocable trust for the benefit of your children with a direction that income during the minority of the children will be accumulated and added to the corpus of the trust and income arising from such corpus would be given to the children after attaining majority. Section 4 of the Wealth Tax Act, 1957, would not be applicable in such a case and the income from the trust would be taxable during the minority period of the children at the maximum marginal rate. After the children attain majority, income of the trust will be taxable in the hands of the beneficiaries in case their shares are determinate. The clubbing provisions would also not be applicable in such a case. I am a small investor in equities and do it as a hobby. In the course of purchasing and selling shares, what is my liability to tax, i.e. capital gains tax, and how to calculate it. I mean I may be purchasing and selling different shares at different times during the course of a year. Should I calculate capital gains tax on every scrip individually or collectively? Is there any provision for the incurred loss to the value of scrip? Do I have to pay long-term capital gains on shares sold after 12 months or is it already deducted in transaction at the NSE? — Ram Niwas I presume the transactions of purchase and sale of shares is not being carried on regularly. In such a case, the income tax authorities may treat these transactions in the nature of a business. Reply to your query is based on the presumption that you are not carrying on business as a trader in shares and securities. The capital gain shall have to be computed by taking into account the cost of the shares which have been sold and deducting the same from the sale price thereof. The cost will have to be computed scrip-wise. For example, if 100 shares of Maruti were purchased on a given date, and are sold thereafter on various dates, the cost of such 100 shares will have be appropriately allocated to the lots which are sold. In case the shares are held for more than a year, the capital gain arising on sale of such shares would be a long-term capital gain. In case such a transaction is in respect of the listed shares and has been subjected to Securities Transaction Tax through the medium of a recognised stock exchange, the long-term capital gain would be exempted from tax. The short-term capital gain in such cases is taxable at the rate of 15% plus applicable education cess. As indicated above, the capital gain should be computed by taking into account the cost of acquisition of those shares which have been sold.
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How to secure mobile banking transactions
Whenever and wherever-based mobile banking access makes banking convenient and results in time saving. For example, you can review your account balance while waiting in a checkout line to see if you should use your credit or debit card for the purchase. You can pay your bills instantly and securely if your due date is close. You can also transfer money between accounts and monitor availability of deposited funds while you are on-the-go. In short, you can do your everyday banking, anytime, anywhere. Moreover, it takes handling physical cash out of the equation in a secured manner, thanks to the advanced in-built security features in mobile banking apps available in the market today. Benefits of mobile banking
The use of mobile banking is showing increasing trends and will continue to do so due to the advantages it provides over other banking channels. How to keep your mobile banking experience secure
Customers often wonder whether transacting over mobile phone is safe as compared to internet or branch banking. The truth is that mobile banking is safe and has two-factor authentication — the customer’s mobile number and the mPIN set by him/her. This ensures the customer against theft/unauthorised use of the phone. As there is no sensitive data shared in the mobile application until successful login and authentication, hackers too can’t pose a threat. In addition to this, security awareness campaigns are run by banks periodically to make customers aware of potential threats and how to safeguard their mobile banking experience. The author is President — Retail Banking, Axis Bank. The views expressed in this article are his own |
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Many of my friends who are now chartered accountants, company secretaries, MBAs and engineers, etc. have started working in corporate sector and are doing well in their respective fields. On occasional meetings, they share what they did with their new-found love — the pay cheque. One friend bought an Apple I-phone 5S, another got a 10-gram gold coin and this one takes the cake who spent his entire salary on shopping in just five days. Some of them did save some money, by way of parking the leftover fund in their salary account.
My query is regarding tax liability of stipend received during articleship period. I am getting a monthly stipend of Rs 35,000, which is in excess of the maximum amount not chargeable to tax (Rs 2,00,000). Do I need to pay income tax on the same? Further, as per my understanding, there is a case law (Sudhir Kumar Sharma v. Income Tax Officer. IT appeal no. 631 (JP) of 1982) stating stipend is exempt u/s 10 (16). Please clarify. — Adarsh
The penetration of mobile phones in India is evident from the current base of close to 900 million subscribers — a growth of over 50% from 2009-10. In addition to this, 86 million active mobile web users (growing at 200% YoY) with their internet-capable mobile phones available across various price points are driving faster and unprecedented use of mobile phones in India. India’s mobile banking growth is expected to hit new heights in 2015 with 300 million projected mobile internet users.