Investment Valuation in India

Here are some VAT forms for the state of West Bengal WB VAT Form 1 Application for New Registration WB VAT Form 2 Information to be provided by a registered dealer under Sec 24 (1a) WB VAT Form 14 WB VAT Form 15

It was only recently that the Central Board of Direct Taxes (CBDT) had required that salaries employees claiming HRA need to furnish the PAN details for their landlords in case the rent paid per month was Rs 15000 or more. The CBDT has found yet another means to increase the disclosure burden on salaried individuals by amending the requirements to Rs 100,000 per year, effectively decreasing the above limit to Rs 8,333 per month. Thus, for every employee whose total rent in a year exceeds of Rs 1 lakh per year, he will have to furnish the PAN of the landlord.  In case the landlord does not have a PAN, the assessee must submit a declaration to this effect from the landlord along with the name and address of the landlord. This should be filed by the employee. While this will put a check on the individuals claiming higher House Rent Allowance (HRA) exemption by showing fake receipts, it will unnecessarily increase the difficulties for honest tax payers as landlords are usually relucta

The Companies Bill has been passed by the Lok Sabha and Rajya Sabha as well. The bill is seeing light after decades of discussions and debates. All credits to the Minister of Corporate Affairs for taking the bill through the lower house soon after assuming office. Key highlights of the bill are: Class Action suits introduced for the benefit of investors One Person Company (OPC) introduced Certain class of companies are required to spend at 2% of their average Net profits on Corporate Social Responsibility. Severe punishment for fraud against investors National Financial Regulatory Authority (NFRA) to be set up - this has curbed some rights and powers of Chartered Accountants with respect to setting up of Accounting and Auditing standards. A CA can have maximum 20 companies as audit clients. Every company to have a single financial year end - 31st-March. Certain exceptions apply. A Private company can have 200 members (up from 50) Concept of Dormant company introd

LIBOR LIBOR stands for London Interbank Offered Rate is the average interest rate estimated by leading banks in London that they would be charged while borrowing from other banks. It is the primary benchmark, along with the Euribor, for short term interest rates around the world. As a popular benchmark, it is used for US Dollar, GB Pound, Euro, Swiss Franc, Canadian Dollar and Japanese Yen. Libor rates are calculated for ten currencies and 15 borrowing periods ranging from overnight to one year and are published daily at 11:30 am (London time) by Thomson Reuters. The British Bankers Association (BBA) collects data from 16 banks to calculate LIBOR for each maturity and for each currency. It weeds out the best four and the worst four and then calculates the average of remaining 8 rates which is published as LIBOR. Many financial institutions, mortgage lenders and credit card agencies set their own rates relative to it. At least $350 trillion in derivatives and other financia

Accountants' Adda: 1% TDS on Purchase of Immovable Property : The new provision of Income Tax will come in effect from June 1, 2013 after which sale of immovable property will be subjected to 1% per...

When the two of the 10 richest people joined hands to start The Giving Pledge, they had a tough time convincing billionaires across the world to contribute most of their wealth for philanthropic causes. The Indian government took a leaf out of the concept and made it mandatory for specific class of companies to ensure they spend on Corporate Social Responsibility (CSR) through the new Companies Bill that has been passed in the Lok Sabha in November 2012. Although some European countries require companies to report their CSR information in their Annual Reports, India is arguably the only country in the world that has made CSR mandatory through an Act. What is CSR? CSR is a process with the aim to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members who may also be considered as stakeholders. A firm's implementation of CSR may go b

One of the most important aspect of starting your own firm is to have enough funds to finance the business. You may not always have the capital to start a business, but fortunately there are other alternatives to finance the business. Loans from Banks / NBFCs Most banks and non banking finance companies (NBFCs) provide loans to small and medium enterprises (SMEs). The tenure ranges from 6 months to 5 years while the interest rates range between 10% and 15%. In most cases, banks and NBFCs expect you to show continuity of the business for a couple of years before funding it. Venture Debt Venture Debts are medium term loans offered by venture capital firms and do not require collateral. A start up is evaluated based on its ability to grow, fundamental enterprise value. The venture capital firms peg the value of the firm to its future cash flows and the ability to repay the loans. Leverage is not a great way to start a business so this option is better avoided or should be consid

Hedging through Futures / Forward contracts With the business environment getting increasing complex, profitability often depends on factors that are beyond the control of an organisation like commodity prices, stock prices, interest rates, exchanges rates, etc. As a result, modern business has been subjected to more complexity, uncertainty and risk. Futures markets often permit managers to reduce or control risks through hedging strategies. In other words, futures markets can provide the managers certain tools to reduce and control their risks.  Simply put Hedging means reducing risk. It is the process of investment into securities (usually a derivative) with the objective of reducing or controlling risk. Examples of Hedging: E.g. 1. Firm A is a manufacturer of automobile cars in India and they import auto parts from USA. Firm views that parts may increase in future and thereby increase the cost of cars and this may significantly affect the profitability of the fir

SUCCESS IS A JOURNEY, NOT A DESTINATION: Some Useful Websites for Commerce Professionals : Some useful links for Commerce Professionals: www.icai.org – The Institute of Chartered Accountants of India www.nfcgindia.org ...

Keyman Insurance Policy has, for long been an easy way to pass on tax free benefits to the key managerial personnel of an organisation. Just as a company insures its lands, building and other assets, it can insure its human resources as well so that it can compensate itself for loss of human assets. Earlier the companies and senior management have misused the concept for personal tax free benefits. For Keyman Insurance Policies, the companies pay the premium and any sum received from the Insurance company on maturity or on the death of the employee including bonus, if any was considered to be taxable income in the hands of the employer under the head Income from Gains from Business / Profession (PGBP). However, most Insurance policies allow assigning the policies to the insured himself and the companies used to assign the policy to the managerial person himself. In this case, the policy did not remain a Keyman Insurance Policy and became a normal Life Insurance policy. The matur

Chief Economic Advisor Raghuram Rajan tabled his first ever Economic Survey. Key features of the Survey are: GDP growth for 2012-13 is expected at 5% GDP growth for 2013-14 is expected at 6.1% to 6.7% The Average WPI Inflation has come down from 8.9% in 2011-12 to 7.6% in 2012-13 The Average CPI Inflation has increased from 8.4% in 2011-12 to 10.0% in 2012-13 Gross Fiscal Deficit has come down from 5.7% of GDP to 5.1% of GDP Revenue Deficit has come down from 4.3% of GDP to 3.5% of GDP The trade deficit increased to US$ 189.8 billion (10.2 per cent of GDP) in 2011-12 as compared to US$ 127.3 billion (7.4 per cent of GDP) during 2010-11. Current account deficit seen at 4.6% for 2013-14 Overall global economic environment remains fragile Gold imports is key contributor to inflation, imports need to be curbed LPG and Diesel prices need to be increased in line with global rates, oil subsidy is a key risk

Given the financial crunch that most governments are going through, there is one thing that seems to be an easy route - imposing higher taxes on the richer people. Earn more pay more taxes. This has been hotly debated across the world and India is no exception. From the times of Robin Hood, squeezing the rich and passing on the benefits to the poor has had an emotional appeal - partly because they have it and so they can pay and partly because they are always a minority, so politicians can save their back by not adversely affecting the poor, usually their vote banks. However, there have been numerous studies that has shown that there are better alternatives than taxing the rich. Higher taxes for the richer is usually counter productive in the long run as it encourages tax evasion and is a disincentive to work. Also, usually it is ineffective since the rich can plan their taxes effectively and can often save taxes. As of 31s March 2011, the number of effective tax payers in India

Hi, Check out this link on Accountants' Adda where in I explain about the Lock in period for Tax Saving SIPs in India. Accountants' Adda | Lock In Period for Tax Saving SIP

Hi, Please visit my article on Profitability Index on Accountants Adda. Accountants' Adda | Profitability Index