Investment Valuation in India

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

Hi, Do read my article on Independent Directors as mentioned in the Companies Bill 2011 (passed in Lok Sabha as of Dec 2012) Accountants' Adda | Companies Bill 2011 - Independent Directors

Accountants' Adda | Deduction at a lower rate or non-deduction of tax in case of salaries As per Section 192 of the Income Tax Act, an employer is required to deduct tax at source on the amount payable to the employee at the average rate of income tax. Unlike other payments, in case of salary, TDS is deducted only at the time of PAYMENT of salary.  This is to be computed on the basis of rates in force for the financial year in which payment is made. Section 197 enables a tax payer to make an application to his Assessing Officer for deduction of tax at a lower rate or non deduction of tax. The application has to be made in   Form No.13  (vide Rule 28(1)).    If the Assessing Officer is satisfied that the total income of a tax payer justifies the deduction of income tax at any lower rate or no deduction of income tax, he may issue a certificate in   Form No. 15AA   (relevant Rule 28AA) providing for deduc...