MoneyVedam

Most of you may have completed linking your PAN with Aadhar on the Income Tax portal by July 31st, 2017. Some of you may still be in the process of linking Aadhar with your various bank accounts by December 31st, 2017. There are a couple of more "Aadhar linkings" that you may have to complete with respect to financial market accounts as well. Linking Aadhar with Mutual Funds As per the recent amendments to the Prevention of Money Laundering (Maintenance of Records) Rules, 2005, all mutual fund account holders are required to link their folios with Aadhaar numbers by 31st December 2017, failing which the said account/folio will cease to be operational. A simple way to accomplish this is by linking at the registrars and transfer agents (RTA) of mutual funds like CAMS, Karvy, Franklin Templeton Investments, and Sundaram BNP Paribas. You may also get your Mutual Fund Distributor - MFD's help to complete the same. https://www.karvymfs.com/karvy/Aadhaarlinking_indivi...

As nifty touched its all time high on Nov 3, 2017 at 10452, one would wonder if all's well with the Indian economy - only its not. In a year when supposedly more than 15 lac people have lost their jobs per CMIE (Center for Monitoring Indian Economy Pvt Ltd) and the economy is at its all time low of 5.7%, the stock market's behaviour is curious! Reasons behind Nifty's rise This month, nifty doubled its market cap to $2.2 Tn from $1 Tn Nov'14. It has provided a 53% return since the time NDA came to power in May'14 and a 30% return since Jan'17. All while the earnings growth and return on equity have declined continuously. Add to this the worsening bank NPA situation to Rs.8 Tn in bad debts, the stock market rise doesn't quite add up!? A widely believed reason behind nifty's rise is falling returns from realty & gold is chasing domestic investors into the stock market. Some observers also believe that AMFI's (Association of Mutual Funds in In...

For over 5 years, economists and analysts have issued numerous warnings on the plaguing bad loans problem in the Indian Banking sector. Although the bad loan problem cropped up as early as 2011, the first bold measure against this banking ill was undertook by former RBI governor Dr.Raghuram Rajan in December 2015. Since then the fight against the bad loans has only become stronger. Bank Jargon NPA : Non Performing Assets - Loans given out by banks for which interest/principal is not paid by the borrower (loan default) Provisioning : Setting aside money to cover for losses arising from loan defaults -  typically this money comes from the bank's profit (SARFAESI) Act - a recovery method that gives the bank the right to recover its dues by seizing the borrower's assets. Asset Reconstruction Companies - a recovery method that allows banks to sell the defaulted loans at a discount to an ARC company, which then tries to recover as much as possible from the borrower. The loan...

Its raining discounts for online shoppers and cab riders as e-comm biz is wooing the indian shopper with big discounts. However, the scene on the startup street is glum especially after the recent fallout of snapdeal sale to flipkart and its subsequent layoff of 1000 employees out of the present 1200 (it was 9000 last summer). This contrast prompted some questions about startup funding and its economic value add to the nation. Funds - whopping $21bn (Rs.1.36 Lac crores) & counting.. Startup funding statistics ( http://trak.in/india-startup-funding-investment-2015/ ) reveals that India has received a total of $16bn from 2014-16 and additional $5bn just in Q1'2017. The top four supposedly unicorns - Flipkart, Snapdeal, Ola & PayTm have received about half of all this funding ($10.4bn). But none of these companies are making profit yet, infact they are so heavily loss-making, that without burning $20-50mn a month, they may not even be in business. This monthly "cash-b...

On Jun 9, 2017, the Supreme court in its ruling on IT section 139AA, upheld that all PAN card holders must link their Aadhar with their PAN (Permanent Account Number) for filing of income tax returns from July 1, 2017. And even non-IT assessees who have PAN & Aadhar as of July 1, 2017 must link the two on the IT portal. In another related notification, the government has mandated that all bank accounts in the country need to be linked to Aadhar by Dec 31, 2017, failing which the respective accounts will be frozen. Let us look into the details and impact of these announcements. PAN & its use PAN (Permanent Account Number) is a 10-digit unique ID issued by the income tax department, however a person may have multiple PANs. It is primarily used to file income tax returns and required for most financial transactions such as deposits & withdrawals exceeding Rs.50k, purchase of all assets such as car, bike, home, jewellery, mutual funds, demat accounts, bonds etc. Residents o...

With interest rates falling further and holding period for capital gains reduced from 3 to 2 years in the budget, new buyers and upgraders are looking to get the best realty deals. However, not all is done upon locating the property to buy. Choosing a right home loan product is vital to ensure that your hard earned money does not pay for exorbitant interest costs. Home Loan - Product A home loan comes with a variety of options and bargains but borrowers are not usually presented with all the available choices to make an informed choice. They are usually sold a product which may not suit them best. Let us take a case of a new buyer (or) an upgrader who seeks a loan of Rs.30 Lacs. This buyer is typically coerced into a 30-year "Fixed interest rate home loan" based on the lowest EMI option of Rs.23k per month. As this amount is close to the rental outgo of the buyer, s/he readily tends to accept the product. A "Fixed" interest rate is in favor of the borrower if ...

Missing Tax Payers or Tax Evaders? Per the finance ministry, about 1.09 crore bank accounts received a deposit of Rs.2-80Lacs and another 1.58 Lac accounts received a deposit of >Rs.80Lacs. The IT department has officially said that after scrutinizing these 1.09 crore bank accounts, 18 Lac accounts whose deposits do not match their tax profile(s) are now under inquiry for tax evasion. What the demonetization reveals about Tax evasion? Post-demonetization, these 1.1 crore bank accounts received a total cash deposit of Rs.10.4Tn / $157bn. This number clearly matches the 1.05 crore missing assesses based on the top 1% wealthy. Demonetization has cleverly brought this huge chunk of people into the tax net. In the 1st category, only deposits over Rs.5Lacs are being inquired, while all accounts under the next category are under inquiry - here a high average of Rs.3.31 crores in cash is a clear indication of tax evasion . The tax on the Rs.10.4Tn deposits @35.535...

Highlights of 2017 budget on Personal Taxation Reduce the tax rate of the lowest income slab (Rs.2.5-5Lac) from 10% to 5% IT rebate reduced from Rs.5k to Rs.2.5k & applies only for Income upto Rs.3.5Lacs Levy a 10% surcharge on those earning Rs.50L - 1Crore income Reduce the holding period from 3 to 2 years for real estate assets to qualify as long term Revealed the amount gathered under the demonetization scheme (Rs.10.4Tn) Direct Tax collection Based on the latest data published by the Income Tax (IT) department for AY2014-15, 3.91 crore returns were filed and a total of Rs.4.46Lac Cr (Rs.4.46Tn) in direct taxes collected. Key stats: Total returns filed: 3.91 crores Returns from Individuals: 3.65 crores (93%) Total tax paid by Individuals: Rs.1.91 Lac crore / Rs.1.91Trillion / $29bn 26 Lac returns filed by companies & firms Total tax paid by Companies: Rs.2.55 Lac crore / Rs.2.55Trillion / $39 bn The top 1.5% Tax payers The stats revealed that 47.5% (...