Personal finance reforms

There has been a couple of reforms that has been seen in the personal finance arena in India. Unification of accounts or portability is one of the most important this that is happening in India, unlike many advanced countries in the world. Here are few to list:
a) portability of mobile numbers:
Now one can retain the same old mobile number irrespective of how you roam around in India due to job related transfers or for other business trips. The same mobile number can be ported across regions/states, and across providers.
If you are not satisfied with the service of one telecom company then you can easily switch to other telecome provider, with your mobile number remains the same.

b) portability of bank account:
After SBI launched it core banking facility, now one can deposit, withdraw money from one's SBI account anywhere across India, without the ATM card by visiting to the branch. Once the Aadhar card is accepted as the single document to prove one's identity, this will be even simple to prove ones identity while withdrawing money from ones own account. The same has been followed by other banks and now the bank account number portability is in place. No need to change your salary account details in your home loan in your native state or anywhere else in India. The same details works since your bank account number has never changed. No worry of cheque bouncing, no defaulting.
So, as an effect if you change your job and now the new company does not provide salary deposit into your previous bank then you can simply switch to the new bank for salary account with the same old account number.

c) Health insurance policy portability:
Now if you are not satisfied with the health insurance policy of one company, you can easily switch or try another health insurance provider.

d) Here comes the brand new portability, the PF account portability:
Coming 2013 March, your PF account will be portable across the country. What does it mean? It simply means that if you change your job, which is the trend now a days with Indian youths unlike the olden days when your father has served 20 years in the same company, you do not have to change your PF account. A well thought initiative by PF organization of India, EPFO. Your PF account number will be your permanent PF account number.

Now just log on to EPFO website to check your monthly balance

Over 50 million subscribers of the retirement fund body EPFO can obtain e-passbook along with details of their updated accounts online from on Wednesday.

"The EPFO subscribers can get their statement of accounts online from today," Central Provident Fund Commissioner R C Mishra said while addressing a seminar on Employees' Provident Fund Act by the PHDCCI here.

In order to avail this facility, the active subscribers would have to register themselves on the EPFO portal by furnishing their account details.

The facility to obtain e-passbook will be available only for active members of the Employees' Provident Fund Organisation (EPFO) and would not be extended to those whose accounts are inoperative, settled or have negative balance.

The members of exempted provident fund trusts regulated by the EPFO, too will not be entitled for this facility through its portal. The e-passbook will also have additional information like name, date of birth and account number.

Mishra also informed that the EPFO is in the process of introducing the facility of online settlement of provident fund claims in a couple of months.

At present, the subscribers who are either superannuated or applied for withdrawals, can apply only manually and is time consuming. As per the EPFO citizen charter, such claims should be settled within a month, though it takes longer than that.

Mishra said in order to provide the facility of online application of claims, EPFO would require a central database. At present, all regional EPFO offices maintain their database separately.

"These works including fund transfers, settlement of PF accounts and withdrawals constitute over 80 per cent of our work," he said, adding online claim settlement will save time and improve efficiency.

Income Tax: No need to file returns if salary not exceeding Rs 5 lakh

NEW DELHI: Salaried employees earning up to Rs 5 lakh a year need not file income tax returns from this year, the Finance Ministry said today.
The exemption from filing I-T returns is applicable only if "the total income of the employee does not exceed Rs 5 lakh ... (and) the annual interest earned from savings bank account is less than Rs 10,000" for assessment year 2012-13.

Filing I-T returns is, however, necessary to claim refunds.
The last date for filing tax returns is July 31. There are about 85 lakh salaried persons in the country whose yearly income, including earnings from other sources like bank deposits, does not exceed Rs 5 lakh.
The exemption will be permitted only if the assessee has received a certificate of tax deduction in Form 16 from the employer. The employees have to report income from interest on savings bank account to the employer to become eligible for exemptions.
Earlier, it was obligatory for all salaried persons to file income tax returns under the Income Tax Act, 1961.
Meanwhile, the tax department said special counters will be set up in Delhi and 'Tax Kiosks' in various parts of Mumbai to assist people in filing income tax returns.
Unlike the previous years, the tax department will not set up any return receipt counters are at Pragati Maidan in New Delhi.
"Instead returns will be received at Civic Centre, opposite Ramlila Ground, New Delhi, from July 26 to 31.
The Mumbai Income Tax Department will set up 'Tax Kiosks', manned by Tax Return Preparers, at various locations in city to assist individual and HUF taxpayers in preparation and filing of the returns. A tax payer will have to pay Rs 250 to avail services of TRPs.
'Tax Kiosks' will be functional in certain residential areas on July 22 and in certain offices on July 24 and 25.
At present, income of Rs 2-5 lakh attracts 10 per cent tax, Rs 5-10 lakh 20 per cent and above Rs 10 lakh, 30 per cent.

New Income Tax Slabs for 2012-2013

New Income Tax Slabs for 2012-2013:
1. Income < 2 Lakhs = NIL tax
2. Income > 2 Lakhs & < 5 Lakhs = 10%
3. Income > 5 Lakhs & < 10 Lakhs = 20%
4. Income > 10 Lakhs = 30%.

Investing properly in PPF

Investing in PPF:
If you are a regular investor of PPF, then you should invest before 5th of every month. Otherwise, you do not earn interest for that month for your investment.

If you are a casual investor who put lump sum money just before the end of tax year during January to March 31st, then you should dump your money before 5th of every money, just after your salary getting credited into your account.

Earlier, your bank account used to give interest for your money that you deposit before the 10th of that month, but things have changed after RBI allowed day by day interest credit in savings banks in India. That rule no longer valid in India.

So, from that point of view too, you should be good to invest before 5th of that month in your own PPF account opened either in SBI or post office. For my readers, you can open your own PPF account in India, only in SBI Bank or in Post Offices. The best part is it not in the custody of your company, but it your own managed fund.

Thanks for reading, and keep investing...




Regards, Kongkon