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Foreign Direct Investment – FDI

| Filed under Economy

Foreign Direct Investment – FDI

You might have heard it all over the finance news channels, news papers etc. At the time of the budget they come into our ears quite often.I’m sure you would have wondered what is this FDI- Foreign Direct Investment. Those of the finance gurus out here would be ready with the answer, but we have to allow the new guys on the dock too.

This post is for those who need to know what an Foreign Direct Investment is. So lets get to the point. In very simple terms we can say that If a company makes an investment in another country on a business or entity  It would be called Foreign Direct Investment. Do not get the idea misguided, if a company that is foreign invests indirectly on portfolio, it would not be treated as Foreign Direct Investment or FDI. With the investment the Foreign company would have some controlling power over the invested Company.

An example of foreign direct investment would be an Indian company taking a majority stake in a company in America.

Another example would be a Indian company setting up a joint venture in China.

Every country would have some regulations about the percentage of investment that can be made in their companies.

 

How Much Tax Deducted at Source?

| Filed under Economy

Tax Deducted At Source (TDS)

Those who have invested your money anywhere and have taken them back, you would be sure that the hands of the “Tax man” has been through you. The procedure is simple for the tax man, most of the time they deduct the tax from your investment and give you back the money.  We call this by the name of TDS which means Tax Deducted at Source.  The most awkward thing about TDS is that they do not have an exact rate. The amount of tax purely depends on the source of earnings. It can depend from 1% to 30% depending on the activity.   Lets see where all do they have them.

Salary TDS:

Salary is the first target, The investment declaration that you fill up when you join a new company or your present company would have that. This will include the maximum tax deductions allowed under Sections 80C, 80D and other tax-saving instruments. If, despite all these deductions, your salary is above the exemption limit, TDS will be cut from it every month.

Bank Accounts TDS

If the interest you have earned from your bank FD is above Rs 10,000, you will receive it after the bank deducts tax. This exemption limit also applies to interest earned from a bank savings account. Don’t think you can outsmart the taxman by opening accounts or FDs in different branches, since the system works on core banking and all your FD is tagged with your PAN Card you have no other option to escape from the tax man.

Property TDS

Whether it is rental income or the money that you get after selling a house, you will receive the final amount only after tax is deducted. However, you can avail of exemptions in both cases.  If the rent you receive is less than Rs1.8 lakh a year, no tax is deducted at source. Beyond this limit, 10% of the income is cut as TDS. However, the advance deposit paid by the tenant is not taken into account for this limit.

It’s possible that there is more than one owner of the flat and that all of them share the rental income. The benefit of the exemption limit will depend on the type of ownership, whether it is joint or co-owned. “In case of co-owners, where the specific share of the property has been decided, the limit of Rs 1.8 lakh can be claimed separately by each owner. If you are selling a property, the tax will be deducted at the rate of 1% if the deal is above Rs 20 lakh in a rural area, while in urban areas, the limit is Rs50 lakh. This will be applicable from October this year.

Lottery TDS

Money won in a lottery, puzzle competition, reality show or a horse race is subject to the highest TDS rate of 30%.
“If you win Rs 50 lakh in a game show, you will only be able to take home 70% of your winnings or Rs 35 lakh. The TDS is applicable even on non-cash winnings.  So, if you have won a car worth Rs 10 lakh, you will only be able to claim it after you pay Rs 3 lakh as tax.

 

 

 

Know Your PAN

| Filed under Economy

Know Your PAN

PAN, aka, Permanent Account Number is a unique alphanumeric combination. This is issued by the Indian Income Tax Department to all juristic entities identifiable under the Income Tax Act 1961. The issuance of PAN by the Indian Income Tax Department is done under the supervision of the Central Board for Direct Taxes and on a general note, resembles the National Identification Number. This is also considered a very important identity proof. The PAN is unique and permanent and is not at all affected by the change of address, even if the change is from one state to another. So you should Know Your PAN.

know your pan 300x188 Know Your PAN

 

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National Savings Certificate

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National Savings Certificate

National savings certificate is a special scheme designed to target the Government employees, Businessmen and other employees drawing a fixed monthly salary. National savings certificate can be bought by any individual or by two or more people jointly, or even by an adult of behalf of a minor.  National savings certificate can be bought from authorized post offices or the Head post offices by applying for the same in a form prescribed for the purpose. This application can be submitted either in person or through an authorized agent. There is no maximum limited set for the purchase of National savings certificate.

National Savings Certificate 300x155 National Savings Certificate

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Student Bank Accounts in India

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Student Bank Accounts in India

As a student, student bank accounts can be opened and maintained, regardless of whether you are a minor or not. If the student bank accounts holder is a minor then a guardian is required. There are different types of student bank accounts in India. Among the various types of student bank accounts, one has to choose wisely the type of account that suits ones needs. It is better to choose a tech savvy bank offering state of the art facilities for student bank accounts such as free net banking and other added facilities like free ATM/Debit card services etc.

student bank accounts Student Bank Accounts in India

For choosing from the various student bank accounts, one should take into account the totality of the bank’s services, the accounts and finally, the fees. Different banks have different student bank accounts with different features and different fees. When compared, it may be notices that the overdraft fees of some banks for student bank accounts may be lower while some may be high. Some of the student bank accounts account even waives all the fees if a minimum balance is maintained.

 

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Types of Bank Accounts in India

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Types of Bank Accounts in India

Types of Bank Accounts in India 300x214 Types of Bank Accounts in India

Since the start of banking in India back in the 18th century, the same has played a crucial role in the development of the Indian economy. Banks now offer different types of bank accounts to suit the varying needs of the people. Prior to opening up bank accounts, care should be taken to choose the right bank to suit ones needs. At the same time make sure the bank is reliable and trust worthy. This can be done by going through the performance of the banks with respect to their total deposits, total income, total expenditure, net profit and their number of branches both local and international.

These details are provided by the banks itself through the media.  Among the various types of Personal Bank Accounts that Banks offer, Savings Bank Accounts rank the most popular. Savings bank accounts encourage people to save money. These bank accounts offer up to an interest of 4%. In public sector banks, a minimum balance of Rs. 100 has to be maintained, however different banks follow different norms with regards to minimum balance. On a normal basis, if a checkbook is required then the minimum balance to be maintained is Rs. 500.

Another of the many Personal bank accounts is Fixed Deposit Bank Accounts. In a Fixed deposit bank account, certain money is invested for a certain period of time; the interest rate is fixed (depending on the maturity period) for the amount deposited. Next come Business Bank Accounts. The current account is the most popular among the business bank accounts. Such bank accounts have no limit on the number of transactions, as long as sufficient funds are available, however the banks pay no interest for the money in the current account.

Another type of business bank account is the cash credit account. Against the security of commodities, banks lend money to the cash credit bank account holder. The account holder also enjoys the privilege to withdraw a certain sum of money called the “limit” or “credit facility”. This is usually fixed on the basis of the percentage of the value of the commodities. As a standard rule, many banks require passport size photographs, proof of identity and reference from an existing bank account holder in the bank and the permanent account number card, aka, the PAN card.

The best ways to buy mutual funds online

| Filed under Economy

The best ways to buy mutual funds online

 

The days where Mutual fund investors seemed to be a pampered lot is gone now as times have changed. This is very much evident once you approach an agent for a mutual fund because most probably he might either offer you an excuse or an Ulip or both.

However unconceivable this might look like, this is the sad truth for the mutual fund industry. The scrapping of entry loads-the bread and butter for many advisers, is partly to be blamed. But since times have changed, there are better options even if you don’t have a dependable advisor. This is where the online route comes in thereby helping you to invest in mutual funds.

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