MUMBAI: Home loans for HDFC borrowers have turned more expensive with the mortgage finance company revising its benchmark rates for the second time in less than four weeks. On Monday, the country's largest mortgage finance company said it was increasing its retail prime lending rate (RPLR) on housing loans by 25 basis points (bps). Last month, HDFC raised its RPLR by 25 bps to 15.25% following a 25 bps hike in key interest rates in the monetary policy. With this, the total increase in HDFCs RPLR this financial year, from April 2010 to date is 175 bps as compared to 175 bps to 200 bps rise in the banking and financial system, HDFC said in a statement. For new borrowers, HDFC has maintained the rate at 9.75%, 10% and 10.25% for loans up to Rs 30 lakh, Rs 30 to Rs 75 lakh and Rs 75 lakh. Bankers are divided on the outlook fo...

Have you put your money in stocks and/or mutual funds? The Budget often impacts the bottomlines of industries and companies and can make a difference to your investments. TOI commissioned CRISIL India's leading ratings, research, risk and policy advisory company to analyse how your market wealth could have been affected. Airlines: State of the Industry Domestic air traffic grew 18.6% year-on-year between April 2010 and January 2011, driven by strong demand from both business and leisure segments. During the period, average domestic passenger load factor was higher at 79.5% compared with 73.9% between April 2009 and January 2010. International passenger traffic at Indian airports grew 10.9% year-on-year between April 2010 and December 2010, driven by strong demand from leisure tourists. The industry's net sales increased 30.2% during April-December 2010, EBITDA (earnings before interest, tax, depreci...

NEW DELHI: In a big relief from cumbersome tax filing process for the salaried class, finance minister Pranab Mukherjee on Monday proposed to exempt them from filing tax returns unless they have other sources of income. The government will be issuing a notification exempting 'classes of persons' from the requirement of furnishing income tax returns, said the Memorandum to the Finance Bill 2011. The decision, which will come into effect from June 1, 2011, will reduce the compliance burden on small taxpayers, it added. Salaried taxpayers who do not have other sources of income and whose incomes are subject to Tax Deduction at Source ( TDS )) will be excluded from filing returns. "Therefore, in cases where there is no other source of income, filing of a return is duplication ...

MUMBAI: Housing Development Finance Corp , India's top mortgage lender, said on Monday it would raise its retail prime lending rate on housing loans by 25 basis points with effect from Tuesday. "This is in line with the rates of interest in the economy, which have hardened due to rising inflation and shrinking liquidity in the domestic market," the company said in a statement.

NEW DELHI: The government today proposed to increase the service tax on life insurance policies to 1.5 per cent from 1 per cent, a move that would increase the premium cost for policyholders. "It is being provided that tax shall be charged in the portion of the premium... the composition rate is also being increased from 1 per cent to 1.5 per cent," Finance Minister Pranab Mukherjee said in his 2011-12 Budget speech. "In case of traditional endowment plans, the service tax rate has been increased from 1.03 per cent to 1.545 per cent. Although the increase is marginal, there could be some increase in premium or returns might be lowered," Max New York Life Insurance CEO & Managing Director, Rajesh Sud said. In the traditional endowment life insurance products where it is not possible to segregate the mortality premium and the premium attributable ...

NEW DELHI: To reduce compliance burden of small taxpayers, Finance Minister Pranab Mukherjee proposed to introduce a new simplified income tax return form 'Sugam'. "I propose to introduce a new simplified return form 'Sugam' to reduce the compliance burden of small taxpayers who fall within the scope of presumptive taxation," Mukherjee said in his Budget speech. He also said the Income Tax Department will launch 58 more Aaykar Seva Kendra (ASK) or the Sevottam centre scheme for serving tax payers more efficiently. ASK is a pilot project initiated by the I-T Department to set up a one-stop service centre for enquiries. "The three pilot projects of Aaykar Seva Kendras (ASKs) under CBDT have come of age. CBDT will commission eight more such centres this year. In 2011-12, another fifty ASKs w...

NEW DELHI: The Union Budget stepped up plan allocation for the health sector by 20 per cent with a focus on health insurance , which Finance Minister Pranab Mukherjee announced would be extended now to unorganised sector workers in hazardous mining and associated industries. "The Rashtriya Swashthya Bima Yojana has emerged as an effective instrument for providing a basic health cover to poor and marginal workers. It is now being extended to MGNREGA beneficiaries, beedi workers and others," Mukherjee said in his budget speech today. He said that in the current year, the government proposed to further extend this scheme to cover unorganised sector workers in hazardous mining and associated industries like slate and slate pencil, dolomite mica and asbestos. The Finance Minister rescinded the service tax levied on health check up or treatment instead imposing...

NEW DELHI: Finance Minister Pranab Mukherjee on Monday proposed to enhance the income tax exemption limit to Rs 1.8 lakh (Rs 180,000 or $4,000) for the next financial year, from Rs 1.6 lakh now. He announced this while presenting the federal budget for the next fiscal. The minimum alternate tax levied on the corporate sector has, however, been increased to 18.5 percent from 18 percent and the surcharge has been lowered to 5 percent from 7.5 percent. Mukherjee also said he was proposing a very senior category of income tax payers, above the age of 80, for whom the tax exemption will be up to Rs 5 lakh. The qualifying age limit for senior citizens was being lowered to 60 years from 65 years.

MUMBAI: Will it stay or go off the investment radar? Retail investors may have the answer to this Rs 24,500 crore question once the Union Budget is presented on Monday. With equity-linked savings schemes (ELSS) not being included in tax exemption list in the direct taxes code (DTC), which is expected to come into force from April 2012, it could well be the end of the road for this popular investment category after the next financial year (2011-12). ELSS or tax-saver mutual funds (MFs) offer the twin benefit of high returns and tax saving to average investors. They are considered an ideal entry point for investors looking at equity-related instruments. Even after the recent market correction, the top 10 tax-saver MFs have given 10.9-16.6% annual returns over a five year period, much higher than the 8-8.5% returns offered by traditional tax-saving avenues such as bank FDs, PPF and NSC. "It is a good...

Rs 33,715 crore was the commission doled out by insurance companies in 2009 and 2010. The primary role of an investment adviser is to suggest the right mix of products to his clients. However, most advisers have been accused of selling the ones that earn a higher commission or fee. Should the advisers disclose their commissions before selling products as a measure of fair play? ET Wealth raises the question with a cross-section of experts. Srikanth Meenakshi Founder, fundsindia.com Yes The relationship between a ...

* They own two houses, but plan to buy a third one next year. * Almost 19% of total monthly income gets exhausted in paying insurance premium. * Concentrated stock portfolio with 92% of investment in one stock. Should Patris take fresh liabilities on the verge of retirement? It seems to be a poor trade-off: buying a new home as an investment in exchange for a comfortable retired life. This is what the Mumbai-based Patris appear to be doing when they are just eight years away from retirement. A bigger worrythey still havent started saving for it. The situation, however, is not as grave as it seems because the Patris are a double-income couple and have accumulated a fair amount of wealth. All they need to do is prioritise their goals and avoid superfluous investments. Aswani Kumar Patri, a 52-year-old finance manager, is married to Padma, a 50-year-old insurance ad...

NEW DELHI: The question papers of an all-India examination for posts of 375 assistant administrative officers in the Life Insurance Corporation of India ( LIC )) were leaked, police said Sunday. A youth, allegedly selling them for Rs.5 lakh each, was arrested. On the basis of a tip-off, police got hold of two sets of question papers for the morning and afternoon sessions of the exam which was held Sunday. They arrested Pawan Kumar, a geography graduate from Delhi University from Naraina area of west Delhi, police said. He sold the papers to four candidates who are being interrogated and are likely to be arrested soon. "We went to three centres in Delhi and one in Chandigarh and tallied the seized copies with the original question paper which were found to be the same," a police official said. ...

NEW DELHI: Finance Minister Pranab Mukherjee is likely to give tax concessions to the salaried class and offer incentives to farmers in his Budget 2011-12 on Monday to give relief from high prices and keeping an eye on elections in five states. It is widely expected that the Budget will raise the income tax exemption limit to Rs 1.80 lakh from the current Rs 1.60 lakh per annum. The Finance Ministry is already committed to raising the exemption limit to Rs 2 lakh per annum in the Direct Taxes Code (DTC) which is to be implemented from April 2012. Mukherjee may also consider raising the limit for investment in tax-free infrastructure bonds to give a boost to the fund-starved sector. Investments up to Rs 20,000 in infrastructure bonds enjoy tax exemption now. Experts said with fiscal deficit projected to come down sharpl...

NEW DELHI: Amid series of scams rocking the country, an extra cautious EPFO has send the tender document for appointment of funds managers to the Central Vigilance Commission (CVC) for vetting. The Employees Provident Fund Organisation (EPFO), which manages over Rs 3 lakh crore of retirement fund, will for the first time seek CVC's approval before floating bids for selecting fund managers for three years period beginning April 2011, sources said. The EPFO, according to sources, is being extra cautious in view of the discrepancies discovered in tendering process of state-owned organisations. Earlier, the EPFO in 2008 had appointed fund managers through the same process without obtaining any clearance from the CVC. It had appointed ICICI Pru, HSBC, Reliance Capital and SBI in July 2008 and their tenure will end in March this year. ...

NEW DELHI: Finance Minister Pranab Mukherjee is likely to give tax concessions to the salaried class and offer incentives to farmers in his Budget 2011-12 on Monday to give relief from high prices and keeping an eye on elections in five states. It is widely expected that the Budget will raise the income tax exemption limit to Rs 1.80 lakh from the current Rs 1.60 lakh per annum. The Finance Ministry is already committed to raising the exemption limit to Rs 2 lakh per annum in the Direct Taxes Code (DTC) which is to be implemented from April 2012. Mukherjee may also consider raising the limit for investment in tax-free infrastructure bonds to give a boost to the fund-starved sector. Investments up to Rs 20,000 in infrastructure bonds enjoy tax exemption now. Experts said with fiscal deficit projected to come down sharpl...

MUMBAI: The government is expected to come up with measures to promote alternative sources of infrastructure funding in the Union Budget since an increased dependence on banks has resulted in the banking industry being overexposed to the core sector. The Economic Survey released by the finance ministry on Friday said, Financing infrastructure would be a big challenge in the coming years and to meet the challenge some innovative ideas and new models of financing would be required. The budget expectations include an increase in deduction limits under Section 80C for infrastructure bonds and raising the disbursement target for IIFCL. Also, there has been a demand from banks to float infrastructure bonds with tax saving features. There is a possibility of an extension of the benefit under section 80CCF from Rs 20,000 to Rs 1,00,000. This can help improve financ...

MUMBAI: Life Insurance Corporation of India today launched 'Samridhi Plus' under its unit linked portfolio offering insurance protection, safety and growth. Samridhi Plus safeguards policyholders' investment from market fluctuations, LIC said in a statement here. Accident benefit option is also available under this plan that will be equal to the life cover up to a maximum of Rs 50 lakh, subject to certain conditions. The policy term for the plan is fixed for 10 years, it said. The minimum age at entry level for Samridhi Plus is 8 years while the maximum age is 65 years. The minimum premium ranges from Rs 1500 (monthly - ECS) to Rs 30,000 (single premium) depending on the mode of payment while the maximum is Rs 1 lakh per annum under any mode for the 5 year premium paying term.

NEW DELHI: The Economic Survey 2010-11 today said there will be different set of norms for life and non-life insurance companies for coming out with a public float. "It is proposed that the disclosure requirements for life and non-life companies would be separately mandated given the nature of their respective business," the Economic Survey tabled in the Parliament said. The Survey said that investors would be required to be made aware of the financial performance, company profile, financial position, risk exposure, corporate governance and management of these companies. "The IRDA is participating in the meetings of the Standing Committee on Disclosures and Accounting Issues (SCODA) set up by the SEBI to finalise the disclosure requirements for insurance companies in their prospectus documents," the Survey added. "Several insuran...

It is less than a week before the Union finance minister presents the Union Budget 2011 in Parliament. The economy is looking up with expected 8.5% growth in GDP. We have seen double-digit inflation during the current fiscal year resulting in measures to tighten the money market. Houseowners/occupiers (a section of aam aadmi) enjoy tax benefits on income from their properties. A re-look at some of them is essential in the current scenario. Interest on loan for self-occupied property House-owners enjoy tax exemption for one self-occupied house property. Interest paid on loan taken for acquiring/ renovating such property is also deducted from other income upto . 150,000 p.a. This limit was set in 2002. Cost of house properties have increased manifold. Interest rates on housing loans too are climbing upwards. Interest payout has gone up in real and percentage terms. Increasing the ...

NEW DELHI: The income tax department is in for a Rs 2,000 crore windfall from the custodian, which is working to recover the money lost during the securities scam of 1991-92 that was perpetrated by Big Bull Harshad Mehta. The decks were cleared by the Supreme court on Tuesday to recover and distribute the money among claimants when it refused to grant a stay against the ongoing distribution proceedings in the special court, which was set up to deal with all scam-related cases. In its judgment in 2010, the special court had granted permission to the custodian to treat the entire Harshad Mehta family as one group and consequently sell the residential apartments owned by family members of Harshad Mehta to meet the groups liabilities. The custodian had filed a proposal to pay Rs 2,000 crore of the Rs 2,250 crore collected by liquidating Mehtas assets to the tax department. The gr...

MUMBAI: MNC bank Morgan Stanley has debunked mutual fund industrys pet theory that entry load ban and the resultant lull in new fund offerings have impacted its profitability. The MF industry has become more stable post-entry load ban, according to a Morgan Stanley report said. The fund industry is gaining more stability since the Sebi ban on entry load on NFOs. This is obvious from the falling turnover in domestic MF flows, the report said. The report debates that counting out NFO subscription, net inflows into equity funds have been negative in 2004-08 an opinion that was also voiced by former Sebi chief CB Bhave. People like to combine the ban with inflows into the fund industry. This is just to confuse , as the ban on entry load has nothing to do with outflows , Bhave had said, brushing aside criticism that the ban has affected inflows into the industry . According to Bhave, whose tenure ...

NEW DELHI: The government's health insurance scheme for the poor may be extended to workers of non-coal mines and beedi factories , benefiting over 50 lakh people engaged in these sectors. The finance ministry has discussed the feasibility of this move with the labour ministry, the nodal ministry running the scheme, and could announce it in the budget next week, a government official said. " In fact, we would be very happy if it is done as these two occupations involve health hazards and workers would benefit extensively from the health cover," an official of the labour ministry said. The health insurance scheme, called Rashtriya Swasthya Bima Yojana, provides cashless medical treatment up to 30,000 every year to five members of all families below the poverty line. Smart cards are issued to facilitate treatment at empanelled government and priv...

NEW DELHI: Labour and Employment Minister Mallikarjun Kharge today exuded confidence that Finance Ministry is likely to approve by March-end the EPFO proposal to give 9.5 per cent interest on provident fund deposits for 2010-11. "The Ministry of Labour and Employment has forwarded the recommendation of CBT to the Ministry of Finance for approval... We are pursuing it...We will try our best so that we can get approval by March... We are hoping that Finance Minister may definitely give approval," Kharge told the Rajya Sabha during the question hour. He was replying to a question by CPI-M member R C Singh on the issue of interest rate on provident fund deposits. The Central Board of Trustees (CBT), the apex decision making body of Employees' Provident Fund Organisation (EPFO), has decided to give a hi...

NEW DELHI: The government may raise the income tax exemption limit in the upcoming Budget to provide some relief to the taxpayer from inflation, Goldman Sachs said today. "Income tax relief can be provided to lower income brackets to compensate for inflation. This could take the form of raising the tax exemption limit from the current Rs 1.6 lakh," it said in a report. Presently, income up to Rs 1,60,000 is exempted from tax for individuals. For women and senior citizens, the limit is Rs 1,90,000 and Rs 2,40,000, respectively. Inflation continues to be a concern for the common man as well as the government. While the food inflation had touched 18.32 per cent in December, 2010, before being moderated to over 11 per cent this month, the overall inflation still stood above eight per ce...

The insurance regulator may have stipulated that all health policies will be portable from July 1, but insurers may refuse to accept policies on the pretext of poor risk profile of individuals and upper age of entry especially for senior citizens. They may also ask for steep premiums in case they do not want to offer health cover to persons opting for transfer of cover from another company. Portability of health insurance refers to the ability to change companies keeping the cover intact while the risk profile of an individual refers to the probability of a person getting sick and making a claim. The poorer the risk profile, the higher the probability of claims arising from an individual and in such cases, premiums charged are higher. Age of entry, on the other hand, refers to the upper limit for an individual to buy a cover. Why would an insurer want to let his premium customers who have ha...

Last year, several customers of a private general insurer were up in arms against its decision to increase health premiums. They went to town crying themselves hoarse over the disproportionate hike, but many could not switch to another insurer. This was because they would have had to forgo critical continuity benefits. However, cases like these could become a thing of past once health insurance portability becomes a reality from July 1, provided it is implemented by insurers in its true spirit. More power to policyholders The key issue that prevents policyholders from insurer-hopping at will lies in the pre-existing disease (PED) cover offered by health insurers. In most cases, claims arising out of such pre-existing illnesses are reimbursed only after a waiting period of 3-4 years. A pre-existing disease is defined as any ailment or condition that the policyholder was suffering from, within 48 months prior to ...

NEW DELHI: The government may raise the income tax exemption limit in the upcoming Budget to provide some relief to the taxpayer from inflation, Goldman Sachs said today. "Income tax relief can be provided to lower income brackets to compensate for inflation. This could take the form of raising the tax exemption limit from the current Rs 1.6 lakh," it said in a report. Presently, income up to Rs 1,60,000 is exempted from tax for individuals. For women and senior citizens, the limit is Rs 1,90,000 and Rs 2,40,000, respectively. Inflation continues to be a concern for the common man as well as the government. While the food inflation had touched 18.32 per cent in December, 2010, before being moderated to over 11 per cent this month, the overall inflation still stood above eight per ce...

BELLARY (KARNA): The Income Tax department on Tuesday conducted raids at the premises of a mining company and two iron ore transporters in Hospet here. A 20-member team conducted searches on offices and residences of the mining company's proprietors, official sources said here. The team also raided two transport firms engaged in transporting iron ore in Hospet and seized several documents, the sources said.

India Infrastructure Finance Company ( IIFCL )) has come up with its first series of infrastructure bonds. You can invest upto 20,000 under infrastructure bonds to get tax benefits under section 80CCF. This is in addition to the 1 lakh limit available under Section 80C, 80CCC and Section 80CCD. THE PRODUCT There are two options here. You can opt for a 10-year bond or a 15-year bond. The face value of each bond is 1,000 and you need to subscribe to a minimum of five bonds and in multiples of one bond thereafter. You can even subscribe using a combination of 10-year and 15-year bonds. For example, you can apply for 10 bonds of 10-year period and 10 bonds of the 15-year period. While the coupon rate for the 10-year bond is 8.15%, the coupon rate for the 15-year bond is pegged slightly higher at 8.3% per annum. You could choose to receive interest on an annual...

Insurance regulator Irda plans to review a rule that mandates insurers to offer guaranteed maturity benefits on unit-linked pension plans to boost sales of these products. The regulator will unveil new guidelines on pension products offered by insurers in a fortnight and they will come into force from April 1 this year, said a senior Irda official. "The 4.5% guaranteed return attached to the pension plan is something that deters insurers from launching pension products. Very few companies have launched pension products after the new norms came into force last year. We therefore plan to frame guidelines for pension products, keeping in view the differences in risk appetite for investors," said Irda member-actuary R Kannan. Today, insurers are mandated to offer a 4.5% guaranteed return on pension products offered under the unit-linked platform. The regulator had reckoned that a guarant...

Our expert Vaibhav Sankla, Executive Director, Adroit guides you in matters relating to taxation. TAX ON SHORT-TERM CAPITAL GAINS I am a senior citizen. I have a pension income of Rs 1,90,000 and short-term capital gain (STCG) of Rs 53,000. Should I pay 15% tax for STCG of Rs 3,000 (Rs 1,90,000 + Rs 53,000- Rs 2,40,000) or on Rs 53,000. Jyoti Prakash Malik If you are a resident of India, income tax is payable on short-term capital gains of Rs 3,000. If you are a non-resident,then the basic exemption applicable will reduce to Rs 1,60,000 and income would then be payable on short-term capital gains of Rs 53,000 and pension income of Rs 30,000 (Rs ,90,000-Rs 1,60,000). TAX PAYABLE ON BROKING FEE I am a sub-agent of a fixed deposit broker. My commission income this ye...

Talk to any financial advisor about equity investing and he is bound to recommend systematic investment plans (SIPs) to you. This is because it is extremely difficult for a lay investor to decide when to enter or exit the market, as the market generally sways to a host of factors ranging from international to domestic or even politics. The biggest advantage of SIP is that it removes the element of timing, says Vineet Arora, head-product and distribution, ICICI Securities. You continue to invest small amounts over a long period of time, say, 5-10 years and you do not have to worry and the element of volatility is taken care of, says Sumeet Vaid, founder, Ffreedom Financial Planners. SIPs give you the benefit of compounding and averaging your investments, says Jimmy A Patel, CEO, Quantum Mutual Fund. In short, SIPs help you average your investments and remove the element of market timing. So whe...

MUMBAI: The Insurance Regulatory and Development Authority (Irda) will come out with guidelines for mergers and acquisitions for the industry over the next two-three months, while the IPO norms will be out in the next 15-20 days, a senior Irda official said today. "We have been examining the pros and cons of the mergers and acquisitions in the industry and we are sure to come out with the final guidelines within the next two to three months," Irda Member (Actuaries) R Kannan told reporters here, on the sidelines of an international conference on actuaries. When asked about the IPO norms for insurance companies, Kannan said, "they (the initial public offering guidelines) will be out within the next 15-20 days". Earlier this fiscal, the Anil Ambani group company Reliance General insurance had expressed its readiness to take over the Chennai-based Royal Sundaram All...

NEW DELHI: Seeking equal treatment in investment and taxation between overseas and resident Indians, diversified conglomerate Hinduja Group today said amnesty must be given to bring back black money from foreign soil to India. In a pre-budget memorandum to Finance Minister Pranab Mukherjee, Hinduja Group Chairman S P Hinduja said, "Overseas Indian investment and taxation (must) be at par with resident Indians in all respects." Hinduja, who is also Chairman of IndusInd International Federation, said NRIs having their wealth in Overseas Corporate Bodies (OCB) should be allowed to invest in India. "By lifting the ban on OCBs and simplifying the procedures for individual NRI investment, the market will be widened with more players," he said. On the issue of black money,...

A home loan helps you achieve peace of mind by providing you with one of the basic necessities of lifea roof over your head. But if you dont borrow right and are not aware of the financial and tax implications, a home loan can rob you of that very peace of mind. Ask Yatindra Salian. The Bangalore-based software professional learnt a hard lesson five years ago when he and his sister jointly applied for a home loan. No one was willing to give me a loan because the co-borrower was my sister. A big foreign bank initially agreed to lend Rs 31 lakh but later backed out, he says. The cancellation left the Salian siblings in the lurch because they had already booked the house as joint owners. With the payment deadline fast approaching, they were forced to settle for a lender who charged a very high rate of interest. This could have been avoided had they tied up the financing before applying for the property. ...

Financial planning is one of the most used and talked-about topics in today's world. Still many people are not aware what does it actually mean. For most of the investors, 'financial planning' still sounds as a jargon. So let's first understand what financial planning actually is: Meaning of Financial Planning: Financial planning is the most important way through which a person can allocate his current income to secure his future. Financial planning ensures that a person has the right amount of money at right time as and when financial need arises in future. It is a process that helps an investor find out various ways through which he can reach his defined & desired goals by gathering relevant information about his current financial status and adopting suitable strategies. Financial planning helps not only to meet future financial expenditure but also involves protection of self and...