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Tax changes - 2008-2009 vs 2009-2010

March 11th, 2010

This year there is an increase in the scope of Section 80E. Till 2008-2009, the interest paid on the education loan taken for  graduate and post graduate (PG) programs in engineering, medicine and management, or for PG programs in applied pure sciences (including mathematics and statistics) could be deducted from your taxable income. But from 2009-2010, this facility would be available for all types of courses including vocational studies.

Selling your property? Know your rights

March 11th, 2010

You should be ready to hand over all the paperwork related to the property to the buyer, whenever asked. But you are exempted from this rule under 2 circumstances: either you have clarified in the agreement with the buyer that you’ll retain a portion of the property or you have sold the property to various buyers, in which case, the buyer who has bought the property with the highest value can keep the papers. In the latter case, you can show the documents and handover true copies or extracts according to the demands from other buyers.

Does a step-up home loan make sense for you?

March 11th, 2010

The step-up scheme can be implemented in different stages. In certain instance there are 2 phases, one lower and other higher. In other cases, it is a gradual system. It can be carried out annually, after 5 years or at any time intervals. Some step-up schemes from certain banks offer fixed interest rate, but these loans are costlier than those with floating rate.

Selling inherited gold? Pay tax!

March 10th, 2010

To decide whether the gold is long or short term asset, find out how long have held it. If your holding period is over 36 months, it is considered as a long term asset, and accordingly long term capital gains (LTCG) tax rate is charged. If you have held it for less than 36 months, then they are considered as short term capital assets and you end up paying long term capital gains tax.

Earning a regular salary? Save tax the smart way!

March 10th, 2010

PPF, NSC, Post office accounts, insurance (except ULIPs) and FDs are safer, they offer lower returns and are not very liquid, due to their long lock-in period. On the other hand, ELSS (Equity Linked Savings Scheme) has a short lock-in period but is more risky, while ULIPs (Unit Linked Insurance Plan) carry the risk of ELSS but without the liquidity benefit. So while investing for tax saving purpose, take into account factors like your risk appetite, returns generated by the instrument, liquidity, capital appreciation and safety of capital.

Some smart ways to save and still have fun!

March 10th, 2010

Whether it’s to indulge your retail therapy fix, or the weekly list of grocery essentials, shopping is something you just can’t get away from, and therefore all the more important to guard against, especially if you’re looking to save.

Gift Tax – The new rules

March 10th, 2010

The gifts received in the names of one’s minor children will be clubbed with the parents’ income for taxation purpose. Also the taxman is very alert in saying that, in case of both parents having income, clubbing will be done with that parent who is earning more. So one cannot hide under the cover of their minor child(ren) receiving the gifts.

Public sector banks to obtain Rs. 35,000 crores from center

March 9th, 2010

Over the next 2 years, public sector banks will get Rs. 35,000 crores from Center. This measure has been taken in order to meet the credit needs of the economy.

According to the RBI norms, at least 6% Tier I capital must be kept by the banks. The planned capital infusion will let the banks keep an 8% Tier-I capital adequacy ratio (CAR).

IDBI bank offers perpetual bonds to raise capital of Rs. 3,00 crores

March 9th, 2010

IDBI Bank intends to raise Rs. 300 crore this month by issuing perpetual bonds. Mr. P Sitaram, chief financial officer, IDBI Bank said, “The amount raised will be to meet Tier-I capital requirement of the bank.”

A perpetual bond is a bond without a maturity or redemption time. The holder of this bond can earn coupons permanently. As there is no necessity of redeeming these bonds they are as good as equity instead of debt.

Visa, RBS, Global Payments shorlisted by SBI for POS

March 8th, 2010

State Bank of India (SBI) has shortlisted 3 applicants as prospective associates for a joint venture to install 5 lakh swipe machines for credit and debit cards throughout the country. These applicants are Visa, Royal Bank of Scotland (RBS) and Global Payments.

SBI has been looking to reach leadership position in electronic networks. SBI has more than 20,000 automated teller machines, and has long beaten ICICI Bank in ATMs.

New base rate to be made effective from 1st July

March 8th, 2010

Giving in to the banks’ demand, the Reserve Bank of India has delayed the date of implementation of the planned base rate system to 1st July and also removed 3 types of loans from the new model. This means the rates on old home loans will not change till 1st July.

Usha Thorat, RBI Deputy Governor said, “Yes. We have allowed that it (the base rate) will start from July 1. All concerns of banks (regarding the implementation of the base rate model) have been addressed.”

And the winner is - The 5 L income earner

March 8th, 2010

This piece will try to look at the numbers post budget 2010 and compare it with the tax laws prevailing in 2009-2010 to see which part of the Indian junta will laugh its way to the bank in 2010-11.

There have been countless discussions on how the budget is pro-middle-middle class (the repetition of middle is intentional to define a new creed- the people in the 4 lakh to 8 lakh taxable income). Let’s look at actual numbers to see how much you and me stand to save post budget 2010 vis-à-vis 2009-10.

Tax 2010-11: Should you invest in the infrastructure bonds?

March 8th, 2010

This article will try to look the pros and cons of investing in Infrastructure bonds for the sake of tax saving. The analysis will be from the perspective of the different “tax groups” post budget 2010. For the sake of parameters we will have to make an assumption on the lock-in period (as nothing has so far been announced by the Finance Minister). As is generally the case with most tax saving instruments we can assume two scenarios -  3 year lock-in and 5 year lock-in

The Budget - Promises kept and not…

March 8th, 2010

Reams of paper and millions of words are used to discuss the budget every year, but, by the time the next budget has come many of these experts are more involved about thinking of what should be done in the upcoming budget rather than what has been done that was promised in the last year.

Health insurance plans – new types for tax benefits!

March 8th, 2010

Health insurance plans get benefit under section 80D in the form of deduction from taxable income upto Rs.15,000/- for non-senior citizens and upto Rs.20,000/- if senior citizens are covered. But many a times for a normal household with parents under the age of 45 and 2 children, the premiums may not come upto the levels at which one can maximise the Section 80D benefits.

StanC’s Indian arm earns $1-b net profit

March 8th, 2010

The profit from Indian arm of Standard Chartered has exceeded the $1 billion mark for the 1st time. The profit before tax for the year 2009 went up by 19% to 1.06 billion from $891 million last year. Actually, the Indian arm of the emerging markets bank is turning out to be the biggest profit center for the bank.

ICICI Bank employees have a reason to cheer

March 8th, 2010

The year 2010 has brought a smile on the face of the ICICI bank employees as the bank is likely to offer bonuses to most of its 36,000 employees for the period 2009-10 by April.

The bank had not offered bonuses in 2008-09 due to the worldwide financial crisis. In this year, it is for the first time in the history of the bank, it saw a reduction in its annual profits.

Private banks increase car and home loan rates

March 8th, 2010

HDFC Bank, ICICI Bank and Kotak Mahindra have increased rates on home and auto loans, highlighting the hardening market that may cause RBI to hike interest rates to combat inflation.

These banks have increased lending rates by as high as 100 basis points, subsequent to the stiffening of the interest rate, despite RBI trying to keep the rates low to prevent disruption of economic growth.

ICICI Bank removes fixed rate home loan scheme

March 8th, 2010

In a clear indication of an increasing interest rate scenario, India’s biggest private sector bank, ICICI Bank said it has increased its car loan rates by up to 0.5% and removed its special home loan scheme offering loans at 8.25%.

SBI to increase the number of recruitments

March 8th, 2010

India’s biggest lender, State Bank of India intends to increase the staff recruitment in its branches throughout the country. The bank has hiked the target of recruiting 11,000 employees for its clerical post to 25,000 in order to deal with the retirements and the vacancies at its new branches.


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