 |
| July 14, 2017 |
| |
| |
Impact 
Do you get a preferential treatment at your bank branch? Probably if your account balance is attractive enough for the bank to pay you extra attention. ‘HNI’ (High-Net-worth Individual) is the buzzword in the banking industry. Banks appoint well-trained relationship managers to service HNIs; so that these customers feel esteemed and the bank can keep racking up a lot of profit by selling them more products.
Income-Tax (I-T) Department seems to have decided to take some lessons from this relationship building practice of private corporate entities. Central Board of Direct Taxes (CBDT) may soon start treating leading taxpayers as “preferred customers”.
The Department aims to broadly classify taxpayers into 3 categories:
- Preferred taxpayers
- Individual taxpayers with earnings upto Rs 10 lakh
- Another intermediate category between the two mentioned above
The priority taxpayers will receive the following special facilities:
- Such assessees will be able to schedule a one-to-one meeting with the concerned tax officials and resolve their concerns about their tax liabilities. With this, the tax jurisdictions will become less relevant in resolving tax disputes.
- In case the department wants to issue a tax notice to a preferred corporate taxpayer, first it has to get it inspected by an industry specialist.
- Smaller taxpayers will be protected against the active interference of the Department and will be encouraged to avail of the e-filing facilities.
However, all these changes will become a reality only if necessary amendments are made to the Income Tax Act. According to a tax official, these changes have already been discussed with the Prime Minister, and he was favourable for the proposed changes.
How will the Government benefit out of this?
There will be tax collected from top 20,000 assessees accounts for nearly 80% of overall direct tax collections. This makes it imperative for the Government to value large taxpayers. Similarly, to increase the tax collections, it is necessary for the Government to address all fears of the smaller taxpayers. Once the proposed changes are accepted and implemented, instances of tax litigations may drop drastically, resulting in a massive saving of costs and other resources.
Possible downsides
Unless the Government monitors the entire process meticulously, one-to-one discussions of the tax liability can possibly end up in ‘shady settlements’ among tax officials and preferred customers. Therefore, the emphasis should be to minimise the human intervention in the assessment process at all levels.
It’s heartening to see that the Tax Department has realised the need to change its perceived image among the masses. However, to achieve any success at the grassroots level, the tax officials first will have to stop treating assessees as tax evaders and offer them advice on how to become more compliant.
PersonalFN always encourages its readers to pay all tax dues in time and file returns before due date.
|
Impact
Can you say no to a deal that would be beneficial to you?
Irrespective of what you think, the Government now insists that you should say ‘no’ to subsidies if you can afford to.
Inspired by the success of the initiative taken by Petroleum Ministry which persuaded over 10.5 million families to give up cooking gas subsidies, the Railway Ministry is also planning to launch a similar initiative—‘Give-It-Up.’
Briefing the media about the new campaign, a railway official said, “The scheme will be launched soon. Passengers will have the option to forgo either 100 per cent of the subsidy or 50 per cent or to avail of the subsidy. It will be a voluntary decision.”
Indian Railways reportedly offer 43% subsidy per ticket, on an average. While on the local travels, subsidies run into 60% of the actual cost of the trip. This collectively makes Indian Railways foot a subsidy bill of nearly Rs 30,000 crore every year—which is huge considering the constraints on raising revenue of the Government.
The new campaign is in consensus with the findings of Bibek Debroy Committee Report, 2015 which offered solutions to curb the expenditure on subsidies. To bail out low passenger fares, Indian Railway, for years, has been imposing higher freights for moving goods. This has not only destabilised the finances of one of the world’s largest railroad operator, but has also increased the burden on roadways since businesses prefer road transport, which is comparatively cheaper. Conversely, railroads remain the most affordable medium for the movement of people.
If you were to travel between Mumbai and Pune or Pune and Bengaluru or Mumbai and Nagpur by road, you would end up paying more toll tax than what the Indian Railways charge you for the entire journey.
Considering this, it makes a lot more sense to launch this campaign at this juncture. However, it would be accelerated if the political class leads by example.
How many politicians can voluntarily give up their pensions? How many politicians will forgo the fat allowances they don’t need? Hopefully, politicians will stop this political racism.
To receive an overwhelming response to such emotional campaigns, the Government and the opposition has to show greater commitment towards these objectives.
|
Impact
Digitalisation has made it possible for banks to reach out to their customers living in the remotest areas. One of the consequences, however, is the rise of fraudulent incidences in banking services.
Misuse of credit/debit cards, ATM frauds, online frauds—all are offshoots of sea-level technological changes the Indian banking system has experienced over the last few years. Sadly, customers/investors have minimum bargaining power against banks to resolve and settle such issues. If your account gets debited for transactions that you didn’t perform, recovering the funds is difficult. So, when you try to reason with your bank in such cases, the bank can raise its hands and not be held responsible to resolve it —no matter how genuine your case is.
But, all is not lost. There’s some good news for banking customers…
On July 06, 2017, the RBI issued a circular limiting the liability of customers in unauthorised electronic banking transactions. So, now, if you are a victim of any type of bank fraud, banks will be unable to dictate terms in settling these issues.
To read more about this story and Personal FN’s views over it, please click here.
|
Impact
“Customer is king!”
This has been the age-old business mantra introduced to service and sales professionals to improve the customers’ experience. However, the concept of providing quality service has broadened and is no longer restricted to a one-time service experience. Rather, it is the practice to live upto the buyers’ expectations every single time.
Surrounded by offers, both online and offline, are you on a shopping spree this season?
With exuberance in the market, citizens are sighting 'acche din' and the story of consumerism is gathering steam. But with changing times, the shopping preferences of Indian consumers are changing rather rapidly. Until recently, people were fascinated with shopping at big malls. While footfalls are still seen at malls, the buzz has shifted to the convenience of online shopping.
To read more about this story and Personal FN’s views over it, please click here.
|
Impact
India enjoys a demographic advantage, but the irony is only about 3% of its working population pays income tax. Contrary to what tax collections tell us, there’s no dearth of money in India. The investment accounts of “poor Indians” speaks volumes. The records of property holdings and other assets are astonishing. In a country of 125 crore people, about 76 lakh draw an income of over Rs 5 lakh, as per the existing records. Interestingly, consumerism is in a full swing and India is one of the fastest growing markets for global airlines companies. Luxury carmakers have been reporting their highest-ever sales from India.
Are we a society of perpetual tax-evaders? Looks like it, doesn’t it? At least, the present Government feels so. Ever since it announced demonetisation, it’s been chasing perennial tax evaders with focused efforts. Lately, the Income-Tax (I-T) Department sent SMS’ to nearly 10,000 citizens who made huge investments ( bought properties worth more than Rs 50 lakh or invested Rs 10 lakh in mutual funds ), over the past two years but neither paid taxes nor filed returns.
To read more about this story and Personal FN’s views over it, please click here. |
If you think protesting to the banking ombudsman about the inconvenience caused during demonetisation, you are probably expecting a lot from the judiciary/financial system. The RBI recently clarified that demonetisation and issues associated with it are not grounds to lodge a complaint against banks. The RBI has released a list of 27 instances that can become grounds to lodge a complaint against banks.
|
How To e-File Your Income Tax Returns In Few Easy Steps…
How Equity Funds Can Help You Earn Better Returns And Save Tax
How To View And Read Form 26AS
|
Distressed Securities: "A financial instrument in a company that is near or is currently going through bankruptcy. This usually results from a company's inability to meet its financial obligations. As a result, these financial instruments have suffered a substantial reduction in value. Distressed securities can include common and preferred shares, bank debt, trade claims (goods owed) and corporate bonds."
|
Quote: “Risk is what's left over when you think you've thought of everything”- Carl Richards
|
| |
| © Quantum Information Services Pvt. Ltd. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of PersonalFN is strictly prohibited and shall be deemed to be copyright infringement.
Disclaimer: Quantum Information Services Pvt. Limited (PersonalFN) is not providing any investment advice through this service and, does not constitute or is not intended to constitute an offer to buy or sell, or a solicitation to an offer to buy or sell financial products, units or securities. All content and information is provided on an 'As Is' basis by PersonalFN. Information herein is believed to be reliable but PersonalFN does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. PersonalFN and its subsidiaries / affiliates / sponsors or employees, personnel, directors will not be responsible for any direct / indirect loss or liability incurred by the user as a consequence of him or any other person on his behalf taking any investment decisions based on the contents and information provided herein. This is not a specific advisory service to meet the requirements of a specific client. Use of this information is at the user's own risk. The user must make his own investment decisions based on his specific investment objective and financial position and using such independent advisors as he believes necessary. All intellectual property rights emerging from this newsletter are and shall remain with PersonalFN. This is for your personal use and you shall not resell, copy, or redistribute this newsletter or any part of it, or use it for any commercial purpose. The performance data quoted represents past performance and does not guarantee future results. As a condition to accessing PersonalFN's content and website, you agree to our Terms and Conditions of Use, available here.
Quantum Information Services Private Limited Regd. Office: 103, Regent Chambers, 1st Floor, Nariman Point, Mumbai - 400 021 Corp. Office: 16 Jolly Maker Chambers II, Nariman Point, Mumbai 400 021 . Email: info@personalfn.com Website: www.personalfn.com Tel.: 022 61361200 Fax.: 022 61361222 CIN: U65990MH1989PTC054667
SEBI-registered Investment Adviser. Registration No. INA000000680, SEBI (Investment Advisers) Regulation, 2013 |