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Friday, August 17, 2012

Tax Free Incomes in India





While submitting your Income Tax returns you need not include the following incomes since they are are tax free in India.

1 Agriculture Income

Agriculture income is exempt under the Indian Income Tax Act. This means that income earned from agricultural operations is not taxed. Agriculture operation includes processing & sale of agricultural crops from agriculture land. Even rent received from agriculture land is not taxable.

2. Dividend Income

Any dividend received by investment in stocks or mutual funds is tax free in the hands of investors.

3. Saving Bank Interest incomeThe interest earned on Savings Bank accounts up to a limit of Rs. 10,000/- is exempt from inclusion in Gross Total Income for the purpose of Income Tax.

4. Income for being partner in firm

If you received any income for being partner of firm which has already been assessed, than this income share does not required inclusion for calculation of tax. This is called as profit sharing as per partnership deed.

5. Travel Concession or Assistance

Money received from employer as LTA for the purpose of travel to any place in India along with family for the purpose of leave is exempted from tax.
The amount exempt under this clause shall in no case exceed the amount of expenses actually incurred for the purpose of such travel. This claim can be made two times in bunch of 4 years.

6. Money received as Gift

If you receive gift amount less than 50,000 Rs/- from anyone it will be considered as tax free amount.
Another good thing is gifts received from specified relatives are exempt from Income Tax, and there is no upper limit also.

7. Rent Received

Any allowance received by employer to an employee to meet expenditure actually incurred on the payment of rent for accommodation is tax free. This is called as HRA this amount is taxable if house is owned by the employee or he has not incurred the rental.

8. Income from Long term Capital Gain

Any income arising from the transfer of a long-term capital asset, being an equity share in a company or a unit of an equity oriented fund are tax free in nature. These transactions are subject to securities transaction tax.

9. Income from Life insurance policyMaturity amount received as benefit from a life insurance policy, including bonus payment, is tax free.

10. Income from government securities

Any earnings from interest, premium on redemption or other payment on securities, bonds, annuity certificates, savings certificates and other instruments issued by the central government is tax free.

11. Scholarship money

Scholarships granted to meet the cost of education is tax free in nature.

12. Awards and RewardsAll payments receive in cash or kind as an award given by the central or state governments or by a body recognized by the central government is tax free.

13. Retrenchment


In unfortunate event of company closure compensation received by workman is considered as tax free.

14. Relief funds

Any amounts which are received by an individual as part of the Prime Minister’s National Relief Fund or students fund or foundation for communal harmony will be treated as tax free.

15. Retirement / Gratuity

Any gratuity received by persons covered under the Payment of Gratuity Act, 1972 shall be tax free subject to following limits


For every completed year of service or part thereof, gratuity shall be paid at the rate of fifteen days wages based on the rate of wages last drawn by the concerned employee.



16. Commutation of Pension

In case of employees of Central & State Govt., Local Authority, Defense Services and corporations established under Central or State Acts, the entire commuted value of pension is exempt.

In case of any other employee, if the employee receives gratuity, the commuted value of 1/3 of the pension is exempt, otherwise, the commuted value of ½ of the pension is exempt.

17. Leave Encashment

Any cash amount received as compensation for earned leave which is enchased at the time of retirement is tax free. This is applicable only to employees of central/state government.


In case of other employees, the exemption is to be limited to a maximum of 10 months of leave encashment, based on last 10 months average salary. This is further subject to a limit of Rs. 3,00,000/-.

18. Voluntary Retirement

Payment received by an employee at the time of voluntary retirement, or termination of service is exempt from the tax subject to extent of Rs. 5 Lakh.

But, the company paying the VRS should have a framework for VRS as prescribed by the government.

19. Provident Fund

Any payment received from a Statutory Provident Fund, (i.e. to which the Provident Fund Act, 1925 applies) is tax free.

20. Superannuation

Payment from an Approved Superannuation Fund will be tax free provided the payment is made at retirement, incapacitation or at death of employee.

(Source: http://www.staffcorner.com/view.html?id=195001 )

Monday, August 13, 2012

Basic Savings Bank Deposit Account


The central bank had introduced 'no-frills' accounts in 2005 to provide basic banking facilities to poor and promote financial inclusion**. The accounts could be maintained without or with very low minimum balance.

Reserve Bank of India as per  Circular dated 10.8.2012 asked banks to drop the 'no-frills' tag from the basic saving accounts as the nomenclature has become a stigma.

It has asked the banks to provide zero balance facility in the basic banking accounts along with ATM-cum-debit cards without any extra charge.


The details of the circular are given below:

1.Banks were advised in November 2005 to make available a basic banking 'no-frills' account either with 'nil' or very low minimum balance as well as charges that would make such accounts accessible to vast sections of population. 

With a view to doing away with the stigma associated with the nomenclature ‘no-frills’ account and making the basic banking facilities available in a more uniform manner across banking system, it has been decided to modify the guidelines on opening of basic banking ‘no-frills’ accounts. 

Accordingly, in supersession of instructions contained in circular DBOD.No.Leg.BC. 44/09.07.005/2005-06 dated November 11, 2005 on Financial Inclusion, banks are advised to offer a ‘Basic Savings Bank Deposit Account’ which will offer following minimum common facilities to all their customers:

i. The ‘Basic Savings Bank Deposit Account’ should be considered a normal banking service available to all.

ii. This account shall not have the requirement of any minimum balance.

iii. The services available in the account will include deposit and withdrawal of cash at bank branch as well as ATMs; receipt/credit of money through electronic payment channels or by means of deposit/collection of cheques drawn by Central/State Government agencies and departments;

iv. While there will be no limit on the number of deposits that can be made in a month, account holders will be allowed a maximum of four withdrawals in a month, including ATM withdrawals; and

v. Facility of ATM card or ATM-cum-Debit Card;

3. Banks would be free to evolve other requirements including pricing structure for additional value-added services beyond the stipulated basic minimum services on reasonable and transparent basis and applied in a non-discriminatory manner.

4. The ‘Basic Savings Bank Deposit Account’ would be subject to RBI instructions on Know Your Customer (KYC) / Anti-Money Laundering (AML) for opening of bank accounts issued from time to time. If such account is opened on the basis of simplified KYC norms, the account would additionally be treated as a ‘Small Account’ and would be subject to conditions stipulated for such accounts as indicated in paragraph 2.7 of Master Circular DBOD. AML. BC. No. 11/14.01.001/2012-13 dated July 02, 2012 on ‘KYC norms/AML standards/Combating of Financing of Terrorism (CFT) /Obligation of banks under PMLA, 2002’.

5. Holders of ‘Basic Savings Bank Deposit Account’ will not be eligible for opening any other savings bank deposit account in that bank. 

If a customer has any other existing savings bank deposit account in that bank, he/she will be required to close it within 30 days from the date of opening a ‘Basic Savings Bank Deposit Account’.

6. The existing basic banking ‘no-frills’ accounts should be converted to ‘Basic Savings Bank Deposit Account’ as per the instructions contained in para 1 above.


** Financial inclusion is the process of ensuring access to appropriate financial products and services needed by vulnerable groups such as weaker sections and low-income groups at an affordable cost in a fair and transparent manner by mainstream institutional players. 

Financial inclusion has become one of the most critical aspects in the context of inclusive growth and development.

Sunday, August 12, 2012

History of Olympic games and some interesting facts of the games-Part 2


 

In continuation of my posting on the above subject, I post below an interesting article about "Ancient Olympic Games" by Dr.Stephen Instone.This article was originally published by the British Broadcasting Corporation on 30-7-2004 . 

(Stephen Instone was an Honorary Research Fellow at University College London. He has written widely on Pindar and ancient Greek athletics, and was an advisor to the BBC TWO programme 'First Olympians'. )

                                The Ancient Greek Olympics 

Today's Olympic Games are based on what took place at Olympia, in Greece, nearly three millennia ago. What were the ancient Olympics like, and how different were they from those of modern times?

Origins

Traditionally it has always been said that the Games started at Olympia in 776 BC, about the time that Homer was born. But for several centuries before that date Olympia had been a cult site for the worship of Zeus, a numinous location away from human dwellings, overlooked by a hill, with the sacred River Alph flowing through it.

What was it that caused people to change from honouring Zeus solely with dedicatory offerings, to honouring him through athletics? Several factors seem to have been involved. One is the rise of the Greek polis, or city-state. 

As city-states in different locations grew, each wanted a means of asserting its supremacy, so would send representatives to Olympia to become supreme in physical competition.

The Games were an attractive means of getting men fit.

Connected with this is the development of military training. The Games were an attractive means of getting men fit. Another factor is the traditional Greek view that the gods championed a winner, so by establishing a competition aimed at producing supreme winners, they were thereby asserting the power and influence on humans of the supreme god, Zeus.

Earliest races

A winner being presented with tokens of victory   For the first 13 Olympics there was only one event, the stadion race , which was a running race up one length of the stadium. How long this race was is a matter for conjecture, as the ancient stadium, 192 meters long, visible at Olympia now, did not exist then.

In 724 BC a longer, there-and-back race, the diaulos, was introduced, followed four years later by the long-distance race, the dolichos, a race of perhaps 12 laps. 

The emphasis on running in the early years of the Olympics may reflect the perceived basic requirements for a fit soldier.
The emphasis on running in the early years of the Olympics may reflect the perceived basic requirements for a fit soldier.
Boxing, wrestling, and the pancration (the 'all-power' race, combining all types of physical attack) soon followed, along with the pentathlon, and horse-and-chariot racing. 

A race while wearing armour was introduced in 520 BC, and even a mule race (in 500 BC, but it was not generally popular). So the changing shape of the modern Olympic programme is not without precedent, though the ancient Greeks would perhaps have baulked at the sight of some of our modern 'sports'.

Religion and politics

Religion pervaded the ancient Olympics. Zeus was thought to look down on the competitors, favouring some and denying victory to others. 'You could spur on a man with natural talent to strive towards great glory with the help of the gods', says Pindar in a victory-ode. If an athlete was fined for cheating or bribery (human nature stays much the same over a few millennia), the money exacted was used to make a cult statue of Zeus.

A grand sacrifice of 100 oxen was made to Zeus during the Games, and Zeus the apomuios, or 'averter of flies', was invoked to keep the sacrificial meat fly-free. Olympia was home to one of Greece's great oracles, an oracle to Zeus, with an altar to him consisting of the bonfire-heap created by burnt sacrificial offerings. As the offerings were burnt, they were examined by a priest, who pronounced an oracle - an enigmatic and often ambiguous prediction of the future - according to his interpretation of what he saw. Athletes consulted the oracle to learn what their chances in the Games were.

The Greeks tried to keep some aspects of politics out of the Olympics, but their efforts met then, as such efforts do now, with limited success. The Olympic truce was meant to lead to a cessation of hostilities throughout Greece, to allow competitors to travel and participate safely, but it was not always observed.
A victorious athlete brought great honour to his home city.
The great historian of the Peloponnesian War, Thucydides, tells how in 420 BC the Spartans violated the truce by attacking a fort and dispatching hoplites, and they were therefore banned from the Games. But Lichas, a prominent Spartan, thought of a way round the ban - he entered the chariot race as a Boeotian. When his true nationality was discovered, however, he was given a public flogging at Olympia.

A victorious athlete brought great honour to his home city. The sixth-century Athenian statesman Solon promoted athletics by rewarding Athenian victors at the Games financially - an Olympic victor would receive 500 drachmae (for comparison, a sheep was worth one drachma). Thucydides represents the maverick Athenian leader Alcibiades as trying to drum up political support in 415 BC by boasting of his earlier successes in the Olympic Games.

And it is clear from the victory odes of Pindar and Bacchylides that the Sicilian tyrants in the fifth century aimed to strengthen their grip on affairs by competing in the equestrian events at the Games, and by commissioning famous poets to compose and publicly perform odes celebrating their victories.

Nakedness and women

'Sow naked, plough naked, harvest naked', the poet Hesiod (a contemporary of Homer) advises. He might have added 'compete in the Games naked', for that is usually understood to be the standard practice among the ancient Greeks. Some dispute this, for although the visual evidence for it - the painted decorations on vases - generally shows athletes performing naked, all sorts of other people (eg soldiers departing for war, which they would presumably have done clothed) are also shown unclad.

Also, some vases do show runners and boxers wearing loin-cloths, and Thucydides says that athletes stopped wearing such garments only shortly before his time. Another argument is that it must have been impractical to compete naked. On balance, however, it is generally thought probable that male athletes were naked when competing at the Games.
Women did not participate at the main Olympic festival.
Women did not participate at the main Olympic festival. They had their own Games, in honour of Hera, where the sole event was a run of five-sixths of the length of the stadium - which would have preserved in male opinion the inferior status of women. 

Whether women could even watch the festival is disputed.
Unmarried virgins, not soiled by sex or motherhood and thus maintaining the religious purity of the occasion, probably could. Festivals (and, for example, funerals) were among the limited occasions when women, especially virgins, orparthenoi, had a public role. 

At the Games unmarried girls, besides helping with the running of the festival, may have taken the opportunity to find a fit future husband.

As Pindar wrote, about a victor in the Greek colony of Cyrene -
'When they saw you many times victorious in the Games of Athene, each of the maidens was speechless as they prayed you might be her husband or son.'
Great athletes

Boxing contest  Milo of Croton, in southern Italy, would come high on anyone's list of greats. 

He was Olympic champion in the men's wrestling six times in the sixth century, besides winning once in the Olympic boy's wrestling, and gaining seven victories in the Pythian Games. 

He is said to have carried his own statue, or even a bull, into the Olympic arena, and to have performed party tricks such as holding a pomegranate without squashing it and getting people to prize open his hand - nobody could.
He was Olympic champion in the men's wrestling six times in the sixth century, ... and gaining seven victories in the Pythian Games.
Then there is Leonidas of Rhodes, who in the second century BC won all three running events at four consecutive Olympics. 

Another great Rhodian athlete was Diagoras, who in the fifth century BC won at all four of the major Games (Olympic, Pythian, Nemean and Isthmian). His three sons and two of his grandsons were also Olympic champions.

Superhuman heavyweights were regarded with special awe. Cleomedes, a fifth-century Olympic boxing champion, killed an opponent at the Olympics, was disqualified, went mad and smashed up a school. Not a recipe for special reverence, you might think. But the Greeks regularly explained abnormal feats and states of mind by saying that something divine, or a god, had entered whoever was affected in this way, and Cleomedes ended up receiving semi-divine honours as a hero.

Athletics fans and haters

Long-distance runner   Not all Greeks admired athletes. 'It isn't right to judge strength as better than good wisdom', writes Xenophanes (sixth to fifth century BC). Just because someone has won an Olympic victory, he says, they won't improve the city.

The tragedian Euripides expressed similar sentiments in his play Autolycus, now only surviving in fragments. In it he describes how athletes are slaves to their stomachs, but they can't look after themselves, and although they glisten like statues when in their prime, become like tattered old carpets in old age. 

Galen, physician and polymath of the first century AD, also attacked athletics as unnatural and excessive. He thought that athletes eat too much, sleep too much and put their bodies through too much.

But in the end the detractors of athletics lost out to the sympathisers. The person who most idealised the Olympics was Pindar, from Thebes, midway between Delphi and Athens. Pindar composed odes for victors at the Olympic and other Games in the fifth century BC, comparing their achievements to those of the great heroes of the past - such as Heracles or Achilles - thus raising them to an almost divine level.
Galen, physician and polymath of the first century AD, also attacked athletics as unnatural and excessive.
He thought that, though mortals, their superhuman feats of strength had temporarily elevated them to another realm and given them a taste of incomparable bliss. 'For the rest of his life the victor enjoys a honey-sweet calm' he writes.

For Pindar, the Olympics stood out among the Games -
'Water is best; gold like fire that is burning during the night is conspicuous outshining great wealth; but if, my heart, you desire song to celebrate the Games, look no further than the sun for another radiant star hotter in the empty day-time sky, nor let us proclaim a contest better than Olympia.'