CA Wife and CA husband

When I told my mom that I wanted a professional woman as my wife, she got
me one; a Chartered Accountant.She uses LIFO method while taking out the
refrigerated food.

She thinks I am no good at figure work. Fine with me, for now she handles
the budget of the house. Initially she used to send me a bill at the month
end, but when I told her that I am not her client but her husband, she
asks for the money in advance. The expenses had been rising steadily over
the months, so one day I snooped into the papers maintained in a current
file. No wonder! She was charging conveyance and overtime to the house
budget. She is crazy, I tell her but she corrects me. No my darling, I am
the auditor. I fail to see the light. Every scrap of the paper in our
house is filed. She tells me as per some Ordinance she must keep a copy of
every thing for at least ten years before destroying it. I am worried.

The other day we had an hour-long fight. Later, I got to know that she had
charged that hour to a client of hers, in the time sheet. My time was put
down as unoccupied. She says that she says that she loves me and I tell
her that I love her too. However, she never believes me. She says that
there is susceptibility of it being a misstatement. Duh! She wants my
representation on this! Last year our house accounts got a qualified
opinion I had not kept the supporting etc. of my purchases. Not a long
time back my brother's wedding was to be solemnized. Wedding cards had
been sent.

After some time I started receiving a steady trickle of letters. I was
puzzled until my wife was explained that external evidence was more
reliable. She had called for confirmations from all those to whom cards
were sent.

When she cooks, my wife at times does not go by recipe. Where the recipe
says add half-teaspoon vinegar, one tsp black salt or one teacup of water,
she ignores them. She says that they are not material when taken in
context of whole meal being prepared.

She is crazy, I tell you. Surprisingly everybody calls her an auditor,
instead. I checked the dictionary and it did not state that auditor is a
synonym for crazy.

The dictionary must be outdated. When we got married, she had given me an
Engagement Letter and I Had said how cute-how sweet.Now she gives it to me
every year saying that her standards state that it must be sent anew if
there is any indication that I have misunderstood the objective and scope
of engagement. Huh! Apart from sending me the engagement letter once again
she says I can't get rid off her just like that. She says that she has the
right of being heard before I appoint some one else. It seems I must keep
reading one local and another English newspaper published and circulated
in the vicinity of our house for more details. Phew! For a minute, I
thought that we had jeopardized our going concern status. Duh! Dare I say
so??

I am told by one of my female colleagues who is married to a CA that the
scenario is even worse when the guy is a CA.

Apparently he capitalized the wedding expenses as preliminary expenses and
is writing it off every year.Also the time he spent dating his wife before
marrying her is still under consideration for valuation under
AS-26...valuation of intangible assets.

So guys please think twice....should u really marry a CA? and yes please
discount it by the appropriate rate to arrive at the present value of the
risk of doing so !!!!!!

Year Ending requirments for Income-Tax assesse

The Income Tax department does not want too many papers as proof of investments made or expenses incurred. But it is always better to file them now.
So please rush! Here are ten things to do before March 31, 2008 or before the financial ends:
1. If you are claiming deduction for house rent allowance on account of actual rent paid, collect the rent receipts from the owner and keep them in your possession.

2. If you received any gifts during the year, please collect the gift deeds. The deeds should clearly state that you received the gift without any consideration.

3. In case you have changed employment during the financial year, you have to go back to your previous employer and collect the Form 16.

4. If you have donated to charitable trusts, obtain a receipt and also a certificate saying the trust is an approved one under Section 80G of the Income Tax Act, 1961.

5.Collect all your bank statements and TDS certificates, if any. This will help you calculate your earning from bank interest and deposit advance tax if required.

6. If you have a running home loan, you must collect the certificate of repayment of principal amount and the interest paid during the financial year from the bank.

7. If you are claiming an interest-paid deduction on an educational loan, get a certificate of repayment made in the financial year where the interest is stated separately.

8. Keep all receipts for contributions made to schemes listed under Section 80C, such as insurance payment, PPF, ELSS, and children's tuition fees.

9. In case you are claiming a deduction for any medical disability under Section 80U, do not forget to collect a certificate of disability from an authorised doctor.

10. If you are claiming deduction for payment of health insurance premium, you need to keep the premium receipt indicating that the premium was paid in cheque

Games time guys enjoy it

Blog Games

STATE OF INDIAN ECONOMY [INFLATION]

Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair." -- Sam Ewing.
Inflation has hit a ten-month high of close to 6 per cent in India, breaching the Reserve Bank of India's target of 5 per cent. The Wholesale Price-based Index rose to 5.92 per cent for the week ended March 8 from 5.11 per cent in the previous week as food products turned expensive in line with the global trend.

Everyone is facing the brunt of rising prices. Prices of all essential commodities are rising not just in India but across the world due to a fall in supply. Inflation has spiralled all over the world. With India importing food items, it is only adding more woes to the people.

The Indian economy is also facing a slowdown. The markets have also shed huge gains -- March 25 was a sort on aanomaly -- taking a cue from global meltdown. Industrial production has slowed down, further decelerating the economy.

PAN CARD QUERIES SOLVED [APPLY NOW]

1. What Is PAN?
Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department.
A typical PAN is AABPS1205E.
{Section 139A(7) Expln (b) and (c)}

2. Why Is It Necessary To Have PAN?
It is mandatory to quote PAN on return of income, all correspondence with any income tax authority. From 1 January 2005 it will be mandatory to quote PAN on challans for any payments due to Income Tax Department.
{Section 139A (5) (a) and (b)}

It is also compulsory to quote PAN in all documents pertaining to financial transactions notified from time-to-time by the Central Board of Direct Taxes. Some such transactions are sale and purchase of immovable property or motor vehicle or payments in cash, of amounts exceeding Rs. 25,000/-to hotels and restaurants or in connection with travel to any foreign country. It is also mandatory to mention PAN for obtaining a telephone or cellular telephone connection. Likewise, PAN has to be mentioned for making a time deposit exceeding Rs. 50,000/- with a Bank or Post Office or depositing cash of Rs. 50,000/- or more in a Bank.
{Section 139A (5) (c) read with Rule 114B}

3. How does Income Tax Department ensure that PAN is quoted on transactions mentioned above?
It is statutory responsibility of a person receiving document relating to economic or financial transactions notified by the CBDT to ensure that PAN has been duly quoted in the document.
{Section139A (6)}

4. Is it compulsory to quote PAN on return of income?
Yes, it is compulsory to quote PAN on return of income.

5. How will these authorities verify PAN?
A facility for verifying PAN is available on the website of the Income Tax department.

6. Who must have a PAN?
i. All existing assesses or taxpayers or persons who are required to furnish a return of income, even on behalf of others, must obtain PAN.
{Section 139A (1) and (1A)}
ii. Any person, who intends to enter into financial transaction where quoting PAN is mandatory, must also obtain PAN.
{ Section 139A (5) (c) read with Rule 114B}
iii. The Assessing Officer may allot PAN to any person either on his own or on a specific request from such person.
{Section 139A (2) and (3)}

7. Can a person obtain or use more than one PAN?
Obtaining or possessing more than one PAN is against the law.
{Section 139A (7)}

8. Where to apply for PAN?
In order to improve PAN related services, the Income Tax department has authorized UTI Investor Services Ltd (UTIISL) to set up and manage IT PAN Service Centers in all cities or towns where there is an Income Tax office and National Securities Depository Limited (NSDL) to dispense PAN services from TIN Facilitation Centers. For convenience of PAN applicants in big cities, UTIISL has set up more than one IT PAN Service Center and likewise there are more than one TIN Facilitation Centers.

9. How to apply for a PAN? Can an application for PAN be made on plain paper?
PAN application should be made only on Form 49A. A PAN application (Form 49A) can be downloaded from the website of Income Tax department or UTIISL or NSDL
(www.utiisl.co.in, www.incometaxindia.gov.in, www.tin.nsdl.com) or printed by local printers or photocopied (on A4 size 70 GSM paper) or obtained from any other source. The form is also available at IT PAN Service centers and TIN Facilitation centers.

10. Can an application for PAN be made in Form 49A obtained from anywhere?
Yes, PAN application may be made on Form 49A obtained from any source other than IT PAN Service Centers or TIN Facilitation Centers. For instance, a PAN application may be made on form downloaded from the website of Income Tax department or UTIISL or NSDL; or on form printed by local printers or a photocopy of downloaded or printed form.

11. Can an application for PAN be made through Internet?
Yes, application for fresh allotment of PAN can be made through Internet. Further, requests for changes or correction in PAN data or request for new PAN card (for an existing PAN) may also be made through Internet. For more details visit (www.tin-nsdl.com)

12. How do I get a PAN allotted quickly (TATKAL)?
If an application for allotment of PAN is submitted through Internet and payment made through a 'nominated' credit card, the PAN is allotted on priority and communicated through email.

13. How to find an IT PAN Service Center or TIN Facilitation Center?
Location of IT PAN Service Centers or TIN Facilitation Centers in any city may be obtained from local Income Tax Office or any office of UTI/UTIISL or NSDL in that city or from websites of the Income Tax department
www.incometaxindia.gov.in or UTIISL (www.utiisl.co.in) or NSDL (http://www.tin.nsdl.com)

14. What services are provided by these IT PAN Service Centers or TIN Facilitation Centers?
IT PAN Service Centers or TIN Facilitation Centers will supply PAN application forms (Form 49A) and forms for 'Request For New PAN Card Or/ And Changes In PAN Data', assist the applicant in filling up the form, collect filled form and issue acknowledgement slip. After obtaining PAN from the Income Tax department, UTIISL or NSDL as the case may be, will print the PAN card and deliver it to the applicant.

15. What if I submit incomplete Form 49A?
IT PAN Service Centers or TIN Facilitation Centers shall not receive any incomplete and deficient PAN application. However, these centers will assist applicants to correctly fill up form 49A or 'Request For New PAN Card Or/ And Changes In PAN Data', as the case may be.

16. What documents and information have to be submitted along with the application for Form 49A?
a. a. Individual applicants will have to affix one recent, coloured photograph (Stamp Size: 3.5 cms x 2.5 cms) on Form 49A;
b. b. Any one document listed in Rule 114 must be supplied as proof of 'Identity' and 'Address'; and
c. c. Designation and code of the concerned Assessing Officer of Income Tax department will have to be mentioned in Form 49A.

17. Which documents will serve as proof of 'Identity' in case of Individual applicants, including minors and HUF applicants?
Copy of school leaving certificate or matriculation certificate or degree of a recognized educational institution or depository account or credit card or bank account or water bill or ration card or property tax assessment order or passport or voter identity card or driving license or certificate of identity signed by a MP or an MLA or a Municipal Councilor or a Gazetted Officer;

In case the PAN applicant is a minor, any of above documents of any of the parents or guardian of such minor shall serve as proof of Identity;

In case PAN application is made on behalf of a HUF, any of above documents in respect of Karta of the HUF will serve as proof of Identity.

18. What is proof of 'Address' for Individual applicants, including minors and HUF applicants?
Copy of electricity bill or telephone bill or depository account or credit card or bank account or ration card or employer certificate or passport or voter identity card or property tax assessment order or driving license or rent receipt or certificate of address signed by a MP/ MLA/Municipal Councilor / a Gazetted Officer;

In case the PAN applicant is a minor, any of above documents of any of the parents or guardian of such minor shall serve as proof of Address;

In case PAN application is made on behalf of a HUF, any of above documents in respect of Karta of the HUF

19. What documents will serve as proof of Identity and Address for other applicants?
Copy of Certificate of Registration issued by the Registrar of Companies or Copy of Certificate of Registration issued by the Registrar of Firms or Copy of Partnership Deed or Copy of Trust deed or Copy of Certificate of Registration Number issued by Charity Commissioner or Copy of Agreement or Copy of Certificate of Registration Number issued by Charity Commissioner or Registrar of Co-operative Society or any other Competent Authority or any other document originating from any Central or State Government Department establishing Identity and Address of such person.

20. How to find 'Assessing Officer code'?
Assessing Officer code may be obtained from Income Tax Office where you submit your return of income. Applicants who have never filed return of income may find out Assessing Officer code with the help of IT PAN Service Center or TIN Facilitation Center or jurisdictional Income Tax Office.

21. Is a photograph compulsory for making an application for PAN?
A photograph is compulsory only in case of 'Individual' applicants.

22. What is the procedure for applicants who cannot sign?
In such cases, Left Hand Thumb impression of the applicant should be affixed on Form 49A or 'Request For New PAN Card Or/ And Changes In PAN Data' at the place meant for signatures and got attested by a Magistrate or a Notary Public or a Gazetted Officer, under official seal and stamp.

23. Is father's name compulsory for female (including married/divorced/widow) applicants?
Only father's name is required to be filled in the PAN application (Form 49A). Female applicants, irrespective of marital status, should write only father's name in the PAN application

24. Is it compulsory to mention telephone numbers on Form 49A?
Telephone number is not compulsory, but if provided it may help in faster communication.

25. Who can apply on behalf of non-resident, minor, lunatic, idiot, and court of wards?
Section 160 of IT Act, 1961 provides that a non-resident, a minor, lunatic, idiot, and court of wards and such other persons may be represented through a Representative Assessee. In such cases, application for PAN will be made by the Representative Assessee.

26. I had applied to the department but I do not know my PAN?
Please contact the Aaykar Sampark Kendra (ASK) at 0124-2438000 (or 95124-2438000 from NCR) or visit thewww.incometaxindia.gov.in and go to 'know your PAN'.

27. Are there any charges to be paid at IT PAN Service Centers or TIN Facilitation Centers?
UTIISL and NSDL have been authorized to collect Rs.60 + Service Tax as applicable, per PAN application and this includes cost of a tamper proof PAN card. This amount will have to be paid in cash at IT PAN Service Center or the TIN Facilitation Center.

28. Do you need to apply for a PAN when you move or transfer from one city to another?
Permanent Account Number (PAN), as the name suggests, is a permanent number and does not change during lifetime of PAN holder. Changing the address or city, though, may change the Assessing Officer. Such changes must, therefore, be intimated to nearest IT PAN Service Center or TIN Facilitation Center for required correction in PAN databases of the Income Tax department. These requests will have to be made in a form for 'Request For New PAN Card Or/ And Changes In PAN Data'

29. I had applied to UTITSL/ NSDL a month ago but I have not received my PAN card and I have to file my return of income.
Please contact Aaykar Sampark Kendra (0124-2438000 or 95124-2438000 from NCR) orwww.incometaxindia.gov.in or send an email to pan@incometaxindia.gov.in.

30. Will the existing PAN cards issued by the Department remain valid?
All PAN allotted and PAN card issued by the Department will remain valid. All persons who have been allotted a PAN need not apply again.

31. Income Tax Department has issued me a PAN card; can I obtain a new tamper proof PAN card?
For obtaining the tamper proof PAN card an application will have to be made in the form for 'Request For New PAN Card Or/ And Changes In PAN Data' to IT PAN Service Center or TIN Facilitation Center, in which existing PAN will have to be indicated and old PAN card surrendered. The payment of Rs.60 + Service Tax as applicable, will also have to be made.

32. I had applied for PAN and received PAN number but have not received the PAN Card?
Apply in the form for 'Request For New PAN Card Or/ And Changes In PAN Data' at any IT PAN Service Center or TIN Facilitation Center quoting the PAN allotted to you.

33. How will the new PAN card be delivered to me?
The UTIISL or NSDL, as the case may be, will ensure delivery of new PAN card at the address indicated by you in the PAN application form or form for 'Request For New PAN Card Or/ And Changes In PAN Data'

34. I want to pay taxes today but I do not have a PAN?
It takes about 15 days to get a new PAN allotted. However, PAN can be obtained in around 5 days if application is made through Internet and processing fee paid through credit card. It is advisable to initiate action for obtaining PAN will in time.

35. Who should be contacted for inquiries regarding PAN applications?
All such inquiries should be addressed to:
For UTIISL For NSDL
The Vice PresidentIT PAN Processing Centre,UTI Investor Services Ltd Plot No. 3, Sector - 11CBD_ Belapur Navi Mumbai-400 614 e-mail.- utiisl-gsd@mail.utiisl.co.in Tel No. 022-27561690 Fax No. 022-27561706 The Vice President Income Tax PAN Services Unit, NSDL4th Floor, Trade World, A WingKamala Mills Compound,S. B. Marg, Lower Parel,Mumbai-400 013 e-mail.- tininfo@nsdl.co.in Tel No. 022-2499 4650 Fax No. 022-2495 0664
Coupon number or Acknowledgement number, as the case may be, should be mentioned in all communications.

Tips on how to invest safely

After almost over four years of good times, the Indian economy is looking at a slowdown. Industrial production is already down and the stock market mayhem in the last two months is reflecting that the global scenario continues to be grim. In such a situation, investors find themselves in a situation where they are unable to decide where to invest.

Safe havens

Some part of your portfolio should always include safe instruments. However, for starters, it should be said that there is nothing that can be called 'safe' at all times, except maybe government-backed instruments.

For instance, investing in gold can be a considered safe when there is a crisis of confidence in the equity markets. At other times, commodities like silver or metals might also fall in this category.

With the rise in investment opportunities, the scope for the investor has also increased in the recent years. Traditional routes that provide assured returns is also a way to achieve safety. Instruments like bank fixed deposits and post office savings could be a primary source to achieve this objective.

The idea is to have some money in instruments that are less likely to be affected by the prevailing crisis all around. Remember that safe havens can be spread across different asset classes and they are dependent on the current market conditions.

Cover against recession

There are several sectors where the impact of an overall slowdown might be negligible. This is because of the fact that there will always be some demand for those goods and services. Hence, it is unlikely that there would a sharp change in the consumption pattern of these items.

Take for instance, companies involved in the making of food items. No matter what happens to the economy, these companies will continue to do okays. In many cases, people may switch from expensive options to cheaper ones but consumption per se will not be too badly impacted.

So such industries are likely to recession-proof. Another very good example of this is children's items where parents are unwilling to cut spending even when the times get tough. Several of the basic requirements will also witness strength in their demand and this can mean good times for listed companies who are into such areas.

It's important for one to choose properly from such options and invest in them, directly through stocks or mutual funds. Others like art and specific collections are also examples whose value may not get eroded in recessionary times because they are not related to the markets. This is one of the methods that can be used to ensure that your investment basket has an element of safety.

Growth areas

The other way in which one can deal with investments, especially those that are related to the equity side, is to move towards areas that are growing in spite of the situation.

If there is going to be a growth in that particular area then there is a good chance that the valuations and other parameters of such sectors will continue to remain strong.

Sectors like infrastructure financing or telecom related areas are good examples of sectors, which may not be too badly impacted, in this mayhem.

This does not guarantee that there will not be a fall in the value because when it comes to equities there is nothing that an investor can do to stop a fall along with the market as a whole. In case of equities, that are related to growth sectors, it is more likely that when there is a fall the recovery can also be quick if the growth continues.

There are exceptions to this situation especially when the valuations are already too high so that a fall is actually bringing them safer valuations.

However, targeting growth areas will also ensure that the individual is able to get good value for the investment where things improve. That is, having positions in stocks with strong fundamentals will ensure that there is wealth creation for the investors.

6th Pay Commission for govt staff

The Sixth Pay Commission on Monday submitted its report to the government presumably recommending a 40 per cent hike in salary for the central government employees. The commission, headed by Justice B N Srikrishna, submitted its report to Finance Minister P Chidambaram on Monday morning.

The recommendations of the commission, when accepted, would provide a bonanza to over 4.5 million central government employees. The commission was set up by government in 2006.

The government has decided to merge 50 per cent of the Dearness Allowance (DA) in the basic pay of its employees and the recommendation would have an impact of substantial increase in salary.

Although the finance minister had not provided for any specific allocation for the salary hike in the budget, he had stated that there was enough head-room.

Earlier, a secretary-level official of the central government said recent reports about the expected increase in salaries were a bit over the top.

"A senior secretary gets Rs 52,000 as monthly salary. I do not expect it to go up to more than Rs 60,000. Salaries of top officials will not be more than that of governors," the official said.

Earlier this year, the Union Cabinet decided to double the salary of the President to Rs 1 lakh (Rs 100,000) a month, even as the Vice-President's salary was raised from Rs 40,000 to Rs 85,000 and that of Governors' from Rs 36,000 to Rs 75,000 a month.

The hike, which is with retrospective effect from January 2006, was necessitated by the fact that members of Parliament were drawing Rs 68,000, more than the Vice-President, who is the Chairman of the Rajya Sabha.

Going by this order of precedent, the country's highest ranking bureaucrat -- the Cabinet Secretary -- cannot be paid more than Rs 75,000.

The financial impact of the Sixth Pay Commission award has been estimated to be within 0.4 per cent of Gross Domestic Product (GDP), similar to the Fifth Pay Commission award of 1996. Given that the Budget has projected GDP at Rs 5,303,770 crore (Rs 53,037.70 billion) in 2008-09, the impact of the award may well be Rs 21,215 crore (Rs 212.15 billion).

Add Gold in your portfolio

Now that the dizzying Sensex is not blinding us anymore, we can look at introducing a third investment vehicle that reduces risk and provides stability to our portfolio: gold!.

Should I buy gold now?

Yes. For three reasons.

Get diversification advantage. Anytime is a good time to buy gold if the aim is an efficient portfolio.

A portfolio is efficient if it contains assets (like stocks, bonds, real estate and gold) that do not move up or down together. The aim of adding products to a portfolio is to bring the overall risk down by diversifying across assets.

The addition of gold, for example, to a portfolio will help move it to a higher level of portfolio return for the same risk or to the same return for a lower risk. Gold in a portfolio adds to liquidity, especially in distressed financial systems, acts as a hedge against inflation and is a solid store of long-term value.

These are enough compulsions for every portfolio to own gold, irrespective of timing.

Exploit 'recency' bias. Two, timing. But why are we saying this now? Behavioural finance has identified what it calls a 'recency' bias, or the propensity of people to invest in a thing that has been in the news.

Since the rush of gold-related news in the last month could not have escaped your attention, here is a good time to catch this bias and introduce the metal into your portfolio.

Why Oil is at its all time High

Oil at a record high
A global energy crisis looms large, with crude oil prices hovering over the $111.80-per-barrel mark, which it hit on March 17. It later fell to $105.11. With international crude oil prices shooting through the roof, the basket of crude oil that Indian refiners buy too recorded a record high of $101.2 per barrel.

On the backdrop of a global meltdown, the rise of oil prices is a cause for concern. The spiraling oil prices will derail a booming economy if not checked.

So why are oil prices soaring like crazy? Will there be some respite in the near future? The answers are disturbing. . .

The fall in the dollar rates is just one of the factors that has led to this astronomical rise in oil prices. A weaker American currency tends to increase the demand for dollar-denominated oil as it becomes cheaper for buyers using stronger currencies.

Oil prices are also heading higher because investors are seeking a safe investment for their cash amid fears of rising inflation and a US recession.

Property prices may fall by 25% by year end

Experts say property prices could fall by 20-25 per cent in the next 6-8 months if the volatility in the stock market continues.

The bearish trend on Dalal Street has started affecting real estate prices in metros like Mumbai and Delhi. “Property prices had reached unrealistic levels, and the market boom was a major driver. I expect prices to fall by 25 per cent due to the crash.

Basis. In 1994, when the Sensex touched a high of 4,634.85 points, real estate prices shot up. But three years later, the market entered a bearish phase, and the realty sector took a hit. “When the Sensex was down in 1997, realty prices dropped. “Stock and realty markets are interlinked.”

Realty prices started rising as the Sensex began rising in 2003. Prices have since gone up almost 300%, .

There are other indicators too. Stocks of realty companies have fallen 25-35% in the past month, as the Sensex shed 18%.

The share price of realty major DLF has dropped to Rs 602 from Rs 1,225 two months ago. Companies like Omaxe, Puravankara and Kolte Patil Developers, who recently entered the market through IPOs, are trading below offer prices.

Some experts say the market meltdown is only one of many factors in determining realty prices. The 15-20% correction that is happening is more because of lack of demand and oversupply.

As stocks plummet, speculators who drive real estate rates are likely to stop investing in property. “Lesser demand will trigger a correction. But some are putting up a brave front that buyers are not stock market players. The impact, if any, may be felt after three months.”

Why you should buy gold now

They say that a crisis shows you the faces of your real friends. A financial crisis is no different - it shows you the basic nature of each product in your portfolio.

With the 30-plus per cent returns we got in the last few years, we assumed immunity to the inherent short-term risk that the product called equity carries. Now that the world battles the latest financial crisis and Indian stocks are off by almost a quarter, it is a great time to rebuild your portfolio in case you were using just equity (in the form of equity funds or direct stocks) and debt (in the form of your Employees Provident Fund, Public Provident Fund and fixed deposits) in it.

Now that the dizzying Sensex is not blinding us anymore, we can look at introducing a third investment vehicle that reduces risk and provides stability to our portfolio.

The stability comes from it being a great hedge against inflation -- it may not give returns like equity can, but will keep the money's head over the inflation trend line (see Market Record).

Market Record
Return* (%)
Gold is the perfect vehicle for inflation-
adjusted conservative returns
Sensex 23.05
Gold 12.69
FDs 9.35
Inflation 5.24
* Average return per year from 1995 to 2008




And to make the deal sweeter, this product is on steroids currently and is up 40 per cent from last year. Ladies and gentlemen, introducing the contents of the cloth bundle at the back of your Godrej safe, or of the box in the bank locker, on your fingers and around your neck: the not-so-humble rock star: Gold.

The 10 biggest falls of the Sensex

The Bombay Stock Exchange benchmark Sensex sank by 951 points on black Monday on panic selling by funds, triggered by weak global cues. Similarly, the wide-based National Stock Exchange's index Nifty dropped by 243 points to 4,503.
The government meanwhile said that Indian stock markets are taking cues from the United States and Asian markets, even though the sub-prime mortgage crisis has only moderately impacted the credit and financial flows into the country.
The 10 largest falls of the Sensex

1. Jan 21, 2008 --- - 1,408.35 points
2. Mar 17, 2008 --- - 951.03 points
3. Mar 3, 2008 ---- - 900.84 points
4. Jan 22, 2008 --- - 875.41 points
5. Feb 11, 2008 --- - 833.98 points
6. May 18, 2006 --- - 826.38 points
7. Mar 13, 2008 --- - 770.63 points
8. Dec 17, 2007 --- - 769.48 points
9. Oct 17, 2007 --- - 717.43 points
10. Jan 18, 2007 --- -687.82 points

Highlights of Union Budget 2008-09

Following are the highlights:
Changes in I-T slab. Threshold of exemption for all Income Tax assesses raised from from Rs 1,10,000 to Rs 1,50,000.
Every income tax assessees to get relief of minimum of Rs 4,000.
No change in rate of surcharge.
New tax slabs will be: 10 per cent for Rs 150,000 to Rs 300,000, 20 per cent for Rs 300,000 to Rs 500,000 and 30 per cent above Rs 500,000.
For women, the income tax limit goes up from Rs 1.45 lakh to Rs 1.80 lakh. In case of senior women citizens, it increases from Rs 1.95 lakh to Rs 2.25 lakh.
Fresh facilities, encouragement to sports and guest houses exempted from Fringe Benefit Tax.
Five year tax holiday for setting up hospitals in tier II and tier III regions for providing healthcare in rural areas from April 1, 2008.
Five year tax holiday for promoting cultural tourism.
Short-term capital gains increases to 15 per cent.
Commodities Transaction Tax to be introduced on the lines of Securities Transaction Tax.
Banking cash transaction tax withdrawn from April one, 2009.
Direct tax proposals to be revenue neutral. Indirect tax proposals to result in loss of Rs 5,000 crore.
Rs 500 crore for corpus fund to subsidise all women Self Help Groups for LIC cover for permanent disability.
Agricultural loans given by scheduled commercial banks, regional rural banks and cooperative credit institutions up to March 31, 2007 and due for December 31 that year will be covered under the waiver scheme to address the problem of indebtedness.
No change in corporate income tax.
To protect tigers, Rs 50 crore for National Tiger Conservation Programme. Bulk of it to be used to raise Tiger Protection Force.
Plan expenditure fixed at Rs 2,43,000 crore and non plan expenditure at 5,74,000 crore.
Fiscal deficit pegged at 3.1 per cent and revenue deficit at 1.4 per cent.
Tax to GDP ratio increased from 9.2 per cent in 2004-05 to 12.5 per cent 2007-08.
No change in peak rate of customs duty for non
Customs duty on specified life saving drugs reduced from ten per cent to five per cent.
Special Countervailing Duty on power imports.
Customs duty on specified sports goods machinery down from 7.5 per cent to five per cent.
Duty withdrawn on naptha for production of polymers.
Duty on crude and unrefined sulphur reduced from five to 2 per cent to help raise domestic fertiliser production.
General Centvat on all goods to be reduced from 16 per cent to 14 per cent. Excise duty reduced from 16 per cent to eight per cent on all pharmaceutical goods manufacture.
Excise duty on small cars reduced to 12 per cent from 16 per cent and hybrid cars to 14 per cent.
Excise duty reduced from 16 to 8 per cent on water purification items.
Duty on non filter cigarettes to be raised.
Asset management service under mutual funds, services by stock exchanges to be brought under Services Tax net.
Threshold for small service providers raised from Rs eight lakh to Rs 10 lakh.
Allocation for defence to be increased by 10 per cent from Rs 96,000 crore to Rs 1,05,600 crore.
75 lakh people to be covered by health insurance scheme.
Allocation for Textile Upgradation Fund to be more than doubled.
Micro, small and medium enterprises to continue to get special attention.
Risk Capital Fund to be set up in SIDBI.
PAN requirement to be extended to all transactions in capital market subject to a threshold.
Rs 750 crore for upgradation of 300 ITIs in 25 districts.
Rs 32,676 crore as subsidy to Public Distribution System.
PDS through smart cards in Haryana and Chandigarh on pilot basis.
Three schemes to be introduced for providing social security to unorganised sector workers.
Sixth central pay commission to submit report by March 31, 2008.
Rs 624 crore allocated for Commonwealth Games
Farmers' debt to be waived
Complete waiver of loans for marginal farmers owning land up to one hectare and small farmers owning land up to 1 and 2 hectares.
Agricultural loans given by scheduled commericial banks, regional rural banks and cooperative credit institutions up to March 31, 2007 and due for December 31 that year will be covered under the waiver scheme to address the problem of indebtedness.
One time settlement of loans for other farmers.
Agriculture loans restructured and rescheduled by banks from 2004-06 and other loans normally rescheduled under RBI guidelines will also be eligible under the waiver scheme.
Implementation of debt waiver and debt relief will be completed by June 30 this year.
Loan waiver scheme to involve loans liability of Rs 60,000 crore and to benefit four crore farmers.
By loan waiver scheme, the country is discharging a deep debt and sense of gratitude to farmers, says Chidambaram.
The corpus of rural infrastructure development fund to be raised to Rs 14,000 crore.
More reforms needed in coal and electricity sectors to ensure double digit growth in manufacturing sector.
Rs 800 crore for accelerated power reforms programme.
National Fund for Transmission and Distribution Reforms to be launched.
The loan waiver scheme will benefit three crore small and medium farmers and cover loans totalling Rs 50,000 crore.
One crore other farmers will benefit to the tune of Rs 10,000 crore in the waiver.
Foreign investment of 3.5 to 8 billion dollars expected for exploration and development of new oil blocks.
Rs 7,200 crore to be allocated to the Ministry of Women and Child Development, marking an increase of 24 per cent.
Rs 500 crore for corpus fund to subsidise all women Self Helf Groups for LIC cover for permanent disability.
A target of Rs 2.80 lakh crore for agriculture credit set for the coming year.
Rs 20,000 crore for irrigation projects under AIPB, showing an increase of Rs 9,000 crore over last year.
National Horticulture Mission to be given Rs 1,100 crore in 2008-09 with special focus on coconut cultivation.
Rs 75 crore to be given to Agriculture Ministry for providing mobile soil testing laboratories in 250 districts.
Rs 644 crore for National Agriculture Insurance Scheme, which will be continued pending evolving an alternative crop insurance scheme.
National Plant Protection Training Institute at Hyderabad to be made autonomous body and Rs.29 crore will be allocated to it.
A scheme of debt waiver and relief for small and marginal farmers announced.
NREGA scheme to be rolled out in all the 596 rural districts in the country in 2008-09.
Jawaharlal Nehru Urban Renewal Mission to get Rs 6,865 crore this year against Rs 5,482 crore past year.
Allocation for Rajiv Gandhi Drinking Water Mission to be increased to Rs 7,300 crore. Rs 200 crore for potable water in schools.
Rs 300 crore to be set aside for desalination plant in Chennai for drinking water.
Rs 500 crore for identifying urgent needs of development programmes of border areas like Arunachal Pradesh.
SC, ST and minority students to continue to get special attention.
Allocation for several schemes in North East raised from Rs 14,365 crore to Rs 16,400 crore.
Rs 75 crore sanctioned for Rajiv Gandhi National Fellowship Programme for SC/ST students pursuing M.Phil.
Rs 230 crore will be extended as additional equity to developmental organisations looking after the welfare of SC,
ST, socially and economically backward classes and minorities.
Allocation for Minority Affairs Ministry to be doubled from Rs 500 crore to Rs 1,000 crore.
Rs 540 crore for multi-sectoral development plan for minority concentration districts.
288 public sector bank branches to be opened in districts having minority community concentration.
Sarva Shiksha Abhiyan will be provided Rs 13,100 crore, Mid Day Meal scheme Rs 8,000 crore, Secondary education Scheme Rs 4,554 crore.
410 additional Kasturba Gandhi Vidyalaya to be set up in backward blocks.
Navodaya Vidyalayas to be opened in 20 districts with special focus on regions having SC/ST concentration.
Allocation of Rs 130 crore for this purpose. Rs.750 crore more to be given for merit scholarship to students up to 10th and 12th class.
Mid day Meal scheme extended to upper primary level in 3479 schools. 16 central universities to be opened in 2008-09.
Three IITs to be set up in Andhra Pradesh, Bihar and Rajasthan.
Schools of architecture and planning in Bhopal and Vijaywada. More institutes of higher education to be opened.
Rs 100 crore to be given to Information Technology Ministry to set up national knowledge centres.
Allocation for NRHM increased to Rs 12,050 crore
Rs 992 crore for national AIDS programme.
A national programme for the elderly to be started at a cost of Rs. 400 crore.
Rashtra Swasthya Beema Yojana to start from April one in Delhi and Haryana. Rs 30,000 for each family belonging to unorganised sector.
Allocation for ICDS increased to Rs 6300 crore.
Rs 85 crore sanctioned for scholarships to students pursuing science education.
Indian Institutes of Science Education and Research to be set up at Bhopal and Thiruvananthapuram.
Agriculture credit doubled in the first two years of the government to reach Rs.2.40 lakh crore by March 2008.
Eleventh Plan started on a robust growth.
Gross budgetary support to be raised to Rs 2,43,386 crore, an increase of more than Rs 38,000 crore from the current level.
Allocation for Bharat Nirman to be raised to Rs 31,280 crore.
Twenty per cent hike in education budget this year from Rs 28,674 crore to Rs 34,400 crore.
GDP growth slows down to 8.4 per cent during quarter ended December 31, 2007 as compared to 9.1 per cent a year ago.
Economy grew over eight per cent over 12 successive quarters since 2005, says Finance Minister P Chidambaram.
Growth rate of agricultre extimated at 2.6 per cent during the current year.
Services and manufacturing sectors expected to grow by 10.7 per cent and 9.4 per cent, says Chidambaram.
Keeping inflation under check is one of the cornerstones of the Government's policy.
Rice production estimiated at 94.08 million tonnes, maize 16.78 mt, soyabean 9.45 mt and cotton 23.38 million bales.

Different credits offered by banks

OverdraftThis is offered to help your business meet its working capital requirements. Your Relationship Manager will determine your borrowing limit together with you. The facility is renewable annually. It entails simple documentation and could be made available in a range of currencies depending on your business requirements.
Bills DiscountingThis offers your business cash against post dated cheques issued by your customers. The Bank discounts these cheques and the amount is credited in your account upfront helping you to manage cash flows better. The discounting of cheques is undertaken on certain pre-approved customers. It is ideal in managing the business in today’s competitive environment without having to wait for cheques to be realized on due date.
Invoice DiscountingThis gives your company an ideal opportunity to transform credit sales into working capital. The invoice is discounted by the Bank once it is accepted by your customer. This gives you immediate cash injection in the business upto an agreed percentage of the value of the unpaid invoices. Your Relationship Manager will help you decide whether invoice discounting finance will work for your company.
Loans including asset backed financingTerm Loans ranging between 1 to 5 years are offered to part fund your ongoing business expansions and other capital expenditure programmes. Asset backed financing is also undertaken where the Bank uses collateral such as land, buildings, equipment or inventory as security against the loan. The repayments are tailor-made to suit the cash flows associated with the business.
Import & Export financingA loan is granted to the importer to provide liquidity for buying against sight payment. Each loan is related to a specific import transaction and the terms of financing can vary depending on the type of product and the requirement of the importer. This provides importers who have orders from customers backed by a letter of credit with the necessary financial backing to meet larger orders than they would on their own financial strength.
When you export, you significantly reduce the risk of non-payment by asking your buyer to pay you under a letter of credit. The Bank helps you get paid quickly by discounting such letter of credit after its acceptance by the issuing bank.
Contract financingTaking into account your contractual requirements with your clients and based on the cash flows, we structure a full array of banking products specifically to suit your requirements thereby enabling you to comfortably execute your projects.
Structured dealsWith their extensive banking experience, our Relationship Managers are able to help you understand and structure deals most beneficial for your business requirements. This involves a customized package from a lender to a borrower.
Letters of CreditLetters of Credit are a time-tested mechanism for settlement of international trade transactions. They are an undertaking given by us, at your request, to effect payment against presentation of credit complying documents. This is an effective way to get paid for goods and services that you have provided or an effective means of ensuring delivery of goods and services that you have paid for.
GuaranteesThe Bank stands as a guarantor to your client to meet your trade/contractual agreements for a fee.
Documentary CollectionsThis provides an excellent solution to help lower costs and expedite processing while still maintaining control over the transfer of goods and funds. When this facility is used, you as the seller forward the shipping documents and a sight/time draft drawn on the buyer’s account to the Bank. The draft and the documents are sent with instructions to the buyer’s bank. The buyer’s bank delivers the draft to the buyer, but retains the documents until the buyer pays or accepts the draft. This lets you maintain control of your shipments until payment is secured. The buyer also benefits by not having to release the payment until the goods have been shipped. We can supply you with an efficient routing system for your trade documents so that you can be sure of their delivery to you, your trading partners and their banks.

You have more money to invest wisely

In his Budget speech, when Finance Minister P Chidambaram doled out a bonanza to four crore (40 million) farmers by announcing a loan waiver of Rs 60,000 crore (Rs 600 billion), a lot of urban Indians would have felt the jitters. Where would he get the money from? Would it mean more taxes or another surcharge?
However, he had the urban middle-class in mind as well. Thus came a slew of measures like the hike in basic exemption limits, duty cuts for breakfast cereals, water purifiers and milk, clarification on incomes from reverse mortgage for senior citizens and even a higher deduction on insurance premiums paid for parents under section 80D. All in all, these are satisfying sops from the FM for the individual.
The direct measures for one have enthused many. By hiking the basic exemption by Rs 40,000, Rs 35,000 and Rs 30,000 for male, female and senior citizens respectively, Chidambaram has saved them a lot of money.
Says financial planner Sajag Sanghvi, "The income taxpayer, with a salary of up to Rs 5 lakh, can save as much as Rs 45,000 a year."
That basically means another month's salary comes into the hand of the individual. And for the salaried, with incomes above Rs 5 lakh, the savings is an additional Rs 5,000 a year.
Also, now you have a wider choice of investment avenues under section 80C. The introduction of two instruments, Senior Citizen Saving Scheme 2004 and the Post Office Time Deposit Account, gives more options to risk-averse investors.
However, remember that there is a lock-in period of five years for both these instruments. Importantly, if you were to withdraw any amount from such deposits before five years, the amount withdrawn will be included in the income, and be taxed according to the income bracket.
For senior citizens, there is more. With a move of treating cash received from a reverse mortgage on your home as a loan and not as income, he has also pleased many who were worried that there would be more income tax to pay, if they mortgaged their house with a bank.
Also, under section 80D, now an individual can claim another Rs 15,000 of tax relief on the premium paid for purchasing medical insurance for his/her parents.
In other words, now the individual taxpayer has a benefit of Rs 30,000 under this section, which is a straight deduction on total taxable income.
Also, senior citizens, at present, get deductions up to Rs 20,000 on medical insurance. Therefore, an additional amount would be great for them with the rising cost of medical treatment and hospitalisation.
Housewives also can be happier now. Though fuel prices continue to be a concern, the fact that duties on some essential items like milk, water and refined edible oil are down should bring some smiles. Besides, the across the board cut in Cenvat from 16 per cent to 14 per cent will mean that most household goods would become cheaper.
Also, investment experts have felt that the hike in the short-term capital gains tax from 10 to 15 per cent will dissuade a lot aggressive investors and traders from active stock market trading.
But many financial planners like this move a lot. "By increasing the short-term capital gains tax, the FM has given a disincentive to traders who want to play the market. It is something we always advise our clients," says Kartik Jhaveri, director, Transcend India.
Of course, like in every Budget, there are some negatives as well. The introduction of service tax on unit-linked insurance plans (Ulips) is one that many are looking as a negative. Ulips, which are already considered very expensive because of the high costs that are paid to the insurance agent in the initial years and other fund management costs, will now become more expensive.
Many financial planners are quite happy with this as they believe that this will make investors think twice before mixing their investment and insurance needs.
Says Ranjeet Mudholkar, CEO, Financial Planning Board of India (FPSB), "The introduction of service tax on the asset management services, provided under Ulips will surely have a long-term impact on the personal finances of a large number of investors."
Yes, this was the last year for the UPA government before elections. Many people even believed that this would be the Budget where he would give sops to all and sundry. That has happened now.
While there will be critiques about how the FM will raise money to do all that he has plans to, for the urban middle-class, this is almost the best-case scenario.
To give Jhaveri the last word, "From a personal finance point of view, this is a pretty good budget." Absolutely true. As personal finance advice goes, you will be better off considering this bounty as a windfall and invest it wisely.