Monday, July 29, 2013

Brief on New Pension Scheme - NPS

New Pension Scheme (NPS) is one of the best retirement products available today in India.  This is a Defined Contribution based pension scheme, which is being administered in India by Pension Fund Regulatory and Development Authority (PFRDA).  If planned properly and if the contribution is made by employer we can avail tax exemption under section 80CCE.  Main advantages of this scheme are
  1. It is open to all citizens of India between the age of 18 and 55. 
  2. Administration cost is one of the lowest, for non Government employees charge is subject to a limit of 0.25% which is lowest amongst all existing schemes
  3. Scheme closely monitored by PFRDA
  4. Clearly defined investment options which choice resting with employee or in case employee feels it can be an automated option, it is also available.  The auto choice is as below (Class G - Government securities; Class E - Equity; Class C - Corporate Debt).  The visibility is clear, higher the age lesser the risk and viceversa
 


The next question arises what is the return over the last 3 years.  I have been investing since 2010 April and in these 3 years I have received 8% returns which is a decent return considering the additional interest due to tax benefit which I received on contribution.  The calculation of my contribution is as below as on 7th May 2013 and on that date my fund value was Rs.37,350


I would recommend for all non governmental employees who do not have a proper pension plan to adopt NPS and start contributing from an early age to benefit from decent returns and a handsome corpus on retirement.

Sunday, July 28, 2013

A Brief guide to Income tax returns filing - PY 2012-13 / FY 2013-14

Select your relevant form
 
ITR1

    • Income from salary / pension
    • Income from one house property (excluding losses brought forward from previous year)
    • Income from other sources (excluding lottery, horse races)

    ITR2 – ITR1 categories plus / or 
    • Income from Capital Gains
    • Income from other sources including Lottery, races 
    ITR3 
    • Income from partnership firms by way of salary, interest, bonus, commission includable under the head “Profits or Gains of business or profession”
    ITR4
    • Individual or HUF who is carrying on a proprietary business or profession

     ITR4S – ITR1 categories plus / or 
    • Income from business computed under special provisions of section 44AD & 44AE of income tax act (presumptive taxation)
    ITR5 
    • Returns by Firms, Association of Persons, Body of Individuals
    ITR6
    • Returns by companies 
    ITR7
    • Returns under section 139(4A) , 139(4B), 139(4C) & 139(4D) – belated returns but before completion of assessment year
    Compulsory E-filing of Returns with or without digital signature – Previous Year 12-13 / Assessment Year 13-14

    ITR1, ITR2, ITR3, ITR4, ITR4S, ITR5 is mandated for compulsory e-filing (with or without digital signature) if income exceed Rs.5 lacs.  Income below Rs.5 lacs can go in for manual filing.
     
    Compulsory E-filing of Returns with digital signature – Previous Year 12-13 / Assessment Year 13-14
     
    ITR4 & ITR5 is mandatory for e-filing with digital signature if section 44AB is applicable (audit of accounts)
     
    ITR6 is mandatory for e-filing with digital signature
     
    How to file returns

    Visit site https://incometaxindiaefiling.gov.in/ and download the relevant ITR in excel format.
     
    View your 26AS following this link https://services.tdscpc.gov.in/serv/tapn/welcome26AS.xhtml. If you have not registered in income tax website, there will be a promt to register using your PAN.  After registration or login this site provides you all details of your tax deducted by your employer or any other person like your banker on interest income. Also it provides details of advance tax paid & details of high value transactions reported in your name. Cross check the tax deducted & advance tax, ensure that these figures are reflected in your ITR returns. If there is a mismatch then there will be query from income tax as to the mismatch. If there are any discrepancies take it up immediately with the TDS deducing authorities to correct if discrepancy is in TDS or take it up with your banker if discrepancy is in advance tax payment.

    Once you have filled in the ITR, convert into an XML file and go to site https://incometaxindiaefiling.gov.in/e-Filing/MyAccount/UploadReturnsHome.html?ID=1707942105  to upload your returns. If you would wish to digitally sign your returns register your token in the “Profile settings” menu or follow this link https://incometaxindiaefiling.gov.in/e-Filing/MyAccount/UpdateDscDetailsLink.html?ID=579614307.  Upload the returns.
     
    Download the acknowledgement and forward it to CPC Bengaluru, if you have digitally signed the return you need not forward to CPC Bengaluru.