HOW TO BE THE 1% WHO REALISE THEIR DREAMS

Only 1% of you may go on to fulfil your aspiration of becoming a CEO of a large company or leading a successful startup! 90% of you are not likely to get anywhere close to your aspirations and ambitions even 25 years from now!” 

I was speaking to a packed hall of bright youngsters from top Bschools. A pall of silence descended on the room. “You worked very hard to get here. However, do you still have that passion, drive, dreams, determination and a huge appetite to learn what brought you here? Or did you dump it to focus instead on shortcuts like how to “network” and changed your life goals to simply land the best job in campus?” 

I could see some nods in the room. In my experience, only 1% of us are able to realise our original dreams despite the rest being just as capable. To get to your dreams you need to learn to create magic “outside the boundaries of logic and reason” and not be trapped within. So how does one do that? Let me share with you three ideas that have worked for me. The first is to embrace your uniqueness. Think about it. What is that one thing which you have and which no one else in the world has? I believe the answer is, “you”. So why try hard to ape others and be like someone else? In that attitude alone we lose our uniqueness and our ability to create magic. There was once a boy who was born without a right arm. When he grew up he learnt karate and soon wanted to compete in a tournament. His master said he could and taught the boy one single move. The boy won the first round of the tournament and then the next round and the one after that until he found himself winning the entire tournament. Baffled, he asked his master how he did it. The master smiled and told the boy there is only one defence against the move the boy learned and that defence involves grabbing the attacker by the right arm! 

There are 6 billion other humans on this planet. However, there is only one you. There is a reason God made you unique, find it, leverage it and you will win every time. The second is to look beyond distractions. Life is a box of unknown events that appear at random times – some good and some not so good. I call them ‘distractions’. It’s your ability to stay focused through these distractions, fixated on your long-term goal that will help you see beyond trappings like salary, bonus, cars or notso-good ones like the wall of failure, rejection, unfair assessment etc. Remember a magician systematically creates magic by distracting his audience, yet remaining focused on the end game, undistracted. Unless you train yourself to look beyond and outside the distraction box, how will you even stand a chance of getting to your goals? 

The third is having a deep-rooted conviction in your goals. Once there were two trees in a village. One next to a river was green and beautiful. The second stood in an arid patch of land. It was thin and had few leaves and people ignored it. One night there was a storm and the villagers woke up assuming the tree next to the river would have survived and the other tree would have died. But the reverse happened. The reason was simple. The tree next to the river used to get water easily. Therefore, its roots were shallow and were not able to withstand the storm. The other tree had deep roots and survived. If you do not have a deeprooted conviction, won’t you be blown away by the first advent of adversity? So ask yourself again, what is it that you really stand for? The list of what you can do to be in that 1% is long and it all starts with you – actually your mind. The more you have it in your control, the higher your chances of fulfilling your dreams and ambitions. 

Source : Mr. Vineet Nayar – Economic Times – 10/12/2013

(The writer is founder, Sampark Foundation and vice-chairman & CEO, HCL Technologies)

HOW TO STAY SAFE WITH THE NEW CARD PAYMENT SYSTEM

RBI has taken many measures to make the payment infrastructure more secure, but cardholders must also take some basic precaution while using cards at merchant outlets :-

From December 1, 2013, for using your debit card at retail outlets, you need to use your existing ATM PIN. This is as per RBI mandate”.

You may have received a similar SMS from your bank last week. As the message states, you will have to punch in your personal identification number or PIN (the number that you punch at the ATM to carry out transactions) when you use your card at a shop or restaurant (point-of-sale (POS) terminals, in banking parlance) in India. 

“This is a logical extension of the measures the Reserve Bank of India (RBI) has been taking over the last few years to make the payments infrastructure more secure. The second layer of authentication will help debit cardholders carry out their transactions in a secure manner and will certainly reduce frauds as the password is known only to the customer,” says Parag Rao, senior executive vice-president and business head-card payment products and merchant acquiring services, HDFC Bank. However, this does not mean that swiping your card at merchant outlets is totally secure. You still need to take some basic care to ensure that your transaction is completely secure. To begin with, make sure that no one is able to view your PIN while you are entering it. “At present, POS machines at most outlets are installed in such a way that the cashier has a clear view. Ideally, the retailers should provide a separate enclosure for customers to enter the PIN. If such facilities to ensure privacy are not available, you should cover the digits panel while punching in your PIN,” suggests VN Kulkarni, chief credit counsellor with Bank of India-backed Abhay Credit Counselling Centre. 

You also should never reveal your PIN to anyone. Do not let the cashier enter the PIN for you under any circumstances. If you find the entire process cumbersome, it is best to carry cash or withdraw money from the nearest ATM till you get used to the new regime.

In addition, the central bank had also asked banks to replace all magnetic stripe cards that have been used by the holders for international transactions at least once, with the more secure EMV (Europay, MasterCard and Visa) chip-based cards by November 30. If you fall in this category but haven’t received a chip-based card, you need to make enquiries with your bank. Chip cards will also require PIN for POS transactions. The RBI has made it clear that banks will have to bear any loss incurred by the cardholder due to misuse after expiry of the deadlines.

It is not clear whether the compensation structure outlined for customers of banks that failed to upgrade their POS infrastructure will be applicable in case of non-replacement of magstripe cards with chip cards as well. In any case, if you encounter a fraud because of the bank’s failure to issue a chip card, you can always approach the Banking Ombudsman with your grievance. Regular cards used abroad, particularly in certain countries, are vulnerable to skimming and other frauds. Therefore, a chip card, which is not as prone to cloning or hacking, is in your interest. 

“The RBI had given instructions to banks that they should convert all magnetic stripe cards into chip cards and also, that all debit and credit cards will be used domestically only. Those who want to go abroad should get a chip card issued and can spend as per FEMA regulations. Those who have not got chip cards because banks have not issued them will have to get a threshold limit approved, which in any case should not be more than $500 per day. Banks can approve a higher limit after mutual discussions with the customer on the basis of spends made during earlier visits,” says AC Mahajan, chairman, Banking Codes and Standards Board of India. If you intend to travel abroad but do not have a chipbased card, you must inform your bank in advance and have your magstripe card replaced with a chipbased one.

Source : Preeti Kulkarni – Economic Times – 03/12/2013

ARE YOU SAVING TOO MUCH FOR YOUR KIDS ?

Sacrificing for children can jeopardize your retirement planning

The Indian parent is more entertaining than a juggler. Watch the precision with which he handles his limited, disposable income in fulfilling the various needs and wants of his family. He puts away money for his son’s education, his daughter’s wedding and the dream house he is planning for the family. Yet, he tends to leave out a goal, inadvertently perhaps, but one that is the most essential—retirement. 

Given the multiplicity of goals, how should a parent decide which one is more important? “One should prioritise one’s goals based on two main factors—the time on one’s hands and alternate sources of funding the goal,” say financial planners . List your goals and the time in which you need to achieve them. Then, distribute the investible surplus among goals on the basis of the urgency of each goal. 

You should choose to allocate a higher surplus towards your own retirement if you haven’t managed to build a sizeable nest egg. However, if you have a sufficiently large retirement corpus, you can allocate more towards other goals. Experts say retirement planning is paramount because you can get a loan for all other goals, but nobody lends for retirement. Yes, reverse mortgage is gradually catching on, but only the people with a house can go for this option. 

EMOTIONAL INVESTOR 

The Indian parent is also an emotional investor, torn between his responsibility to provide for his children’s needs, and ensuring a golden retirement for himself. This is why child Ulips, despite their high charges, were a big hit with insurance buyers at one time. “Emotion is the last thing that should influence your decision. This is why it is not always prudent to allocate all your savings towards your children’s goals,” says Pai

Don’t get us wrong. We understand that your children’s needs are paramount and you want to give them a leg up in life, but don’t go overboard in doing so. Putting away a large chunk of your investible surplus in a house for your child is not a good idea if you have not built a sizeable nest egg. Besides, who knows whether your child would want to live there 20-25 years from now. So, you are diverting resources today towards things that your child might not want tomorrow. 

In most cases, children may not even need the money you are saving for them. As the HSBC survey shows, 86% of retirees plan to leave an inheritance for their kids, but only 59% of the working people expect something from their parents. 

GIFT FINANCIAL INDEPENDENCE 

The greatest gift you can give your child is financial independence. Delhi-based Apra Jain, 23, learnt the importance of saving as a kid. “Today, I put money in equities instead of the piggy bank,” she says. During her college days, she would get a monthly allowance of `5,000, from which she began to invest in stocks. “I started by putting in 10,000 and gradually increased it to 25,000 a month, all from my savings. Today, I invest `10,000 every month in my portfolio,” Jain adds. 

This financial independence does not come in a day, but is a process that parents must indulge in from childhood. Start by teaching your child the value of money. When you buy him a toy, make him pay the money so that he understands that things come for a price. As your child grows, give him a piggy bank and later you can also open a child-friendly bank account. This will inculcate the habit of saving in him. In his teen years, give him pocket money and ask him to use it for his expenses. This will teach him to spend within his means. These small steps will lead him to the financial discipline that everyone desires, but few actually have.

Source : Sakina Babwani – ET Wealth – 25/11/2013

INSURANCE COs CANT UNILATERALLY CHANGE POLICY TERMS

 Background: Insurance companies unilaterally and surreptitiously change policy conditions without the knowledge of the insured. When a dispute arises, the company claims that it is a yearly contract and it has the right to revise the terms governing the policy. Insurers adopt a “take it or leave it” attitude, and claim that the policy holder can opt out if he/she does not agree to the revised terms. This is patently illegal. 

    Case study: Jayshree Shah had first taken a medical insurance policy of New India Assurance in 1999. Later, the insurance company changed it to ‘Hospital benefit policy/ Mediclaim Policy 2007’, with revised terms and conditions. This policy was also renewed and premiums for 2011-12 were paid. After Jayshree fell ill and was hospitalized, she lodged a claim for Rs 29,155. The insurance company’s TPA, Health India, processed the claim and sanctioned Rs 16,879, disallowing an amount of Rs 12,276 under the revised terms and conditions. Jayshshree protested against this deduction, contending the claim ought to be paid according to the original terms when the policy was first taken. She filed a consumer complaint through the Consumers Welfare Association. 

    The insurance company contested the case, saying that it had the right to change the terms and conditions, and the insured was free to opt out if the terms were not acceptable. The South Mumbai District Forum, 

in its judgment of September 27, 2013 observed that the policy stated that it was issued on the basis of a proposal form and declaration dated February 2, 1999. The original policy as issued in 1999 provided for a claim to be reimbursed up to the sum insured, without imposing any limits under each head of expense. But these terms were changed and limits were not prescribed for various heads of expenses. The forum held that such unilateral change in the terms of the policy was not permissible. It relied on the judgment of the Supreme Court in the case of Biman Krishna Bose v/s United India Insurance Co Ltd, where the apex court had observed that a renewal of an insurance policy means repetition of the original policy. The renewed policy merely extends the period of insurance on identical terms and conditions contained in the original policy. The forum then set aside the revised terms of the policy and directed the insurance company to renew the policy as per the original terms prevailing when the insurance coverage was first taken. It ordered the company to pay Shah the balance claim of Rs12,276 along with 9% interest from May 12, 2011 and Rs 5,000 as litigation cost. 

    Conclusion: Once issued, the policy terms cannot be unilaterally changed, unless specific consent of the insured is obtained for such changes. 

Source : Jehangir B Gai – TOI – 25/11/2013

MIS-SELLING : TREAT CUSTOMERS FAIRLY - RBI TO TELL BANKS

With cases of misselling by banks continuing to come to light, the Reserve Bank of India plans to introduce the concept of ‘treat customers fairly’ (TCF) for sale of third -party products. Under the TCF norms, first introduced by the UK’s financial services authority, it is not enough for banks to merely stick to rules, they must prove that they have acted in the best interest of the customer.  “The intent and basic structure for TCF is in place in India for banking products of scheduled banks. However, it is now being considered to extend the TCF structure to thirdparty products, viz, mutual funds, capital market and insurance products sold by banks and also extending the ombudsman scheme to non-scheduled banks,” the RBI said in a report released on Thursday. 

The issue of mis-selling by banks had come to the fore with Sebi’s recent showcause to HSBC for needlessly churning a client’s MF portfolio. TCF aims to link products with promises 

The RBI’s move to implement the TCF (treat consumers fairly) concept comes in the wake of a case of ‘mis-selling’ by HSBC recently. Sebi found that the unnecessary churn in the client’s mutual fund portfolio could only have been done to earn more commission. Under TCF guidelines, it is not enough for a bank to obtain the signature of a customer on the application form; it also bears the onus to make sure that it is providing correct advice. 

According to the RBI, TCF is a consumer protection policy designed to address the problem where banks know something about the product that the customer does not. “It is a regulatory initiative by which firms are required to consider their treatment of customers at all the stages of the product life-cycle, including the design, marketing, advice, point-of-sale and after-sale stages. By encouraging firms to re-evaluate their company culture and to inculcate the attitude of treating customers fairly, the outcome is likely to result in a more optimal one from the perspective of regulators, consumers and ultimately, firms,” RBI said.

The report said that the desired outcome of the TCF programme is to ensure that consumers are provided products that perform as firms have led them to expect, and the associated service is both of an acceptable standard and as they have been led to expect; and consumers do not face unreasonable post-sale barriers imposed by firms to change a product, switch providers, submit a claim or make a complaint.

Source : TIMES NEWS NETWORK – TOI – 22/11/2013.

INSURER CANNOT REJECT CLAIM ONLY DUE TO DELAY IN RENEWING POLICY

Consumer Forum rules rejection for this reason ‘completely unacceptable’, directs National Insurance to pay policy holder the amount plus interest

An insurance company cannot reject a claim under the mediclaim insurance policy only on the hyper-technical grounds of a mere 11 days delay in renewing the policy, the Thane District Consumer Forum has ruled.   The forum determined that rejection of the claim for this reason was only to suit the insurance company’s interests, and was therefore “completely unacceptable”. 

    Making these observations, the two-member bench of U V Jawlikar and N D Kadam directed National Insurance Co to pay Virar based Prabha Iyer an amount of almost Rs 1 lakh — Rs 58,000 as claim amount, over Rs 26,000 as interest, and Rs 15,000 as compensation for mental agony and litigation cost.  The insurer, citing 11 days delay in renewing the mediclaim policy by Iyer in 2007,wanted her to undergo a four-year “cooling off period for covering pre–existing diseases” all over again, but the forum thwarted the attempt. 

    In April 2003, Iyer had bought a mediclaim policy for Rs 1 lakh from National Insurance. Thepolicyhadaclausespecifyingawaitingperiod of four years before Iyer could claim expenses incurred on ailments already existing in her body. This meant that she qualified to make such claims only after April 2007.  Iyer kept renewing her policy without a break till April 2007 when, due to some unavoidable circumstances, she could renew it only after a delay of 11 days. 

    She fell ill in June 2007 and was admitted to PD Hinduja Hospital. The next month, she fell ill again and this time was admitted to a hospital in Kalyan. She sought reimbursement of Rs 58,284 from National Insurance for expenses incurred during both periods of hospitalization.     

The insurer, however, rejected the claim saying that Iyer was hospitalized due ailments in existence since 1998, and since she had delayed renewal of her policy in April 2007, it was now a fresh policy and she would therefore have to wait for four years before making claims under the relevant clause. 

    Iyer finally approached the consumer forum in 2009. During hearing of her complaint, the forum found out from her policy documents that even while renewing her policy after an11-day delay in April 2007, the insurer had noted the original proposal date as “April 2004”, which meant that even as per its own records,National Insurance had not treated the policy as “fresh”. Yet, when it came to reimbursing Iyer’s claim, the company rejected it citing the hyper-technical ground just for its convenience. The forum has now directed National Insurance to pay the entire amount to Iyer by December29,or face an increased interest rate.

Source : Sunil Baghel – Mumbai Mirror – 18/11/2013

YOU CAN STILL FILE YOUR TAX RETURNS

Those who have missed the August 5 deadline should file as soon as possible to avoid penalty on unpaid taxes, says Preeti Kulkarni

The last date to file income-tax returns is gone. Okay, the government last week had extended the deadline by a week from July 31 to August 5. As usual, there are many taxpayers who couldn’t meet the deadline this year, too. 

Of course, they also list the usual reasons for not filing returns on time: some could not login to the Income-Tax portal; some received the Form 16 late; some were too busy with their career and life to notice the deadline. 

“A lot of salaried individuals received their Form 16 very late this year. The delay in issuance of Form 16 on the part of the employers was primarily because of changes in the process relating to preparation of the Form 16,” says Vaibhav Sankla, director with tax consulting firm H&R Block India. 

“Further, many faced challenges in accessing the TRACES website for many days. It is estimated that only 50% of those who are required to e-file their returns in Form ITR 2 could actually file it within the due date,” he adds. Even the Income-Tax department concedes that some taxpayers have not been able to log on to the e-filing website” he said. 

Due to a large number of tax-payers accessing the e-filing website on the due date of filing, some cases of tax-payers not being able to access the portal have been reported,” the I-T department noted, while granting an extension till August 5 for such tax-payers. 

You can still file returns
Tax rules permit assesses to file their returns pertaining to two preceding financial years, even after the expiry of the respective annual deadlines. “Tax-payers who haven’t filed their tax return for the financial year 2012-13 can do so until March 31, 2014. However, it is advisable to complete the process as soon as possible to avoid any possible penal interest, if there is tax to be paid. The I-T department charges a penal interest for every month of delay,” explains Nikhil Bhatia, executive director of PwC India.
In fact, returns can be filed even till March 31, 2015. However, you will have to pay a penalty of up to . 5,000 if it is filed after March 31, 2014.
There are other complications, too. “Tax-payers who complete the process before the due date are allowed to file a revised return in case they have filed an incorrect return. However, this leeway is not extended to those filing the returns after the deadline,” says Bhatia. Similarly, you will not be allowed to carry forward any losses incurred under the head ‘Capital Gains’ and ‘Business Losses (other than depreciation loss)’. 

If you are expecting a refund from the I-T department, you will have to be prepared to forgo some benefits. “If the taxpayer is claiming a refund and is also entitled to receive interest on the refund, then the delayed filing would mean that he would not receive interest for the period of delay,” points out Sankla.
Since the delay on your part rules out second chances, it is important to pay extra attention to details to ensure that you get it right in the first instance. Ensure all the required documents — Form 16, bank statements, last year’s return — are at hand before commencing the process to avoid any back-and-forth and loss of time. Make sure you claim all the deductions that do not reflect in your Form 16. 

For instance, section 80G deductions on donations made to approved charities.
“Taxpayers should thoroughly double-check the tax calculations and they should also check whether all the tax exemptions and deductions they are entitled to claim have been actually reflected in the tax return. In certain cases, it would also be a good idea to get the tax return reviewed by another tax professional before it is filed,” says Sankla. 

Source – Preeti Kulkarni – The Economic Times – 07/08/2013

Salaried up to 5L must now file I-T returns

Unlike the past two years, salaried persons earning up to Rs 5 lakh annually will have to file income tax returns, the Central Board of Direct Taxes (CBDT) said on Monday. 

The CBDT had exempted salaried employees with income up to Rs 5 lakh, including income from other sources up to Rs 10,000, from filing tax returns for assessment year 2011-12 and 2012-13. 

“The exemption was available only for assessment years 2011-12 and 2012-13...the exemption is not being extended for 2013-14,” the CBDT said. AGENCIES ‘Exemption revoked as e-returns easy to file’ 

The CBDT had in May made e-filing of income tax return compulsory for assessment year 2013-14 for persons having total assessable income exceeding Rs 5 lakh. 

The CBDT said the exemption was given considering paper filing of returns and their processing through manual entry on system. It said the exemption has been not been extended as the facility for online filing of returns has been made “user-friendly with the advantage of pre-filled return forms”. 

These e-filed forms also get electronically processed at the central processing centre in a speedy manner, it said. “Taxpayers are encouraged to file their returns electronically. E-filing is an easy, fast and secure method of filing of income tax return. Moreover, digital signature is not mandatory for these taxpayers...,” the finance ministry added.

Source – TOI – Mumbai Edition – 23/07/20013

Get an Add-on Motor Cover for a Smooth Cruise This Monsoon

Such schemes can help you get full claim on the value of car parts that are replaced after an accident, says Prashant Mahesh

Your regular motor insurance policy is of little use if you have to replace plastic, glass or rubber parts after an accident. For example, if the windshield of your two year-old car were to be replaced, you may get only . 2,500 from the insurance company. A new windshield would cost you around . 10,000. However, you can overcome this problem if you go for car insurance with added benefits like zero depreciation, engine protection and return to invoice. “Spare parts in high-value cars are costly. We recommend people with cars costing upwards of . 10 lakh to go for add-on covers, as it will lower their risk,” says Arvind Laddha, CEO, Vantage Insurance Brokers. 

ZERO DEPRECIATION 

This add-on cover ensures that you will receive the full claim without any depreciation on the value of parts that are replaced after an accident. “In case of a major accident, a zero-depreciation policy could come in handy,” says Niraj Jain, CEO & Principal Officer, Insurancemall — an online insurance portal. “Remember to buy the zero-depreciation cover in the first year itself, as an insurance company could deny it in the second or third year or ask for a heavy premium,” adds Niraj Jain. If your bumper gets damaged and it costs . 15,000 to replace it, most insurance companies would merely pay around . 7,500. However, if you have a zero depreciation cover, you could get the entire amount back. Most insurance companies offer it for vehicles that are less than three years old. If you were to meet with an accident in an unknown area where a basic service centre is far away, this add-on could be handy. “The facilities included under this would include towing, repairing a flat tyre or a battery, fuel assistance, taxi and accommodation benefits,” says Vijay Kumar, chief technical officer, Bajaj Allianz General Insurance

ENGINE AND ELECTRONIC CIRCUIT COVER 

During monsoon, chances of flooding in many areas cannot be ruled out. If you start your car while it is still submerged in water, the engine could get badly damaged. Since the engine is one of the most crucial parts of a car, repairing it is a costly affair. Trying to start the car repeatedly may cause further damage and it may finally break down. This phenomenon is known as hydro-static lock, and as per experts, is one of the most common reasons for vehicle engines to get damaged during monsoon. “Such damage is not payable under a regular motor insurance policy. You may have to call the towing agency or the insurer who can arrange to tow the vehicle. An add-on such as engine protector may cover such specific claims,” says Vijay Kumar. Same is the case with electronic circuits. “In case of water logging, it is not one or two parts, but the entire circuit may need to be replaced. This cost could be very high, and hence, an add-on policy which covers electronic parts could help,” says Rahul Aggarwal, CEO, Optima Insurance Brokers. 

RETURN TO INVOICE 

This benefit is available only in the first year of buying a car. In case the car is totally damaged, 100% of the value of the vehicle (without deducting 5% depreciation) is reimbursed. 

NCB RETENTION 

No claim bonus is a reward for those policy holders who have not registered any claims against their car insurance policy in the past. Over a period of time, this bonus can be accumulated to claim a discount of up to 50%. However, even a single claim on your policy can bring this down to 0%. By buying an add-on cover, this can be avoided. Under this add-on, even if you have a claim, subject to a certain sum, NCB earned by you remains protected at the current eligible percentage, instead of becoming 0% under a normal policy,” says Banwari Lal Sharma, AVP (Marketing), Carwale, an online automobile portal. 

Many add-ons are bundled as a package by insurance companies. If you end up buying all of them, your premium will increase substantially. “Understand what you need the most and buy accordingly,” says Banwari Lal Sharma. 

Source : Prashant Mahesh – Economic Times – 25/6/2013 

ONLINE EPF TRANSFER AND WITHDRAWL FROM JULY 1, 2013

Starting July 1, 2013 , EPF account holders will be able to withdraw or transfer their EPF accounts from one employer to another employer online. EPFO has said that they are working on setting up a central clearance house which will be operational from July 1, 2013 . One of the major problems faced by employees is to transfer their EPF accounts from one company to another when they change their jobs or to withdraw their EPF accounts after leaving their job, which takes years and months, without them having any transparency in the system and process. They are frustrated, lost and have no idea where to ask for their EPF status and to whom . Because of this delay, a lot of people just let things go and the matter drags for years and years

You can also Track the Status Online

The best part is that you will be able to track your request online and will be able to see which stage your EPF withdrawal or transfer is ! .

Permanent EPF account number for each person

EPFO has earlier said that they are working on the permanent EPF account number where a employee once allotted a EPF account number will be able to use the same Employee provident fund number when he/she moves to another employer. The new employer will deposit the provident fund money in the same permanent account number. This will solve a lot of issues, but this would be possible only after 1-2 yrs , the first focus is on introducing a online withdrawal or transfer service.

Verification of Details after the request is put ?

Once you apply for withdrawal or transfer, the verification of all the details from employer will be done by EPFO . All you would have to do is just initiate the transfer or withdrawal request online (Its not clear how it will happen or what you need to exactly do). After that EPFO department will take charge and do their part of work by contacting the employer. Here is how the transfer would work

The member makes his transfer application at his new or old office or directly to the EPFO through an online application. The process is then taken over by the EPFO, which gets data verification from both offices and gets the transfer done immediately. Now, EPFO would do the work of getting details from both old and new offices where transfer is involved, says EPFO Commissioner Anil Swarup. – SOURCE

This will help 50 million Employee provident fund account holders , lot of paper work will be saved and surely the harassment will reduce . (Read how you can withdraw/transfer your EPF , if your employer is not supporting or helping you) . at this moment , a lot of withdrawal’s happen because employees know that its more easier and do not want to take chance for future issues due to the complex process. Hence this move will help a lot to EPFO department in retaining employees with their EPF’s .

What should you do right now ?

While the EPFO has said that this will be operational from July 1, 2013 , still there might be delays from their end (you know how deadlines work in real life , remember what happened with DTC (Direct Tax Code) ?) . If you can really afford to wait and want to try out this online system, then wait for 2-3 months and then give this a shot, else follow the usual process at this moment.

Conclusion

While its a welcome move and we should trust the EPFO department, still you know what happened with the EPF Online Passbook system by EPF , which is not up-to the mark and there are tons of issues with it. It might happen that this online EPF transfer and withdrawal system is built , but there can be huge disappointment with the way it would work . We can only wait and watch at this moment.

What do you feel about this move ? A lot of people might have faced bad experience while transferring and withdrawing their EPF accounts and would have wondered why dont EPFO makes every thing online. Now it comes !

Source - Jagoinvestor.com

WHAT MATTERS YOU IN THE BUDGET - 2013

Indian Budget - 2013

       No changes in slabs and rates of Income tax

·         Tax Credit of Rs.2000/- to be given to people earning between `2 - `5 lacs

·         RGESS to be liberalised - extended to 3 consecutive years and eligible income level raised to `12 lacs

·         First home buyers taking of loan upto ` 25 lacs to get additional `1 lac benefit of interest paid - over and above the limit of `1.5 lac

·         Infrastructure debt funds - IDF to be given impetus by giving signals to float Tax Free Bonds

·         KYC of banks to be applicable for buying insurance

·         On 42k persons filing income more than `1 CR - 10% additional surcharge - only for 1 year

·         Surcharge increased on domestic companies having revenue of `10 crore and above

·         Surcharge on Dividend Distribution Tax increased

·         TDS of 1% applicable for sales over `50 lacs - agricultural land exempted

·         STT rates reduced on equity FUTURES (securities transaction tax)

·         DTC - work in progress

·         No Change in Peak Customs Duty, Excise & Service Tax

·         High End goods like cars, motocycles, yatchs etc - customs duty increased to

·         Duty Free limit for Gold brought by individuals from abroad raised to Rs.50000/- for males & Rs. 1 lac for females

·         Excise on tobacco products increased

·         Excise on SUVs increased to 30% from 27%.  not applicaple for registration as TAXI

·         Mobile phones - priced more than Rs.2000/- increase in duty

·         Service Tax to be levied by all Air Conditioned Restaurants

·         Fiscal Deficit target for 2012-12 is 5.5% and estimate for 2013-14 is 4.8%

·         Demand - Supply issue raising the inflation

·         Plan Expenditure to be `5.53 Lac Crore - more by 29% in 2013-14

·         Total Expenditure to be `16.65 Lac Crore for 2013-14

·         To create jobs for youth, raise incomes & safety

·         Focus on Human Development - Gender, Disability - a new feature in the budget

·         Allotment to HRD ministry - `65K Crore - increase by 17%

·         Focus on Agri exports - which is often oppressed by populist parties

·         Food Security Bill is a commitment of the government - allocation of `10k Crore

·         Dabhol power plant to be fully operational in 2013-14

·         Benefits announced MSMEs

·         Proposal to set up India's first all woman bank in the public sector to be run by women and for the women with an initial capital of `1k Crore - to be opened by October 2013

·         New Co Bill stresses on CSR activities

·         New branches of LIC & one General Insurance company can be opened without the permission of IRDA in TIER II cities

·         `14k Crore capital infusion in PSU Banks

·         Incentives to Foreign Investors by simplifying entry rules

·         Defence Allocation increased - allocation of `2.03 lac crore

·         Modified GAAR to come into effect from  01-04-2016

5 Money tips for expectant parents

 Welcoming a child in the family is one of the most anticipated events in a couple’s life. However, if you haven’t planned for it well, it could be financially debilitating. Here are the things you should take care of before the baby arrives, says Namrata Dadwal. 

 1 Don’t buy everything   

Most parents start splurging on cute baby stuff the moment they receive the good news. But, remember, your baby isn’t going to notice, let alone remember, the expensive toys, clothes or nursery accessories. So, avoid spending money on things that she’s going to outgrow within a few weeks. Preferably, rent most of the stuff, buy pre-owned items online or use hand-me-downs, especially items like baby swings or cribs. For the latter, check sites like olx.in, rentoys.in, toys-on-rent.com and toyzland.in. It’s a good idea for parents to focus on essentials as the baby is likely to receive a lot of gifts. You don’t want to end up with double of everything, do you? Instead, spend on baby-proofing your house. Once the child arrives, you will hardly have time for repair work for at least two years. So, install smoke alarms and socket protectors, smoothen and varnish splintered wooden furniture, and install shelves so you can keep stuff above the toddler’s reach.  

2 Get your finances in order  

 
Your budget will go up substantially once the baby arrives, so it’s best to get rid of high-interest debts or at least pay off as much as you can. You’ll need to bolster your contingency fund, too, since your monthly expenses will be on the rise. Keep at least six months’ worth of expenses in the fund. Also, discuss with your spouse whether both of you will continue working or move from a DINK to a SISK (single income, single kid) family. If both of you plan to work, calculate how much you are likely to spend on hiring a full-time maid/nanny. However, if one of you is thinking of quitting, try living on the income of only one person for 3-4 months to see if you can afford to do so. In this case, take care of financial paperwork too. If you want to leave the job for an indefinite period, you may want to consider withdrawing money from the EPF and investing it in another avenue since the former won’t earn you any interest if there is no contribution in it for three years. 

 
3 Write a will 

 
Don’t be lax here. Write/modify your will immediately to ensure that your child has no problems claiming your assets as a legal heir. You could even appoint her as a nominee for some of your investments or accounts. More importantly, appoint a guardian for your child after taking that person’s approval. Specify the manner in which you would want your child to be brought up and the assets to be used for rearing her, if anything were to happen to you and your spouse. This will avoid any confusion or acrimony among family members about who will be responsible for what. 

 
4 Increase your insurance 

 
Review all your insurance policies. Take a term plan or enhance the existing one after taking into account all your outstanding debts and the amount you will require to sustain and educate your child for the next 20 years. Reassess your health plan too. The cost of prenatal and postnatal care, as well as regular paediatrician consultation fee, can be exorbitantly high. Even if your employer provides a cover, buy a family floater plan that includes your child. A cover of 3 lakh for a 30-year-old with a family of three will have an annual premium of 6,500-7,500. However, all such plans cover the child only after he is over three months old. Some plans provide maternity benefits too, but you should have had the policy for at least two years to avail of this benefit. 

 
5 Start saving for other goals 

 
Bringing up and educating a child can be very expensive. In fact, you will spend 50-60 lakh on your child till he turns 21. At least half of this amount will be spent on education. So, start saving early for this goal. A good way to begin is to invest the cash gifts that your baby receives and start a monthly SIP. If you begin investing even 2,000 a month after the baby is born, you will have a corpus of about 12 lakh by the time he is an adult (assuming 10% return). However, don’t pare down on investing for your own goals, specifically retirement. You can get a loan for your child’s education, but you won’t get one to sustain you during the sunset years.

HOW TO FILE A COMPLAINT AGAINST YOUR BANK

Find out where to lodge your grievance and the steps you need to take to redress it suitably.

AMIT SHANBAUG

    Laxmi Bhardarkar, an 81-year-old retired schoolteacher from Mumbai, feared phone calls till recently. It wasn’t suprising considering that she had received nearly 1,500 threatening, abusive calls for over two months. Bhardarkar’s fault? Her son had pending dues on his credit card, a transaction he had not even carried out. He had sent a letter to the bank, pointing out the error and refusing to pay. After this, he had to go abroad for an official assignment, and while he was away, the bank appointed recovery agents, who started harassing his mother. The ordeal ended when the family contacted the police. 

    The Bhardarkar family isn’t alone in its predicament, nor is it the only grievance against banks. In 2011-12, 48,180 complaints were filed against public-sector banks alone. Here are the steps you need to take to redress your grievance. 

 Step 1
Complain to your bank According to Adhil Shetty, CEO, Bankbazaar.com, nearly all banks have a grievance cell. “So a customer can visit the bank and meet the officials to sort out the issue,” he says. Banks have a dedicated toll-free customer care number, which you can use to lodge your grievance and get a complaint ID. “You can also register a complaint on the bank’s website,” he adds. 

    KS Harikumar, head, operations, Federal Bank, explains that e-mails can also be sent to the service quality department in public-sector banks. “This is an exclusive unit dealing with customer grievances and headed by an executive of the rank of general manager. The complaints posted directly on the bank’s website are also resolved by this department,” he says. Harikumar adds that some banks have begun or are in the process of starting a realtime monitoring system for the complaints received centrally through the customer relationship management (CRM), which is set up in all branches. Once the complaint is lodged, the customer needs to wait for 30 days for the bank to offer a solution or give a suitable reply.  

Step 2
Approach the banking ombudsman If your bank does not address your complaint within a month, you can approach the banking ombudsman. This is a senior official appointed by the Reserve Bank of India to redress customer complaints against deficiency in banking services, as per its scheme introduced in 1995. All scheduled commercial banks, regional rural banks and scheduled primary cooperative banks are covered under the scheme. So far, there are 15 ombudsmen, whose offices are located mostly in state capitals. Their addresses and contact details are available on the RBI website. The ombudsman tries to effect a legally binding settlement between both the parties within a month. However, if a settlement is not possible, it will pass an award after allowing both the parties to present their cases to him. 

 
    Types of grievances When the scheme was introduced, it addressed complaints such as non-payment or delayed payment of cheques and drafts, and services such as remittances. However, in the ensuing years, the scope has widened to include grievances related to plastic money, unfair banking practices, levying of service charges without prior intimation, transactions on the Internet banking platform, and the like. Deficiency in service with respect to loans and advances, say, delays in sanctioning/disbursing loans and non-acceptance of loan applications without a valid explanation, are also valid grounds for complaint. For a complete list of the types of complaints you can take up under this scheme, visit www.rbi.org.in/scripts/FAQView.aspx?Id=24. 

Lodging a complaint 

You have to file the complaint at the office of the ombudsman under whose jurisdiction your bank branch is located. The grievances relating to credit cards and other types of services with centralised operations are to be filed with the ombudsman in whose territorial jurisdiction the billing address of the customer is located. 

    You can put it down on a plain paper, send an e-mail, or fill the complaint form on the RBI website. There are no charges for filing a complaint. 

Grounds for rejection The ombudsman can reject a customer’s complaint if he has not approached his bank for grievance redressal first, or if the subject is pending for disposal, or has already been dealt with at any other forum, such as a court of law or consumer court. Also, the complaint will not be considered if more than one year has passed since the customer has heard from the bank, or 13 months since the date of representation to the bank. 

Compensation limit The scheme caps the amount of compensation that can be doled out to 10 lakh or actual loss suffered, whichever is lower. The ombudsman may choose to award the compensation, not exceeding 1 lakh, to the complainant for mental agony and harassment. However, so far, this has been limited to complaints regarding credit card operations.

 Step 3
Legal route If you are not happy with the settlement offered by the ombudsman, you can file an appeal before the appellate authority within 30 days. The appellate authority in this case is the deputy governor of the RBI. Alternatively, you can approach consumer redressal forums, which take up bank-related complaints, or even the courts.

 

Source : ET Wealth - 21-Jan-2013