Aadhaar Holders Don't Need to Submit ITR-V After E-filing

New forms also seek more detailed declaration on bank accounts held by taxpayers here and abroad
 

In a change that will impact millions of Indians, the new tax forms released on Thursday have exempted taxpayers with Aadhaar cards from submit payers with Aadhaar cards from ting their ITR-V by post after filing their returns online.This will make the online filing procedure truly paperless even for those who don't have digital signatures. The income tax (I-T) department intends to link the electronic verification code (EVC) system-endorsed Aadhaar card to the ITR (income tax return) form submitted by a taxpayer and the authentication of the return will take place electronically. Till now, online filing was paperless only if the person had a digital signature. Taxpayers who did not have it had to post a physical copy of the ITR-V to the Central Processing Centre in Bengaluru within 120 days of filing tax returns online. This physical submission of the ITR-V acknowledgement slip prevented e-filing from becoming a completely online process. The new forms have removed this anachronism and made e-filing easier.

“A large number of e-filers skipped this very important process, assuming the job was done once their return was e-filed, whereas the I-T department doesn't consider a return filed unless the ITR-V re filed unless the ITR-V reaches them on time,“ said Archit Gupta, CEO and co-founder, ClearTax.in, a Delhi-based online tax filing portal. Moreover, ITR-V had to be signed and printed properly so that the bar code was clearly visible. ITR-Vs that did not conform these specifications got rejected. There have been complaints of postal delays and losses in transit as well.

“It was unfair, to say the least, to expect every single tax payer to have access to a printing facility and then make the time to go to the post office to send the speed post. We're glad the process is being done away with for those who have an Aadhaar card and with this the e-filing process will become fully electronic,“ said Gupta. The refund process should get faster and smoother. “One of the possible mechanisms for EVC could be through an OTP sent on the mobile number of the taxpayer,“ Gupta said.

The new forms also seek a more detailed declaration from taxpayers. It's now mandatory to list bank accounts held at any time during the year in ITR-1, includ ing those that have been closed during the period. Tax payers will also have to provide ac count numbers, name of the bank, IFSC code and list any joint holders along with the closing balance on March 31 of the assessment year.

ITR-2 now seeks particulars of foreign bank accounts and assets held, details of overseas travel and expenses on the trip. travel and expenses on the trip.It also seeks utilisation details of amounts deposited in capital gains account schemes for the year. Unutilized amounts from such schemes are taxed as short-term capital gains when not invested within the specified period. “With this disclosure, the department has eased its process of collecting tax by putting the onus of disclosure on the tax payer,“ Gupta said.

Source : The Economic Times -  April 2015

Retirement - An Unavoidable Event in our Life

Diwali Wishes

GET DETAILS OF UNCLAIMED INSURANCE ONLINE

Come April, You Can Get Details of Unclaimed Insurance Online

 

This will also help nominees not having access to relevant documents - Preeti Kulkarni (The Economic Times – 25/02/2014)

Insurance customers and their nominees don’t have to suffer inordinate delays in claim settlement anymore. A new circular from Insurance Regulatory and Development Authority (Irda) is going to change the current opaque scenario from April 1. 

“While unclaimed amount is not uncommon in insurance sector, a steep increase in unclaimed amount is a cause of concern,” the regulator said in the circular that put out the figures of unclaimed insurance proceeds in the public domain for the first time. The unclaimed amount swelled from . 3,037 crore in 2011-12 to . 4,865 crore in 2012-13 — an increase of over 60%. The unclaimed money is the result of insurance proceeds that have failed to reach policyholders or their nominees in time for various reasons. Needless to say, it completely defeats the entire purpose of buying an insurance cover. 

Transparency in Procedure 

From April, a policyholder or nominee will be able to access information about the policy. Irda has asked insurance companies to display details like policyholders’ names and address, maturity proceeds, death benefit and premium due for refund, among other things, unclaimed for over six months, on their websites. 

“Several thousands of crores of unclaimed amount might be lying with insurance companies. There is no reason why insurers should absorb this amount,” says P Nandagopal, MD and CEO, IndiaFirst Life Insurance. “Now, policyholders or their nominees will be able to access information pertaining to their own policies and claim the amount due to them,” he adds. 

Insurers may not allow unfettered access to their database to prevent frauds, but if you have a cover, you can run a check and obtain the details of your policy. 

Many policyholders often misplace original policy documents, and this could result in them forgetting about a policy. It also could lead to their nominees not having access to the relevant documents when they need them. 

These problems will be solved once companies start displaying details on their website. Once they get the information, they can go ahead with claiming the due amount . “The nominees have to intimate the insurance company about the policyholder’s demise, specifying the reason for the death. Then, the insurer will send across the claim form relevant to the cause of death. The claim processing begins after the nominees furnish the documents asked for in the form,” said certified financial planner Harshvardhan Roongta, CEO, Roongta Securities. 

Benefits of Direct Transfer 

Irda has also asked insurance companies to transfer proceeds from policies to the registered bank accounts of policyholders and nominees. Even existing policyholders will be given the option of receiving the funds electronically. For new policies, insurers will seek these details at the time of buying the policy. In case of non-life insurance policies, these details will be collected at the time of renewals or claims. “This is a very good move. It will curb frauds, where unclaimed cheques are discounted and encashed by others. This is a rampant practice,” says Roongta. 

It will also help claim amounts — maturity proceeds, death benefits, or reimbursement claims in health and motor insurance — to reach you sooner. “The move will improve the efficiency and accelerate the pace of claim disbursal, as the claim amount will be directly transferred to the bank accounts,” says Arvind Laddha, CEO, Vantage Insurance Brokers.  

DEDUCTION IN RESPECT OF MEDICAL TREATMENT UNDER INCOME TAX

Section 80DDB. Where an assessee who is resident in India has, during the previous year, actually paid any amount for the medical treatment of such disease or ailment as may be specified in the rules made in this behalf by the Board—

          (a)  for himself or a dependant, in case the assessee is an individual; or

          (b)  for any member of a Hindu undivided family, in case the assessee is a Hindu undivided family,

the assessee shall be allowed a deduction of the amount actually paid or a sum of forty thousand rupees, whichever is less, in respect of that previous year in which such amount was actually paid :

Provided that no such deduction shall be allowed unless the assessee furnishes with the return of income, a certificate in such form, as may be prescribed^89-90, from a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist, as may be prescribed, working in a Government hospital :

Provided further that the deduction under this section shall be reduced by the amount received, if any, under an insurance from an insurer, or reimbursed by an employer, for the medical treatment of the person referred to in clause (a) or clause (b) :

Provided also that where the amount actually paid is in respect of the assessee or his dependant or any member of a Hindu undivided family of the assessee and who is a senior citizen, the provisions of this section shall have effect as if for the words “forty thousand rupees”, the words “sixty thousand rupees” had been substituted.

Explanation.—For the purposes of this section,—

           (i)  “dependant” means—

      (a)  in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them,

      (b)  in the case of a Hindu undivided family, a member of the Hindu undivided family,

                dependant wholly or mainly on such individual or Hindu undivided family for his support and maintenance;

          (ii)  “Government hospital” includes a departmental dispensary whether full-time or part-time established and run by a Department of the Government for the medical attendance and treatment of a class or classes of Government servants and members of their families, a hospital maintained by a local authority and any other hospital with which arrangements have been made by the Government for the treatment of Government servants;

         (iii)  “insurer”⁹¹ shall have the meaning assigned to it in clause (9) of section 2 of the Insurance Act, 1938 (4 of 1938);

         (iv)  “senior citizen” means an individual resident in India who is of the age of sixty-five years or more at any time during the relevant previous year.]

Specified diseases and ailments for the purpose of deduction under section 80DDB.

11DD.  (1) For the purposes of section 80DDB, the following shall be the eligible diseases or ailments :

               (i)   Neurological Diseases where the disability level has been certified to be of 40% and above,—

        (a)   Dementia ;

        (b)   Dystonia Musculorum Deformans ;

        (c)   Motor Neuron Disease ;

        (d)   Ataxia ;

        (e)   Chorea ;

         (f)   Hemiballismus ;

        (g)   Aphasia ;

        (h)   Parkinsons Disease ;

              (ii)   Malignant Cancers ;

            (iii)   Full Blown Acquired Immuno-Deficiency Syndrome (AIDS) ;

             (iv)   Chronic Renal failure ;

              (v)   Hematological disorders :

         (i)   Hemophilia ;

        (ii)   Thalassaemia.

(2) The certificate in respect of the diseases or ailments specified in sub-rule (1) shall be issued by the following specialists working in a Government hospital—

(a)     for diseases or ailments mentioned in clause (i) of sub-rule (1) - a Neurologist having a Doctorate of Medicine (D.M.) degree in Neurology or any equivalent degree, which is recognised by the Medical Council of India;

(b)     for diseases or ailments mentioned in clause (ii) of sub-rule (1) - an Oncologist having a Doctorate of Medicine (D.M.) degree in Oncology or any equivalent degree which is recognised by the Medical Council of India;

(c)     for diseases or ailments mentioned in clause (iv) of sub-rule (1) - a Nephrologist having a Doctorate of Medicine (D.M.) degree in Nephrology or a Urologist having a Master of Chirurgiae (M.Ch.) degree in Urology or any equivalent degree, which is recognised by the Medical Council of India;

(d)     for diseases or ailments mentioned in clause (v) of sub-rule (1) - a specialist having a Doctorate of Medicine (D.M.) degree in Hematology or any equivalent degree, which is recognised by the Medical Council of India :

Provided that where in respect of any diseases or ailments specified in sub-rule (1), no specialist has been specified or where the specialist specified is not posted in the Government hospital in which the patient is receiving the treatment, such certificate, with prior approval of the Head of that hospital, may be issued by any other specialist working full-time in that hospital and having a post-graduate degree in General or Internal Medicine, which is recognised by the Medical Council of India.

(3) The certificate from the prescribed authority to be furnished along with the return of income shall be in Form No. 10-I.]

DON'T GET LURED BY LOW PREMIUM, CHECK CO'S SETTLEMENT RECORD TOO....

Claim settlement ratio and other data tell you which insurer is more reliable. Would your life insurance policy really take care of the financial needs of your dependents as insurers promise to do after your death? Don’t take them for granted. Insurance regulator IRDA’s annual reports for 2012-13 reveal that of the total 23 private life insurers, only five have a claim-settlement ratio of over 90% (in terms of number of policies), despite many of them having completed 10 years of operations. The figure tells you that many insurers are tight-fisted when it comes to passing on the benefits to nominees. According to financial advisors, it’s time insurance buyers, especially those considering pure protection-term covers, take their eyes off the claims of lowest premium and highest benefits, and pay a more attention to the claim settlement record of the insurance company. “Claims settlement ratio, along with related data, is the only objective yardstick for the consumer to determine which insurance company is preferable and more reliable,” says consumer activist Jehangir Gai. IRDA’s data reveals LIC had the best claim settlement ratio of 97.73% among life insurers in the country. Private life insurers’ average settlement record was at 88.65%. Of the 23 private life insurers, only five — ICICI Prudential Life, SBI Life, HDFC Life, Max Life and Kotak Life — have a claim settlement record of over 90%. Shriram Life, Aegon Religare, Edelweiss Tokio and DLF Pramerica Life are at the bottom of the list. Insurers say wrong information provided by policyholders in the proposal form or non-disclosure of facts are the key reasons for rejection of claims. Often, they claim, this is because many policyholders leave the paperwork to agents. So, apart from completing the form yourself when you have zeroed in on an insurance product, next time ask your insurance advisor for the claim settlement record of the insurer. Even before asking him for details, you can visit the website of the insurance regulator and go through the industry data to ensure the advisor doesn’t take you for a ride. “Customers should exercise caution while buying a policy. They should select a company which has a claims settlement ratio of above 95%,” says Kalpana Sampat, chief of branch operations (underwriting and claims), ICICI Prudential Life. However, please note the distinction: new companies typically tend to have a high claim-rejection ratio. As older companies see more of non-early claims, their overall rejection ratio seems lower. Insurers are not allowed to reject claims citing non-disclosure of facts, if the policy has been in force for more than two years. For a newer company, which is bound to have more early claims, the overall repudiation ratio seems higher as most claims are likely to be early claims, requiring investigation. However, do not stop at just examining the claim-settlement record. Claim pending ratio would help you in ascertaining the time taken by insurer to settle claims. According to the IRDA annual report, private insurers’ claim-pending ratio stood at 7.68% (pending for 3-6 months). LIC’s ratio was higher at 15.47%. A high claim pending ratio usually points to the company’s inefficiency in processing claims, particularly, if the proportion of claims pending for more than six months is higher. “While considering claims-pending ratio, ageing of claims pending should be considered. There are three bands — within three months, three to six months and greater than six months. As per policyholder protection guidelines, all claims should be decided within six months. There should not be too many claims pending for more than three months,” says P Ravi Kutumbarao, head-technical, Bajaj Allianz Life Insurance. Turnaround time for claim settlement is crucial as well. You will get an indication of the time taken by a company to settle claims. While choosing an insurer, check whether a huge proportion of claims has been settled after a delay of more than 180 days. Source : Preeti Kulkarni – The Economic Times – 16/01/2014

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