10 To-Dos before filing I-T returns

It is that time of the year again when tax payers - particularly the salaried class - scramble to file I-T (income tax) returns. After all, filing of tax return is compulsory for everyone whose gross total income exceeds the basic exemption limit. For financial year 2007-08 (assessment year 2008-09), for instance, this limit was Rs 1.45 lakh for women below 65 years of age, Rs 1.95 for senior citizens and Rs 1.10 lakh for any other individual. If your income for the year exceeded the exemption limit, you will be required to file the return by the due date (July 31, in this case). However, despite all the precautions taken by you, rush-hour filing may mean that you could inadvertently miss out on certain details and disclosures, and therefore be on the bad books of the taxman. If not that, you might just forget to make the most of the tax breaks available to you, thus paying more tax in the process and claiming no or less return. Here are 10 important things to do before filing your I-T returns: The first thing to do is to see that you have chosen the right form to file your return. For example, there are two I-T return forms -- ITR-1 and ITR-2 - available for salaried individuals at the moment, and your sources of income will decide which form to use. Use the first form if your income is from salary, pension or interest, and use the second one in case of any capital gain, income or loss from house property and income from any other source. The Tax Department will refuse to accept your form in case you have chosen the wrong form. Ensure that you fill in correct personal details in the form meant for you, especially your name, address, bank account details and PAN number. Bank account details include the bank account number, type of account and the bank's MICR code. This is crucial, especially if you are claiming a refund. Likewise, your PAN is very important because the tax laws levy a fine of Rs 10,000 for not quoting or misquoting your PAN number. Check that you have already received your Form -16, i.e. certificate of tax deducted at source by the employer on your salary income. The original Form-16 will have to be deposited with the I-T return form. Similarly, "if any tax has been deducted by bank on interest or any other party on the payment made to you, then you will have to obtain Form -16A, i.e. certificate of tax deducted at source on rent, interest etc," informs Vikas Vassal, executive director, KPMG. Ensure that you have analyzed your bank statement as to any income received or any investments made, that are required to be disclosed in your tax return. "A common mistake most salaried tax payers tend to commit is the exclusion of interest income. Your assessing officer doesn't have to a genius to guess that any person who maintains a savings/deposit account would normally also receive interest income and not disclosing the same may.Therefore, be one sure way to get discomforting correspondence from the tax office," says R K Chopra, V-P (Finance), Alankit Assignmets Ltd. Ensure that you have computed your tax liability, including your salary income, and "if any tax is payable, the same has been paid as 'self assessment tax' before filing the tax return.Further, if any interest is payable for late payment of tax, then the same has also been deposited," says Vassal. Check whether you have correctly filled in details of your salary income/other income and also the tax deducted at source in the relevant columns of the tax return form to ensure that you get the credit for TDS. Don't miss on the details of your stints with stocks last year. Note that even if the markets haven't been kind, the loss would be allowed for carry forward for luckier times in future for setoff only if the same has been appropriately been disclosed in the form. Ensure that you have, under various sections of the I-T Act, claimed all the deductions that you are eligible for. For example: a. Under Sec 80 C - For investments made like PF, PPF, NSC, school tuition fees of children, insurance premium investments in specified mutual funds etc. b. Under Sec 80 G - Donations made to charitable organizations. c. Housing deduction for interest on housing loan etc. You also have to fill in information in respect of specified investments, as per prescribed limits, such as: Property bought or sold in excess of Rs 30 lakh Mutual funds, in excess of Rs 2 lakh; Cash deposits in excess of Rs 10 lakh; Credit card payments in excess of Rs 2 lakh; Bonds etc in excess of Rs 5 lakh It is also important to know that certain income that is exempt (i.e. income which is not taxable) is also required to be disclosed in the I- T return form. For example, dividend received and receipt of PF balance, among others. Not disclosing these incomes may land you in trouble also.

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WPI inflation 11.91% for week ended Jul 5

Data Watch: WPI inflation 11.91% for week ended Jul 5 Thursday, Jul 17 The annual inflation rate and Wholesale Price Index weekly data, based on Government of India announcements: . Week ended Jul 5: Index for all commodities 238.7, up 0.3% from 238.1 a week earlier; annual point-to-point inflation rate 11.91% vs 11.89% a week ago, and 4.61% in the year ago period.

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RBI says bank credit grew 25%, deposit 22% in year to Jul 4

MUMBAI - Bank credit in year to Jul 4 registered 24.9% growth, while
deposits grew 21.7% during the period, according to data released by
the Reserve Bank of India today.

According to latest RBI data, advances of commercial banks rose to
24.9 trln rupees as on Jul 4 from 19.9 trln rupees on Jul 6, 2007.

In the fortnight of Jul 4, credit expanded marginally 0.63%.

Bank deposits in the year to Jul 4 grew 21.7% to 34.12 trln rupees.

On a fortnightly basis, deposits registered grew 1.74%.

RBI, in its annual policy statement for 2008-09 (Apr-Mar), projected
credit growth of 20% and deposit growth of 17% for the current
financial year.

12 FDI proposals worth Rs 354 cr cleared

The Government on Tuesday has cleared 12 FDI proposals totalling Rs
354.13 crore, including the biggest proposal worth Rs 160 crore from a
Hyderabad-based construction firm Costal Projects.


The proposals, approved by Finance Minister P Chidambaram on the
recommendations of the Foreign Investment Promotion Board (FIPB), also
include a proposal by Singapore-based Singtel to set up a joint
venture company in long distance telephony, that required no-objection
certificate from Bharti.

Singtel's proposal would include FDI of just Rs 48 lakh with foreign
equity up to 74 percent, which is the cap in the telecom sector.

Costal Projects of Hyderabad would bring in Rs 160 crore of FDI for
converting its operating company into an operating cum holding
company.

New Delhi-based Unicon Financial Intermediaries, The company is
engaged in commodity broking, stock broking and other permitted non-
banking finance activity, would attract Rs 120 crore of FDI through
increase in FDI in its holding firm.

IT company Aurionpro Solutions would bring in Rs 53.65 crore of FDI
through issue of equity shares and convertible warrants and through
share swap.

Rs 19.45 crore of FDI would flow into India through a proposal by
Standard Chartered Bank (Mauritius) for acquisition of additional
equity and conversion of operating company into an operating cum
holding company.



Chidambaram rejected a proposal by Freedman Opthaimic Ltd for issue of
40 percent equity to NRI under the single brand retail trading.



As many as eight proposals were deferred, which included one by Elken
International Ltd to undertake cash-and-carry wholesale trading for
which approval for test marketing had already been obtained by the
company.



Hughes Communication has been advised to apply afresh for a proposal
as per new policy guidelines in telecom sector.

Govt advances WPI inflation data release to Thursdays

NEW DELHI - The commerce and industry ministry has advanced the
release of  headline inflation data for the week to Jul 5 to 5PM
Thursday from noon Friday, a senior ministry official said today.


"Future inflation data will now be released on Thursday instead of
Friday," the official said.

India's headline inflation rate shot to a fresh 13-year-high of 11.89%
for the week ended Jun 28.

The rate is widely expected to top 12% in the data for week to Jul 5
to be released Thursday.

 

 

Companies slow down hiring on credit woes

It may have started with IT and ITeS, but job insecurity is fast
gripping other sectors as well. With India Inc in the throes of
inflationary pressure, the job market is getting tighter with each
passing day. As a result, more people are now chasing fewer jobs.

"Companies are doing a reality check in terms of the effect of the
credit crisis in the US on their businesses," says Kelly Services
country head Rajiv Mehrotra. "Though hiring for crucial roles will
continue, volume hiring to fuel growth plans is being revisited."

The effect is quite evident, especially in the IT sector. While
companies like HCL, Infosys and TCS had indicated that they had slowed
hiring processes in the recent past, Patni Computers is the latest to
show some 400-odd employees the door. Following the cues, banking and
financial services sector, too, is facing a slowdown in terms of
hiring. Indian banking major ICICI Bank has already laid off some
1,000 employees. Similarly, hiring in investment banking seems to have
taken a nosedive. "Recruitment in I-banking has flattened, but the
same cannot be said about insurance, retail banking and financial
services," says Transearch International partner Atul Vohra.

Among others, sectors like retail, realty and automobiles are
witnessing a drop in hiring. According to an industry source, the two-
wheeler industry had tightened its belt on hiring almost a year ago
and it won't be surprising if carmakers soon follow suit. "Only those
positions which got vacated are being refilled, but no additional
hiring is being done," he pointed out.

Retail and FMCG are also showing a similar trend. Delayed expansion
plans and rising input costs are giving retailers sleepless nights.
Recently, FMCG major P&G was reported to have cut back its 'initiative
development' teams across operations worldwide by 10-20%, eliminating
duplication of functions. "Organised retailers have been on a hiring
spree for some time," says Sachit Bhatia of Technopak Consultants.
"They are now focusing on enhancing the skills of existing employees
rather than hiring more."

The scenario is no different in realty. Though big players continue to
hire, it's the small developers who are being hit. Analysts and HR
consultants also believe that sectors driven by consumer demand may
get further affected. This means sectors like gems and jewellery,
travel and tourism and hospitality are likely to witness a slump in
hiring. In the wake of current fuel crisis, a few domestic airlines,
SpiceJet for example, had deferred hiring plans while GoAir had issued
pink slips to 150 employees.

But there is another downside to it. The salaries, which were soaring
at a rate of anywhere between 10-15%, might see a de-growth in the
coming months, say analysts. "Looking at the current market conditions
and cost pressures across sectors, salary growth is likely to come
down. The rate of acceleration would not be as much," says Hewitt
Associates business leader (consulting), Sandeep Chaudhary. Agrees
Hunt Partners India country manager Sunit Mehra: "Year 2009 may
probably be a year where salaries may remain flat in several industry
sectors and functions." Interestingly, he feels, as a result of all
this, attrition rates may get positively affected. "People will think
twice before quitting their jobs, which would bring down the attrition
rate."

Source: Economic Times
 

 

 

Mukesh may foot intl faculty salaries at IIM-B

Chairman and Managing Director of Reliance Industries, Mukesh Ambani
is understood to have expressed interest in footing the salary bills
of international faculty at the Indian Institute of Management (IIM),
Bangalore.


A source said Ambani, who is on the governing board of the premier
IIM, had emphasised that the institute should recruit international
faculty to become world class at the institute's recent board
meeting.

"The board discussed hiring international faculty but we have not yet
worked out a detailed plan on this front. We will be taking a call on
the issue in the next couple of months and could put a proposal in
front of all board members," said a board member.

The institute could also approach the board members to raise funds for
the purpose.

Last year, Mukesh Ambani, who is also an alumnus of the Stanford
Graduate School of Business (GSB), had sponsored a GSB and IIM-B
student exchange programme under which 16 students of the institute
visited Stanford on a seven-day trip.

"Sponsoring the recruitment of international faculty could be another
step towards raising IIM-B's international portfolio and international
research," added the source.

None of the seven IIMs has international faculty on their rolls. Last
year, IIM-Ahmedabad was in talks with an international professor but
the deal fell through.

For IIMs, recruiting and retaining international faculty is a
challenging affair.

"Though we always welcome visiting faculty, we find that they do not
want to stay on a permanent basis on campus. However, NRI faculty, who
have been working with universities abroad do show interest in joining
us," said a professor from IIM Calcutta. Two new NRI professors have
joined IIM-C from the UK.

A major hindrance in attracting international faculty to IIMs is the
salary. At any IIM, an assistant professor's monthly income is
anywhere between Rs 35,000 and Rs 40,000 (it varies depending on the
consultancy fee from corporate assignments). An associate professor's
monthly income is Rs 40,000-45,000 and a professor's around Rs
54,000.

Conservative estimates peg a professor's salary in the US at anywhere
between $4,000 (around Rs 1.8 lakh) and $5,800 (around Rs 2.61 lakh)
per month. This income is over and above consultancy fees from
corporate assignments.

Bank stocks: Interesting bet for investment

The BSE Bankex was the worst performing sectoral index on Tuesday,
shedding nearly 8%, steeper than 5% drop in the benchmark Sensex. The
Bankex has more than halved in 2008 following fears of economic
slowdown. The banks have to face twin challenges in the form of rising
interest rates. First, the value of investment in government
securities (g-sec) declines. Further, the loan offtake slows down as
cost of borrowing increases. Yet, for all these negatives, the sell-
off in some of the private bank stocks may have been overdone.

Indian banks typically hold g-sec with a maturity of two years. The
yield rate of such a security has gone up from 7.5% at the end of
March '08 to 9.2% at present. This implies a fall of 3% in the value
of investment. Less than 20% of the total g-sec investments of private
sector banks like ICICI Bank, HDFC Bank and Axis Bank fall under the
category of available for sale securities unlike their public sector
counterparts.

This makes them less vulnerable to rising interest rate. However,
private bank stocks have been treated at par with public sector banks,
though their exposure to g-secs are much lower. This shows that the
investors are increasingly worried about the growth in the loan book
of private banks in FY09.

The top two private sector banks — ICICI Bank & HDFC Bank — have
recorded healthy growth rates in profits in the last two financial
years. Net profit of HDFC Bank grew by 40% in FY08, while that of
ICICI Bank increased by more than 30%. The high growth rates were
reflected in the price to earnings (P/E) multiple of these banks.

When the markets reached its peak in January '08, HDFC Bank was
trading at a P/E of 50 and ICICI Bank was trading at a P/E of 36. It
is evident that the stock prices had increased much more than the
growth rates implied by the earnings.

At current prices, the stocks of HDFC Bank and ICICI Bank are trading
at a P/E multiple of 24.5 and 14.2 respectively. This means analysts
are expecting the balance sheets of these banks to grow by over 20%
considering that the profit growth will depend solely on the business
growth rather than improvement in net interest margin (NIM).

On the other hand, the stocks of Axis Bank and Yes Bank are trading at
a P/E of less than 20. Both these banks are on a much higher growth
trajectory than the two biggest private sector banks. This is evident
as Axis Bank witnessed 90% growth in its profit in the June '08
quarter. Experts feel that the low multiples of these two banks and
high growth trajectory make them interesting bets for investment.

Share feed with IPTV, HITS: Govt tells channels

The government has made it mandatory for all broadcasters — representing about 350-plus television channels that are currently allowed to be beamed on cable and direct-to-home (DTH) platforms — to share their feed with Headend-In-The-Sky (HITS), IPTV and Mobile TV, the new cable distribution platforms that have emerged recently. A clarification issued by the Ministry of Information and Broadcasting (I&B) recently makes it compulsory for all broadcasters to immediately share their channels with Wire & Wireless India Ltd (WWIL), the HITS licence holding company of Essel Group. This is significant because several broadcasters, including the STAR channels (distributed by STAR-DEN) and Sony bouquet (MSM Discovery), were not sharing their channels with Essel Group's HITS venture that will be initially launched across 12-cities in the last week of July. WWIL would ultimately rollout HITS across all the 55-cities listed by the broadcast regulator, Telecom Regulatory Authority of India (Trai), for the proposed CAS rollout. "The I&B ministry has told all broadcasters, including STAR-DEN and MSM Discovery, to share their channels with HITS platform of WWIL at the earliest," a source in the I&B ministry told Business Standard. Similarly, operators of IPTV (Bharti, Reliance Communications and MTNL) or Mobile TV (Doordarshan) can now demand from the broadcasters any channel they want, even in the trial-phase, till an overall policy for all the new platforms comes out, an industry source said. This move will also make Subhash Chandra-promoted Essel Group the pioneer of private DTH (Dish TV) and HITS. Dish TV is the first private DTH company in the country launched in late 2004, while WWIL will become the first cable company to have launched HITS starting July-end. Digital Entertainment Networks (DEN), the joint venture company with STAR India, is also interested in launching their own HITS platform and therefore waiting for the government to announce the HITS policy, a source in STAR-DEN alliance said. It should be noted here that the government is yet to bring out its policy on HITS, IPTV and Mobile TV. HITS is a new cable distribution platform that is similar in its technology with DTH. But unlike DTH, where the television signals reach the end consumers directly via satellite, in HITS, the cable operator receives the channels via a satellite and then pushes them to the consumers through a set-top box. This, according to Trai, is a faster and cost-effective technology to enforce both conditional access system (CAS) and the digitalisation of analogue cable. The Essel Group is using a private satellite Asiasat-4 for the HITS operations and has booked 10-transponders on it. Its HITS rollout will have about 200 digital quality channels offered to the consumers through attractive schemes. Source: Business Standard

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IT firms have no place for a fake resume

Date: Monday, 14 July, 2008, 11:22 AM     The IT-BPO industry is becoming increasingly clear that a fake resume can cost you your job with India's largest IT serivces provider, Tata Consultancy Service (TCS), being the latest to recently ask close to 20 employees at its Kolkata centre to leave. The company, during the background verification, found that these employees have used fudged resumes to get jobs. In the recent past all the major IT firms including Infosys, Satyam and Wipro Technologies and many mid-cap firms have taken a hard stand on fake or fudged resumes. However, the incidents continue. First Advantage, a leading background screening firm, in its recent report states that 30 per cent of all the resumes they have screened have discrepancies. In 2006-07 the company screened over 2 million applicants across industries. Ashish Dehade, managing director (West Asia), First Advantage says, "The percentage has been increasing. In 2006 it was 16-17 per cent, for 2007 its was 30 per cent and while we are just six months into 2008 the percentage is around 30 per cent." TCS is not the only firm doing this. Earlier Infosys had asked close to 100 employees to leave in FY07 due to discrepancies found in the resumes. Same goes for Satyam and Wipro Technologies. Some time back it was reported that Wipro would be sharing with other IT firms the database of job applicants who have faked information in their CVs. Satyam has put in place a system that does a background check even before the candidate actually comes and joins the firm. "Well most of the companies have put in place some procedure to tackle this. We started this process two years back and 100 per cent of our associates joining come through this system. This has dramatically brought down the number of resumes with discrepancies," says Sucharita Palepu, Satyam HR MyHR Frameworks head. IT sector is the second most affected verticals, banking sector has the highest discrepancies, when it comes to fudged resumes. One in every four CVs received by the IT services firm has some kind of discrepancies. And one in every six CVs in the BPO industry in fudges states the First Advantage report. The problem is not just at the fresher level, it goes up to the senior level as well. "One of the leading IT firms was hiring a practice head. But after his background check it came to light that the gentleman with over 20 years of industry experience had fake IIT certificates," says a spokesperson from a leading background screening firm in India. To tackle this problem industry body Nasscom, created the National Skills Registry (NSR), which has a candidates personal, academic and employment details and undergoes professional verifications. The registration numbers towards the end of 2007 was 160,000. However despite the actions taken by IT firms Dehade feels that the problem will persist in India. "Education and employment discrepancies in BFSI, ITeS/BPO sectors have seen the highest increase in the past 15 months." Source: Business Standard

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