Visit http://staffcorner.com

Saturday, August 28, 2010

EPFO Trustees' decision final on PF investments: Labour Ministry

Amid reported differences between the ministries of labour and finance, the former today asserted that the decision of EPFO trustees would be "final and supreme" on whether a portion of Rs 5 lakh crore of provident funds should be invested in stock markets.
The Finance Ministry wants the Labour Ministry to follow the investment pattern that is has notified, which provides for up to 15 per cent of the corpus in stock markets.
"Central Board of Trustees (CBT) decision is final and supreme. We would go by that. This matter would be placed before trustees in their next meeting scheduled on September 10", Labour Secretary P C Chaturvedi told reporters at CII event.
"We are careful in investing money of our workers. People call us very conservative, but paramount thing is safety of principal amount (deposits) of workers," he added.
In a recent letter to Chaturvedi, Finance Secretary Ashok Chawla had referred to the changes by made in EPF schemes earlier without any discussion with CBT and said it (Labour Ministry) could take a similar view on the issue of investment pattern of provident funds.
On the letter, Chaturvedi said, "There are many missing links in the advice of Finance Ministry (to invest in equity). There are many issues in that."
He added, "When you say equity, it is not face value. It is not that you are getting Rs 10 share for Rs 10. You are getting that at Rs 100. Tomorrow this Rs 100 could become Rs 120 or Rs 80."
Chaturvedi said there were several issues, operational as well as about the returns, involved in the case. "You don't get anything by way of interest (by investing in equity). It is only when you liquidate that share only then you get return."
He said the Finance Ministry's advice is based on the experience of New Pension Scheme (NPS) where they have admitted that there is no data available to establish that "what Labour Ministry is doing is inferior to what they are advising."
Chawla's letter said that while NPS for central government employees could generate a weighted average investment return of 14.82 per cent in 2008-09, EPF has been giving only 8.5 per cent returns to its subscribers for many years.
The EPFO has been giving 8.5 per cent return annually to its subscribers since 2005-06.

Thursday, August 26, 2010

New Direct Tax Code: Pay less in taxes from April 2011

The Cabinet has cleared the Direct tax code and will be introduced in Rajya Sabha, and referred it to a select committee, during the monsoon session.

The new provisions under the Direct Tax Code are as follows:

  • Tax for income between Rs. 2 lakh - Rs. 5 lakh: 10%
  • Tax for income between Rs. 5 lakh - Rs. 10 lakh: 20%
  • Tax for income over Rs. 10 lakh: 30%
The limit for exemptions for salaried people is Rs. 2 lakh, while that for senior citizens is Rs. 2.5 lakh.

Corporate tax has been kept at 30%.
The new Code comes into effect from April, 2011.
After the approval of the Cabinet, the decks are cleared for tabling the legislation in the Monsoon Session of Parliament so that the new Act ushering in reduced tax rates and exemptions may come into effect from next fiscal.
When enacted, the Code will replace the archaic Income Tax Act and simplify the whole direct tax regime in the country.
The Code aims at reducing tax rates, but expanding the tax base by minimising exemptions.
The Finance Ministry had earlier come out with a draft on the (Direct Tax Code) DTC bill, some of whose provisions drew strong criticism from industry as well as the public.
To address those issues, the ministry brought out the revised draft, dropping earlier proposals of taxing provident funds on withdrawal and levying Minimum Alternate Tax on corporates based on their assets.
"As of now, it is proposed to provide the EEE (Exempt-Exempt-Exempt) method of taxation for Government Provident Fund (GPF), Public Provident Fund (PPF) and Recognised Provident Funds (RPF) ...", the revised DTC released by the Finance Ministry said.
The revised draft also puts pensions administered by the interim regulator PFRDA, including pension of government employees who were recruited since January 2004, under EEE treatment.
The first DTC draft had proposed to tax all savings schemes including provident funds at the time of withdrawal bringing them under the EET (Exempt-Exempt-Tax) mode.
Under the EEE mode, the tax exemption is enjoyed at all the three stages - investment, accumulation and withdrawal.
The earlier DTC draft had proposed to reduce the corporate tax to 25 per cent from the present 30 per cent. The revised proposal has also made it clear that tax incentives on housing loans will continue. Payment on interest on housing loans up to Rs. 1.5 lakh will continue. The earlier draft was silent on housing loans.

Read more at: http://www.ndtv.com/article/business/new-direct-tax-code-pay-less-in-taxes-from-april-2011-47396?cp

Wednesday, August 11, 2010

Income Tax Refund fortnight from August 16 to 31

The Income Tax Department will observe the second fortnight of August, 2010 as IT Refund period to solve the pending complaints of salaried tax payers up to the Assessment year 2008 – 2009. This IT Refund Fortnight will be observed all over Tamil Nadu from 16th August, 2010 to 31st August, 2010.

IT officers will sit with the complainants and solve the problem. There are about 2200 complaints are pending with IT department related with the refund of excess tax they paid or deducted from their income.

The salaried employees those refunds are pending should bring the original TDS certificate, Form 16, PAN card, TAN number, bank account details and current postal address etc., with them. You can view your status by log in to tin.nsdl.com

Monday, August 2, 2010

AICPIN for the month of June-2010 published. DA hike of 10%

Just now All India Consumer Price Index Number for Industrial Workers (CPI-IW) on base 2001=100 value has been released by Labour Bureau. The value of the index stands at 174 level, so in this situation, the Dearness Allowance for Central Government Employeeswill be rised 10% and total of 45% (35% + 10%).

All India Consumer Price Index Number for Industrial Workers (CPI-IW) on base 2001=100 for the month of June, 2010 increased by 2 points and stood at 174 (one hundred and seventy four). 

During June, 2010, the index recorded an increase of 8 points in Varanasi centre, 6 points each in Quilon and Giridih centres, 5 points in 4 centres, 4 points in 8 centres, 3 points in 13 centres, 2 points in 17 centres and 1 point in 19 centres. The index decreased by 1 point each in Ludhiana and Ghaziabad centres, while in the remaining 12 centres the index remained stationary. 

The maximum increase of 8 points in Varanasi centre is mainly due to increase in the prices of Rice, Wheat, Fresh Milk, Onion, Vegetable and Fruit items, Electricity Charges, Bus Fare, Tailoring Charges, etc. The increase of 6 points in Quilon centre is due to increase in the prices of Rice, Fish Fresh, Onion, Vegetable and Fruit items, Cigarette, Tailoring Charges, etc. and in Giridih centres it is due to increasein the prices of Mustard Oil, Fish Fresh, Turmeric Powder, Vegetable and Fruit items, Soft Coke, etc. However, the decrease of 1 point each in Ludhiana and Ghaziabad centres is due to decrease in the prices of Onion, Vegetable items, Sugar, etc. 

The indices in respect of the six major centres are as follows : 

1. Ahmedabad – 169
2. Bangalore –182
3. Chennai – 162
4. Delhi – 159
5. Kolkata -172
6. Mumbai -171

The point to point rate of inflation for the month of June, 2010 is 13.73% as compared to 13.91% in May, 2010.