Practices to Keep Money Safe using ATM, Online Banking,Cards

Everything is a just a click away. With the Government push towards becoming a cashless economy gaining traction, the number of people expected to transact and bank online is expected to continue to grow. But how do you keep your money safe in a world where getting lost money back is a mammoth, even impossible, task? Article talks of  Practices to Keep your Money Safe when you are using ATM, Online Banking,Cards, Phones Computers.

Bank accounts

  • Register your mobile and email id with your bank : The RBI mandates banks to send online alerts for all card transactions. Update your phone number and email id with your bank.
  • Set limits : Transaction limits on every card are a must to limit loss. Banks allow setting separate limits for transactions such as e-commerce, PoS and ATM. One can have a different limit for each.
  • Have two bank accounts : Primary account and Secondary account
  • Keep all your money in Primary and never use it for online transactions.
  • Never use Primary Debit card anywhere.
  • Use the Secondary account for all the spending and withdrawing money from ATM. Transfer money from Primary account when needed and keep balance under Rs 10,000.
  • Register your mobile and email id with your bank : The RBI mandates banks to send online alerts for all card transactions. Update your phone number and email id with your bank.
  • Set limits : Transaction limits on every card are a must to limit loss. Banks allow setting separate limits for transactions such as e-commerce, PoS and ATM. One can have a different limit for each.
  • Among security questions banks ask is your sibling’s name, pet’s name etc. and these can be easily fished out from your social media accounts. So please Revisit privacy settings on social media Change settings on sites such as Facebook so that only close friends and family members can access information.

Use Credit Cards

Use Credit Card as much as possible So that the liability is on banks. Debit cards means your money is gone. In credit card payments banks can delay or revert the fraudulent payment but not in case of debit card payment. So credit card is safer choice for transactions. If you aren’t earning a handsome salary or have bad credit score just put an FD of 25,000 and get a Credit Card against it. Never ever use your Debit Card for online shopping or at POS terminals.

  • Get a safer chip based card: A duplicate copy of magnetic cards can be made in minutes, chip based cards cannot be copied easily. Difference between EMV (Europay, Master Card Visa) and Magnetic Chip Card is shown in image below.
  • Never let your cards out of your sight : When paying bills at some restaurant, ask them to bring the POS machine to you or you yourself go to the machine. Also grab that receipt, check, and tear.
  • Always hide the keypad : Those devices that you swipe that card have walls to hide your fingers so that no one can see what you’re typing, that isn’t adequate, cover the top of your hand as well. Don’t punch in the numbers by making a fist and taking the index fingers out. Instead, type like a person playing the piano, i.e: all four fingers resting or hovering over the keypad.
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This Festive Season, Gift Yourself and Your Loved Ones the iPhone 7  


The recent launch of the new iPhone 7 has created quite a buzz in the market. Since then many individuals are now gearing up to buy this Apple product. The new handset is water-resistant, coupled with other features like a superior 12-megapixel camera and long-lasting battery.

With Dussehra and Diwali in October, potential buyers will consider these festivals an auspicious time to buy this phone and dealers may offer the handset at a discounted price with attractive schemes. You can take advantage of such exclusive offers during the festive time and gift the phone to your loved ones or purchase one for yourself.

Features of iPhone 7

The phone will be available in five colors, namely gold, rose gold, silver, black, and jet black. It will have three storage variants of 32GB, 128GB, and 256GB. The iPhone 7 will also be lighter than the previous model, offer wireless earphones (AirPods), ultra-fast Wi-Fi, and a 2GB RAM. With the starting price estimated to be Rs. 60,000, some may find it quite expensive. However, the good news is that you can buy phones on EMI.

Financing options

Purchasing the phone on EMI is a financially viable option. It is light on your pocket and gives you the power to purchase the luxurious device. You may opt for a durable loan from reputed lending institutions like Capital First, thereby letting you buy the phone without a credit card. In this way, you will save a significant amount, as the interest paid on credit cards is higher than that on loans. Additionally, the credit limit of your card will reduce considerably if you opt to pay through your credit card. Are you also planning to purchase the iPhone 7 on EMI?

Note: This is a sponsored post.

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Five Best Tax Saving Options In Financial Year 2016-17

Although saving money is round the year activity for any earning individual, tax saving only gets in focus in the last three months of the FY. There are many reasons for this, and more than these there are many side-effects of this approach of investing. This article looks at the various Tax Saving Options and compares them on different parameters like Liquidity, Flexibility, Maturity Period, Volatility and Taxability.

Remember that your money is supposed to provide security and prosperity for you and your dependents in the present and in the future. Since investment instruments are like vaults where you park your hard-earned money for a better future, you should ensure, as much as possible, that these funds are available to you when you need and grow in value over time.

Therefore, when it comes to saving money for tax rebates, the objective of only ‘tax saving’ does not make any sense for long-term financial goals.

The money you invest to save tax will benefit you in the current assessment year, but can you ensure that it helps you in future as well?

Securing Your Future While Saving Taxes in The Present

It is possible to make sure that the money you invest now to save tax this financial year, also comes in handy in future if you decide objectively and not rush the decision. There are simple parameters you can use to judge whether the investment is going to save tax and provide for a future goal.

For example, the endowment plans can offer you definite returns for a fixed monthly investment, and you can claim the invested amount each financial year as a deduction from your taxable income. Also, the maturity proceeds you receive remain tax exempt.

The Parameters to Judge an Investment

You know your risk appetite. Even if you do not have a detailed personal risk assessment report in hand, you have an idea of where you should invest your money. The two factors you will be considering for your investments are these:

  • The flexibility of Investment: Can you decide the amount and time of investment and the type of instrument you’d like to hold time to time? g. whether you can switch to a debt investment from equity or equity to debt.

Remember that the more risk you can take the higher your returns can be.

  • Liquidity of Investment: How easily and quickly you can turn the investment into cash without losing much of its value?
  • Time to Maturity or Holding Period: How many years do you need to formally stay invested? The shorter the maturity period the better.
  • The uncertainty of returns or Volatility: How certain are you about the returns?
  • And finally, we also test the ‘Taxability’ of the investments at the time of:
  1. Investment: Whether the amount you invest is tax-free?
  2. Interest Payment: Whether the interest accrued or dividend you receive is tax-free?
  3. Maturity or liquidation: Whether the maturity proceeds are tax-free?

Let’s See How Different Tax Saving Options Fare on These Measures

Let us Consider some popular investment options for tax saving and evaluate their features on the three parameters we have selected. We assign ‘5’ for the best possible features in the category and ‘1’ to indicate the worse:

Tax Saving Options: Equity Linked Savings Scheme (ELSS)

Category Product Features Score
Flexibility of Investment Minimum investment may be capped to Rs. 1000.

Any amount can be invested anytime.

ELSS only invests in equity. Therefore, no switch before 3 years is possible.

Liquidity Units can’t be sold back to the fund before 3 years of holding.

Though units can be sold on the exchange where Fund is listed, the price will be highly discounted.

No Loan is available on the investment.

Volatility Very volatile as it is an equity scheme 1
Maturity Period Must be held for a minimum of three years, but due to equity holding should be held for more than five years. 4
Taxability Invested amount can be used for reducing taxable income.

Dividends received are tax-free.

Maturity proceeds after three years are also tax exempt as long term capital gains on equity.

Total 16

Tax Saving Option: Unit Linked Insurance Plans (ULIP)

Category Product Features Score
Flexibility of Investment Flexibility is low, as once the premium is decided on the policy, it must be paid, the only choice is the frequency which must be chosen in the beginning.

You can switch between equity and debt multiple times. Thus, investment flexibility is good in this aspect

Liquidity Money/unit balance cannot be withdrawn before 5 years of the policy are complete.

There is no loan available within this period.

Volatility Depends on the type of investment chosen.

E.g. If you choose growth option the money is invested in equity funds which are the highly volatile investment, but wealth protection option gives you more debt investment.

Maturity Period Maturity period depends on the policy period. However, the accumulated fund value can be withdrawn after 5 years. 4
Taxability Investment, earnings, and maturity all are tax exempt 5
Total 17

Tax Saving Options:Tax Saving Fixed Deposits

Category Product Features Score
Flexibility of Investment Money can be invested once in an FD.

However, multiple FDs can be opened in a financial year.

No option to switch to equity or other security before maturity.

Liquidity FDs can’t be broken before 5 years. 1
Volatility Returns are fixed at the interest rate decided in the beginning. 5
Maturity Period Tenure for these Fixed Deposits is five years. 2
Taxability Investment is tax-free, but interest and maturity values are taxable. 1
Total 11

Tax Saving Options: National Pension Scheme (NPS)

Category Product Features Score
Flexibility of Investment Any amount starting from a minimum of Rs.500 can be invested any number of times throughout the year.

The minimum annual contribution is Rs.6000

The option to switch is inbuilt. The investor has less flexibility to decide the maximum risk under the tax saving (retirement) option.

Liquidity Withdrawal is only possible at retirement, resignation or death of the account holder.

Partial withdrawal is allowed only after 10 years.

Loans are not available.

Volatility NPS portfolio has a maximum of 50% exposure to equity. Therefore, it is less volatile than ELSS but more volatile than PPF, NSC or bank FD 2
Maturity Period Depends on the age of the accountholder. Though for investors below 40 years of age, it is longer than 20 years 2
Taxability Investment up to Rs. 200,000 can be claimed for tax saving purpose.

Interest accrued is not taxable. However, maturity proceeds can be partially taxable.

Total 13

Tax Saving Options: Public Provident Fund (PPF)

Category Product Features Score
Flexibility of Investment A minimum of 12 contributions of Rs. 500 are required in a financial year.

No option to switch to equity from PPF before maturity.

Liquidity Loan facility is available from the 3rd financial year of the account.

Partial withdrawal is allowed after 5th year.

Volatility Very little. Only interest on the account is revised each year by central govt. to match the debt market scenario. 4
Maturity Period 15 years 1
Taxability Investment, interest and maturity proceeds are all tax-free. 5
Total 15

Tax Saving Options: National Savings Certificate (NSC)

Category Product Features Score
Flexibility of Investment Minimum of Rs. 100 can be invested, any number of times in a financial year.

No option to switch to equity of other debt investment before maturity

Liquidity The certificate can be liquidated anytime, however, will receive a lower interest or no interest.

The loan can be taken from financial institutions by pledging the certificate.

Volatility Nil 5
Maturity Period Five years 2
Taxability Interest and maturity value is taxable, but TDS is not deducted. 1
Total 15

Tax Saving Options: Life Insurance Policies

There are many types of life insurance policies available, some of which like ULIP, as seen above, come with an investment option and provide maturity value. But, most of the time, it is not possible to achieve adequate life cover under ULIPs, Endowment and Moneyback policies without committing huge amounts as annual premiums.

Category Product Features Score
Flexibility of Investment The premium amount must be paid for the continuation of the policy.

Life policies (except ULIP) do not give the option to switch to high-risk investments.

Liquidity Policy can be surrendered in the second year onwards. But surrender value can be very low.

Loans may be available in the later stage of the policy.

Volatility Nil 5
Maturity Period As per Policy Term. Minimum Policy Term can be 5 years. 2
Taxability Interest and maturity are tax-free. 5
Total 16

Life Insurance as Tax Saving Investment

While you build your wealth and ensure that your family’s future goals are looked after, life insurance on your life is also important. There are two types of life insurance investments, and both make your money eligible for tax savings in the year you invest in it. One is the simple ‘Term Plan’ other is ‘Endowment and Money Back Plan.’

Term Plan

The difference between term and endowment/moneyback plans is that term plan consists of only life cover. You can get a term life cover for a nominal amount of premium. This will ensure that your nominee gets the sum assured in the event of your untimely death. But if you survive the tenure of the policy you do not receive any maturity value.

But, you will have an adequate amount of life cover for a nominal annual premium.

Endowment & Moneyback Plans

With endowment and moneyback plans, you get a life cover as well as a guaranteed (and some additional unguaranteed bonus, if you choose) maturity amount. Meaning, while the sum assured you have bought will be paid to the nominee in case of your demise, the maturity amount will be paid to you if you survive the policy tenure.

There are guaranteed returns in endowment and moneyback plans, but the premiums are higher than term plans for the same amount of cover. These plans are a better provider of security and assured returns over a long period, and you can be sure to meet your goals in future with these.

What Should You Do?

Recommended investment plan is that you have adequate life cover using a ‘Term Plan’ and invest the remaining amount in Endowment or Moneyback plan to meet your future goals.

For example: You need to invest up to Rs. 150,000 this year to maximize your tax savings. You need a life cover of Rs. 1.5 crore to make sure that your family is provided for even in your absence. If you buy a term cover of Rs. 1.5 cr. And you are 35 years old the premium would be approximately Rs. 35,000 (even lower if you buy term plans online); i.e. you still need to save additional Rs. 125,000. This amount can be used for investment in various plans for your financial goals through endowment plans, ULIPs, ELSS, etc.

Remember that no investment is always bad or always good. Therefore diversification is the best way to maintain and grow your wealth, and keeping your family’s future safe with an adequate term insurance cover.

Summary of Ranks of Tax Saving Options

Now let us consolidate and see how each instrument fared in different category and overall:

Rank Investment Flexibility of Investment Liquidity Volatility Maturity Period Taxability Total Score
1 ELSS 3 3 1 5 5 17
2 ULIP 3 2 3 4 5 17
3 Life Insurance 2 2 5 2 5 16
4 PPF 3 2 4 1 5 15
5 NSC 4 3 5 2 1 15
6 NPS 4 1 2 2 4 13
7 Tax Saving FDs 2 1 5 2 1 11

To learn more about your tax liability and the income tax slab for the Assessment Year 2017-18 click here.

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Jayalalithaa : Amma Assets,Freebies in TN,Disproportionate Assets case

Tamil Nadu Chief Minister J Jayalalithaa passed away at Apollo Hospital at 11:30 pm on Monday 5 Dec 2016 after suffering cardiac arrest . Jayalalithaa was 68 years in age. Jayalalithaa  shot to iconic status first in the glamorous world of Tamil films, and then in the male-dominated rough and tumble of Tamil politics. Comprised equally of triumphs and travails, setbacks and comebacks, her political career saw her rebound from corruption cases and rise to the chief ministership of Tamil Nadu four times.Because she strode so tall over her party and state her passing leaves a gaping void ­ and great uncertainty about how it will be filled. Jayalalithaa along with Mayawati, Mamata and Jayalalithaa, were not only in control of the political destiny of people of their states but they are also shaping the future of Indian politics. This article talks about Jayalalithaa Assets, What will happen to her assets as she left without will, Her timeline, freebies that Amma provided, The Disproportionate Assets case and wedding of her foster son..

Jayalalithaa Assets

Jaya didn’t leave a will: So, who’s the legal heir? Will her political heir apparent Sasikalaa Natarajan stay put in Veda Nilayam or will Amma’s niece Deepa Jayakumar and her brother Dipak stake claim? Or will history repeat itself as in the case of Jaya’s mentor M G Ramachandran, whose house in Ramapuram, Chennai remained mired in legal disputes decades after his death?

AIADMK supremo and Tamil Nadu Chief Minister Jayalalithaa declared assets worth Rs 113.73 crore as on April 2015. This was Rs.3.40 crore less than what she had declared the previous year. The AIADMK leader has filed income tax returns upto the assessment year 2015-16 and assessments have been completed up to 2013-14.

Movable and immovable assets : She has movable assets, total value of which is Rs 41.63 crore and immovable properties valued at Rs 72.09 crore and the total value is Rs 113.73 crore, according to the affidavit filed by her to contest from Radhakrishnan Nagar Assembly constituency.

Cash : She has Rs 41,000 cash in hand, listed Rs 2.04 crore as liabilities and declared agriculture in the profession-occupation column.

Investment and shares :In the column on investment in companies, she said “various deposits and shares with companies have been seized by the police and with the custody of the court in case relating to Spl.C.C.No.208 of 2004 on the file of 36th Additional City Civil and Sessions Court, (Special Court) Bengaluru.” The reference is with regard to the disproportionate assets case against her.

Residence, property and commercial buildings :

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Buying an iPhone 7: iPhone Upgrade Program vs. Consumer Durable Loan

The iPhone 7 created ripples in the smart phone market once it was unveiled on 7th September 2016. Its notable 12-megapixel camera, water and dust resistant exterior, dual speakers, and other unique specifications give the device an unmatched appeal. Apple has priced the iPhone 7 at INR 60,000 and INR 80,000 for the 32GB and 256GB variants respectively. However, with the price tag that comes with this luxurious phone, many may find it difficult to purchase one. This article talks about Buying an iPhone 7 in the iPhone Upgrade Program vs. Buying it on a Consumer Durable Loan

Financing options

In case your financial position does not allow you to make an outright lump sum payment, there are other modes of payment that can ensure you own this high-end device. These include loans, credit cards, and the iPhone upgrade program. However, using a credit card lowers your credit card limit and also charges a higher rate of interest as compared to loans. Therefore, it is advisable to purchase phones without a credit card.

iPhone Upgrade Program

Apple has also given its buyers access to the iPhone Upgrade Program. According to this program, buyers may spread the cost of the phone over a period of 24 months. These spaced-out payments allow buyers to avoid financial roadblocks. Additionally, buyers may also upgrade to the latest iPhone after six months, if a minimum of twelve payments is made. However, buyers may have to pay for an insurance plan known as AppleCare+, which could incur an additional cost over the phone.

The other option available to consumers is to take a loan. Recognizing the urgency to buy this coveted phone, many lenders offer durable consumer loans at competitive rates of interest. Buying the iPhone on EMI (Equated Monthly Installment) is light on the pocket and grants borrowers the power to purchase. Additionally, banks and lending institutions also provide customized repayment schemes, quick approval, minimal documentation, and other benefits.

The right choice

Each financing option has its own set of benefits. However, consumer durable loans offer more benefits than other options mentioned above. Lower credit card limits and higher interest rates on credit cards make buying iPhones on EMI without a credit card  a more feasible option.

Also, though the iPhone Upgrade Program seems to be an attractive option, you may end up incurring higher monthly payments inadvertently. Moreover, you have to trade in your current phone, which means you cannot sell the phone even if you wish to. Leasing the phone leads to higher costs than purchasing it through a consumer durable loan.

Therefore, it financially advisable to buy phones on EMI as it helps you obtain the luxury gadget in a pocket-friendly manner.

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Demonetization: How much Gold can you keep? Income Tax Raids

Since Demonetization many rumours have been making rounds such as that all gold jewellery including ancestral jewellery shall be heavily taxed. Government said that during search operations, conducted by Income Tax Department, there would be no seizure of gold jewellery and ornaments to the extent of 500 grams per married women, 250 grams per unmarried women as also 100 grams per male member of the family. The Bill has not introduced any new provision regarding chargeability of tax on jewellery. This article discusses Income Tax Law on gold jewellery,Income Tax Raids or search and seizure and how much Gold can you keep and whether Gold in your locker, your house is safe.

How much Gold can you keep : Finance Ministry clarifications

Demonetisation came as a rude shock to many.  The Lok Sabha on 29 Nov 2016 passed the Taxation Laws (Second Amendment) Bill, which proposes a steep up to 85 per cent tax and penalty on undisclosed wealth that is discovered by tax authorities during search and seizure. 

Dispelling rumours that jewellery would be covered under the amended law, the Central Board of Direct Taxes (CBDT) said the government has not introduced any new provision regarding chargeability of tax on jewellery. The government has often clarified that only unaccounted money or black money hoarders have reasons to be concerned after the amendments. It  clarified that the jewellery/gold purchased out of disclosed income or out of exempted income like agricultural income or out of reasonable household savings or legally inherited which has been acquired out of explained sources is neither chargeable to tax under the existing provisions nor under the proposed amended provisions.

Points clarified by Finance ministry to remove doubts about the current position of Income Tax Law in respect of gold jewellery from Twitter are shown in image below. Hence  the rumour that the jewellery with the household which is acquired out of disclosed sources or exempted income shall become taxable under the proposed amendment is totally unfounded and baseless. There is no rule for opening of Gold Lockers unless Government suspects you of holding black money and conducts  Income Tax raid or Search and Seizure operation.

Finance Minsiter on gold jewellery how much gold you can keep

Finance Minister on Income Tax Law on gold jewellery


Why the panic on Gold?

The sudden demonetisation announcement has come as a jolt to many. But a peek into the past tells us that the Government and income tax department has been slowly putting measures in place to curb tax evasion , asking for asset declarations. The Prime Minister and the Finance Minister have warned several times about the “harsh measures” on those who don’t participate in these scheme. For example
  • to increase financial inclusion, the government came out with the Pradhan Mantri Jan-Dhan Yojana in August 2014. As of now, the total number of Jan-Dhan accounts is close to 26 crore.
  • Next step was the amnesty scheme for black money hoarders (i.e.Voluntary Disclosure of Income Scheme or VDIS) with only 45% tax that ended on September 30 2016.
  • Now, government has introduced one more amnesty scheme with harsher measures.

Prime Minister Modi also mentioned that he has more tough plans in his mind and will implant it in future if needed. The government has often clarified that only unaccounted money or black money hoarders have reasons to be concerned after the amendmentsWill it be a Gold or Real estate surgical strike ? Many people feel that since real estate and gold are the other places where people hoard black money, the government is expected to switch focus to them now. India’s gold hoard is estimated to be 20,000 tonnes and at current market price, this works out to be a massive Rs 60 lakh crore – four times the total value of the withdrawn Rs 500 and Rs 1,000 notes. We are not saying that the entire gold hoard is black money,  but just like the withdrawn notes, a part of it will be black money.

demonetization myth on Gold Locker

demonetization myth on Gold Locker

Sometime back there was rumour about e-registration of property.

News in Social Media E – Property Pass Book (EPPB).

News in Social Media E – Property Pass Book (EPPB).

About the New Income Tax Bill for Undisclosed Income

The Bill was brought in as a Money Bill requiring consent of Lok Sabha alone.  On 29 Nov 2016 amid a din, the bill which seeks to tax money deposited in banks post demonetisation was passed in the Lok Sabha within minutes without any debate.   The Bill, which is currently under consideration of the Rajya Sabha, will amend Section 115BBE of the Income Tax Act to provide for a steep 60 per cent tax and a 25 per cent surcharge on it (total 75 per cent) for black money holders. So as per bill, discussed in our article, Tax on Undisclosed Income and Pradhan Mantri Garib Kalyan Yojana 2016  One who declared his undisclosed income under the Pradhan Mantri Garib Kalyan Yojana 2016 shall be required to pay

  • tax @ 30% of the undisclosed income,
  • penalty @10% of the undisclosed income.
  • Further, a surcharge to be called Pradhan Mantri Garib Kalyan Cess @33% of tax is also proposed to be levied.
  • totalling to approximately 50%
  • In addition to tax, surcharge and penalty (totalling to approximately 50%), the declarant shall have to deposit 25% of undisclosed income in a Deposit Scheme to be notified by the RBI under the ‘Pradhan Mantri Garib Kalyan Deposit Scheme, 2016’. No interest will be paid to the owner for this. After four years the owner can reclaim his money (25%)

The Bill only seeks to enhance the applicable tax rate under section 115BBE of the Income-tax Act, 1961 which provides rate of tax to be charged in case of unexplained investment in assets. The chargeability of these assets as income is governed by the provisions of section 69, 69A & 69B which are part of the Act since 1960s. The Bill does not seek to amend the provisions of these sections. Tax rate under section 115BBE is proposed to be increased only for unexplained income as there were reports that the tax evaders are trying to include their undisclosed income in the return of income as business income or income from other sources. The provisions of section 115BBE apply mainly in those cases where assets or cash etc. are sought to be declared as ‘unexplained cash or asset’ or where it is hidden as unsubstantiated business income, and the Assessing Officer detects it as such.

Tax on Undisclosed income is detected in search conducted after Presidential assent to Bill

Particulars Existing Provisions Proposed Provisions
General provision for Penalty Under-reporting –50% of tax Misreporting – 200% of tax. No changes proposed.
Provisions for taxation & penalty of unexplained credit, investment, cash and other assets. Tax (Section 115BBE)-Flat tax Rate of 30% + Surcharge + Cess (No expense, deductions and set-off is allowed) Income Tax (Section 115BBE) – Flat tax rate of 60% + Surcharge of 25% of tax(i.e. 15% of such income). So total tax impose 75%. (No expense, deductions and set-off is allowed)Penalty (Section 271 AAC) if Assessing officer determines income referred to in section 115BBE, penalty @ 10% of tax payable in addition to tax (including surcharge) of 75%.
Penalty for search seizure cases Penalty (271 AAB)(i)                  10% of Income, if admitted, returned and taxes are paid.(ii)                (ii) 20% of Income, if not admitted but returned and taxes are paid.

(iii)               60% of Income in any other case.

Penalty (271 AAB)(i)                  30% of Income, if admitted returned and taxes are paid.(ii)                60% of Income in any other case.

Search and seizure operations, Income Tax Raids

Search and seizure is a procedure used in many civil law and common law legal systems by which police or other authorities and their agents, who suspect that a crime has been committed, do a search of a person’s property and confiscate any relevant evidence to the crime.
The search and survey operations conducted by the Income tax department, commonly known as Income tax raids (‘raids’), has always been one of the worst nightmares of businessmen, high earners and corporate.  Some reasons for this fear being heavy tax and penalty payments, possible devastating impact on the business, mental harassment faced during such raids etc.
  • Search operations are carried out by a team of members from investigation wing and usually it takes place in the morning.
  • The search team carries a search warrant with it for verification.
  • The search team usually cover all the business premises of the assessee (in India) and the residential premises of the important and key persons of the assessee like the partners of the assessee firm; directors of the company etc. and can extend upto 2-3 days.
  • It may also cover residential premises of close relatives, friends, business associates etc.
  • The search team usually checks cash, stock, Jewellery, other assets, books of accounts, loose papers.
  • Government has clarified during search operations, conducted by Income Tax Department, there would be no seizure of gold jewellery and ornaments to the extent of 500 grams per married women, 250 gm per unmarried women as also 100 gm per male member of the family.
  • Besides the checking of records the search team records statements of personnel, management and at times questions any person present at the searched premises, which may include even visitors, customers and guests.  Search team generally does not allow use of telephones and mobiles during raids.

Status  of Income Tax Raid

Income Tax authorities are conducting search and seizure places at many places, including one at Bengaluru where Rs 5.7 crore cash in new currency notes was recovered from two businessmen.
Search and seizure operations are conducted by the tax department when the Assessing Officer believes that the assessee is unlikely to produce books of accounts or likely to suppress books of account and other documents which may be useful and relevant to an income tax proceedings
  • During 2015-16, the Income Tax Department conducted 445 searches which discovered undisclosed income of Rs 11,066 crore. Total assets seized were Rs 712.68 crore.
  • Also 545 searches conducted in 2014-15 have led to admission of undisclosed income worth Rs 10,288 crore. Total assets seized amounted to Rs 761.70 crore.
  • Besides, 569 searches in 2013-14 saw admission of undisclosed income of Rs 10,791.63 crore and asset seizure of Rs 807.84 crore.
  • This took the total undisclosed income which was admitted during searches to Rs 32,146 crore.

Related articles:

The government has often clarified that only unaccounted money or black money hoarders have reasons to be concerned after the amendments. If you have income or Gold which you can explain then there is no tension. And Govt is not going to open Lockers. At least not yet!

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