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Mobile Banking App to the Rescue

The usual monsoon nightmare! Kshitij woke up to the pouring skies. The heavy downpour and the flooded roads forced Kshitij to take a day off from work as there was no way he could wade through the waist-deep water to his workplace. A movie and a coffee later, Kshitij thought he could finally get to the task of cleaning his smart phone of all the applications he had hardly used.

After uninstalling a number of them, he thought of removing the Kotak Bank mobile banking application as he hardly used it, thanks to the Kotak Mahindra Bank and ATM facility right across his office. Just as he was about to uninstall, his phone rang. It was his youngest brother calling him to transfer some money to a friend’s account. Kshitij’s brother had lost his wallet (which had his ATM card) and was in urgent need of cash to pay his hostel fees. The fear of getting scolded by his parents made Kshitij his only hope. While Kshitij was figuring out a way to reach the bank through the flooded streets in his neighborhood, it struck him that why not use Kotak mobile banking app to transfer the funds to his brother. He was glad he had not removed it from the phone yet and decided not to do so in the future by realizing its worth and necessity. This incident made him explore the other features of the app.

He now uses it not just to transfer funds or to check his accounts status, but also to pay his bills, recharge his phone and DTH connections and for things like pin change for his credit and debit cards. He was surprised and happy at how conveniently he could book flight tickets and make hotel reservations for him and his family’s next vacation with mobile banking services from Kotak Bank. Utilizing mobile banking facility has saved him a lot of energy and time that he would have otherwise spent on visiting the bank, the ATM and other stores for things like recharging his phone and planning his vacations.

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Is Employer provided Medical insurance Sufficient?

Many employers today, offer a group medical insurance cover to their employees, which include the employees’ family members as well. Most of the salaried people think that the corporate group health insurance policy from the employer is sufficient and there is no need to buy another policy by putting in own money.  But is the corporate health insurance plan a complete solution? It looks at the employer provided Medical benefits like Health Insurance Policy,Medical Bill Reimbursement,Cost of Hospitalization,Types of Medical Insurance, Tax Benefits on Medical Insurance.

What is Employer Health Insurance Policy?

An employer-sponsored health insurance is usually a group insurance, which covers all the employees in the organization. Group health insurance is a medical insurance that covers a group of people, who are usually the members of societies, employees of a common company, or professionals in a common group. Group policies are usually cheaper than individual policies. The logic of group  insurance is that all those who are insured are not going to fall sick and are not going to make a claim. But the benefit can go to that one person who falls ill and needs to make a claim.

Employees must  know the benefits offered, the sub-limits and the sum assured at the time of joining.

  • Usually the benefits of Employer-provided insurance policy can be availed at the time of hospitalization of those covered in the plan typically the employee and dependants. So it is a floater policy i.e in time of need coverage amount can either be used by one member or by all upto max of  yearly coverage amount.
  • Usually Employer Group Insurance covers Pre-existing Diseases and Maternity benefits upto two children from the day employee joins. Whereas, standalone health policies will have a waiting period of at least two to four years, depending on the insurer.

Employer Health Insurance Mediclaim Policy means hospitalization. This policy covers any illness or disease or  injury and typically covers which are incurred in India and are within the policy period.

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Payment Banks,Types of Banks in India, History of Banking in India

On 19 Aug 2015, RBI gave in-principle licences to eleven entities to launch payments banks. What are Payment Banks, What are different Kinds of Banks in India, what is the history of Banking in India are some of the questions that are covered in the article.

What are Payment Banks?

Payment banks are banks which will offer selected services as compared to full fledged banks. A payment bank can only receive deposits and provide remittances. It cannot carry out lending activities. This type of bank is targeted at migrant labourers, low income households, small businesses, and other unorganised sector entities to to help India reach its financial inclusion targets. These banks have to use the word Payment Bank in its name which will differentiate it from other banks.

Why are Payment Banks important?

It’s a step to redefine banking in India. The Reserve Bank expects payment banks to target India’s migrant labourers, low-income households and small businesses, offering savings accounts and remittance services with a low transaction cost.

  • It hopes payments banks will enable poorer citizens who transact only in cash to take their first step into formal banking. So For unbanked customers, a payments bank account will provide the much-needed access to banking services.
  •  It could be uneconomical for traditional banks to open branches in every village but the mobile phones coverage is a promising low-cost platform for quickly taking basic banking services to every rural citizen. A labourer working in a metro, today spends about half a day in a queue at the local bank branch to transfer money to his family in the village. With a payments bank account, he may be able to do it through his phone which need not even be a smart phone.
  • The innovation is also expected to accelerate India’s journey into a cashless economy. The new payment banks will also make people less dependent on cash, even for small sums, and since a mobile wallet could be a bank account soon, this move could, over time, have a big impact on m-commerce.

For customers who already have bank accounts, a payments bank account can be an additional one from which they can carry out all their remittance and transactions electronically. They can avoid handling cash.

What the Payment banks can do?

  • They can raise deposits of upto Rs. 1 lakh, and pay interest on these balances just like a savings bank account does.
  • They can enable transfers and remittances through a mobile phone.
  • They can offer services such as automatic payments of bills, and purchases in cashless, chequeless transactions through a phone.
  • They can issue debit cards and ATM cards usable on ATM networks of all banks.
  • They can transfer money directly to bank accounts at nearly no cost being a part of the gateway that connects banks.
  • They can provide forex cards to travellers, usable again as a debit or ATM card all over India.
  • They can offer forex services at charges lower than banks.
  • They can also offer card acceptance mechanisms to third parties such as the ‘Apple Pay.’

What the Payments banks cannot do?

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Gift and Income Tax Return

My Father has gifted me some money Rs 1,00,000. Do I have to pay tax on it? Do I have to show it in Income tax return. What happens when you decide to gift money, assets to your family or some other persons? Or you get Gifts. Say You are buying a house and your family gives you money to fund your purchase. Your friend gives you Rs 20,000. Brothers gift sisters on Rakshabandhan. Parents gift their children on every occasion, especially during marriage. Grandchildren are the recipients of loads of gifts from grandparents. But are these gifts taxable? Are not some gifts exempt from tax? For what gifts does one have to pay tax? Does receiver has to show gift received while Filing income tax return? if yes where and how? Is there some documentation required ?

What is a Gift?

A gift is Money or House, Shares, Jewellery etc. that is received without consideration, or simply an asset received without making a payment against it and is a capital asset for the Recipient. Examples of Gifts and the form are

  • Money : a sum received in cash or cheque or draft
  • Immovable Property : land or building or both (does not include agricultural land in rural area)
  • Movable Property : Shares and Securities ,Bullion ( gold bars, silver bars or other precious metals)  or Jewellery (ornaments of precious metals or precious or semi precious stones in any form), Archaeological collection, Art such as Drawings or Paintings or Sculptures

History of Gift Tax in India

As gifts can be a big source of money laundering if there are no limits , Gift Tax has been  in India.

  • Gifts Tax Act was introduced in India first time in 1958 . Any gift worth more than Rs 25000 were subject to tax. From preview of gift tax any cash, cheque or a draft received form non blood relative was considered as a gift.
  • Gift  tax was abolished in 1998.
  • It was re-introduced  in 2004. Now Gift  received  by Individual or HUF of more than Rs 50,000 is subject to gift tax. It is taxable under head Income From Other Sources under Sec 56(2) (vi).

Are all Gifts taxed?

As per the Income Tax Act, 1961 if the value of gifts received is more than Rs 50,000 a year, then such amount is taxed as income in the hands of the receiver. These gifts may be in any form ,cash, jewellery, movable and immovable property, shares etc. However, there are exemptions for example this rule is not applicable if your relatives present the gifts. But Rules related to clubbing of income would apply on certain instances.

Gifts received from non-family are exempt in following cases.

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Exempt Incomes and Allowances for Income Tax Filing

While you get ready to deal with the daunting task of preparing your taxes, we have prepared a list of exempt incomes and allowances so that you can minimize your taxation liability. There are few incomes that aren’t taxable at all, whereas some others are exempted to a certain limit. Taking one at a time, we will cover both incomes and allowances that are exempt from taxation. For easy computation we have taken the lowest exemption slab of Rs 2.5 lakhs, which can vary depending on your age.

Incomes Exempt from Taxation

Income that is exempted from taxation is shown in image below:

Income exempted from taxation

Income exempted from taxation

Agriculture: Income from agriculture is exempted. If the income is less than Rs 5,000 then the entire amount is exempt from taxation. Whereas any amount exceeding that is included for the limited purpose of determining the tax rate. For example if your income is Rs 12 Lakhs that comprises of agricultural income of Rs 1 lakh and salary of Rs 11 lakh, then the tax liability would be calculated as follows:

  • Step 1. Calculate total tax liability on income of Rs 12 lakhs which amounts to 1.85 Lakhs.
  • Step 2. Add the tax benefit, which is Rs 2.5 lakhs as basic slab and Rs 1 lakh as agriculture income. Hence the total tax concession works out to be Rs 10,000
  • Step 3. Subtract total tax benefit from the total tax liability, Rs 1, 85,000 – Rs 10,000 = Rs 1,75,000 Hence Rs 1.75 Lakhs would be the liability in this case.

Hindu Undivided Family (HUF): Any amount received from HUF entity which includes money received through inheritance is exempted under section 10(2) of Income Tax Act.

Interest from Bank – Interest up to Rs 10,000 received through your savings bank account is fully exempted.

Share of profits from partnership firm: It is exempted under section 10(2). However any other income such as wages or interest is taxable.

Long term capital gains: Profit from shares and mutual funds held over a year is called long-term capital gain. Any income from Long-Term capital gains is exempted under section 10(36) of the Income tax act.

Gratuity: It is the amount paid by employer as a gratitude to employee’s meritorious service. Gratuity amount is fully exempted from taxes.

Amount received under voluntary retirement: Amount received by an employee in any organization where the scheme of voluntary retirement is framed according to section 10(16) of IT act 1961, will qualify for full tax exemption.

Scholarship: Any amount awarded to a student to meet the cost of education is fully exempt from taxation.

Allowances Exempted

Now that we have covered the incomes, let us go over the allowances that are exempted

Housing Rent allowance (HRA): You can only claim it if you live on rent. It should be minimum of these three options

  1.  Actual HRA received.
  2. Actual rent paid by you minus 10% of your basic salary.
  3. 50% of your basic salary if you live in metro and 40% in non-metro.

Leave Travel Allowance: It covers total cost of trip and includes you and your family, and it only covers domestic travels

Education of children: There are two allowances that are exempted for children’s education, and this exemption is limited to a maximum of two children.

  1. Education allowance : Rs 100 per month
  2. Hostel subsidy: Rs 300 per month

Allowance of Foreign Services: Any allowance received by an individual rendering services to the country while residing outside India is tax free. Hence the allowance received by IFS (Indian Foreign Service) personnel serving outside India is tax free.

By keeping the above exemptions in mind, you will be on the top of the tax return filing process. We encourage you to fulfil your moral and legal obligation of paying income tax with confidence and pride. #ProudToPayTax

Note: This year, the deadline to file income tax returns (ITR) has been extended to 31 August from 31 July.

Disclaimer: All information in this article has been provided by is engaged in assisting in online ITR preparation and filing of income tax returns online for free. The author can be contacted at

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Disclaimer : This is an information based website, meant for providing assistance to it's readers. We do not hold any responsibility for mis-information or mis-communication.