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Income Tax for AY 2015-16: Tax slabs, ITR Forms

The ITR for Financial Year 2014-15 or Assessment Year 2015-16 were notified by The Central Board of Direct Taxes (CBDT). There are some changes related to Filing of returns. This article covers about Filing of Income Tax Returns for FY 2014-15 or AY 2015-16

Filing Income tax return for FY 2015-16

A brief summary of Changes are given below. Please note last date for filing Income Tax Returns is 31 Jul 2015.  This is just to give you heads up.

  • Aadhaar has to be provided.
  • Introduction of Electronic Verification Code(EVC) as option of sending ITR-V to CPC Banaglore. This would use Aadhaar Number.
  • Providing Details of all bank accounts with Bank name, IFSC Code, Name of Joint Holder, if any, Account number, Account balance as on 31.03.2015 is mandatory. Even those accounts which are closed during the year. for ITR2
Aadhaar number for ITR

Aadhaar number for ITR as in ITR1

Bank account details for ITR2  for FY 2014-15

Bank account details for ITR2 for AY 2015-16

One can read  official Notification at Income tax website CBDT  No. 41/2015 Dated 15.04.2015

ITR Forms can be downloaded from Income Tax  website http://www.incometaxindia.gov.in/Pages/downloads/income-tax-return.aspx

Tax slabs for Financial year 2014-15 or Assessment Year 2015-16 

TAX MEN and WOMEN SENIOR CITIZEN(Between 60 yrs to 80 yrs) For Very Senior Citizens(Above 80 years)
Basic Exemption 250000 300000 500000
10% tax 250001 to 500000 300001 to 500000 -
20% tax 500001 to 1000000 500001 to 1000000 500001 to 1000000
30% tax above 1000000 above 1000000 above 1000000
Surcharge 10% of the Income Tax, where total taxable income is more than Rs. 1 crore
Education Cess  3% on Income-tax plus Surcharge.

What is CBDT?

The Central Board of Direct Taxes (CBDT) is a part of the Department of Revenue in the Ministry of Finance, Government of India.It provides essential inputs for policy and planning of direct taxes in India and is also responsible for administration of the direct tax laws through Income Tax Department. One can read about CBDT at Income Tax webpage Central Board of Direct Taxes

WHAT IS THE ELECTRONIC VERIFICATION CODE?

The electronic verification code comprises a string of characters in the form of a locator number that give a unique identifier to electronic documents.

What is electronic verification code

What is electronic verification code

Changes for Filing ITR for AY 2015-16 or FY 2014-15

General

  1. ITR-1 (SAHAJ) & ITR-4S (Sugam) cannot be filed by individual who has earned any income from source outside India.
  2. Introduction of EVC for verification of return of income filed as an option to send ITR-V to CPC, Bangalore.
  3. Super Senior citizen are now allowed to file Income Tax return(ROI) in paper form even though their income exceed Rs 5 lakhs subject to other conditions.

Our article Filling ITR-1 : Bank Details, Exempt Income, TDS Details explains filling ITR1 in detail.

ITR-1

  1. Introduction of furnishing Aadhaar Card Number in ROI. Which will be used for EVC system introduced as mentioned above.
  2. Details of all bank accounts with Bank name, IFSC Code, Name of Joint Holder, if any, Account number, Account balance as on 31.03.2015 mandatorily to be provided. Even those accounts which are closed during the year.

ITR-2

  1. Introduction of furnishing Aadhar Card Number in ROI. Which will be used for EVC system introduced as mentioned above.
  2. Details of Foreign Travel made if any (For resident and non resident both) includes, Passport No, Issued at, name of country, number of times travelled and expenditure
  3. Details of utilization of amount deposited in capital gain account scheme for years preceding to last two assessment years. Particulars asked include year of utilization, amount utilized, amount unutilized lying idle in capital gain account scheme till the date of filing of return of income.
  4. In case of LTCG & STCG not chargeable to tax to Non-resident on account of DTAA benefit, It is required to furnish Country name, Article of DTAA, TRC obtained or not?,
  5.  For Non-resident, Income from other sources, If any income chargeable to tax at special rate provided in DTAA, It is now required to provide details of Name of Country, Relevant article of DTAA, Rate of Tax, Whether TRC obtained or not?, Corresponding rate of tax under income tax act.
  6. Details of all bank accounts with Bank name, IFSC Code, Name of Joint Holder, if any, Account number, Account balance as on 31.03.2015 mandatorily to be provided. Even those accounts which are closed during the year.
  7. In schedule FA- Foreign assets disclosure, Following details added.
    1. Foreign Bank accounts details: It is now further require to furnish Account number, account opening date, Interest/income accrued from such account, If any along with details of head of income and schedule under which such income is shown, if offered to tax in India.
    2. In similar manner, details of income from Financial interest in any entity outside India along with details of income offered to tax in ITR-2 from such income.
    3. Similar disclosure requirement is also required for Immovable property outside India, capital asset held outside India, trust held outside India

ITR-4S

  1. Introduction of furnishing Aadhar Card Number in ROI. Which will be used for EVC system introduced as mentioned above.
  2. Details of all bank accounts with Bank name, IFSC Code, Name of Joint Holder, if any, Account number, Account balance as on 31.03.2015 mandatorily to be provided. Even those accounts which are closed during the year.

This article gave overview of Income Tax for FY 2014-15 or AY 2015-16. While filing income tax return is no rocket science, it takes a little bit of hard work. Even if you get your returns filed by your Chartered Account, other party please make sure you understand what has been filled in, if something is left out.

Aadhaar : What is Aadhaar, How to enrol,Check Aadhaar status,Download e Aadhaar

JAM or Jan Dhan Yojana, Aadhaar and Mobile number is supposed to be a game changing reform that will allow transfer of benefits in a leakage-proof, well-targeted and cashless manner.   Aadhaar is becoming an important document to have. Our article JAM Trinity: Jan Dhan Yojana, Aadhaar and Mobile number talks about  JAM in detail. This article talks about how important it is becoming to get Aadhaar, how to enrol for Aadhaar, How to Check Aadhaar Status,How to Download e-Aadhar

What is Aadhaar?

Aadhaar , which means foundation, is a unique 12-digit Identification number issued to individuals for the purpose of establishing unique identification of every single person.  It is issued by the Unique Identification Authority of India (UIDAI) on behalf of the Government of India

  • Easily verifiable in an online, cost-effective way
  • Unique and robust enough to eliminate the large number of duplicate and fake identities in government and private databases
  • A random number generated, devoid of any classification based on caste, creed, religion and geography
  •  Aadhaar is required as the single point for all your credentials and entitlementsThis number will serve as a proof of identity and address, anywhere in India.   For example, if you want to get a new PAN card or change your telephone connection, enter your unique ID for authentication and also as proof of identity and address. For Know Your Customer credentials too, Aadhaar authentication is enough.  To know which organizations accept Aadhaar is available at Aadhaar’s website What is Aadhar.

How was the FY 2014-15 for Equities,Debt,Gold

The financial year 2014-15 threw up several surprises for investors. The sustained rally in equities surprised bulls and bears alike while debt investments did fairly well. But assets like real estate and gold, long considered defensive bets, floundered.

FY 2014-15 for Stocks,Debt,Real estate and Gold

During the fiscal 2014-15,

  • Sensex has gone up by 5,571.22 points, or 24.88 per cent to 27,957.49 from 22,386.27 on March 31, 2014. Sensex had touched all-time high of 30,024.74 on March 4 this year.the NSE’s Nifty zoomed by 1,786.80 points, or 26.65 per cent, to settle the fiscal at 8,491 after scaling lifetime high of 9,119.20 on March 4 2015.
  •  Gold has been on the back-foot for over three consecutive years now vis-a-vis equities after outperforming stock market for more than a decade.  Gold prices have come down to Rs. 26,575 per 10 grams from Rs. 29,300 per 10 grams on March 31, 2014. Similarly, silver prices have slid to Rs. 37,200 per kg from Rs. 43,400 per kg.
  • Foreign Institutional Investors made a net equity investment of Rs. 1.09 lakh crore in 2014-15, and a further Rs. 1.64 lakh crore into debt markets — Rs. 2.73 lakh crore in all, as per the latest data available with Central Depository Services Ltd (CDSL). This was the highest net inflow by FIIs since being allowed to invest in Indian capital markets (equity and debt) over two decades ago in November 1992. The previous high was in 2012-13, when the net investments climbed to Rs. 1.68 lakh crore.

Here is a report card of various investment classes during the financial year.

How did gold,equity,real estate,debt performed in 2014-15

How the asset classes fared in 2014-15

Different asset classes perform at different times

How equities,debt,gold has performed over the years

How equities,debt,gold has performed over the years

Mutual Funds in FY 2014-15

Are You Still Banking the Traditional Way?

Mr. Devi Lal, a 63-year old retired government employee is waiting for his neighbor’s 24-year old son, Aniket, who works in a tech company, for their routine Sunday chess session.

Mr. Lal (Thinking): A good lad. Spends too much time on his smartphone, but that is a problem with all these youngsters.

Aniket: Uncle, I will be late by ten minutes. Need to pay a few bills, deposit my credit card payment, andupdate my investment portfolio.

Mr. Lal: You think I am a fool, don’t you? Paying bills on a Sunday? Which bank will be open for your credit card payments? I too have made investments, and I can tell you updating your investment portfolio is not a ten-minute affair.

Aniket: Here, let me complete these tasks in ten minutes in front of you.

Mr. Lal: “What do you mean in front of me?”

Aniket: You see, uncle, the old-fashioned method of banking required you to go to your bank. Today, it’s the bank’s duty to come to you. With my mobile banking app, I can carry my bank in my smartphone wherever I go.” In the past, you had to visit different service provider and stand in line to make payments, right?

Mr. Lal: Correct.

Aniket: Today, I can check balances of all my bank accounts, track past transactions, transfer funds to other accounts or third-party accounts through NEFT, RTGS, or IMPS through the bank’s app.”

Mr. Lal: I visited the branch yesterday to make a RTGS payment. You mean you can complete this transaction sitting here?

Aniket: Certainly, and I can even open a term deposit through the app. I can run my bank account for years with just a smartphone having Internet connection and online banking.

Mr. Lal: That’s impressive. However, your also mentioned credit card payments and investment portfolio. How can a mobile banking app help you there?

Aniket: Well, I can view a summary of my cards, make payments, download statements, and even report lost cards through my app. Remember the TV I bought a few weeks ago? I converted the purchase into EMIs through the app itself.

Mr. Lal: Ah, I was curious to find out how that works. So, no need to go to the bank or call them?

Aniket: No need at all. As far as investments are concerned, I can enter details of my mutual funds investments, and the app will automatically update the NAV to give me a clear idea of where my  investments stand. By, the way, the tip to combine ultra-safe debt funds with high-growth NFO’s proved to be really profitable for me. Thanks a lot.

Mr. Lal: So, you are telling me you can check your MF NAVs on a daily basis?

Aniket: Of course. Further, I can access my demat account as well through the app. Bank accounts, credit cards, investments, share market transactions, and even flight booking and hotel reservations—all in your pocket. You have a smartphone, right?

Mr. Lal: Yes, gifted by my granddaughter for my birthday.

Aniket: Well, simply download the app and make sure you are registered for online banking. With a simple user interface and comprehensive features, using the app and operating your bank account will be an absolute breeze.

Mr. Lal: Well, in that case Aniket, let us postpone our chess match by half an hour. I need to check whether my pension has been credited or not. Also, am planning to open a term deposit and gift it to my granddaughter for her future studies. I had originally planned to spend the entire day at the bank tomorrow. Now, it seems half an hour should be more than enough.

Aniket: Sure thing. Let us complete all our bank transactions from the comforts of our home and meet for the chess match in 30 minutes.

Author Bio:

Rachita Kotian is an independent blogger and writing has been her passion for a long time. A literature major, she loves exploring the world of health, lifestyle, travel and finance. When she’s not writing, she’s most likely listening to music, cooking, surfing the web, or catching up on the latest flick.

Related Articles:

What form of banking are you using? Are your parents moving away from traditional way of banking, have they moved to internet banking,mobile banking,what are pros and cons of mobile banking? Do you have your bank’s app on your mobile?

What is LIC’s Jeevan Lakshya Plan?

Life Insurance Corporation launched endowment plan, Jeevan Lakshya, Table No 833 in Mar 2015. Under the LIC Jeevan Lakshya Plan if the policy holder dies while the policy is in force his nominee will receive regular payment andif the policy holder survives after the expiry of the policy, policy holder will receive a lump sum which includes the Bonus. We will look into the plan, LIC  Jeevan Lakshya Plan in detail in this article, what are the features, what are the riders,what is return from the plan?

What is Jeevan Lakhsya Plan?

In Jeevan Lakhsya Plan, if the policy holder dies while the policy is in force his nominee will receive regular payment and if the policy holder survives after the expiry of the policy, policy holder will receive  a lump sum which includes the Bonus. Technically it’s a moneyback plan which is participating(you get bonus) and non-linked (not tied to stock market i.e it’s not ULIP) plan. It  offers a combination of protection and savings. Purpose of the plan is ,in case of the demise of policyholder any time before maturity,to  provide for annual income benefit  to fulfil the needs of the family, primarily for the benefit of children and a lump sum amount payment at the time of maturity. One can add LIC’s Accidental Death and Disability Benefit Rider  by paying additional premium.

Features of Jeevan Lakhsya Plan

Features of LIC Jeevan Lakhsya Plan are given in table below:

Topic Description
Age
  • Minimum Age at entry  :  18 years (last birthday)
  • Maximum Age at entry :  50 years (nearest birthday)
  • Maximum Maturity Age :  65 years (nearest birthday)
Term of Policy 13 to 25 years. Premium Paying Term : (Policy Term – 3) years
 Basic Sum insured
  • In multiples of 10,000.
  • Minimum : 1 lakh
  • Maximum : No limit
Tax Benefit Premium paid covered under section 80C
Maturity and Death claims free under section 10(D)
Bonus Payable Simple Revisionary Bonuses and Additional Final Bonus
Benefit Death Benefit: 10% SA payable on every policy anniversary after Death till Maturity.Maturity benefit: 110%SA + Bonus + FAB
Accidental Death Benefit Yes

Sample Premium Rates for Jeevan Lakshya Plan

Following are some of the sample annual tabular premium rates (in Rs.) (exclusive of service tax) per Rs. 1000 Basic Sum Assured.

AGE/TERM
(in years)

13
(PPT = 10)

15
(PPT = 12)

20
(PPT = 17)

25
(PPT = 22)

20

100.75

82.80

57.60

43.40

30

101.20

83.30

58.35

44.55

40

103.25

85.70

61.70

48.85

50

109.95

92.95

-

-

How to read the table:

Age of person is in the first column so 20,30,40 and 50 years. The premium to be paid per 1000 of Rs Sum Assured is  across the columns.  We have highlighted in red premium to be paid by someone who is 30 years old and wants policy for 15 years for Sum Assured of Rs 1 lakh(1,00,000) then from the table the annual premium is 83.30 per 1000 Rs. As he is going for basic sum assured of Rs 1 lakh, his premium, without service tax, would be 83.30 * 100000/1000 =  Rs 8330 per annum. This is without the service tax.

Understanding LIC  Jeevan Lakshya Plan with Example

Lets understand  LIC Jeevan Lakshya Plan with help of example. Say Rahul, of 25 years age, purchases LIC Jeevan Lakshya Policy with a Sum Assured of Rs 10 Lakh  for 20 years. He would pay premium for 3 the policy terms i.e for  17 years (20-3 years).

Death Benefit  : In case of unfortunate death of  Rahul after 5 years from the date of policy purchase, his nominee will receive ;

  • From 6th year to 20th year, 10% of basic sum assured i,e a sum of 1 Lakh every year.
  • At the end of the policy term after 20 years, nominee will receive  110% of sum assured i.e 11 Lakh + Accrued Bonuses + FAB (Final Additional Bonus, if any)

Maturity Benefit : Suppose if Mr. Sharma survives till the policy term maturity, he will receive ,Maturity amount = Sum assured  i.e 10 Lakh + Bonus + Final Additional Bonus (if any)

What are Riders available with LIC Jeevan Lakshya Plan?

Riders are additional covers that can be added to a life policy, for a cost For example,  If Akshay, has taken a policy which offers a sum assured of Rs. 10 lakhs and has taken an accidental death benefit rider of an additional Rs. 10 lakhs. In the event of death of the policy holder due to an accident during the tenure of the policy, the nominee would get Rs. 20 lakhs as the death benefit. These Riders are optional. Our article Life Insurance explains many such terms. Riders available with LIC Jeevan Lakshya Plan are

  • LIC Accidental Death and Disability Benefit Rider : In Case of death of policy rider, during the policy term, Accident Benefit Sum Assured will be paid to the nominee.  In case of accidental permanent disability, an Accident Benefit Sum Assured will be paid in the form of dividing the amount into equal monthly installments spread over 10 years and all the future premiums for Accident Benefit rider are waived off.  This rider can be opted at any time during the Premium Paying Term (PPT) of the Basic Plan. The benefit cover under this rider shall be available during the policy term. The maximum sum assured offered under this rider is Rs 1 crore (subject to the limit of Basic Sum Assured).
  • LIC New Term Assurance Rider: LIC’s New Term Assurance Rider provides for life cover in case of unfortunate death of the insured during the cover period. It can be attached with a basic policy to provide add-on benefit at a nominal cost. This rider shall only be attached with Non-Linked plans at the time of taking the policy. Its Benefits are:
    • Death Benefit: In case of unfortunate death of the life assured during the term of the Rider, an amount equal to the Term Assurance Rider Sum Assured shall be payable.
    • Maturity Benefit: On survival to the end of the term of the Rider, nothing shall be payable. This rider is available only at the time of taking the policy. The maximum sum assured offered under this rider is Rs 25 Lakh.

How much is the bonus and Final Addition Bonus of LIC?

When Life Insurance companies make profits and share the profits with their policyholders they do so by calling it a Bonus. Bonus is not shared with every customer or every policyholder. It is only paid to customers who have bought a Participating Insurance Policy such as  traditional insurance policies like the endowment policy. The percentage of bonus that is paid to the policyholder is not fixed. We shall touch two kinds of bonus, here Simple reversionary bonus and Final Addition Bonus. To know more about the bonus of Insurance Policies you can read out article , Bonus of Life Insurance Policies and Bonus of LIC(Coming soon).

  • Simple reversionary bonus is a with profits life assurance bonus, normally declared annually, which is based on the profits of the life company’s investment and is payable at the maturity of the policy or prior death. Simple reversionary bonuses are declared as a percentage rate, calculated on the sum assured. For example if you hold a policy of Rs 10,00,000 Sum assured and the simple reversionary bonus for the year declared is Rs 60 per thousand sum assured, then your bonus amount is Rs 60 * 10,00,000/1,000 which is Rs 60,000 for this year, but you will only get it at maturity or on death.
  • Terminal bonus or Final addition bonus : The terminal bonus is given at the end of the life of traditional policies. Its value is not guaranteed  and it is different from the reversionary bonus, which is paid out annually by insurers. After declaring reversionary bonuses if there are still residual profits available in the policy, they are declared as terminal bonus.

Insurance companies declare bonus rates and information is available on their websites , for example  bonus rates of LIC, bonus rates of ICICIPruLife. To find how much bonus your policy has collected you can register your policy online and check details or contact the insurance adviser or insurance company with your policy details.

Returns of the LIC Jeevan Lakshaya Plan

The Expected returns from LIC Jeevan Lakshya are around 6%. Let’s see with example. Policy duration is 25 years for Basic sum assured of Rs 100000 with premium of Rs 4366 and the Premium Payment Term of 22 years (25-3 years). Assuming Rs 45 per Rs 1000 Sum assured as Yearly bonus and Rs 300 as Final Additional Bonus, on maturity policy holder will get around Rs 2.425 lakh(100000 (Basic sum assured)+45*100*25+100000 (for Bonus every year) + 100*300 9 (for Final Addition Bonus)) after investing 96,052(4366 * 22). So if you calculate returns using using IRR (Internal Rate of Return) function of MS Excel you would get 7%. Our article Understanding Returns: Absolute return, CAGR, IRR etc explains the different returns in detail. The details are shown below

Year CashFlow
1 -4366
2 -4366
3 -4366
4 -4366
5 -4366
6 -4366
7 -4366
8 -4366
9 -4366
10 -4366
11 -4366
12 -4366
13 -4366
14 -4366
15 -4366
16 -4366
17 -4366
18 -4366
19 -4366
20 -4366
21 -4366
22 -4366
23 0
24 0
25 0
26 242500
 IRR 6%

Should one buy LIC Jeevan Lakshya Plan?

Wearing a helmet while driving is inconvenient but is useful in an accident. Reaching an hour or two early before the scheduled departure of flight prevents one from missing the flight though time is wasted just sitting at the airport. Similarly Insurance provides financial protection against unexpected events and Life insurance is meant to offer financial protection to dependants in the unfortunate event of one’s death. Its purpose is to enable one’s dependants to maintain their current life style and pursue their life goals.  Purpose of the LIC Jeevan Lakshya Plan is ,in case of the demise of policyholder any time before maturity,to  provide for annual income benefit  to fulfil the needs of the family, primarily for the benefit of children and a lump sum amount payment at the time of maturity

Generally, the returns from Money back and Endowment Plans are in the range of 5 % to 7 % and  are  dependent on the bonus rates ( Simple Reversionary and Final Additional Bonuses) that LIC declares every year. Now, the problem with mixing life cover and investment is you get superior returns from none. If a person buys a term plan, and invests the rest of the amount in a public provident fund (PPF), he can make more money than what the money back/endowment insurance plans  offered.  Term insurance, has the lowest possible premium among all the other insurance plans available.  PPF is government backed fixed income investment. PPF will also give him tax advantage. One gets the same amount of life cover as term plan and a better corpus by splitting the two. If somebody can live with volatility and instead of putting in PPF,put in  an equity fund and assume a return of 10-12% , then your corpus would be even more. Our article Mixing Insurance with Investment shows how PPF and Term plan can give a higher return and why one should keep Insurance and Investment separate.

  • Kindly stay away from these kind of plans if you are expecting higher Rate of Returns.
  • Do not buy this plan just because it offers you Tax Saving benefits. There are better Tax Saving Investment options available in the market. For example, PPF (Public Provident Fund). Do go through our Checklist for buying Life Insurance Policy

 All information is also available at LIC’s webpage about  Jeevan Lakshya plan.

Related Articles:

If you are buying the plan please be aware of the reasons why you are buying it. For my daughter’s education I have bought a money back plan from LIC. Though it was to keep my parents and inlaws happy but looking back it gave me a sense of security too and diversified my investment for my daughter’s education.What are  your views on LIC Jeevan Akshay plan? Have you bought any money back/endowment policies. Do share your comments.

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.