How demonetization will affect loans and investments

The scraping of the Rs. 1000 and Rs. 500 notes on November 8^th 2016 has lead to widespread confusion among the masses. This demonetization has gained a highly polarizing response. Apart from the ones with hoards of black money, how has this move affected common people with investments and loans to pay off? Here are some insights on the issues.

Mutual funds

Mutual Funds are deemed to be beneficial in the long run. The scraping of the notes will lead to banks reducing the interest rates for fixed deposits. Thus we will see a gradual shift towards Mutual Funds, which offers a much better returns. With interest rates falling, debt mutual funds are expected to do well in this economy, and this trend will continue for a while. Also with stock markets rapidly falling due to demonetization, you can invest in god equity mutual funds are low prices, and reap benefits in the future.

Bank FD

If you are someone who has parked a majority of your money in Bank FDs then you have bad news. Bank FD rates are expected to go down, since many people are flocking to deposit their money in denominations of Rs 500 and Rs 1000 in the banks. Since Banks are getting a heavy cash inflow due to deposits, they do not have to depend on interest rates from loans, thus they can afford to reduce interest rates on FDs. If you fall in a higher tax bracket, then investing in tax free bonds, which gives you 6% returns with no lock-in period is your best bet, since the interest you earn through this is not taxed, unlike FDs.

Car loans and home loans

These are all set to fall. Again, since people are queuing up to deposit their money in their savings accounts, these make up the low cost deposits. Hence, banks can afford to give out loans at significantly lower rates. If you are planning on buying a new car or a home, this would be a great time.

If you are confused about how this demonetization will affect your taxes and billings this year, you can contact us for expert services. Our professional CAs at Mahaveer and Singhvi Associates will ensure that your money matters are handled with care. Please contact our website at http://www.ca-msa.com/

Why you need a professional CA?

           A Chartered Accountant is a professional who has finished the Chartered Accountants Program and has been inducted as a professional. This professional course requires immense dedication and hard work also with a minimum three years of article ship where the prospective CA learns under the mentor-ship of a credible Chartered Accountant.

          The primary job of a chartered accountant is to provide a credible accountancy services by overseeing all the financial operations of an organization. The training and immense experience before their professional induction helps prove their mettle in solving real world problems.

          Chartered Accountants work closely with your company to ensure that your accounting is top notch, and that your tax requirements are met. These services are immensely valuable for smaller businesses, which does not have a dedicated accounts department. A CA will help you make sense of all your accounts and will help file taxes and keep your records straight.

          Even with a dedicated accounts department in place, having a CA on hand will help iron out any discrepancies and confusions. Hiring such a consultant will ensure that your business is running on the right track without having to worry about the gritty details.

          At Mahaveer Singhvi & Associates we offer viable accounting solutions for our clients. For more information about our services, do visit our website at http://www.ca-msa.com/services.html

Why it’s important to spend time on your accounts

          For small business owners, it is quite easy to allocate time to different aspects of the business, including daily accounting. This will ensure that they have a complete knowledge of their accounts. However, as the business grows, it becomes increasingly hard to keep a check on your accounting. This is where it becomes imperative to hire a good accounts team/ professional to take care of your books.

       However, this does not mean you can completely absolve your responsibilities of looking into your accounts. It is important to regularly look into your accounts and have a healthy control over it, will help you assess you current business financial situation and will allow you to make decisions on the fly, before it is too late.

          Investing in a good accounting system is highly recommended. This will not only easy your accounting process, but will also give you a comprehensive view of your finances. This will enable you to have a greater stability over your finances. Keeping accurate check of your invoices and bills will also help you during your audits as well.

          At Mahaveer Singhvi and Associates, we offer quality CA services, and we ensure that your accounting is in order. For more information about our services, do visit our website at http://www.ca-msa.com/

Why you need an expert financial planner?

   Having a financial experts to help you with your investments is a good option for anyone who is interested to make secure investments. This will ensure a professional, expert touch in helping you make educated choices when it comes to investing your money.

·        A professional will make it easy to choose funds and will help you with the investing process. They will also help with portfolio re-balancing and managing cost & fees as well.

·        A professional will also help with asset allocation and relocation thus ensuring low risk factors.

·        A financial planner should also help with making important decisions as well, such as job switching, children’s career choices and other such personal choices, which will affect your finances.

·        The expert will also help converting more savings into safe investing thus being able to handle volatile assets much better. This will also allow you to strike a size-able balance between savings, investing and thus securing your financial balance.

·        In most cases, the financial planner is expected to choose a good investment fund for their clients.

Having a good financial planner will also enable you to keep your financials in order, thus making it much easier when filing your taxes once a year. At Mahaveer and Singhvi Associates, we provide viable CA services for our clients. 

Brace yourselves for a new Monetary Policy Committee

The finance bill, bill, which was recently passed in the Lok Sabha is awaiting passage in Rajya Sabha. The government has decided to set up a six member Monetary Policy Committee (MPC) after the passage of Finance Bill, 2016. This committee will comprise of three independent directors and three members nominated by the government. This committee will be responsible for fixing benchmark interest rates of the Reserve Bank of India (RBI) and look into inflation targets.

The three members from the Reserve Bank will be the RBI Governor, Deputy Governor and Executive Director. The three others who will be nominated form the Government’s side will be via selection and voting. This move has been taken to distribute the powers of decision making with respect to setting up interest rates. Currently this power solely lies with the RBI Governor. However, a collective decision among a group of competent academics will ensure optimal growth and will leave little margin for error.

The members of the MPC will continue for a tenure of four years and will not be eligible for reappointment. The committee is expected to meet at least four times a year, some times more if deemed necessary. When this is established, the RBI will be responsible for publishing the Monetary Policy Report every six months.  For More details please visit our website at http://www.ca-msa.com

Earning a secure tax investment returns for an NRI

One of the best investment options for NRI’s is the NRE Bank FDs. These assure a secured, tax free return in India in a secure, stable manner. NRI’s have invested billions of dollars in the NRE bank deposits and have reaped benefits as well. This however has begun to change in the recent times, thanks mainly to the increasing currency risk of INR depreciation.

The income from NRE bank FD is the nature of an interest, but the income from money market mutual fund is in terms of capital gain. Traditionally, the interest is acquired in INR and is then converted to the foreign currency, while the capital gains are calculated in foreign currency, which thus provides the benefits of INR depreciation, i.e., better returns.

Hence if you are an NRI living in a country where you do not have to pay taxes on your foreign income, you can opt for NRE FD in order to generate a secure, tax free return in India. But if you live in a country that taxes foreign income, it is best for you to invest in money market investments.

At Mahaveer and Singhvi Associates as one of best Chartered accountants in Mysore, we will help you will all your investments and filing tax returns. Please contact us at http://www.ca-msa.com/

Direct Tax amendments-15CB, 15CA procedures updated

The Central Board of Direct Taxes (CBDT) has issued a Notification no. 93/2015, dated December 16, 2015, revising the rules for any one making a payment to an NRI or remitting money outside India or transferring from NRO to NRE account. These changes makes money transfer practical and reasonable. 

The important amendments include-

·   Form 15CA and 15CB will not be required for any payments included in the specific list, and the nature of payment in the specified list has been increased from 28 to 22, which includes payments for imports, savings and family maintenance.  

·      These forms are not required form any payment by an individual for remittance that do not required RBI approval under its Liberalized Remittance scheme.

·         The revised form 15CA has four parts now, which has to be submitted if it meets the specified circumstances-

1.      Part A: For any payment chargeable tax if the aggregate of such payments during the year does not exceed Rs. 500,000

2.      Part B: This is to be submitted if the payment exceeds Rs. 500,000, or in an order from the Assessing Officer is obtained.

3.      Part C: Part C of Form 15CA is to be submitted along with Form 15CB for payments that is (i) chargeable to tax (ii) amount payment of sum of payment exceeds Rs. 500,000 during the years, and (iii) order or certificate form Assessing Officer is not obtained.

4.      Part D: Part d of Form 15CA is to be submitted for payments that is not chargeable to tax, and where Form 15 CB and Form 15 are not required.

At Mahaveer and Singhvi Associates as one of the leading CA Firms in Mysore, we provide viable auditing services from best and take care of your paper works. For more details visit our website: http://www.ca-msa.com/

CIB- What is it?

The Income Tax Department (ITD) has strengthened its vigilance in the past few years and has made it a mission to identify stop- filers and non- filers and hence widen the tax base effectively. Once they have successfully identified these defaulters, they send a notice to such persons. The notice will usually read as such-

“The Income Tax Department has received information on financial transactions / activities relating to you. A list of some of the information for Financial Year is provided below. As per records, you do not appear to have filed Income Tax Return for Assessment Years. “ 

If you have received such a notice, then you will have to login to your e-filing portal and issue an appropriate response as stated in the compliance module. You would then have to print out this acknowledgement of response and send a copy to the jurisdiction ITO (Income Tax Officer) within a set number of days.

This additional crackdown- information gathering and other associated operations- are done via CBI )Central Information Branch). They will look beyond the Annual Information Report, as per Form 26AS, furnished by the ward. Since 2011, they have been working tirelessly to ensure a transparent exchange fo financial information between the individuals and the ITD by gathering information about investments, expenses, payment of taxes etc. For more information about our services and CA’s in Mysore, do visit our website at www.ca-msa.com