Central Civil Services (LTC) Rules, 1988 - Fulfillment of Procedural requirements.

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How returns from various asset classes are taxed

By 

Narendra Nathan

EQUITY

Stocks

1. If you hold on to them for a year, the long-term capital gain is tax free

2. Short-term capital gain is taxed at 15%

3. Dividends are tax free

DEBT FIXED INCOME INSTRUMENTS

Savings a/c 

1. Interest up to Rs 10,000 is tax free, taxed at slab rate after that

2. TDS not deducted on savings interest.

Fixed deposits

1. Full interest taxed at slab rate

2. TDS of 10% if interest in any financial year crosses Rs 10,000

Recurring deposits 

1. Full interest taxed at slab rate

2. TDS not deducted on RD interest 

Tax-free bonds 

1. Full interest is tax free

2. The long-term capital gain (after holding for 1 year) taxed at 10%

3. Being interest bearing instruments, no indexation benefit allowed

4. Short-term capital gain taxed at marginal rates.

Normal bonds and debentures 

1. Full interest taxed at slab rate TDS of 10% if interest in any financial year crosses the Rs 5,000 mark

2. The long-term capital gain (after holding for 1 year) taxed at 10%

3. Being interest bearing instruments, no indexation benefit allowed

4. Short-term capital gain taxed at marginal rates.

MUTUAL FUNDS

Equity funds 

1. Long-term capital gain (after holding for 1 year) is tax free

2. Short-term capital gain is taxed at 15%

3. Dividends are tax free 

Arbitrage funds 

(Provided they maintain equity fund status)

1. Long-term capital gain (after holding for 1 year) is tax free

2. Short-term capital gain is taxed at 15%

3. Dividends are tax free

Equity oriented balanced funds 

1. Long-term capital gain will be tax free

2. Short-term capital gain taxed at 15%.

3. Dividends are tax free 

Debt funds 

1. Long-term capital gain (after holding for 3 years) is taxed at 20% after indexation

2. Short-term capital gain taxed at marginal rates

3. Dividends are tax-free in the hands of the investor, but scheme pays a very high dividend distribution tax of 28.32%

Debt-oriented balanced funds 

1. Long-term capital gains (after holding for 3 years) taxed at 20% after indexation

2. Short-term capital gain taxed at marginal rates

3. Dividends are tax-free in the hands of investors, but scheme pays a very high dividend distribution tax of 28.32%

Gold funds

1. Long-term capital gain (after holding for 3 years) taxed at 20% after indexation

2. Short-term capital gain taxed at marginal rates.

GOLD

Gold bullion and ornaments 

1. Long-term capital gain (after holding for 3 years) taxed at 20% after indexation

2. Short-term capital gain taxed at marginal rates.

Gold bonds

1. Small interest received in the middle will be taxed at slab rates

2. Long-term capital gains (after holding for 1 year) taxed at 10%

3. Being interest bearing instruments, no indexation benefit allowed

4. Short-term capital gains taxed at marginal rates.

INSURANCE

Endowment policies 

1. Final proceeds tax free if premium in any year did not exceed 10% of the sum assured

2. TDS of 2% if the total receipt crosses Rs 1 lakh in financial year

3. Investors should consider service tax paid on premiums also while calculating returns

4. For endowment plans, it is 3.5% for first year's premium and 1.75% for the renewal premium. 

Ulips 

For ULIPs, service tax is 14% on all charges (like mortality charges, AMC fees, switch fees, etc)

REAL ESTATE 

1. Rent received (or notional rent for the locked up second home) are taxed at slab rate

2. Deductions available for rent includes property tax, repair costs, home insurance, etc

3. The long-term capital gain (after holding for 3 years) is taxed at 20% after indexation

4. Short-term capital gain is taxed at the marginal rates.

REAL ESTATE INVESTMENT TRUST (REIT) 

1. Long-term capital gain (after holding for 1 year) from REIT units listed and traded in stock exchanges will be tax free 2. Short-term capital gain from REIT units listed and traded in stock exchanges will be taxed at a lower rate of 15%

3. REIT will be pass through vehicle and is not liable for any income received by it

4. Rents received by REIT and distributed will be taxed at the hands of investors as rental income

5. Interest received by REIT and distributed will be taxed at the hands of investors as interest income

6. Dividends received by REIT and distributed will be tax free in the hands of investors.

Securities Transaction Tax (STT): STT is levied on stocks and equity mutual funds in lieu of tax-free dividends and also lower capital gain taxes. Equity mutual funds are defined as schemes that maintain more than 65% equity exposure and because of that, equity oriented balance funds and arbitrage funds also comes under this category.

Dividend distribution tax (DDT): The mutual fund dividends are tax-free, but there is a dividend distribution tax (DDT) applicable for debt mutual funds. The high DDT (works out to be 28.32% now) has taken the sheen out of the dividend options in debt mutual funds.

Indexation benefit: While computing long-term capital gain (LTCG), indexation benefit is provided as compensation against inflation. For example, if the LTCG is 10% p.a. and the inflation is 7% p.a., you need to pay tax only on 3% additional gains. Indexation benefit is not available for instruments that have interest components. 

Source:-The Economic Times

IT ministry redresses 200 consumer complaints lodged on facebook and twitter

Social media is fast becoming a popular platform for the communications and IT ministry to fix consumer complaints from across the country. The ministry has redressed about 200 complaints till now, as per official data. Until December the minister's office had forwarded 136 complaints received through social media to different departments for action. Of these 92 cases were successfully redressed. 

The state run-BSNL separately received 326 cases, of which 111 cases had been resolved. "This is part of digitising India. For digital revolution to trickle down to grass-roots level, citizens' complaints from any corner of the country, especially remote, must be redressed immediately and promptly," communications and IT minister Ravi Shankar Prasad told ET. 

A small team in the minister's office attends to any specific complaint posted by citizens on his Facebook and Twitter accounts. Every complaint that the officers find tangible and specific is forwarded to the department concerned in writing and a time frame is given for attending to that complaint. The minister's personal staff monitors this redressal mechanism and delay in redressing public grievances beyond the stipulated time frame is taken very seriously, officials said. 

"Unlike the conventional channels of public grievance redressal, the advantage of using social media is that it enhances transparency and accountability of the organisation," Prasad said. This is so because when an aggrieved citizen writes on an open platform like Facebook and Twitter, the world gets to read about his problem, officials said. 

The problem, its redressal and the time frame for fixing it all are under public scrutiny, helping the government perform in a transparent manner, said an officer who is part of the team that monitors complaints. Citing an example of the process of handling complaints, an official said Bikas Swain, a resident of Jharkhand, had posted a picture of a dilapidated letter box in Dhanbad on the minister's Twitter account.

IIn less than a week, the letter box was restored. "The minister thanked Bikas Swain for acting like aresponsible citizen and shared the photo of the restored letter box through Twitter," the official said. 

Source:-The Economic Times

Special Donation from members for 40th Circle Conference and 39th All India Conference

To view the list of members who have contributed Special Donation for 40^th Circle Conference and 39^th All India Conference along with the Receipt No. and Amount please Click Here.

All the members of the Association are requested to contribute Rs.1000/-(Rupees One Thousand Only) as special donation for the Circle Conference scheduled to be held at Bhubaneswar on 07/02/2016 (Sunday) and All India Conference scheduled to be held at Jaipur(Rajsthan) on 13/02/2016 and 14/02/2016.  

The Payment of Bonus (Amendment) Bill, 2015 notified:Increase in the Eligibility Limit under clause (13) of Section 2 and Calculation Ceiling under Section 12 of the Payment of Bonus Act, 2015

The Payment of Bonus (Amendment) Bill, 2015 was passed by the Parliament in the just concluded Winter Session of the Parliament. The Payment of Bonus (Amendment) Act, 2015 has been published in the Gazette of India, Extraordinary on 1st January, 2016 as Act No. 6 of 2016. The provisions of the Payment of Bonus (Amendment) Act, 2015 shall be deemed to have come into force on the 1st day of April, 2014. 

The Payment of Bonus (Amendment) Act, 2015 envisages enhancement of eligibility limit under section 2(13) from Rs.10,000/- per month to Rs.21,000/- per month and Calculation Ceiling under section 12 from Rs. 3500 to Rs.7000 or the minimum wage for the scheduled employment, as fixed by the appropriate Government, whichever is higher. The Payment of Bonus (Amendment) Act, 2015 also mandates previous publication of draft subordinate legislations, framed under the enabling provisions under the said Act, in the Official Gazette for inviting objections and suggestions before their final notification.

The Government has been receiving representations from trade unions for removal of all ceilings under the Payment of Bonus Act, 1965. It is also one of the demands made by them during the country-wide General Strike held in February, 2013 and September, 2015. As the last revision in these two ceilings were made in the year 2007 and was made effective from the 1st April, 2006, it was decided by the Government to make appropriate amendments to the Payment of Bonus Act, 1965. 

These changes in the Payment of Bonus Act, 1965 will benefit thousands of work force. 

Source:-PIB

Adhoc Promotion to JTS Gr-A Cadre and Posting thereof

The following PS Group-B Officer(s) is/are promoted to JTS Gr-A Cadre on temporary and adhoc basis and allotted Regions/posted against the post as mentioned below vide Circle Office Memo No.ST/2-34(3)/2015 dated 08-01-2016:-

Sl No	Name of Officer S/Shri	Present place of posting	Allotted to the Region	Posted on adhoc Promotion
1.	Krutartha Behera	SPOs, Keonjhar Division	Bhubaneswar HQ	SSPOs, Bhubaneswar Division, Bhubaneswar

10-year National Savings Certificate discontinued

National Savings Certificate (NSC) issue IX, which had a term of ten years has been discontinued. The move was approved and notified by the Ministry of Finance on 1 December 2015 and the postal department stopped issuing these certificates 20 December 2015 onward.

Observers believe that the instrument was discontinued because it locked-in the government into a long-term commitment in a falling rate regime.

The small-savings instrument that was launched in the December 2011 were available in denominations of Rs 100 to Rs 10,000 that offered a rate of interest of 8.80%. This was higher than the 100 months Kisan Vikas Patras which offers a 8.7% per annum. The Public Provident Fund ( PPF), another long-term savings instrument with 15-year lock-in, also provides a rate of 8.7%, but the rates get revised every year. On the other hand, the NSCs guaranteed the same rate for the whole investment term.

Although the interest rates of small savings schemes have been linked to the bond yields in the secondary market, the 10-year NSC meant that the buyer locked in at a rate that remained fixed for the rest of the tenure. So, while the rates for NSC were revised, they were effective only for the NSCs issued for that particular year. It, therefore, seems the government is trying to avoid issuing long-term contracts.

TThe five-year NSCs still remain in continuation. They offer an interest rate of 8.5% and accept deposits Rs 100 onward. These NSCs can be purchased by any adult for himself or on behalf of a minor. These single-holder certificates come in smaller denomination than the KVP, which requires a higher minimum investment deposit of Rs 1,000. Also, the deposits qualify for I-T rebate under Section 80C of Income Tax Act. 

Source:-The Economic Times

Procedure for empanelment of retired officers as the Inquiry Officers for conducting Departmental Inquiries - reg.

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CJI for book-reading instead of only using internet

New Delhi, Jan 6 (PTI) Chief Justice of India T S Thakur today drew a distinction between study of books and getting information through the internet, saying youngsters could miss the opportunity to learn many other things if they solely concentrated on their laptops.

"Books remain relevant all the time and that's what I feel personally. Nowadays, youngsters are so fond of carrying laptops that they think they are carrying the universe in their bag.

"There is a problem... you can hit the bull's eye by going straight to a point you are looking for, but you are losing an opportunity to find many other things," he said at a function here.

Emphasising the relevance of books, Justice Thakur said "when you are looking for something in a book, you may stumble upon many others things or connected things or a new dimension which you may not have thought of." 

The CJI also had a word of caution of lawyers saying though they had laptops, they too must have a taste for books.

"Now lawyers also have laptops but every lawyer must have a great taste for books and should be surrounded by books so that you get the atmosphere in which you feel like studying and drawing inspiration," he said while releasing a book authored by former Supreme Court judge B S Chauhan.

On a lighter vein, the CJI told Chauhan that he might have drawn inspiration from Justice Markandey Katju who was in the habit of taking notes and maintaining a diary. Katju was also present in the audience.

"We know about the kind of diary which he (Chauhan) was maintaining and I am sure he might have drawn inspiration from a visionary friend Justice Katju. .... I shared bench with Justice Katju for nearly eight months and when at times question of law arises, Justice Katju would take out a diary somewhat of 18th century (vintage)." 

The CJI said "the lawyers would say 'Sir why don't you give us that diary and we will get it printed' but Katju Sahab was very possessive about that diary. And I think this habit of keeping a diary and making notes has been learnt from Justice Katju," the CJI said, evoking peals of laughter.

Supreme Court judges Dipak Misra and Justice A R Dave also lauded the efforts of Justice Chauhan in writing the book and said his work would be of immense importance for lawyers, academics and law students.

Special Donation from members for 40th Circle Conference and 39th All India Conference

To view the list of members who have contributed Special Donation for 40^th Circle Conference and 39^th All India Conference along with the Receipt No. and Amount please Click Here.

As per the decision of the CWC dated 15-11-2015, all the members of the Association are requested to contribute Rs.1000/-(Rupees One Thousand Only) as special donation for the Circle Conference scheduled to be held at Bhubaneswar on 07/02/2016 (Sunday) and All India Conference scheduled to be held at Jaipur(Rajsthan) on 13/02/2016 and 14/02/2016.