Archive for Banking and Savings

Budget Analysis 2013

There was nothing exceptional in this budget. There are many announcements some of which will have a positive impact on our wallets and some that will really take out money out of our wallet, reckons Amar Pandit.

Budget by definition is an accounting exercise. However it is another thing that it’s watched so closely and given so much importance every year. This year was no different and there were high expectations from Mr. Chidambaram to deliver another dream budget. Industrialists and CEOs cheered the budget but the market seemed unhappy and gave a different picture with the Sensex down by more than 250 points. My personal view is that there was nothing exceptional in this budget but it is not something that I would worry excessively about. However, there are many announcements some of which will have a positive impact on our wallets and some that will really take out money out of our wallet.

To start with, let’s take a look at the direct tax law changes » Read more..

Impact of budget on your personal finances


Intro: What the Finance Minister has given with one hand in the form of lower income tax burden, he has more than taken away by hiking indirect tax rates

In this budget the Finance Minister had to deal with the task of reining in a runaway fiscal deficit. So he has indulged in some jugglery. While he has offered some concessions to the salaried class on income tax, he has raised indirect taxes (both excise duty and service tax), which will have a cascading effect on the prices of a wide range of goods and services and adversely affect everyone’s wallet.

Income tax burden reduced

As is customary every year, the Finance Minister offered some tax concession to the salaried tax payer. He raised the minimum tax exemption limit from Rs 1.8 lakh to Rs 2 lakh. This will put an additional Rs 2,060 into every tax payer’s pocket. » Read more..

Our views on the expectations from the Budget and it’s impact on your personal finances.



The budget and your wallet: A look at how this year’s annual budget could affect your personal finances

Amar Pandit

This year’s budget comes against a difficult economic environment of high fiscal deficit (could come in anywhere between 5.6-6 per cent for FY12); high inflation for the past two years, which has shown signs of softening in 2012 but could spike again if crude oil prices remain high; slowing economic growth (third quarter GDP growth came in at a low 6.1 per cent); and problems in Europe that have been eased temporarily due to injection of liquidity by the European Central Bank (ECB) but have by no means been resolved. Let us turn to what is expected from the Finance Minister (FM) on March 16 and what impact his measures could have on your personal finances. In some cases, the impact of his actions will be direct, and in others, indirect.

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Tax saviours

Publication: Complete Wellbeing; Staywell; Section: Wealth; Issue: February 2011

Handy tax saving options you can use if you haven’t yet planned your investments

Come January and a lot of taxpaying individuals suddenly wake up and start looking for tax saving options. This is primarily because of the tax saving proofs that they need to submit to avoid a higher tax deduction at source.

In this rush, people generally end up taking a hasty and myopic view of tax planning as their only agenda is to save tax. I have seen people ending up with a plethora of life insurance policies, pension plans, mutual funds, tax saving deposits and so on.

In the end, most land up with expensive products, low post-tax income and products that they do not even require. However, there is no need to rush through the entire process if one starts off early, typically in the first week of the financial year in April. Yes you read it right. The best time to start off your tax planning exercise would be in the first week of April itself.

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Shopping for a Loan?

Publication:  Business Standard, Mumbai;   Date: March 8, 2009;

A comparison of some of the interesting rates on offer.

State Bank of India, the country’s largest bank, locks home loan rates at 8 per cent for the first year…Canara Bank freezes home loan rates at 8.25 per cent for the first year and 9.25 per cent for the next five years…

Public sector banks (PSBs) have offered rates of 8.5 per cent for loans up to Rs 5 lakh and 9.25 per cent for loans between Rs 5 lakh and 20 lakh. These loans come with a free life insurance and no processing fee…

With the Reserve Bank of India (RBI) reducing the reverse repo and repo rates by another 50 basis points, there could be more such rate cuts. Repo is the rate at which RBI lends short-term funds to banks. Reverse repo is the rate at which RBI borrows from banks.

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Not insurance, but a savings policy

Publication: Business Standard Mumbai;   Date: 2 November, 2008;    Section: Product Analysis;   

Yet another product that defies the basic principle of not mixing insurance with investment.

Most insurance buyers forget one simple thing – they should be buying only life, health or any other cover from insurance companies. Instead they lose their focus and buy products, which are completely different in nature. Here we give you one such example.
Take for instance, HDFC Savings Assurance Policy. The marketing material of this policy reads something like this: “You need to plan today to ensure a bright future for your child, build your dream home and fulfil all your other aspirations. To help you realise your dreams, we present HDFC Savings Assurance Plan.” Interestingly, in spite of being an insurance policy, there is absolutely no mention of life insurance cover at all.

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Do a Recce before the Recession

Publication: Business Standard, Mumbai; Section: Financial Planning; Date: October 19, 2008

Reduce high-cost loans, create a contingency fund and play long term.these are the only mantras to survive during a slowdown.

Headlines across most newspapers, a few days ago, were about 1,900 employees being laid off at Jet Airways. Of course, the company’s chairman, Naresh Goyal, did a volte-face the same day and asked employees to join back from the very next day.

But the reality is that there are troubled times ahead of us. Doomsayers are already talking that the “Great Depression”, which started in 1929, is already on us. And for many, it has just started.

Internationally, there are already stories of lay-offs and salary cuts for almost a month or so. And though the situation has not yet directly impacted India, sooner or later, there will be some trickle-down effect.

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Banking on accounts

Publication: Business Standard, Mumbai;  Section Savings Date: January 13, 2008                  

We often end up having a lot of dormant bank accounts. It’s time we cleaned up our act.
Rajesh Sharma, 45, management professional, has shifted several jobs over the years. No wonder, he has more than five bank accounts because each time he changed jobs, the employer opened a new account for him with their bank. When his wife asks about the balance in the various accounts, he has to rummage through the entire pile of papers in his desk to come up with a reply. The worse part is that he actually has negative balances in some of them because he has not maintained the minimum balance in these accounts. He desperate wants to close some of them, but does not have the time or patience to go to a branch and wait there. Surely, a very common story for many professionals.
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Budget for Savings, not Spending

MARION JONES RUNS OUT OF MONEYPublication: The Times Of India Mumbai; Date: Aug 14, 2007; Section: Your Money; Page: 42


Becoming and staying wealthy is not a matter of earning more, but of keeping what you earn American sprinter Marion Jones is down to her last $2,000, according to The Los Angeles Times. Yes, the same athlete who won five medals, including three gold, at the 2000 Sydney Olympics, shone on magazine covers, and signed multi-million dollar endorsement deals. Fast forward to 2007, and she has been declared bankrupt.

We saw something similar in the movie Tara Rum Pum, where actor Saif Ali Khan plays a car racer who travels a similar path from wealth to insolvency. Well, the film had an important message:one should save for a rainy day and plan well for the future. The reason is clear: history shows that any income can be spent.