Factors to consider while switching home loan lender

Various reasons may lead to switching home loan like changing your home or change in income. The main factors to consider while making the changes are time period interest rate, loan terms etc. A shorter time period of repayment leads to a low overall interest. However choose it based on how much EMI you will be able to shell out for a short term loan. The monthly installments are higher for short-term loans but sometimes the increase is manageable and you can save in the overall interest paid.

A low interest rate should not be a deciding factor to choose a loan provider. It is easier to switch from a variable to fixed interest rate whereas the other way round is not easy. Variable interest rate is viable if the rate is expected to come down in the following years.

In case of fixed rate of interest breaking the loan before the end period will lead to payment of economic cost charged by the bank. The amount is the loss incurred by them for the changes made to the repayment. This is the exit cost of loan and there is entry cost too. When you go for new loan there is entry cost, make sure before you will be able to pay this before ending the previous one.

Check out the benefits associated with the loan such as redrawl of funds and repayment holidays. However do not let these be the deciding factors over cost and effort involved in switching loans

Tips on last day tax payment

Paying taxes is a tedious job and dragging it till the last day and paying it then is worse. Still many of us pay are taxes on the last day. A list of tips on what not to do on the last day of payment:
1. Compile details completely: There are chances you might miss out while filing details, intentionally or unintentionally. False details or missed out details on returns will get you flagged as by internal revenue service (IRS)
2. Calling your tax professional: calling your tax professional on the last day of filing return and expecting it to get done is the last thing in your to-do list. If at all call your professional for an extension.
3. Spending refund: Don’t be in an excitement that you will have tax refund and plan holidays or purchases. There might be delay in refund due to various reasons. An error in calculation or overstated deduction or understated income.
4. Leave early to post office: Everyone is in a rush today, start as early as possible, and do not rush. Post offices have extended hours of working on tax day and make sure you are early and not on the last moment.
5. Postage charges: The IRS will accept return files sent via regular mail or certified mail. It is safer to send via certified mail. In case if there is any question on timely mailing.
6. Filing extension: it is better to file for an extension rather than filing incorrectly.
7. Signature: Do not forget to sign your return papers. Make sure your signature is at the bottom.

However try to file your returns as early as possible and never drag it till the last day

Health and education tax in India

The Budget announced by finance minister Arun Jaitley is aimed at “transforming India”. According to the finance ministry the transformation requires none pillars. Health and education are the two pillars of these nine pillars. There are certain provisions introduced in the budget to make boost these sectors.
In the education sector the central government has removed service tax over services provided by educational institutions recognized school and vocational training institutes. Imports of books are exempt from custom duty and no excise duty over printing of books.
The state government has exempted from payment of value added tax (VAT) over the sale of educational books and material. There are no incentives given in the procurement of educational institutions. The input side taxes have not been reduced considerably. This means there are no changes in input side taxes.
In health sector all clinical entities are not imposed of service tax. However there is no distinction in health services and beauty enhancements. At present tax exemption is available only for health services and not beauty enhancements. This causes confusion in dermatological services so as to classify them in which category.
Again in Health sector too these exemptions are on output side and not in the input side. Also under GST exemptions of these sorts will be minimal. In recent times certain rules or acts have been brought by the government. Right to education act, national Health protection scheme under which every family will one lakh health insurance coverage and National dialysis scheme. However there is a huge gap that has to be covered in both of these sectors to truly transform India.

Equalization levy on Ecommerce firms

The Ministry of Finance announced the Equalizations levy in this year’s budget. The government introduced the Equalizations levy to regularize the taxation of both the domestic and the foreign market. The Equalization levy of six percent in the threshold of foreign ecommerce marketing of non-residents who do not have permanent establishment in the country The tax department is planning to make severe punishment laws to the assessee who fail to pay tax on the levy , according to this year’s budget. The punishment includes, imprisonment and strict punishments in certain cases.
In an interview, the Senior officer of the Income tax department explained in detail about the penalty if an assess fails to pay the tax. If an assessee is unable to deduct, same amount of equalisation levy deducted as penalty. And rupees thousand , deducted every day if an assessee deducted the amount and failed to pay. And if they fail to credit the amount, an interest at the rate of one percent is payable by the assessee. And if the assessee hides the data relating to the levy, it becomes a crime.
The official also said that , if a person produces fake accounts and false statements, they are also sent to imprisonment for three years or imposed to pay fine. The Ministry of Finance is trying to impose stringent punishments and protocols to signify the importance of the levy for private limited company registration. The equalization levy is only a part of the Finance Act, and it is not included in the Income tax Act. If it is not imposed in the Income tax Act, the foreign market would say that the levy is a part local market, and does not affect the foreign market.

Black money in tax heavens and real estate

Real estate has become the hub for black money investments in India. A recent real estate research points to the fact that at least 30 percent of cash transaction involved in lead dealings are black money. The black money flows into real estate when there is a huge difference in market price and circle rate. Due to the increase in number of black money holders buying houses the real estate developers have increased their projects exponentially.

But the actual demand in Home sector is quite low with high prices. This has led to lot un-occupied/unsold properties in major cities.The real estate sector bubble is nearing to burst with inventories sitting vacant. To cope with this problem the union Finance Minister Arun Jaitley has proposed that any immovable property worth more than 20,000 INR should not be done through cash transactions. For any transaction above 1 lakh INR should contain information regarding Personal account number (PAN).

However black money holders tend to have multiple PANs. The government has recently launched e-platform to weed out multiple PANs.Tax heavens are another technically legal ways to get rid of paying taxes. A company with operations in India can register itself as a offshore subsidiary. This means even though the company does not do any business in the parent country the profit claims will be done in the parent country, Tax heavens are usually countries with very low tax rates and financial secrecy and the privacy laws prevent access to the companies’ financial statements

Tax on employee provident fund is taken back

The union finance minister Arun Jaitley announced in his financial budget 2015-16 that provident fund withdrawal of more than 40 percent will be subject to taxation. At present the employee provident fund is not subject to tax.
EPF is popular among the salaried class for its tax free nature. The government also announced that if 60 percent of PF withdrawn was invested in pension scheme the rest of the 40 percent would be tax free. The government stated the reason for its decision was to encourage employees to go for pension security instead of withdrawing the entire provident fund. This decision according to government was not to increase revenue but rather for the sake of its citizens.This decision by the government was faced by severe criticism from the employee class.

Several members took on to social media against the government’s decision of burdening the already burdened taxpaying class of the country. In India only 5 percent of the population pay taxes majorities of them belong to the salaried class. There were online petition signed on Change.org with signatures of more than 1 lakh petitioners.The opposition ministers pointed that the government cannot force its citizens on where to invest their income. The middle class felt that this move will lead to investments being directed towards mutual fundsThe government amid the entire backlash withdrew its proposal to tax EPF and stated that the 40 percent tax exemption on National Pension scheme (NPS) remained the same.

Property and Water tax are reviewed for hike Nashik

Nashik civic administration in Maharashtra increased its water and property tax revenue compared to the previous financial year. The property tax collected for the financial year 2015-16 sums up to 84.04 crore and water tax of 42.38 crore. The previous year revenue figures stand at 75.19 crore of property tax 41.56 crore of water tax. However the civic administration failed to reach its target of 122 crore of property tax and 75 crore of water tax in this financial year.

The increase in revenue was boosted by the civic administration’s efforts to recover due taxes seal properties and sending notices two months ahead of the closure date for payment of taxes.The civic body issued notice to 12,000 defaulters who did not pay their taxes during the first half of the financial year 2015-16. Another set of final notices have been sent to defaulters with an amount of more than 5,000.

The department was also gearing up to confiscate properties if the citizens failed to pay after the notices wereserved.The NMC has also proposed to increase the property tax by 14 percent and water tax by 20 percent. The proposal is yet to be agreed by the government’s standing committee. If approved this will be the hike after a gap of 15 years. The hike was proposed by the municipal commissioners to fund the computerization project, to law roads in the interior of Nashik and Mukane dam

Democratic parties have a difference of opinion over Uber

The Republicans have a difference of opinion on the ride-hailing company, Uber. Since its launch in San Francisco , the company has expanded in more than 300 cities. But in New York, it faces some serious issues with Bill de Blasio, city’s Mayor. He tried to reduce the number of Uber vehicles on the board.The mayor’s views came after a few days from Hillary Clinton’s speech on the economy. Though she did not point out Uber, her questions about the workplace safety and other issues focused the ride-sharing company. This led the Republican technophile, Jed Bush to ride on Uber for his visit to a Silicon Valley startup, Thumbtack. Meanwhile, the Kentucky Senator, Rand Paul said that the government should follow Uber’ design which is more informative and customer oriented.

To gain more attention, the company launched a TV ad- campaign that shows, that Uber has reached even the underserved minority neighborhood. But Uber’s growth does not fit the regulatory categories. HomeJoy recently announced they will shut down because of the lawsuit, which claims that they should treat the people who clean houses as employees and not as contractors.Uber is not the only company that faces these serious pressures, but the internet, finance and schools experience the same with the Democrats .Some Uber drivers themselves feel that the government should handle these issues.Eventhough Uber has faced many problems, the company’s CEO Travis Kalanick spoke the Obamacare. Recently, when he visited the New York city, he praised that the individual market has made it accessible for everyone like the health care.

Income tax exemption for start-ups for first three years

The start-up initiative by the Indian government has introduced various measures to create a friendly environment for start-ups. Start-ups will be exempted tax for the first three years and from capital gains tax. Following are the start-up initiative highlights: The government has set-up a fund of 10,000 crore for support of innovation driven enterprises over a time period of 4 years. The plan also includes 50 bio-technology incubators to promote entrepreneurship in Bio-tech. In future, sector specific incubators To set up 7 new research parks- six in IITs and one in IISc similar to the research park in IIT madras.

Grand challenge innovation awards will be given to ideas which will have low cost solution to India’s pressing problems. Innovation driven programs for school kids will reach 5 lakh schools and 10 lakh students. Panel of experts will be set-up to provide legal support in patent filling trademark and design under relevant Acts for start-ups The insolvency and bankruptcy bill 2015 will help with faster The patent application procedure will be fastened up which will let the applicant know the status of their application at the earliest.

To reduce lengthy registration procedure the government has announced self-certification and a provision for no inspection during the first three years. The start-up program is an entirely new concept even to the most sophisticated start-up environment like USA and Europe. The Prime Minister spoke about the necessity of creating jobs and diverse range of start-ups rather than just IT during the initiative program.

Agricultural income used to evade tax

Growth in agriculture sector for the past decade has been around 3 to 4 percentage. The land under cultivation (14 crore hectares) has not increased. The agricultural production has remained constant at 14-15 percent of the gross domestic product GDP. Parameters necessary to increase income remain the same but the disclosed agricultural income has increased exponentially. The agricultural income disclosed in the financial year 2010-11 is 20 times the GDP of the country summing up to 2,000 lakh crore from 6.75 lakh earners. This amount seems to be increasing year-after-year.

However 90 percent of agricultural land is cultivated by marginal farmers who do not file any income tax return. The small number of farmers who file income tax amount up to thousands of trillions This staggering amount is a contrasting image to the suicides and heavy bank debts of farmers. These figures were released in response to the Right to Information (RTI) filed by a retired Indian revenue services (IRS) officer. Agricultural income is exempted from tax .Therefore revenue from other sources can be channeled as agricultural income to evade tax.

The issue has created uproar in the Indian Parliament. Also the time period when the spike in agricultural income started and the probe into black money coincide creating more suspicions on the nature of these incomes. The IRS official who filed the RTI has put forward the case in Patna High Court seeking probe into this matter. Government has decided to enquire 2,700 cases where the agricultural income has been above 1 crore.