Senior Citizen Savings Scheme (SCSS) Account from India Post

A new avenue of investment and return for Senior Citizen.
The account may be opened by an individual,

Who has attained age of 60 years or above on the date of opening of the account.
Who has attained the age 55 years or more but less than 60 years and has retired under a Voluntary Retirement Scheme or a Special Voluntary Retirement Scheme on the date of opening of the account within three months from the date of retirement.
No age limit for the retired personnel of Defence services provided they fulfill other specified conditions.

The account may be opened in individual capacity or jointly with spouse.
Non-resident Indians (NRIs) and Hindu Undivided Family (HUF) are not eligible to open an account.
The individual may open one or more account in the multiple of INR.1000/-, subject to a maximum limit of INR.15 lakh.
No withdrawal shall be permitted before the expiry of a period of five years from the date of opening of the account. The depositor may extend the account for a further period of 3 years.
Premature closure of account is permitted

After one year but before 2 years on deduction of 1 ½ % of the deposit.
After 2 years but before date of maturity on deduction of 1% of the deposit.

Premature closure allowed after three years.
In case of death of the depositor before maturity, the account shall be closed and deposit refunded without any deduction along with interest.
Interest @ 9.20% per annum from the date of deposit on quarterly basis. Interest can be automatically credited to savings account provided both the accounts stand in the same post office.
Interest rounded off to the nearest multiple of rupee one.
Post Maturity Interest at the rate applicable to the deposits under Post Office Savings Accounts from time to time is admissible for the period beyond maturity.
Nomination facility is available in the Scheme.
The investment under this scheme qualify for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.

Monthly Income Scheme (MIS) and Senior Citizen Saving Scheme (SCSS) are the best for Senior Citizens who desire monthly/quarterly interest. Invest in MIS / SCSS and transfer interest into RD account through SB account through written request and earn a combined interest of 10.5 % (approx.).
This is the safest investment option for the Senior Citizens.

Scheme specially designed for Government employees, Businessmen and other salaried classes who are Income Tax assesses.
No maximum limit for investment.
No Tax deduction at source.
Certificates can be kept as collateral security to get loan from banks.
Investment up to INR 1,00,000/- per annum qualifies for IT Rebate under section 80C of Income Tax Act.
Trust and HUF cannot invest.
Rate of interest 8.50%.
Maturity value of a certificate of INR.100/- purchased on or after 1.4.2012 shall be INR. 151.62 after 5 years.

NSC IX Issue

No maximum limit for investment.
INR. 100/- grows to INR 234.35 after 10 years.
Minimum INR. 100/- No maximum limit available in denominations of INR. 100/-, 500/-, 1000/-, 5000/- & INR. 10,000/-.
A single holder type certificate can be purchased by an adult for himself or on behalf of a minor or to a minor.
Rate of interest 8.80%.
Maturity value of a certificate of INR.100/- purchased on or after 1.4.2012 shall be INR. 236.60 after 10 years.

Buy National Savings Certificates (NSCs) every month for Five years – Re-invest on maturity and relax - On retirement it will fetch you monthly pension as the NSC matures.

Import duty & taxes when importing into India

Overview

Import duty and taxes are due when importing goods into India whether by a private individual or a commercial entity. The valuation method is CIF (Cost, Insurance and Freight), which means that the import duty and taxes payable are calculated on the complete shipping value, which includes the cost of the imported goods, the cost of freight, and the cost of insurance. Duty in particular is calculated on the sum of the CIF value and landing charges (explained below). Some duties are also based on quantity measurements. In addition to duty, imports are subject to other taxes and charges such as landing charges, countervailing duty, CESS, and education CESS.

Duty Rates

Duty rates in India can be ad valorem (as a percentage of value) or specific (rupees per unit). Duty rates vary from 0% to 150%, with an average duty rate of 11.9%. Some goods are not subject to duty (e.g. laptops and other electronic products).

Sales Tax

There is no sales tax in India for imported goods.

Minimum thresholds

There is no minimum threshold in India, i.e. all imports regardless of their value are subject to duty and taxes.

Other taxes and custom fees

Landing charges: (1% CIF)
Countervailing duty (CVD): (0%, 6% or 12% (CIFD + Landing charges))
CESS (Education + Higher Education): 3% (Duty + Countervailing duty)
Additional CVD: 4% (CIFD + Landing charges + Countervailing duty + CESS)

Local Customs office and contacts

More information on import declaration procedures and import restrictions can be found at the Indian Customs website.

systematic investment plan in investing mutual funds !

Systematic Investment Plan (SIP) is a smart financial planning tool that helps you to create wealth, by investing small sums of money every month, over a period of time. Investing at an early stage of life lets you enjoy the benefits of two powerful strategies, rupee cost averaging and the power of compounding.

How SIP works?
SIP is a method of investing a fixed sum, regularly, in a mutual fund scheme. SIP allows one to buy units on a given date each month, so that one can implement a saving plan for themselves. An SIP is generally preferred for an equity scheme and can be started with as small as Rs 500 per month.

The biggest advantage of SIP is that one need not time the market. In timing the market, one can miss the larger rally and may stay out while markets were doing well or may enter at a wrong time when either valuation have peaked or markets are on the verge of declining. Rather than timing the market, investing every month will ensure that one is invested at the high and the low, and make the best out of an opportunity that could be tough to predict in advance. SIPs thus make the volatility in the market work in favour of an investor and help in averaging out the cost called “Rupee Cost Averaging”. For example, with Rs 1000 one can buy 50 units at Rs 20 per unit or 100 units at Rs.10 per unit depending upon whether the market is up or down. Thus, more units are purchased when a schemes’ NAV is low and fewer units when the NAV is high. Hence, when the two cases are taken together, cost is averaged out. The longer the time-frame, the larger are the benefits of averaging.

SIPs also help in availing benefits of compounding. This means the earlier one starts an SIP and longer the investment horizon, the larger the benefits. The reason being, each rupee one invests earns a return, which ends up as more rupees to earn a return, allowing investment to grow at a fast pace. Higher rates of return or longer investment time periods increase the principal amount in geometric proportions. This is the single most important reason for investors to start investing early and keep on investing on a regular basis to achieve the long-term financial goals.

In short - Why SIP?

	Disciplined approach to investments

	No need to time the market

	Harness the power of two powerful Investment strategies: Rupee Cost Averaging - Benefit from Volatility Power of Compounding - Small investments create Big Kitty over time

	Lighter on the wallet

	Reap benefits of starting early

Post Office Savings Schemes

Scheme	Interest payable, Rates, Periodicity etc.	Minimum Amount for opening of account and maximum balance that can be retained	Salient features including Tax Rebate
Post Office Savings Account	4.0% per annum on individual/ joint accounts.	Minimum INR 20/- for opening.	· Account can be opened by cash only. · Minimum balance to be maintained in a non-cheque facility account is INR 50/-. · Cheque facility available if an account is opened with INR 500/- and for this purpose minimum balance of INR 500/-in an account is to be maintained. · Cheque facility can be taken in an existing account also. · Interest earned is Tax Free up to INR 3500/- per year in single and INR 7000/- in Joint account up to 2011-12 and up to INR 10,000/- per year either in single or joint account for 2012-13. · Nomination facility is available at the time of opening and also after opening of account. · Account can be transferred from one post office to another. · One account can be opened in one post office · Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account. · Joint account can be opened by two or three adults. · At least one transaction of deposit or withdrawal in three financial years is necessary to keep the account active. · Single account can be converted into Joint and Vice Versa. Minor after attaining majority has to apply for conversion of the account in his name.
5-Year Post Office Recurring Deposit Account	From 1.4.2013, interest rates are as follows:- 8.3% per annum (quarterly compounded) On maturity INR 10/- account fetches INR 744.53. Can be continued for another 5 years on year to year basis.	Minimum INR 10/- per month or any amount in multiples of INR 5/-. No maximum limit.	· Account can be opened by cash/cheque and in case of cheque the date of deposit shall be date of presentation of cheque. · Nomination facility is available at the time of opening and also after opening of account. · Account can be transferred from one post office to another. · Any number of accounts can be opened in any post office. · Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account. · Joint account can be opened by two adults. · Subsequent deposit can be made up to 15^th day of next month if account is opened up to 15^th of a calendar month and up to last working day of next month if account is opened between 16^th day and last working day of a calendar month. · If subsequent deposit is not made up to the prescribed day, a default fee is charged for each default. After 4 regular defaults, the account becomes discontinued and can be revived in two months but if the same is not revived within this period, no further deposit can be made. · There is rebate on advance deposit of at least 6 installments. · Single account can be converted into Joint and Vice Versa. · Minor after attaining majority has to apply for conversion of the account in his name. · One withdrawal upto 50% of the balance allowed after one year. Full maturity value allowed on R.D. Accounts restricted to that of INR. 50/- denomination in case of death of depositor subject to fulfillment of certain conditions.
Post Office Time Deposit Account	Interest payable annually but calculated quarterly. From 1.4.2013, interest rates are as follows:- Period Rate 1yr.A/c 8.20% 2yr.A/c 8.20% 3yr.A/c 8.30% 5yr.A/c 8.40%	Minimum INR 200/- and in multiple thereof. No maximum limit.	· Account may be opened by individual. · Account can be opened by cash/cheque and in case of cheque the date of realization of cheque in Govt. account shall be date of opening of account. · Nomination facility is available at the time of opening and also after opening of account. · Account can be transferred from one post office to another. · Any number of accounts can be opened in any post office. · Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account. · Joint account can be opened by two adults. · Single account can be converted into Joint and Vice Versa. · Minor after attaining majority has to apply for conversion of the account in his name. · 2,3 & 5 year account can be closed after 1 year at discount. Account can also be closed after six months but before one year with interest @post office savings account. The investment under 5 Years TD qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.
Post Office Monthly Income Account Scheme	From 1.4.2013, interest rates are as follows:- 8.40% per annum payable monthly.	In multiples of INR 1500/-. Maximum investment limit is INR 4.5 lakhs in single account and INR 9 lakhs in joint account. An individual can invest maximum INR 4.5 lakh in MIS (including his share in joint accounts) For calculation of share of an individual in joint account, each joint holder have equal share in each joint account.	· Account may be opened by individual. · Account can be opened by cash/cheque and in case of cheque the date of realization of cheque in Govt. account shall be date of opening of account. · Nomination facility is available at the time of opening and also after opening of account. · Account can be transferred from one post office to another. · Any number of accounts can be opened in any post office subject to maximum investment limit by adding balance in all accounts. · Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account. · Joint account can be opened by two or three adults. · All joint account holders have equal share in each joint account. · Single account can be converted into Joint and Vice Versa. · Minor after attaining majority has to apply for conversion of the account in his name. · Maturity period is 5 years from 1.12.2011. · Interest can be drawn through auto credit into savings account standing at same post office, through PDCs or ECS. · Can be prematurely encashed after one year but before 3 years at the discount of 2% of the deposit and after 3 years at the discount of 1% of the deposit. (Discount means deduction from the deposit.) A bonus of 5% on principal amount is admissible on maturity in respect of MIS accounts opened on or after 8.12.07 and up to 30.11.2011. No bonus is payable on the deposits made on or after 1.12.2011.
Senior Citizen Savings Scheme	From 1.4.2013, interest rates are as follows:- 9.20% per annum, payable from the date of deposit of 31st March/30th Sept/31st December in the first instance & thereafter, interest shall be payable on 31st March, 30th June, 30th Sept and 31st December.	There shall be only one deposit in the account in multiple of INR.1000/- maximum not exceeding INR 15 lakh.	· An individual of the Age of 60 years or more may open the account. · An individual of the age of 55 years or more but less than 60 years who has retired on superannuation or under VRS can also open account subject to the condition that the account is opened within one month of receipt of retirement benefits and amount should not exceed the amount of retirement benefits. · Maturity period is 5 years. · A depositor may operate more than one account in individual capacity or jointly with spouse (husband/wife). · Account can be opened by cash for the amount below INR 1 lakh and for INR 1 Lakh and above by cheque only. · In case of cheque, the date of realization of cheque in Govt. account shall be date of opening of account. · Nomination facility is available at the time of opening and also after opening of account. · Account can be transferred from one post office to another · Any number of accounts can be opened in any post office subject to maximum investment limit by adding balance in all accounts. · Joint account can be opened with spouse only and first depositor in Joint account is the investor. · Interest can be drawn through auto credit into savings account standing at same post office, through PDCs or Money Order. · Premature closure is allowed after one year on deduction of 1.5% interest & after 2 years 1% interest (Discount means deduction from the deposit.). · After maturity, the account can be extended for further three years within one year of the maturity by giving application in prescribed format. In such cases, account can be closed at any time after expiry of one year of extension without any deduction. · TDS is deducted at source on interest if the interest amount is more than INR 10,000/- p.a. Investment under this scheme qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.
15 year Public Provident Fund Account	From 1.4.2013, interest rates are as follows:- 8.70% per annum (compounded yearly).	Minimum INR. 500/- Maximum INR. 1,00,000/- in a financial year. Deposits can be made in lump-sum or in 12 installments.	· An individual can open account with INR 5/- but has to deposit minimum of INR 500/- in a financial year and maximum INR 1,00,000/- · Joint account cannot be opened. · Account can be opened by cash/cheque and In case of cheque, the date of realization of cheque in Govt. account shall be date of opening of account. · Nomination facility is available at the time of opening and also after opening of account. Account can be transferred from one post office to another. · The subscriber can open another account in the name of minors but subject to maximum investment limit by adding balance in all accounts. · Maturity period is 15 years but the same can be extended within one year of maturity for further 5 years and so on. · Maturity value can be retained without extension and without further deposits also. · Premature closure is not allowed before 15 years. · Deposits qualify for deduction from income under Sec. 80C of IT Act. · Interest is completely tax-free. · Withdrawal is permissible every year from 7th financial year from the year of opening account.. · Loan facility available from 3rd financial year. No attachment under court decree order.
Kisan Vikas Patra	Discontinued from 01.12.2011
National Savings Certificates (NSC) 5 Years National Savings Certificate (VIII Issue) 10 Years National Savings Certificate (IX Issue)	From 1.4.2013, interest rates are as follows:- 8.5% compounded six monthly but payable at maturity. INR. 100/- grows to INR 151.62 after 5 years. 8.80% compounded six monthly but payable at maturity. INR 100/- grows to INR 236.60 after 10 years.	Minimum INR. 100/- No maximum limit available in denominations of INR. 100/-, 500/-, 1000/-, 5000/- & INR. 10,000/-.	· A single holder type certificate can be purchased by, an adult for himself or on behalf of a minor or by a minor. · Deposits qualify for tax rebate under Sec. 80C of IT Act. · The interest accruing annually but deemed to be reinvested under Section 80C of IT Act

What are income tax returns in India ?

The filing of income tax/wealth-tax return is a legal obligation of every person whose total income and wealth tax during the previous year exceeds the maximum amount which is not chargeable to income tax or wealth tax under the provisions of I.T. Act, 1961 or Wealth TaxAct 1957, as the case may be. The return should be furnished in theprescribed form on or before the due date(s).

At present, there is an emphasis on self compliance on the part of the taxpayers. The assessing officer will accept the returns, u/s 143(1) of the I.T. Act or u/s 16(1) of W.T. Act, as the cases, may be, on the basis of the returns/documents submitted by the assesses. That is the end of the matter for a majority of the cases, except in the small number of cases selected for scrutiny. It is, therefore, advisable for the taxpayers to furnish correct and complete particulars in the Income-Tax/WealthTax return itself.

INCOME TAX RETURN

It is compulsory for every company to furnish return of income.Every person, other than a company, whose total income from all sources of income exceeds the maximum amount which is not chargeable to income tax in any previous year ending on 31st March is liable to file the Income-tax Return. The maximum limit of income not chargeable to tax under the provisions of the Income Tax Act, 1961 is Rs. 1,10,000 (except in case of resident women below 65 years of age and resident senior citizens above 65 years of age) for assessment year2008-09.

WHAT ARE THE RATES OF INCOME-TAX ?

In the case of Individuals, HUFs, AOPs and BOIs other than those covered under the following two parts of this table :

A.Y. 2008-09

Upto Rs. 1,10,000 Nil

Rs. 1,10,001 to Rs. 1,50,000 10%

Rs. 1,50,001 to Rs. 2,50,000 20%

Above Rs. 2,50,000 30%

For Women, resident in India and below the age of 65 years :

Upto Rs. 1,45,000 Nil

Rs. 1,45,001 to Rs. 1,50,000 10%

Rs. 1,50,001 to Rs. 2,50,000 20%

Above Rs. 2,50,000 30%

For Senior Citizen and Women, age 65 years or more :

Upto Rs. 1,95,000 Nil

Rs. 1,95,001 to Rs. 2,50,000 20%

Above Rs. 2,50,000 30%

Surcharge on Income tax:- @10% shall be levied when income

mentioned in the above tables exceeds Rs. 10 lakhs.

Education Cess @ 2% on income-tax is also chargeable and an

additional levy of Secondary and High Education Cess is also payable

@1% for the A.Y. 2008-09.

The rates of tax for A.Y. 2009-10 shall be as follows :

In the case of Individuals, HUFs, AOPs and BOIs not covered under the

following two parts of this table :

Income Range Rate of Income Tax

A.Y. 2009-10

Upto Rs. 1,50,000 Nil

Rs. 1,500,01 to Rs. 3,00,000/- 10%

Rs. 3,00,001 to Rs. 5,00,000/- 20%

Above Rs. 5,00,000/- 30%

For women, resident in India and below the age of 65 years :

Income Range Rate of Income Tax

A.Y. 2009-10

Upto Rs. 1,80,000 Nil

Rs. 1,80,001 to Rs. 3,00,000/- 10%

Rs. 3,00,001 to Rs. 5,00,000/- 20%

Above Rs. 5,00,000/- 30%

For senior citizen and women, aged 65 years or more:

Income Range Rate of Income Tax

A.Y. 2009-10

Upto Rs. 2,25,000 Nil

Rs. 2,25,001 to Rs. 3,00,000/- 10%

Rs. 3,00,001 to Rs. 5,00,000/- 20%

Above Rs. 5,00,000/- 30%

The Surcharge, Education Cess and Secondary and Higher Education Cess will be the same as for the assessment year 2008-09.

For the A.Y. 2008-09 and 2009-10, two partnership firms and domestic companies the tax rate shall be 30%, but surcharge of 10% will

be levied only if the net income of the partnership firm or the domestic company exceeds Rs 1 crore, education cess will be levied at 2% and

an additional Secondary and higher education cess of 1% shall be levied.

WEALTH TAX RETURN

Every Individual, Hindu Undivided Family and Company whose net wealth exceeds the maximum amount which is not chargeable to

wealth tax in any previous year ending of 31st March is liable to file the wealth tax return. The maximum limit of net wealth not chargeable to tax

under the provisions of the Wealth tax Act, 1957 is Rs. 15 lakhs at present.

WHAT IS NET WEALTH ?

Net wealth is the aggregate value, computed under the provisions of the W.T. Act, 1957, of all assets (including deemed assets), belonging

to the assessee on the valuation date, MINUS the aggregate value of all debts owed by the assessee on the valuation date which have been

taken in relation to the assets attracting wealth tax.

HOW IS WEALTH TAX CHARGED ?

It is charged @ 1% of the amount by which the net wealth exceeds Rs. 15 Lakhs.

Tax Return Preparers Scheme for small tax paying people

Page 2 of 2

A “Tax return Preparers Course Comple

tion Certificate” and an Identity

Card bearing a unique identification

number would be issued at the end

of each training programme. The un

ique identification number would be

used for monitoring the performance of the Tax Return Preparers,

issuing quality alerts and cancellati

on of certificates, if required.

The Tax Return Preparers would be re

imbursed 3% of the tax collected

for the first year’s return of a new ta

x payer, 2% for th

e second year and

1% for the third year, on the returns

prepared by tax returns preparers.

For preparing returns of existing tax

payers, TRPs will collect from the

taxpayer Rs. 250 for return for every assessment year.

The tax return preparers would normally operate from their residence.

However keeping in mind

the convenience to the

public, the local CCIT

may position them at places like th

e department’s Help Centres, post

offices, traders associations, school

s, resident welf

are associations,

community centres etc.

The scheme would be widely publicized through the electronic and print

media.

The pilot scheme would be contro

lled, managed and coordinated by

a Resource Centre.

™

Tax Return Preparers Scheme for small tax paying people

Page 2 of 2

A “Tax return Preparers Course Comple

tion Certificate” and an Identity

Card bearing a unique identification

number would be issued at the end

of each training programme. The un

ique identification number would be

used for monitoring the performance of the Tax Return Preparers,

issuing quality alerts and cancellati

on of certificates, if required.

The Tax Return Preparers would be re

imbursed 3% of the tax collected

for the first year’s return of a new ta

x payer, 2% for th

e second year and

1% for the third year, on the returns

prepared by tax returns preparers.

For preparing returns of existing tax

payers, TRPs will collect from the

taxpayer Rs. 250 for return for every assessment year.

The tax return preparers would normally operate from their residence.

However keeping in mind

the convenience to the

public, the local CCIT

may position them at places like th

e department’s Help Centres, post

offices, traders associations, school

s, resident welf

are associations,

community centres etc.

The scheme would be widely publicized through the electronic and print

media.

The pilot scheme would be contro

lled, managed and coordinated by

a Resource Centre.

™

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Senior Citizen Savings Scheme (SCSS) Account from India Post

Tax free scheme National Savings Certificates (NSC)

How import duty and taxes made on imports in India

Import duty & taxes when importing into India

systematic investment plan in investing mutual funds !

India Postal Savings Scheme

Post Office Savings Schemes

What are income tax returns in India ?

Tax Return Preparers Scheme for small tax paying people

Tax Return Preparers Scheme for small tax paying people

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