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Yogi Zone

Useful articles for your finance management by our team of experts

Personal Finance News 2013 in India at a Glance

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The year 2013 was eventful in many ways. There was drama in politics, economy and what not. Let us focus on the most important personal finance news and events which occurred in 2013.

Sensex at all time high

Sensex reached its all time high level of 21,300 points after BJP swept the elections in three states and gained a significant number of seats in Delhi elections. It was the first time it crossed the level of 21,000 after 2008.

Rupee reached its all time low

INR slumped to its all time low level of close to 69 versus Dollar. Falling rupee meant Indians had to pay more for all things imported such as fuel and gold. Though Govt. and RBI tried hard to not let INR fall to this level, they could not stop the inevitable.

EPF Scam

This came as a shock not just to tons of employees but also the PF managing authority EPFO. Close to 2.5 crore PF accounts were reported to have negative balance. It is believed that fraudsters have used fake bank accounts to withdraw money out of some of these accounts. Most of the accounts reported under this fraud were the ones which were idle for some time i.e. no contributions were being made to them.

Incentive for first time home loan takers

An incentive was announced in budget 2013 for first time home buyers who opt for a home loan. An additional deduction will be available for the said category of people who opt for lending in between 01/04/2013 and 31/03/2014.

Tax credit of Rs.2000 for tax payers

A tax credit of Rs. 2,000 was announced for all tax payers who had income level of up to Rs. 5 lakh p.a. This proposal would eventually increase the minimum tax slab from Rs. 2 lakh to 2.2 lakh. However, it is to be seen if this is only for this financial year or would be continued in the next year as well.

Know more about Tax Saving Investments

Landlord pan mandatory for rent over 1 lakh per annum

Every tax payer who claims HRA and pays a rent of more than Rs. 1 lakh p.a has to compulsorily declare the landlord PAN number to his employer. This is a major setback to quite a lot of people since landlords do not usually agree to provide their PAN numbers.

Interest Rates Cut on Post Office Small Saving Schemes

Post office small saving schemes would now fetch lesser returns compared to the previous year. PPF will now fetch 8.7%, NSC 8.5%-8.8% and few other schemes were also reduced by 0.1%.

Inflation bonds to be launched

Inflation bonds were proposed as a part of government’s battle against inflation. The bonds will be linked to the inflation index and thus will fetch greater returns as per the rise in inflation.

EPF online transfer and withdrawal facility

EPFO announced the launch of online facility through which users can opt for EPF transfer or withdrawal online. EPF transfer/withdrawal should now take less than 30 days once it is applied online. EPFO has also asked its office to resolve all the grievances within a specified time frame.

Curbs on import of gold

Govt. imposed restrictions on import of Gold into the country to put a check on rising inflation and falling rupee. RBI believes that Indians need to start reducing their love for the yellow metal in order to improve the current account deficit (excess imports over exports).

No more service tax on maintenance and repairs for flat buyers

It was welcome news for buyers of apartments who were beaten on account of multiple taxes and registration costs of flats. The service tax which they used to pay on the one time maintenance fees such as common areas, parking, etc and other repairs has been scrapped.

BJP looking at abolition of income, sales and excise tax

BJP announced that it was looking at totally eliminating the concept of income tax, sales tax and excise tax once it comes to power after the general elections in 2014. It may be a political trick but if it does happen, it will bring a smile onto the faces of lakhs of tax payers in the country.

Tax break for senior citizens on house property income

Senior citizens would not have to pay any tax on the income generated from the reverse mortgage scheme. This would encourage a lot more senior citizens to opt for this scheme. The eligible amount would also increase 3 fold with insurance companies also entering the service providers list.

Gold prices set to fall for first time in 13 years

Gold prices are set for an annual fall for the first time after 13 years of history of the shiny metal. At the same time, investors started preferring equities. It signals a gradual shift in the investors’ stance to opt for high risk instruments instead of what they believed was a safe haven – Gold.

Conclusion

These were the most important events of the year 2013. Hope the next year would bring in better news for you and keep you financially healthy. InvestmentYogi wishes all its readers a very happy new year.

  • Av Suresh

    Q. I am a central govt pensioner having total gross income which is below Rs 5 lakhs. In the budget 2013-14 a tax credit of Rs 2000/= is allowed as relief to those whose total gross income does not exceed 5 lakhs. whether can I deduct this amount from my total tax payable amount and remit the balance as tax payable to the income tax department through bank ? Or can I pay the entire total tax payable including the cess of 3% so that I can get back the tax credit of Rs 2000/= from the income tax department to my account ?

    A. You can deduct the amount from the total payable tax. The tax slab of individuals has virtually increased from Rs. 2,00,000 to Rs. 2,20,000 with this new rule.

  • Arvind

    I am 70 yr old NRI and I have some fixed Deposits in Bank. They are trying to cut TDS on my Deposit Income Interest. Bank has also asked for
    TRC under the DTAA tax regulations. Is Inland Revenue is allowed to tax my savings-interests. Would I not get tax allowance of Rs2.50 lacs per year. You kind advise is invited. Please write to me where do I stand in this Indian Income Tax-web.. Thank you.
    Arvind.

    • Av Suresh

      Bank deposits are subject to TDS if interest from the branch deposit exceeds Rs. 10,00 p.a. In case you are in the nil tax slab i.e. income less than Rs. 2.5 lakhs, you need to submit Form 15H to the bank. TRC is required by the banks to make sure that you have followed DTAA regulations.

  • Arvind

    Suresh, How much money one (NRI)can transfer overseas in one financial year? either thro’ Bank to Bank transfer or declared thro’
    Airport Customs (RTGS Or NEFT not allowed to NRIs. Please elaborate.
    Thanks

    • Av Suresh

      You can transfer up to $1 million in one financial year.

  • sumit

    i have worked 29 dec 2009 to 26 march 2012 in a company and pf contribution from jan 2010 to apr 2012 and leave the job and join in other company on 12 apr 2012 and leave the job on 30 nov 2014. the pf contribuion for this company from may 2012 to dec 2014. Last company pf will be transfered in latest pf account.now i withdrowl my pf from PF departement in feb2015.they donot deduct any tds from this pf amount .can u tell me that this PF amount will be taxable or not

  • sumit

    i have worked 29 dec 2009 to 26 march 2012 in a company and pf contribution from jan 2010 to apr 2012 and leave the job and join in other company on 12 apr 2012 and leave the job on 30 nov 2014. the pf contribuion for this company from may 2012 to dec 2014. Last company pf will be transfered in latest pf account.now i withdrowl my pf from PF departement in feb2015.they donot deduct any tds from this pf amount .can u tell me that this PF amount will be taxable or not

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