Byapaar.com -The Indian Business Blog

In the midst of warning by the International Monetary Fund (IMF) of developing economies being toppled in the ongoing financial crisis, guardians of the Indian economy are working overtime to ensure India did not suffer much due to the global phenomenon. There is already signs from everywhere about an imminent slowdown of economies all over the world including the USA which reported a contraction of .1 percent of its economy last week.

It is really heartening to see that the Government of India is doing its best and working with leaders of the industry to see off the crisis. Last week the Prime Minister of India, Dr. Manmohan Singh held a meeting with business leaders like Anil Ambani, Sunil Mittal and others to hear their views on tackling the problem. According to the captains of the industry, the government must relax the credit policy without worrying too much about inflation so as to pump in money in the cash strapped financial sector. They opined that there is already signs of slowdown and if liquidity crunch is not addressed immediately, the economy would suffer more. They urged the government to lower interest rates and release more cash in the market to shore up the already nervous financial sector and thus bring the much needed confidence back in the market.

It seems it is lucky last few weeks in the office for the Manmohan Singh led NDA government as inflation dipped below 11 percent last week for the first time for 5 months and as a result the Reserve Bank of India announced a cut in CRR (Cash Reserve Ration) rate by one percentage point to 5.5 and REPO rate by 50 point basis to 7.5. This will release Rs. 700 billion in the market. Both the government and industry hope that the latest action is a step in the positive direction and it will boos liquidity in the system, stimulate growth and stabilize the financial market. The governor of RBI while announcing the news hoped that the credit requirements would be met through this action and effect the industry positively by picking up growth momentum.

But as always, while welcoming the move, industry leaders hoped the government and the Apex Bank would take more measures to tide over the global financial crisis.  They are asking more reforms in sectors including government debt market to tap new class of buyers and thus bring in more money in the market.

The stock market has responded positively to all these steps as it has been gaining continuously for last 4 trading days. The BSE Sensex has gained a credible 293.44 points today and have crossed the psychological barrier of 10,000 for the first time after it sank few weeks back.

The general notion is that it feels great to be famous – to be someone! But sometimes it is great too if you are nobody like me who works as Asst. Teacher in a semi-govt. school in a semi-urban locality in one of the remotest and non-descript part of the country. Why do I feel great? Because I don’t have to go through the arduous task of filling tax returns every year like my colleagues do! Yes you read it right! I don’t have to pay income taxes (I belong a special community in a special area where nobody from my community has to pay) although my income from regular job and online is roughly around Rs. 500,000 per annum. I don’t even have a (PAN) card! But from what I see my colleagues go through, I reckon it is not funny to file returns especially as every year there are some changes made in tax policies by the government. So, I find my mates go around finding the best and cheapest tax accountant available in the town. Professional consultation is not always for just filling of returns, but salaried individuals with limited income also need to exploit the different schemes on offer by the government to save some paisa for the future and thereby get tax rebates.

As I have avid interest in economic and business affairs, I do read lots of finance and business related papers and journals. The other day I found one of the magazines (Outlook Money) that I subscribe to enclose a little pocket book titled “The Complete Tax Guide for 2008-09” which is really a handy item for all normal tax-payers. It gives a complete guide from calculating incomes to deductions, computation and tax planning, clubbing of income to filing of returns. I believe most net junkies don’t have time to read books anymore. While business houses can afford to hire chartered accountant firms for audit services, individuals can save lots of money if they have basic ideas about tax laws and tax saving schemes. Here, I’ll write what is advised on that handy book about “tax saving strategies during your lifetime.”

The budget of 2008 had much to offer to the salaried tax payers of the country. The smooth passing of the Finance Bill with no changes to the proposals made can bring in showers this financial year. There are two ways in which tax payers will benefit. One, the threshold level of income tax has gone up. This means that a greater part of the income come under zero tax status.

Two, the tax slabs have also been raised. Currently the maximum marginal rate of tax of 30 percent is applicable from the income level of Rs. 250,000, this now stands doubled at Rs. 500,000 for the next financial year. This means an under 65 year old male tax payer with a gross Read the rest of this entry »

First of all, my heartiest congratulations to Abhinav Bindra J who made India proud by winning gold medal for the 10m Air Rifle section at the Beijing Olympic. It is the first ever individual gold that India won in the history of Olympic.

Now, this post is a little bit personal as I’ll try to put a point across by taking example of one of my friend. But before I dwell into that, let me give a brief update on the latest business scenario.

Inflation is at 18 years high that stands more than 12 percent. Stock market has recovered to some extent and has been on a bullish run for last 10 days or so. Tatas and Reliance Infocom have decided to invest huge sum to create GSM based network while keeping their CDMA services. The central government has decided to come to the exporters’ aid and has announced that it would return taxes already paid.

Well, that’s what I call brief update. J

Now the main topic! The other day I was called by my fried who got some exorbitant Credit Card bill and didn’t know where he spent the money. He called me because we went to some websites one night and used it to get membership. It was quite late in night and he didn’t know how to browse the net properly. L So I told him not to browse the net any more after I left. He did!

For the next 3 months he kept receiving those bills and soon he was in debt. I repeatedly asked him to contact the issuing branch to block the card. He didn’t! But when the bill piled on, he was desperately looking how to get out of debt and this mess. Finally he called the customer service of the issuing bank and they did oblige his request.

I am blogging on this because this might happen to anybody who is regularly using credit cards for online purchase – especially from phony sites. There are lots of instances of unauthorized use of credit cards by hackers who steal the card access codes. So everybody must first check how reputed and trusted the site is (Verisign verification is one of those) before putting the sensitive personal data.

While plastic money in the form of credit or debit cards is of great convenience, one must use it judiciously even if they are not using them online. As one does not have to carry and dish out lots of cash, it is very easy to spend a lot by swiping the card at various counters. Its only after that you start worrying how you pay off credit card debt that is now quite a huge amount.

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