Supreme Court Ko Gussa Kyon Nahin Aata?

Published on Sat, Mar 01,2014 | 17:45, Updated at Sat, Mar 01 at 17:45Source : Moneycontrol.com 

By: Menaka Doshi, Executive Editor, CNBC TV18

Justice Robert H Jackson once famously said about the United States Supreme Court "We are not final because we are infallible, but we are infallible only because we are final."

For the longest time I thought the same applied to India's Supreme Court as well. But according to the Sahara Group and its chief Subrata Roy – India's Supreme Court is neither infallible nor final. Which is probably why for 18 months after it lost a landmark Rs 24000 crore case in the Supreme Court, the Sahara Group has refused to comply with the Court's order - to pay the money to market regulator SEBI so that it may be refunded to 3 crore investors.

That Sahara refuses to do as the Supreme Court ordered it to – is shocking. But not as shocking as the fact that the Supreme Court has sat by patiently, watching Sahara come up with random excuses for not obeying its orders. And in doing so the Supreme Court has sent out a horrible message to all Indians. Yes, we may not be infallible and no – we are not final!

Let's go back to the beginning… this is a Sahara Case timeline (borrowed from the Financial Express, with a minor modification)

* Nov 2010: Sebi restrains Sahara India Real Estate Corp and Sahara Housing Investment Corp from raising funds through optionally fully convertible debentures (OFCDs)

* Dec 2010: Sahara moves Allahabad HC; obtains stay on Sebi order

* Jan 2011: Sebi files petition in SC, which directs Sahara to give details of OFCD investors

* April 2011: Allahabad HC vacates stay; Sahara moves Supreme Court

* June 2011: Sebi directs the two Sahara companies to refund around Rs 24,000 cr to investors

* Oct 2011: SAT upholds Sebi order against Sahara entities

* Nov 2011: Sahara challenges SAT order at SC

* Jan 2012: SC admits Sahara appeal against SAT order

* Aug 2012: SC upholds SAT order; Sahara ordered to refund Rs 24,000 cr to nearly 30 mn investors through Sebi

Given the large amounts and number of investors involved, the Supreme Court was keen the case be heard and decided in a time bound manner. So it gave SAT 8 weeks to decide the matter. And the Supreme Court itself took just 8 months to admit the appeal, allocate the case to a bench, hear SEBI's, Sahara's and the Government's arguments and decide the matter.

In 8 months the Supreme Court decided the case. But for 18 months thereafter the Supreme Court has watched its decision being ignored!

Infact in a curious twist in the case – in December 2012, 3 months after the Sahara order was delivered, Chief Justice Kabir's bench decided to extend the deadline set out in the earlier order – in effect reviewing a decision made by another bench. The impropriety of this was criticised by many senior lawyers but the Supreme Court maintained silence. The second deadline gave Sahara up to February 2013 to pay SEBI the remaining Rs 17400 cr (Rs 5120 cr had been paid in December).

February came and went. SEBI filed a couple of contempt notices…the hearings dragged on. Sahara contended that most of the money had already been refunded to investors in 2011 itself. This even though most of the bonds had no early redemption clause. Nor were the Sahara companies able to explain how they raised close to Rs 19000 crore to make the refunds. The same refund argument did not pass muster even with the CJI's bench in December 2012 - yet Sahara kept beating the same drum. And somehow the Court was convinced to allow Sahara to submit property papers as guarantee for the money. Sahara first submitted papers for a single property in suburban Mumbai, that it claimed, when fully developed would be worth over Rs 20000 cr. SEBI discovered the land suffered development restrictions. Sahara tried every trick in the legal book to drag out what was in fact a concluded case. And the Supreme Court allowed it to do so. 

This generosity is baffling and unprecedented – have you ever heard of a Supreme Court that allows its orders to be negotiated down? Sahara must have been emboldened by this patient leniency. No wonder the Sahara Chief thought it well within his right to ignore a Court summons. Unfortunately for him, the wind turned, and his nth act of disobedience turned out to be the proverbial last straw. His non-appearance in the Supreme Court on 26^th February, 2014 lead to the Court issuing a non-bailable arrest warrant against him. The Supreme Court refused to withdraw it when petitioned to do so.

 Mr Roy is now in police custody – not in a jail – but in a state government guesthouse. This after evading arrest for over 24 hours. The same man who claimed he could not attend Court as he had to be at the bedside of his ailing mother, was nowhere to be found the next day. Not even at his mother's bedside.

He will now be produced in the Supreme Court on March 4^th. On that day it will have been exactly 550 days since the Supreme Court first decided that Sahara had acted outside the law in raising Rs 24000 crores from 3 crore investors and hence must refund the money with interest. 550 days of disobedience by Sahara. How many more days of Sahara's non-compliance will it take the Supreme Court to be reminded of its own finality?

Here below are excerpts from the Supreme Court decision ( the individual orders and the combined order) on Sahara – August 31^st, 2012

But from Saharas' conduct and action, it is clear, that their intention was to issue securities to the public under the garb of private placement.

Facts indicate that, through this dubious method, that SIRECL had approached more than thirty million investors, out of which 22.1 million have invested in the OFCDs and it had raised nearly 20,000 crores, for which it had utilized the services of its staff in 2900 branches/service centers and utilized the services of more than one million agents/representatives. Court can, in such circumstances, lift the veil to examine the conduct and method adopted by Saharas to defeat the various provisions of the Companies Act, already discussed, read with the provisions of the SEBI Act.

I find that Saharas conveniently omitted the reference to SEBI in the declaration given in the prospectus. OFCDs were, therefore, issued by Saharas in contravention of the DIP Guidelines, ICDR 2009, notification dated 17.9.2002 and also overlooking the statutory requirements stipulated in Section 73(1) of the Companies Act.

I am, therefore, of the view that since Saharas had violated the listing provisions and collected huge amounts from the public in disobedience of law, SEBI is justified in directing refund of the amount with interest.

The procedure adopted by the appellant-companies is obviously topsy turvy and contrary to the recognized norms in company affairs. All this makes the entire approach of the appellant-companies calculated and crafty. It is clearly apparent, that the appellant-companies had clearly taken upon themselves to tread a path different from the mandate of law delineated under the Companies Act.

For the first time before this Court, in their challenge to the SAT order dated 26.8.2011 (whereby the SEBI (FTM) order dated 23.6.2011 was upheld), some details were disclosed by SIRECL. On an analysis the material placed before this Court, I have recorded hereinabove, that the same seemed to be unrealistic, and may well be, fictitious, concocted and made up.

it is essential to express, that there may be no real subscribers for the OFCDs issued by the SIRECL or SHICL. Or alternatively, there may be an intermix of real and fictitious subscribers.

Even though I hope that all the subscribers are genuine, and so also, the subscription amount, it would be necessary to modify the operative part of the order issued by the SEBI which came to be endorsed by the SAT, so that the purpose of law is not only satisfied but is also enforced.

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Things to note while taking life insurance premiums

While insurance plans do offer tax benefits up to Rs 1 lakh under section 80c of the income tax act, new change in rules and regulations especially with the implementation of Direct Taxes Code (DTC) means one needs to be careful.

Adhil Shetty
BankBazaar.com

Insurance plans have traditionally been a very popular tax saving tool considered by many people. Almost 70 percent of the overall insurance related products are sold in the quarter from January to March. While insurance plans do offer tax benefits up to Rs 1 lakh under section 80c of the income tax act, new change in rules and regulations especially with the implementation of Direct Taxes Code (DTC) means one needs to be careful while selecting any insurance product simply because of its tax related benefits. Here are some things to note while taking life insurance premiums for tax saving.

Not all Insurance Payments are Tax Free:
Many people fail to understand that not all insurance payments are tax free. People in their quest to save tax usually end up buying a lot of unwanted insurance products. All insurance agents may not tell about this, as a lot of mis-selling happens in insurance products.

While premiums paid for life insurance policies are exempt from tax up to a maximum of Rs 1 lakh under Section 80C of the Income Tax Act, Section 80C encompasses investments from all the sources including life and health insurance premiums, investments in PPF and pension schemes to a ceiling of Rs 1 lakh per annum. For individuals paying premium more than Rs 1 lakh for multiple policies the apparent tax benefits may not be possible.

Change in Law for Tax Deduction Eligibility:
The change is law with the introduction of the Direct Taxes Code (DTC) has laid down stiff conditions for deduction of premium from taxable income from insurance policies. Under the new regulation, any insurance policy offering a life cover of less than 10 times the annual premium is not eligible for tax deduction. For example if the premium of an insurance policy of ULIP is Rs 30,000, then the policy must offer life cover of at least Rs 3 Lakh to be eligible for tax deduction. In case the above mentioned pre condition for tax benefits is not met, even the income earned from the policy will be taxable.

Low IRR:
Considering the new direct Taxes Code (DTC) allowing insurance policies offering a cover of 10 times the annual premium to be eligible for tax rebate, the internal rate of return or IRR has also reduced substantially. For a cover of Rs 25 lakh, a user would need to spend a minimum of Rs 2.5 lakh a year. Considering the IRR for a 10 year period, the average internal rate of ireturn comes to a sluggish 5.75 percent which is far lower than other investment options like Public provident fund and bank fixed deposits.

Relief Offered for People with Disease or Disability:
While as per the older direct tax code (DTC) all insurance policies issued on or after April 1, 2012 must offer at least ten times the annual premium to be paid for tax free status, exceptions are being introduced for people with disability and those suffering from disease or ailment as specified in the rules made under section 80DDB.

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Fancy things that your real estate agent may tell you

Adhil Shetty
BankBazaar.com

When investing in a real estate property, a real estate agent might prove to be a really valuable asset. However, if you don't keep your eyes and ears open, you might end up ruining your investment. Ankit is a regular investor in the real estate industry and has been buying properties for some time now. Things weren't always good for him as he once fell for some fancy claims made by a real estate agent and ended up losing a huge sum of money. However, he now knows that even though there are several statements that the brokers make regarding the property they are offering, it is you who needs to be alert and attentive when investing your money.

When you are out for buying real estate property, you should always remember that agents are here for business. The enthusiasm of buying a plush new apartment can get you stalled between tall claims and misleading promises. So, the next time your broker tells you that he has a cozy apartment up his sleeve, you need to be alert that he might just be talking about a cramped one. The industry clichés can change the entire definition of a clean and high class apartment.

Be ready to hear the following things from your real estate agent if you are planning to invest in one of the posh localities of the city.

You Got the Ocean View!
Having an apartment with an ocean view is a dream of every investor. However, not every agent can do that for you, though they surely can promise you of getting one. The estate agents these days are quick to mention that a particular apartment comes with an ocean view. The thing that they don't tell you is that there are certain obstructions. So, when you pay all the money all you get is an ocean view which is obscured by huge buildings and trees. This is quite common in coastal areas like Chennai and Mumbai. 

A Huge Garage that can Hold 2 Cars at a Time
Let's admit it that we all want to have a huge car garage that can hold at least 2 cars at a time. Now, this is what the agents promise you, but the truth is that such garages have storage regions or dryers installed in them and so the space is not enough for two sedans or even hatchbacks for that matter.

You'll Get a Superior Price when You Sell the Property
Whenever we invest our money in a property, our agents claim that they'll help us get a better price for the property in the near future. However, you shouldn't fall for the statement as this is something which is not in the hands of the agent. The market behaviour cannot be predicted accurately and hence, you should invest your money after knowing your requirements well. So, don't believe your broker when he says that he'll help you sell the property at an unrealistic rate.

This is the Best Locality
This is a common lie that you might hear from your agent. To put it simply, you cannot just rate a locality to be the best in an area. There are a number of factors to be considered while determining a property's value, but according to the agent the property they are offering is the best. They will tell you a lot about how the area around the property will develop in no time.

The Place is a Paradise for Investors
Your agent will probably tell you that this place is a paradise for investors and a huge investment house is coming up to build a multiplex and shopping mall. You shouldn't pay much attention to these claims as the market changes quickly and nobody knows what's going to happen in a short span of time.

Not Much Time or Units Left
They'll tell you that there is not much time left as they only have the last few units to sell. You should never hurry up while investing in a property; instead you should stay calm and see why the agent is pushing so much on selling the property. Even if they offer you the flat at the most economical rates, you should not fall for the trap and instead take a sound decision.

With the increased rates of property, brokers tend to charge a huge sum from their clients as a commission. So, if you are already giving them their share, then there's no need for you to take a risk with your investment by believing everything they say.

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Money lessons for kids: How to teach them

Adhil Shetty
BankBazaar.com

During a classroom lesson at a school in Bangalore, Pooja, a young student raised her hand in doubt and asked the teacher to explain the meaning of 'Carried Balance'. The teacher explained the meaning by taking a real life example that if she had her credit card swiped for a purchase of Rs. 1000 and paid Rs. 800 back to the credit card company the same month, she would be receiving a bill from the company for paying the balance amount of Rs. 200 before a stipulated date. The teacher was shocked to hear Pooja's response when she said, "What bill?" and exactly in the same discerning tone that you are thinking about.

Pooja did not know about the basic working of credit cards. She wasn't acquainted with the fact that credit card holders actually pay back the amount, in cash, which they spend on purchasing different items by swiping their credit cards in a month. While her parents might be dealing with such monthly bills, she wasn't taught about how a basic transaction works with credit cards. Though this might be an extreme case, it clearly points out towards the larger problem of 'Lack of Knowledge on Money' that the next-Gen kids face in the modern day world.

Given how vital it is to have proper financial skills in life, it is quite a surprise that schools don't, or better to say can't, focus much on educating kids about money. This leaves the children with only one medium of learning, which is, from their parents. While a majority of parents skip this part and keep it for the later stages of life, it is imperative for those belonging to the minority to make the kids understand the basic, yet important, financial lessons early enough and make them competent enough to deal with even the complex money-matters on their own.

Saving Chart
Parents are known to be the first teachers and home is always regarded as the first school of a child. Being the parents, it becomes their responsibility to pay proper attention towards how they portray themselves to the kids. If a child always sees their parents saving money, they will certainly end up following them and doing the same. For cultivating the habit of saving money in kids, parents can prepare a chart that entails how much to save per week or per month. An easy move would be to ask them to save 10% of their pocket money. So, when the kids get Rs. 100, they'd need to save Rs. 10 out of it.

A Trip to the Bank
Kids, especially the very younger ones, love behaving like grownups as much as the grownups want to taste childhood again. It is just the sense of responsibility that excites the kids and what could be a more productive way of nurturing this human trait than taking them to the bank and having a savings account opened on their name. The feeling of having an individual bank account is sufficient for bringing this sense of responsibility to life and encourages them to save more.

Control Impulsive Feelings
The mere presence of money in the wallets prompts the kids to spend it on just any random thing. Children need to be groomed for having patience and controlling their impulsiveness for shopping or spending more on fun and friends. This habit can be cultivated over a period of time by putting a momentary pause on the favourite purchase of the children. This would help in giving them a moment to think about whether they really need the item or are just letting their inner craving supersede. The ability to identify this thin line of differentiation and saying a simple NO to themselves would prove helpful in the long run.

Maintaining a Domestic Passbook
Letting the kids calculate their savings by maintaining a personal passbook is another motivational way to inculcate the habit of savings in them. This habit would help the children see how their money grows over a period and would definitely instill a sense of responsibility in them. Kids, in the upper age groups, would not only be able to do the simple math of saving money, but will also feel like investing it in something productive to make the saving shrub turn into a big money tree.

These kinds of lessons might be difficult to inculcate, but they definitely hold the capability of paying off later. Early money lessons can help the children in making big financial decisions in a smart manner, avoiding the burden of debt from piling up on their shoulders. 

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Is this right time to take home loan?

Kishor Pate
Amit Enterprises Housing

Because of the on-going economic uncertainties, many aspiring home owners in Pune are still hesitant about taking a home loan and buying a residence. One of the questions that people who seek to make this beautiful city their permanent home is whether it makes more sense to rent now and await a price correction. 

For those who are thinking of renting a home in Pune, there are many aspects to consider. In the first place, the affordability of both rental and purchased property is highly location and project specific. To illustrate – someone in Pune who can afford to buy a home in Undri may not even be able to afford the rentals at Boat Club Road, Koregaon Park or Kalyaninagar. 

Secondly, whether it makes more sense to rent rather than buy a property would also depend on one's future plans in a particular locality. Does one wish to settle down there, or is one also open to other areas? It definitely makes sense to rent a home while one is making up one's mind about a particular locality. 

If an individual is certain of a locality in Pune and is committed to settling down there, the right time to buy a home is now. There are many projects available in the excellent new residential areas that have come up in Pune, and prices are still competitive. There will not be a correction in real estate prices in Pune, as demand for a movement of residential properties in the city is healthy. 

The watch-and-wait policy is only valid if there are informed reasons for anticipating a correction in a certain locality. On the whole, property rates in Pune will either remain stable or appreciate, depending on the area. Also, there are no prospects of home loan interest rates rationalizing over the mid-term, and economic indicators suggest that inflation will continue to drive up costs. 

Given that it is the right time to avail of a home loan and purchase a property in Pune, one still needs to consider the financial implications. As a thumb rule, an individual's home loan EMI should not exceed a rational percentage of his or her net monthly disposable income. Generally, EMIs can amount to 50% of monthly income.

However, home loans are not the only cause of debt in the contemporary context. People take out personal loans and have pre-existing debts, too. In other words, even a 'fair' EMI percentage could prove unaffordable. The 'ideal' EMI component can only be calculated vis-à-vis a debt-free person's salary. This would be between Rs. 1000-1200 per lakh. 

People availing of home loans sometimes forget that they are under legal obligation to repay. There are numerous cases where borrowers have neglected to undertake a due diligence with regards to their financial capabilities and the suitability of the loan of which they have availed. As a result, they find themselves in debt traps and sometimes default on their repayments. Borrowers should stretch themselves only to the extent that they realistically foresee their financial position improving in a given time frame. 

No home loan strategy should ever be based on anticipated financial windfalls as a means to pay off the loan. It should be based on realistic factors such as reasonable salary hikes and maturing of insurance policies and investments. If one anticipates a salary hike, even if this amounts to only a certain annual increase, one can consider a 'step-up' option for the existing home loan. Here, the borrower pays a lower EMI initially and steps up the repayment of the home loan in proportion to the assumed percentage increase in income.

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10 Tips for safe online card transactions

Adhil Shetty
BankBazaar.com

Shopping online using credit cards is becoming increasingly popular as it makes life way and due to the diversified options available. Be it an e-commerce transaction, booking tickets online or availing a service, online transactions has its intrinsic advantages of saving time and convenience. But there is also a fear of data associated with this, as a lot of third party websites and cookies are actively stealing user information silently leading to security risks. Taking some significant steps can minimize their risk of such fraudulent transactions. Let us take a look at the top 10 tips to ensure safe online card transactions.

1. Install latest security software: Prevention is better than cure and the same is true for all online transactions. The World Wide Web is full of malware, spam and spyware and the best protection to avoid your security being compromised is to use good antivirus software. One can also seek to purchase a full version of protection software rather than an anti virus which can guard against phishing, malware and Trojans.

2. Use Auto Update for all software: If you thought your security on the internet was not at risk thanks to all the protective software that you may have installed, think again. Even a small glitch in any of the software being used actively can lead to possible hacking attempt. The most commonly hacked software includes web mail clients and web browsers. Make sure that you always have updated to the latest version of your browser and mail clients like thunderbird and Firefox.

Web browser companies release patches as updates regularly to cover any such security glitch in the software. If you find it hard to manually check and update their software, the best way is to keep the auto update option enabled for all software in your computer.

3. Look for Encryption Signs: Before entering any confidential information or sensitive data on any webpage, check if the website us using proper encryption. Encryption is a security measure that helps protect data while travelling over the various networks on the internet. The basic sighs of encryption include an internet protocol or url address starting with https (where s stands or security) as well as a sign displayed a closed padlock located in the right corner of the screen.

4. Use Different Passwords: A recent study has revealed that majority of the people use common passwords for a number of transactions including sensitive transactions like net banking and credit cards for the convenience of recollecting. Using the same password makes you at high risk, as if hackers can somehow get access to one password, they would virtually have access to all your accounts. The best way to keep you safe in the virtual world is to use unique passwords for different transactions.

5. Cash on delivery option: If any sites are offering cash on delivery option, don't hesitate to use it as it is a good safety tip at no cost. Many sites give this option, but many of us ignore it mainly because of our carelessness in going through all details.

6. Dealing with Offers: You might be getting lot of promotional mails and coupons as mails from retail companies. But while utilizing such offers, it is recommended to go directly to the seller site rather than entering details in the coupon link, which will be usually sent by third parties.

7. Check Website's Digital Certificate: Before doing any transaction from online retailers and merchant websites, make sure to check for safe digital certificates that can authenticate the website. Independent services like VeriSign for example is a popular authentication service provider which helps users to make sure that the website they are dealing with is genuine and not some fraudulent imposter.

8. Avoid using public computers: Always use personal computers or electronic gadgets like phones or tablets to complete any financial transaction over the internet. Never use any public computers or your friend's mobile for such sensitive transaction as their security may have been compromised. Also make sure you always connect to the internet using a secured Wi-Fi connection which is password protected. Doing financial transactions over a public Wi-Fi connection is highly unsafe and not recommended.

9. Stay away from phishing emails seeking confidential information: Any promotional mails from your bank or any third party websites or vendors seeking your sensitive banking information must be ignored as spam. A lot of innocent people have been trapped by such phishing websites and emails in the past coming in the name of banks, RBI, IT department etc. Any mail seeking your banking information by offering lucrative lottery or content winnings must never be encouraged.

10. Buy from reputed merchants: Doing online transaction from reputed merchant websites and e-commerce platforms make sure your security is not compromised. A lot of small vendors may not have adequate security mechanisms in place that could lead to compromise of all user sensitive information in the future. Also check for a confirmations email once you complete any financial transaction to make sure the money you have paid has reached the merchant. Also do check the seller's privacy policy as some retail companies use to resell personal information like contact numbers with market research companies, which can cause leakage of secure data if not handled with care.

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NPS vs insurance pension plans: Which is better for you?

Yashish Dahiya
Policybazaar.com

Everybody dreams of a healthy and peaceful retired life and your monthly pension is what ensures that you enjoy the golden days of your life to the fullest. Thus in order to build up a suitable retired corpus we started to bank upon, Life Insurers promoted pension schemes, Mutual funds with a long term horizon or the mandatory savings under EPF and PPF. The Pension schemes promoted by Life Insurers were good but were always marred by the controversy surrounding in terms of charges deducted from the policy. Hence, making them one of the only other non-preferred choice available.

On May 1, 2009 the Government of India launched the New Pension scheme (NPS) to help individuals develop a pension corpus who were not a part of the regular pension saving schemes and for all other individuals too. NPS allows you to invest while you are working and withdraw your investment at the time of retirement which is fixed at 60 years.

But since the costs incurred in this options were high and the fund managers being forced to keep charges to customer low, such a scheme was never publicized much. Taking an example, for me as a fund manager all I would have got is Rs 9 for managing Rs 10 lakhs, thus these were never promoted by fund managers. NPS (National Pension scheme) has now been available to the consumer for about 3 yrs now but has failed to take off as the distributors have no incentive. But this is about the change, as per the new guidelines the Pension Fund Regulatory and Development Authority is all set to revamp and popularize, which as per me is the only genuine pension product in the country after newly launched Unit-linked Pension Plans.

There are 2 types of account under NPS – tier I (non withdraw-able) and tier II (withdraw-able).  Under the tier I account, you would have to pay a minimum payment of Rs 500/month or Rs 6000 annually till the time you reach 60 years of age. No withdrawals are allowed from this account before you reach the age of 60. Tier II has no such limit – you are free to invest any amount when you want. Also, as long as you maintain a certain minimum amount, you are free to withdraw from tier II account as per your need.
But the catch here is, one can open a Tier-II account only if one has an active Tier-I account. Tier-I is a basic pension account with restrictions on withdrawal, Tier-II is a voluntary savings option from which a person can withdraw money freely.

The other things that work in for of NPS include, the restrictions that placed on withdrawal of funds from the Tier 1 account.  When a consumer withdraws money from the Tier I account, a part of the corpus at the end of the tenure has to be used to buy annuity, which gives regular payments in lieu of a lump sum. While Partial withdrawals are also allowed they come with some amount of rigidity. What the lock in and rigidity in withdrawals do is, ensure that the person remains invested for a longer period of time and utilizes the money invested in NPS for the right objective.

When it comes to investment, NPS can be compared to ULIP Pension Funds. Offering you with an option to invest in both Equity Instruments and Government based securities. Currently the NPS offers you 4 different investment avenues:

High Equity Option: This fund can invest up-to 50% in the equity market and can give high returns. But it also comes with a risk. This investment is suitable for young people who are starting with their careers or middle aged couples with lesser liabilities or dependents.

Average Risk: This fund Invests in corporate bonds and equities and comes with moderate risk with moderate returns. It is suitable for middle aged couples.

Low Risk Option: This fund invests completely in government securities. These securities are risk free and give lower returns than the options presented above.

Auto Allocation Option: If you are not sure about how to invest, you leave it on the auto-selection option. Through this option:

• 15 per cent of your money will be invested in equity,
• 45 per cent in corporate bond and
• 40 per cent in government bonds.

NPS allows you to withdraw 60% of your total corpus after you reach the age of 60, leaving the remaining 40% for a recurring monthly annuity.

NPS helps resolve the gap that is there for me as an individual to build up a respectable corpus. It also works better than EPF and PPF, but when it comes to returns versus to Mutual Funds and the newly launched Unit-linked Pension Plans we would need to judge it on far more parameters.

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Here are investing options for women

Achin Goel
Bonanza Portfolio

Today when Indian women have moved-way beyond their traditional arena – a shift right from managing households to managing multi-national companies and even governments, it has become critical for women to take-on the task of managing their financials as well. In India, this task is usually undertaken by the male members of the family as women tend to undermine their ability to manage their own finances.

For all the women reading this article, we would like to make a point that while women are seen to be the worst enemy of their money, they are equally best friends of their money as well. Women usually avoid managing their own finances. The confidence in the decisions taken with respect to investing is usually seen lacking when it comes to women. This makes them their money's worst enemy. At the same time, women managing their finances are very cautious and they usually take calculated risks after consulting many people whom they believe know about the subject. This makes women their money's best friend. So the first step to managing your finances would be to 'take ownership' of the task. Investing would mean differently for women in different roles. A single parent may not invest in the same way as an unmarried due to various constraints. Hereby we describe various investments for women in various stages of life:

Unmarried women:

If you are unmarried and are undertaking your higher studies, or working full-time or doing both on part-time basis, you are at that very particular juncture in your life when you have all the freedom you need to try new things, take risk, and go the extra-mile. This is the best period when one should ideally start investing. Investing is not a one-time activity; it's a life-long process. Like any other task, in investing too you may need to give some time to learn about various instruments and risks associated with them, make investment, and learn from mistakes (if you make one). This phase would act as a back-bone for your future investing.

Being unmarried, you may be saving for various reasons – for your higher education, your marriage or other long term goals such as buying a flat. When it comes to investing for short term goals like your higher education which may be due in 3 years or sooner, you do not have much time to give to your investments to grow. So if some investments in equity shares or mutual funds go wrong, you may have to sell them at their prevailing market price even at a loss in order to honor your education needs and goals. For such short-term investments it is advised that you invest in traditional instruments such as bank FDs, post-office deposits, liquid mutual funds and FMPs. Here the possibility of capital loss is close to zero and these investments can be withdrawn with limited deductions (for premature withdrawal). Alternatively you may also opt for hybrid savings accounts of banks which shift your money in savings account above a particular threshold viz. amount above Rs. 1 lakh to fixed deposits. This way your money will earn higher returns as well and at the same time you will enjoy high liquidity as availed in normal savings account.

For long term goals like buying a car or buying a house for example, you may choose to invest into good rated equity mutual funds, bullion or debt mutual funds. Amongst them, you may choose the midcap equity funds as they have a greater growth potential in longer term (greater than 5 years). There are various sites such as moneycontrol.com or valueresearchonline.com which may help you with choosing the best funds.

Working married women:

If you are married and working women, you may be having the twin tasks of managing your house-hold and your job/business at the same time. You might not be having the sufficient time required to make informed-financial decisions and to track them regularly. So the best investments for you may be the ones that have minimum/limited risk and the ones that manage themselves or take assistance from a good financial planner. As an earning member of the family you need to plan for your children's education, their marriage, your retirement and other goals as buying a flat or car. If you are investing for your retirement, invest in PPF and NPS which are the most tax-efficient schemes and are the best suited for retirement planning. When planning for your child's education and marriage, you are advised to plan in consultation with your financial advisor and make investments in recommended asset class like Equity, Debt, Corporate FD's, Bullion etc. Diversification across different asset class will help minimize concentration risk and proper plan will help you meet your goals with higher expected yield. Asset allocation shall depend upon your age, your risk profile and risk profile of your goals. 

As mentioned above, investing is a life-long process and tracking your investments is equally important as making the right investments. So make sure you review the performance of your investment portfolio frequently (recommended atleast once a month)

Housewives:

If you are a housewife and personally do not have any source of income, you may look for investing that very savings you make month-on-month by efficiently managing your family's budget. We are pretty sure you would want to make that every penny count. Well, if you are a housewife and do not have a source of income, you can generate one from your own savings. Yes, money earns money in today's world. Get your money at work rather than keeping it idle in your safe. Invest your savings into hybrid bank accounts as discussed above which earn higher interest vis-à-vis normal bank accounts. You may also opt for recurring deposit of Indian post which allows you to invest every month and gives an attractive interest rate of 8.3% on your investments. You may also invest into electronic form of gold every month with as low as Rs. 500 a month through investing into gold mutual funds. This way you will save a lot on making charges you pay (approximately Rs. 350/gram) when you buy jewellery and also earn the same return as physical gold.

Single women (widow) / Single parent (divorced)

If you are a widow or divorced, you may be fully responsible for earning for yourself and your kids, their education, their marriage, and your own retirement as well. In either case, you would like to be ready for the worst independently, wouldn't you?  Hence, you should be looking for investments that do not leave any of your goals to chance.

If you are in your twenties or early thirties, you have substantial time to give to your retirement. Hence, you may invest into PPF or National Pension Scheme (NPS). Both of these are highly tax-efficient, safe and low-cost investment options. While PPF is a 15-year scheme earning a return anywhere between 7-9% (as per yield on 10-yr Government bond), NPS is a market-oriented scheme that is similar to a high-rated mutual fund with ultra-low costs. You may invest the proceeds of both these schemes to buy an annuity plan from insurance company which may act as pension for you after your retirement. 

Build an emergency fund which is sufficient to cover atleast your 3 month's house-hold expenses (including EMIs if any) by investing in a liquid fund or hybrid savings account. As discussed above, opt for investments in various asset classes in consolation with your financial advisor to plan for finances for your kid's education and marriage. Buy a term-insurance plan to cover your family from misfortunes in your absence. Above all, review your investment portfolio every month to weed out any unwanted risks to your goals.

Happy Investing!!

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Why Share Issuance Cases Lost In The DRP?

Friday: 10.30 pm, Saturday: 11.30 am

Sunday: 9:30am & 11.00pm

Published on Sat, Mar 01,2014 | 17:45, Updated at Sat, Mar 01 at 17:45Source : CNBC-TV18 |   Watch Video :

Like all indirect offshore transfers came to be known as the Vodafone problem, this new tax tangle is better recognized as the Shell problem! Mostly because Shell faces an astronomical 15,000 crore rupee tax demand for having allegedly undervalued shares issued to its parent company. Shell may be the biggest case but it is definitely not the only one. Dozens of such share issuances have been sought to be taxed by the Indian tax department in the past few years. And some of them have already met their fate at the Dispute Resolution Panel or DRP. I don't have confirmed figures, but sources tell me the DRP has already decided on a dozen such cases, including the Essar one – and in all of them the DRP has ruled in favor of the tax department. Eventually, of course this issue will get decided in the Supreme Court – but it's still useful to know on what grounds the DRP ruled in favor of Revenue. To discuss just that, CNBC-Tv18's Menaka Doshi spoke to Dinesh Kanabar, Deputy CEO, KPMG and Beni Chatterji, Senior Counsel in the Bombay High Court and Counsel for the Tax Department in many landmark cases.

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Rain continues in North, East and Central India

Weather in North and East India

 The Western Disturbance and its associated cyclonic circulation over northwest region of the country will continue to pull moisture from the Arabian Sea and keep the weather rainy in almost all the states in the region.

According to latest weather update by Skymet Meteorology Division in India, indicates that in the last 24 hours few places in West Bengal like Purulia, Bankura and Malda received light rain. Yesterday, Delhi recorded 17.2 mm while, Jaipur in Rajasthan received 15 mm of rain. The hill station of Dehradun in Uttarakhand also received 17 mm of rain. In Bihar, Patna and Gaya recorded 33.4 mm and 5.6 mm of rain, respectively in the last 24 hours. Yesterday, few places in Jharkhand received good amounts of rain. Jamshedpur and Ranchi recorded 35 mm and 33.8 mm of rain, respectively.

Tomorrow, rain will decrease significantly over the northern plains including Bihar but light rain is likely to continue over Jharkahnd and Gangetic West Bengal. For the next 24 hours, no significant change in day temperatures is expected in the northern and eastern plains, except for Rajasthan. Here the maximums could witness a rise.

Weather in Central India

The main cyclonic circulation which has brought good amounts of rain at several places in Central India will continue to fetch moisture from the Bay of Bengal. In the last 24 hours, significant amounts of rain were recorded in parts of Chhattisgarh and Madhya Pradesh.

In Chhattisgarg, Ambikapur recorded 17.10 mm of rain, Bilaspur 18.9 mm, Durg 13.2 mm, Pendra 12.9 and Raipur 2.3 mm of rain. Khajurao and Jabalpur in Madhya Pradesh received 10 mm and 2.3 mm of rain, respectively. Tomorrow, light rain is likely to continue north Odisha and Chhattisgarh. Our latest weather update indicates that day temperatures are likely to rise marginally over north Chhattisgarh, Madhya Pradesh and Maharashtra while, the minimums could see a drop in the next 24 hours.

Weather in South India

In peninsular India, Telangana and coastal areas of Maharashtra, Karnataka and Kerala received light rain in the last 24 hours. Nagpur recorded 14 mm of rain yesterday. According to latest weather update by Skymet Meteorology Division in India, scattered is likely over Andhra Pradesh, Tamil Nadu, south Karnataka and Kerala in the next 24 hours. Rayalseema region continues to be hottest region in the country with Salem recorded 35.3°C as the maximum temperature on Friday.

By: Skymetweather.com

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