Dec 14, 2012

What Life Is All About

Once upon a time, there was a girl who could do anything in the world she wanted.  All she had to do was choose something and focus.  So one day she sat down in front of a blank canvas and began to paint.  Every stroke was more perfect than the next, slowly and gracefully converging to build a flawless masterpiece.  And when she eventually finished painting, she stared proudly at her work and smiled.
It was obvious to the clouds and the stars, who were always watching over her, that she had a gift.  She was an artist.  And she knew it too.  She felt it in every fiber of her being.  But a few moments after she finished painting, she got anxious and quickly stood up.  Because she realized that while she had the ability to do anything in the world she wanted to do, she was simply spending her time moving paint around on a piece of canvas.
She felt like there was so much more in the world to see and do – so many options.  And if she ultimately decided to do something else with her life, then all the time she spent painting would be a waste.  So she glanced at her masterpiece one last time, and walked out the door into the moonlight.  And as she walked, she thought, and then she walked some more.
While she was walking, she didn’t notice the clouds and the stars in the sky who were trying to signal her, because she was preoccupied with an important decision she had to make.  She had to choose one thing to do out of all the possibilities in the world.  Should she practice medicine?  Or design buildings?  Or teach children?  She was utterly stumped.
Twenty-five years later, the girl began to cry.  Because she realized she had been walking for so long, and that over the years she had become so enamored by everything that she could do – the endless array of possibilities – that she hadn’t done anything meaningful at all.  And she learned, at last, that life isn’t about possibility – anything is possible.  Life is about making a decision – deciding to do something that moves you.
So the girl, who was no longer a girl, purchased some canvas and paint from a local craft store, drove to a nearby park, and began to paint.  One stroke gracefully led into the next just as it had so many moons ago.  And as she smiled, she continued painting through the day and into the night.  Because she had finally made a decision.  And there was still some time left to revel in the magic that life is all about.
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Dec 13, 2012

New Cheque formats under New Cheque Truncation System introduced by RBI

Replace your old Cheque books
he latest directive RBI’s says that one  may not be able to use the old cheques with the implementation of the new Cheque Truncation System (CTS-2010) from next year onwards.  The CTS 2010, eliminates physical movement of cheques for the purpose of clearing. Instead, only the electronic images of the cheques, along with the key information, will be captured and transmitted for clearing. This will make the clearing process faster, more efficient and secure. However, in order to that being successful, patrons have to switch to new cheques which have to be issued with prescribed standard features latest by December 31.

This means that if you haven’t received the new form of cheque books already, then speak to your banks as early as you can. The replacement can be done using the following methods:
1. Send new cheque books by registered post and ask users to cancel the old ones. Customers would or may be asked to show proof of the cancellations, to the bank.
2. The Banks may also ask customers to surrender their older cheques.
3. Alternatively, the customers can also visit the banks themselves and surrender their old cheques and receive the CTS-compliant ones.
The Banks will not charge any replacement fee for this purpose.
Handling of EMIs: In the event of having issued post-dated cheques (PDCs) for supporting any EMIs for loans, the customer will have to issue fresh cheques to the service provider. The NBFCs who have accepted post-dated cheques for future EMI payments from their customers, have to get them replaced with new CTS-2010 standard compliant cheques latest by December 31, 2012. This will be applicable to all banks as well. 
Old Cheque encashments: Any Cheque which is lying with you should be encashed and should not be delayed. The payments will be honoured till 31st Decemeber 2012 only as per the RBI mandate.

Dec 11, 2012

Save more in PF but take home less as Salary

EPFO Clubs Basic Pay and Allowances


Mumbai: In a move that would increase savings of salaried employees while cutting their take-home pay, the Employees Provident Fund Organization has released a circular saying PF must be computed on the basis of basic pay and all allowances being paid to the employee. 
If EPFO insists on implementing the circular, the PF amount of employees would go up at the cost of their take-home salary since most companies havebeen computing PF contributions (at 12% each by the employer and employee) against basic salary and dearness allowance only..
The circular dated November 30, 2012, was issued after internal review meetings held in late November and has been forwarded to Employee Provident Fund offices across India.
The definition of basic wages has long been a contentious issue, with PF authorities claiming that companies split the basic wages into various allowances to reduce the quantum of PF contributions.
The circular aims at addressing this issue.
Reveal true income or face action: Govt
The Centre on Monday issued a stern message to taxpayers, asking them to reveal their true incomes and pay advance tax by December 15 or face action. Only 14.62 lakh individuals and corporates have disclosed taxable annual income above Rs 10 lakh for the current fiscal, according to the finance ministry. P 23 HCs’ rulings on basic pay behind EPFO move
 T he EPFO circular states that basic wages will include all allowances which are “ordinarily, necessarily and uniformly” paid to the employees. Thus, various allowances such as conveyance, educational allowance, medical allowance etc, will have to be taken into consideration while computing the PF contribution. 
Last year, the Madras high court and the MP high court in two separate cases had held that allowances paid by the employer to employees under different heads such as conveyance, education, food concession, medical, special holidays, night shift incentives, city compensatory allowance etc, qualified as basic wages under section 2(b) of the PF Act and needed to be included while computing the PF contribution.
Based on these judgments, PF officials carried out audits on India Inc andraised demands to recover the differential PF contributions. Later, pending dismissal of the writ petitions filed by these companies, the audits were held in abeyance.
“Following this circular, the PF officials may once again commence audits of Indian companies to ascertain whether the PF contribution has been rightly computed and deposited,” says Yatin Pathak, CA. Sonu Iyer, partner, Ernst and Young, said there were ways to beat higher PF cuts. Proviso to paragraph 26A of the PF scheme allows PF contributions by the employer and employees on a maximum notional level of Rs 6,500 per month, instead of the entire salary (including allowances). The rate remains the same at 12% each for the employer and employee contributions respectively.
 “Not many employers have opted for this route, as PF is part of the employees cost to company and it also
 gives a tax shield to employees. Now, if the employer organization wishes to exercise this option and computes PF contributions only against Rs 6,500 per month, it is not clear whether the PF authorities will oblige,” Iyer explains. 
Expatriate workers from India also have to contribute to PF, even if their salary is paid outside India (unless they have exemption owing to a social security arrangement with the country to which they have been deputed).
Unfortunately, for them, this notional limit of Rs 6,500 doesn’t apply. “If an employer has expat workers, there is a higher likelihood of their being subject to scrutiny by PF authorities,” adds Iyer. A similar matter is up for interpretation before the Supreme Court, but until then, PF authorities are likely to commence audits and raise demands on India Inc, based on the circular.