UNION BUDGET 2012-13 - HIGHLIGHTS FOR SALARIED CLASS

DEAR ALL,

Senior Citizens not Having Income from Business Exempted from Payment of Advance Tax.

The exemption limit for the general category of individual taxpayers has been enhanced to Rs. 2,00,000 from Rs. 1,80,000 in the General Budget 2012-13, presented by the Union Finance Minister Shri Pranab Mukherjee in the LokSabha here today. This measure will provide tax relief uptoRs. 2,000 to every taxpayer in this category.

The Finance Minister, Shri Mukherjee introduced the DTC (Direct Taxes Code) rates for personal income tax, marking progress in the direction of movement towards DTC and GST (Goods and Services Tax).
            
It has also been proposed to raise the upper limit of 20 per cent tax slab from Rs. 8 lakh to Rs. 10 lakh. The proposed personal income tax slabs are:

Income uptoRs. 2 lakh	Nil
Income above Rs. 2 lakh and uptoRs. 5 lakh	10 per cent
Income above Rs. 5 lakh and upto Rs.10 lakh	20 per cent
Income above Rs. 10 lakh	30 per cent

            

In another relief to the individual taxpayers, a deduction of up to Rs. 10,000 has been proposed for interest from savings bank accounts. This would help a large number of small taxpayers with salary incomes up to Rs. 5 lakh and interest from savings bank accounts uptoRs. 10,000 as they would not be required to file income tax returns.

          

It has also been proposed to allow deduction of Rs. 5,000 for preventive health check up.

          

 For senior citizens not having income from business, it has been proposed to exempt them from payment of advance tax. 

• Individual Tax payers will be allowed a deduction of up to Rs.10,000/- on interest from savings bank accounts/deposits.
• Tax payers with salary income up to Rs.5 Lakh would not be required to file income-tax returns.
• No change in investing in Infra-structure bonds for tax relief. Limit remains Rs.20,000/- only.

MORE INFORMATION FOLLOWS:-

... EDITOR

L.I.C. OF INDIA BREACHES IRDA CEILING LIMITS

Dear Readers,


Life Insurance Corporation (LIC) has received regulatory for bearance from the government allowing it to breach investment limits set by the insurance regulator. 

The relaxation has been allowed largely to enable the corporation to hike stake in public sector banks, sources said. Several bank chairmen said that the corporation was acting as a proxy for the government as the lenders had originally sought funds from the Centre. Norms prescribed by the Insurance Regulatory and Development Authority (IRDA) require that an insurer should not invest more than 10% of a company's networth. 

Last month, Punjab National Bank said that it would issue shares worth Rs 1,574 crore to LIC and these shares would have a one-year lock-in . As of end-December , LIC already held 8.54% stake in the bank and the proposed investment will increase its stake beyond 10%. Similarly,Dena Bank will hold an extraordinary general meeting next month to issue 5% of its equity capital to LIC, which already holds over 6% in the bank. Syndicate Bank also said that LIC would invest Rs 327 crore in a preferential issue of equity shares. Other banks in which LIC has agreed to pick up stake recently include Indian Overseas Bank (Rs 302.6 crore), Central Bank of India (Rs 341crore), Punjab & Sind Bank (Rs 100 crore approx). In the case of Central Bank too, LIC would breach the 10% ceiling. 

On Friday, the market was rife with speculation that LIC had bought most of the ONGC shares being auctioned by the government in an investment of around Rs 12,000 crore. 

The numbers could not be corroborated. However, this would not be the first time that LIC is bailing out the government in a disinvestment sale. In 2010, LIC was a major bidder in the government's sale of PSU shares. 

Most notable was its bailout of the NMDC public issue where LIC alone bid Rs 8,000 crore. 

But there is a flipside to LIC's filling in as a proxy for the government. Typically, in every sharp fall, LIC would accumulate large chunks of blue chip stocks which would provide the corporation with bargain purchases and, at the same time, support the market . Following recent big-ticket investments in public sector banks and more recently ONGC, the corporation has exhausted a lot of its headroom for secondary market purchases . Although IRDA has reiterated its stance that LIC should follow investment regulations for life companies, it has never penalized LIC for breaching investment limits. LIC has sought to explain the breaches stating that the limits were separate for life fund and for various schemes of unit-linked insurance plans.

IRDA never clarified whether LIC was correct in its interpretation . Some LIC officials have sought exemption on grounds that LIC was special as it was governed by its own Act and because of this legislation it could not even meet IRDA's prescription that a company should have a minimum paid-up capital of Rs 100 crore and, therefore, it should have different rules. 

Big bro's buy 

Banks in which LIC will own over 10%: 

Punjab National Bank 

Dena Bank 

Central Bank of India 

Other banks in LIC's sights: 

Syndicate Bank 

Indian Overseas Bank 

Punjab & Sind Bank




.....EDITOR.

CBI raids premises of insurance companys bosses

Dear All,

The Central Bureau of Investigation (CBI) conducted simultaneous raids in Lucknow and Gurgaon at the office premises of some top bosses of United India Insurance in connection with a fraud under the Vyapari Durghatna Beema Yojna ( VDBY) (an insurance cover exclusively for traders) in which the government was deprived of Rs 15 lakh revenue that was siphoned off as agent commission in a policy though there was no agent involved in the particular transaction.

Though no arrest was reported following the raids which concluded on Thursday late night, the sleuths did seize some documents. The case dates back to 2008 when an insurance cover was assured to a client in Lucknow. Though the amount of cover assured was not known, sources said its premium was calculated as Rs 1.93 crore. The entire work for putting the policy in place and the entire documentation was done directly by the insured and the insurance company, some senior bosses routed the transaction through an insurance agent identified by the name of Bhuwan Chand.

A few months later, it came to light that there was no insurance agent by the name of Bhuwan Chand registered or recognised by the particular insurance company in Lucknow ever. Thereafter, a complaint was lodged with the CBI. The CBI inquiry was complete, it was found that the allegations were true and a formal FIR was lodged by the CBI Lucknow division's anti-corruption department a couple of months ago. The raids were conducted in connection with the particular case only.

The three locations raided by the CBI in Lucknow and one in Gurgaon were the residential and office premises of the four accused named in the FIR including the regional office of United India Insurance Company situated at Narahi in Hazratganj area of the state capital. The sleuths searched the records available at the office of the then senior regional manager (SRM), S K Agarwal, and at his residence at La Plas Colony, also in Hazratganj, apart from the residential premises of the then development officer (DO) P K Bose and the fake insurance agent, Bhuwan Chandra Tripathi. Both of them live in Risaldar Park area of the state capital in Hussainganj.

Another team raided the residential premises of UITC's general manager Ashutosh Asthana in Gurgaon simultaneously. The CBI sources said that the government was deprived of Rs 15 lakh that was given away to the fake insurance agent and which otherwise would have added to the revenue generated from the insurance unit. CBI sources have not ruled out the possibilities of some arrests in near future.

.......EDITOR

"" NEW INDIA ASSURANCE - MUTUAL BENEFIT SOCIETY - REVISING THE LIMITS W.E.F. 01-04-2012 TO ITS MEMBERS ""

DEAR MEMBERS, 


We are pleased to inform you that New India MBS has been revising the following with effect from 01st April, 2012:


1. Passing Insurance Examinations : : 


a) Licentiate : from Rs.300/- to Rs.600/- p.m.
b) Associate: from Rs.500/- to Rs.1000/-.p.m.
c) Fellowship     :From:Rs.750/- to Rs.1500/- p.m.


II. Cost of Children Text Books:  Fom Rs.400/- to Rs.600/-.


III. Special Awards for Children securing 90% in 10th & 12th Standard: Rs.1000/-


IV. Rent for Holiday Home: Rs.90/- per day for family.


V. Funeral Expenses: from Rs.1500/- to Rs.3,000/-


......EDITOR