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Sunday, August 31, 2014

CBDT Sets Up High-Powered Panel To Decide Retro Tax Cases (Vodafone)

It may be recalled that in Vodafone International vs. UOI 341 ITR 1 the Supreme Court held that a transfer of shares of an offshore company would not chargeable to tax in India even if all the assets of the company were situated in India. To suprecede the judgement, a retrospective amendment was inserted in s. 9(1)(i) of the Income-tax Act, 1961 by the Finance Act 2012 w.r.e.f. 1.4.1962. The Shome Committee also issued a detailed report on the subject. The CBDT has now issued an Order dated 28.08.2014 u/s 119 of the Act and set up a Committee to implement the said provisions of s. 9(1)(i). The Order provides that if the AO considers that any income is deemed to accrue or arise in India before 1st April, 2012 through transfer of a capital asset situate in India in consequence of the amendments introduced with retrospective effect, he shall shall seek prior approval of the Committee for the proposed action. The Committee is required to examine the proposed action of the AO and, after providing an opportunity to the assessee, take a decision on the proposed action within 60 days. The Committee's decision is binding on the AO

Friday, August 29, 2014

Minimum pension under EPFO now Rs 1,000 per month




Wage Ceiling Raised To Rs 15,000
The Centre has decided to implement two crucial decisions — minimum monthly pension of Rs 1,000 and a higher wage ceiling of Rs 15,000 for social security schemes run by retirement fund manager EPFO — from September 1.

These decisions were cleared by the previous UPA-2 cabinet on February 28, but could not be implemented since the Lok Sabha election dates were announced on March 5.

After the NDA government came to power, these decisions were at the top of the Union labour ministry's 100-day action plan. The minimum Rs 1,000 monthly pension under the Employees' Pension Scheme 1995 (EPFS-95) will benefit about 28 lakh pensioners, including five lakh widows.

There are 44 lakh pensioners under the EPFO scheme.

The Central Board of Trustees (CBT), EPFO's apex decision making body, met on February 5 and decided to amend the EPS-95 scheme.

The move to enhance the minimum wage ceiling for becoming a subscriber to Employees' Provident Fund Organisation to Rs 15,000 per month from the existing Rs 6,500 is expected to bring 50 lakh additional formal sector workers under its ambit.

"The government has notified enhancement of wage ceiling to Rs 15,000 per month, fixed minimum monthly pension at Rs 1,000 under EPS-95 and enhanced the maximum sum assured under the Employees' Deposit Linked Insurance (EDLI) Scheme to Rs 3 lakh," EPFO's Central Provident Fund Commissioner K K Jalan told reporters. Now, the maximum sum assured under the EDLI works out to be Rs 3.6 lakh, including 20% ad hoc benefit over the prescribed amount under the notification. That is, if an EPFO subscriber dies, his family will be entitled to maximum sum assured of Rs 3.6 lakh instead of the existing Rs 1.56 lakh. Jalan said the notification regarding minimum pension, wage ceiling and EDLI would come into effect from September 1.

Now, only one ID proof to open bank account

The Reserve Bank of India has, as part of Prime Minister Narendra Modi's push for financial inclusion, relaxed `know your customer' (KYC) norms to open new bank accounts. The RBI said there would be no need for applicants to submit separate documents for address and identity proof to open a savings account. The central bank has directed banks to accept a single document, like a driving licence, which contains the applicant's photograph and address to open an account. TNN






Loan scam: CBI lens on Bank of Maharashtra, UCO Bank




Spreading its probe in the `cash for loan' scandal in which former Syndicate Bank CMD S K Jain and alleged middleman Pawan Bansal were arrested earlier this month, the CBI has registered two more enquiries against two public sector banks--Bank of Maharashtra and UCO Bank.

Sources say Bansal's laptop, documents recovered from him and his interrogation has led the agency to several instances of irregularities in extending loan and credit facilities by the banks.The two preliminary enquiries will look into alleged irregularities in the extension of credit facilities in the borrowers' accounts, allegedly facilitated by Bansal's company Altius Finserve.

Sources say no private company or bank officials have been named. Losses to Bank of Maharashtra and UCO Bank Losses are yet to be quantified. We have found some records which seem to be dubious loans or extended credit facilities which went through Bansal. The senior officers of these two banks will be examined soon but those responsible for these loans are yet to be identified," said an officer.

CBI director Ranjit Sinha told TOI that "more enquiries could be registered in coming days" as the agency teams are analyzing all the documents recovered earlier this month during the raids.

CBI had alleged in its FIR in the Syndicate Bank scandal that "Pawan Bansal, director of Altius Finserve Pvt Ltd, located at Nariman Point Mumbai, has been acting as middleman between senior level functionaries of PSU banks and the private companies through his firm on the pretext of providing financial services like credit solutions, debt capital market investment banking etc".

Bansal was alleged to be regularly meeting bank officials for pursuing the loan proposals prepared and processed by his firm on behalf of his clients. "Bansal pursues the case of his client by exercising his personal influence over the bank officials and uses corrupt and illegal means to influence them," CBI had alleged.

CBI sources say they are probing a larger conspiracy in the banking sector where officials of government-run banks are easing loan norms for private persons companies against rules and regulations.




Tuesday, August 26, 2014

Another CAG report had pointed at Manmohan


A year after the CAG's Coalgate report was tabled in Parliament in August 2012, the auditor came out with a report which, while focusing on revenues of the Jharkhand government, dealt with illegalities in coal allocation in some detail.

The report, which escaped attention despite having been tabled in Parliament, accused both the Centre and then-harkhand CM Madhu Koda of allegedly tampering wi th the list of recommendations made by a screening committee for allocation of six coal blocks in the state.

The CAG report revealed that in 2007, the coal ministry, which was directly under thenPM Manmohan Singh, had okayed the alteration made by Koda to allot coal mines to companies which were not approved by the screening committee set up by the Jharkhand government. Further, it made additions of its own at the final stage.

In the process, the screening committee, which was supposed to be the chief mechanism for determining the eligibility of companies vying for precious coal deposits, was rendered irrelevant. The screening committee went through 210 applications to approve 10 of them.

"When the recommendation of the subgroup (screening committee) was sent (June 2007) to the then CM for his approval, he modified and altered the names and made final recommendations to the Centre though no reason was assigned," the federal auditor's report said. The CAG report, No.1 of 2013 of Jharkhand Revenue Sector, was tabled in Parliament in July 2013 as Jharkhand was then under President's rule. Koda's action was violative of the decision to give the screening committee final say in assessing eligibility but passed muster with the Centre.

The federal auditor questioned the rationale for inclusion of five new companies not recommended by the screening committee and exclusion of three companies recommended by the panel in allocation of the six coal blocks--Ganeshpur, Mahuagarthi, Patal East, Ashok Karkata, Seregartha and Amarkunda-Mugadangal.

Some of these coal blocks were allocated to Tata Steel, JAS Infrastructure, Essar Power, Arcelor Mittal India, GVK Powers and Gagan Sponge Iron Pvt Ltd, which were not part of the original recommendations of the screening committee.

CAG sought a response from the state in September 2012 over the alterations made in the original recom mendation but the government did not reply. CAG finally wrote in its report, "The matter was reported to the government in September 2012. We have not received their reply (February 2013)." Koda, an independent MLA who became Jharkhand CM with the support of the Congress in 2006, was arrested on charges of money laundering in connection with the allocation of mines during his tenure. The Enforcement Directorate and CBI registered cases against him and attached properties worth hundreds of crores related to the scam.

The screening committee which had vetted the applications comprised secretary, department of industry; secretary, department of mines & geology; and secretary, department of energy to make recommendations on allotment of coal blocks.








Saturday, August 23, 2014

`1 lakh cr of your money: What’ve banks done with it?


dna exposes one of the best-kept secrets in the Indian banking industry: Fraud cases on the rise


Mumbai: Bank funds of about Rs 1 lakh crore are caught up in frauds or under investigation by the Central Bureau of Investigation (CBI).

But banks are greening their books by selling off bad loans to asset reconstruction companies (ARCs) or by restructuring payments (where the tenure of loan is altered when there is a repayment issue) or plain writing it off to make their balance-sheets rosier.

As on June 30, about Rs 2.54 lakh crore of bank loans turned into bad loans after borrowers defaulted on repayments. Add another Rs 4.46 lakh crore of restructured assets and you have around Rs 7 lakh crore out of the Rs 61.98 lakh crore of bank loans (read depositors' money) that are under stress.

Frauds and vigilance investigations have become commonplace. Depositors' money is getting wasted on operationalising promoters' business plans that are being drawn up to swindle money from banks. Most frauds are staged by dubious businessmen, who are hand-in-glove with corrupt bankers.

Which are the notable frauds reported?

Banks are closely monitoring the Bhushan Steel case (Rs 40,000 crore) while the account has still not turned bad. Kingfisher (Rs 4,022 crore), Deccan Chronicle (Rs 4,000 crore), Zoom Developers (Rs 2,400 crore). Winsome Diamonds (Rs 6,581 crore) and First Leasing Financial (Rs 1,000 crore) are some of the other big cases.

Aren't banks punished?

The RBI recently carried out an independent scrutiny of the loan and current accounts of Deccan Chronicle Holdings and slapped a combined monetary penalty of Rs 1.5 crore on 12 banks for violation of various rules. They were five public sector and seven private banks. While the maximum penalty of Rs 40 lakh was imposed on ICICI Bank, others penalised include Andhra Bank, Axis Bank, Canara Bank, Corporation Bank, HDFC Bank, IDBI Bank, IndusInd Bank, Kotak Mahindra, Ratnakar Bank, State Bank of Hyderabad and Yes Bank.

How do banks report drop in bad loans?

Despite an increase in frauds, many big banks like SBI and ICICI Bank have reported lower bad loans in the first quarter of 2014-15. Banks have sold bad loans of close to Rs 30,000 crore to ARCs till the end of the first quarter ended June 30, 2014. Banks have started selling off loans that are just 60 days due for repayment to avoid an NPA tag on their balance-sheets.

What do ARCs do?

Asset reconstruction companies (ARCs) specialise in recovery of loans or reviving the fortunes of stressed companies. Banks like SBI, ICICI Bank and IDBI Bank together have set up an ARC --ARCIL. There are private ARCs owned by Edelweiss and JM Financial.

How do banks

sell bad loans?

Banks often sell the loans at a discount of 20-40%. ARCs pay 15% of the bad loans in cash and the remaining as security receipts, to be encashed over 8 years. All public sector banks sell loans through an auction process. Private sector banks sell them through bilateral deals.

What is RBI doing

about it?

RBI said in its annual report released on Thursday. The increase in the level of restructured standard advances since 2012-13 reflects potential hidden stress in the quality of loan assets. The improvement in NPAs during Q4 of 2013-14 needs to be cautiously examined in the face of the increased of?oad of loans to ARCs by banks.

Is it planning any concrete action?

The RBI is proposing to cut down bank exposure to companies by half, so that funding to companies is drastically brought down. Tightening norms will help banks in risk mitigation during cyclical downturns.

Tuesday, August 19, 2014

Re's Sudden Fall may Push Cos to Hedge Currency




The sudden fall in the Indian rupee has woken up many corporates to the ground realities of the currency market. After six months of stability, complacency had set in. Indian corporates, after remaining unhedged, may now start covering their currency exposure.

Some companies tend to stay away from hedging as its cost eats into the net receivables.

"Sustained RBI purchases of dollars, uncertain geopolitics and the prospects of early withdrawal of the monetary accommodation in the US do appear as risks to the rupee," said Ananth Narayan, regional head of financial markets, South Asia, Standard Chartered Bank. "In such a context, Indian importers would be well advised to seek option protection as insurance against any shock moves in the local currency ."

Between May 22 and August 14, the Indian rupee dropped about 4% to close at 60.77 per US dollar on August 14 from 58.46 on May 22. It had risen 5.60% till May 22 since the beginning of the year. Strong Reserve Bank of India intervention in mopping up dollar inflows has prevented the rupee's significant appreciation, as any sharp rise in the local unit would hurt exporters.

According to the latest data, the central bank has bought a net $2.4 billion collective ly in May and June compared with $2.3 bil lion sold in the year-earlier period when the rupee was falling against the greenback. In the last few weeks, the dollar has been strengthening as investors seek the safety of the US currency on the back of tensions in Iraq, Ukraine and Gaza that could also hurt crude oil prices.

Moreover, improving economic fundamen tals in the US are attracting investors with their eye on a possible interest rate increase. This too has helped in arresting the rupee's rise.

"Despite all, the local unit has clearly out performed when compared with other cur rencies like in Brazil, Russia or Korea," said NS Venkatesh, executive director at IDBI Bank. "Both exporters and importers should hedge their currency exposures as and when they get the right opportunity at a reasonable price.Chances of rupee appreciation are higher than its depreciation."

The one-year forward rupee-dollar forward rate is currently quoting at about 8.20% or a premium of about ` . 4.90 over the spot market. In the current perspective, it looks attractive for exporters to take positions at these levels with the expectation of more overseas inflows in the coming days. However, it's still a bit expensive for importers, who may be considering their options, dealers said.

"Volatility is likely to increase in the domestic currency market," said Pramit Brahmbhatt, CEO, Veracity Financial Services. "While foreign inflows are likely to increase further in 2014-15, external factors may strengthen the dollar against other currencies."

According to Narayan, going forward, domestic factors look much more favourable than 12 months ago.

Foreign exchange reserves have improved significantly by about $4 billion to $319 billion on August 8 since May 16 this year. The prospects for a growth revival look good given the positive indicators and that the government is looking to boost the economy.

"Given improved India fundamentals and steep forward premia, exporters continue to see merit in increasing hedge ratios, despite lack of rupee appreciation," Narayan said.

Monday, August 18, 2014

SEBI NORMS WILL ALLOW RETAIL PARTICIPATION - You Can Enter Realty Mkt with as Little as .Rs 2 lakh

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If you have .

`2 lakh to invest, your bank may roll out the red carpet, your stock broker may inundate you with hot tips and the friendly neighbourhood jeweller may even offer a discount on making charges. But you will probably get laughed out of the estate agent's office. Not anymore.

With the Securities and Exchange Board of India (Sebi) issuing final guidelines for real estate investment trusts (REITs), an investor should soon be able to enter the property market with as little as .

`2 lakh.

REITs are just like mutual funds.

But instead of using the money collected from investors to buy stocks and bonds, they invest in property. Till now, investing in real estate has been a big-ticket affair. Whether you buy a residential property or commercial space in a metro or tier I city, the minimum investment is upwards of .

`30-40 lakh.

Sebi has pegged the minimum investment in REITs at .

`2 lakh, which will allow retail investors to participate in the real estate market. In the secondary market, the minimum holding could be even lower at .

`1 lakh.

"REITs allow even middle income individuals to invest in real estate.

Without this, they can't participate in real estate because of the high entry barrier," said Keki Mistry, vice-chairman and CEO, HDFC.

Investors in REITs will earn two different types of income. The rental income earned by the property in which the REIT has invested will be distributed as dividends. This will be tax free for investors, but the REIT will have to pay dividend distribution tax on these payouts. If the property held by the REIT appreciates in value, the net asset value (NAV) will go up and will lead to capital gains when the investor redeems his units.

Since REITs will be listed on the exchanges and will be liable to securities transaction tax (STT), they will enjoy the same tax treatment as stocks and equity mutual funds. The short-term capital gains (units held for less than one year) will be taxed at 15% while long-term capital gains (investment for more than one year) will be tax free.

Industry watchers say the launch of REITs will increase the flow of funds to the cash-starved real estate industry. "Even if half of the currently available Grade A office space gets converted to REITs and listed in the next two-three years, it can mean an inflow of around .

` 60,000-72,000 crore," said Anuj Puri, chairman and country head, JLL India.

But experts are doubtful if this will translate into better returns for investors in REITs. "The idea behind Indian REITs is not to create something investors are looking for, but to resolve the financing problem faced by real estate developers and the banks that are funding them," said Dhirendra Kumar, CEO of mutual fund tracker Value Research.

Right now, Sebi has allowed REITs to invest only in commercial real estate, where the rental yield (annual rent as percentage of property value) is 6-8%. Some experts pointed out that this is lower than the prevailing interest rate, which puts a question mark on whether REITs will make a good investment. However, most experts are optimistic.

"The rental yield is not very attractive now, but is expected to rise in future," said Ujwala Rao, national director, capital markets, JLL. Besides, there is also the possibility of capital appreciation that will push up the NAV. "REITs will not only provide opportunity to earn regular rental income, but also capital appreciation on such assets, along with liquidity of listed market," said Sharad Mittal, director and head, real estate fund, Motilal Oswal Real Estate.

"This is the time to get into commercial real estate, because it is at the bottom of the cycle," said Anshu Kapoor, head of global wealth management, Edelweiss.

Mistry agreed: "For the REIT to work, you need a buoyant real estate market. Nothing much was happening for the past three-four years, but things have started picking up now."



Friday, August 15, 2014

BEST's power monopoly ends, Tata enters island city




BEST's power monopoly finally came to an end on Friday . Tata Power Company (TPC) has now been granted a distribution licence in Mumbai for the next 25 years, and it will now set foot in the island city--giving residential consumers a chance to switch to cheaper power.

This could be a big blow to BEST, which has been serving 10.5 lakh consumers between ColabaCuffe Parade and SionMahim areas for several years. BEST officials apprehend large-scale poaching and "cherry picking" of consumers by TPC.

Although MERC mentioned in its order that it was granting the licence "in public interest", it also pointed out TPC's "inadequate network rollout plan" and directed Tata officials "to approach the commission in 6 weeks with a fresh rollout plan". MERC's order clearly stated: "The rollout plan submitted by Tata Power Company (TPC) is inadequate as it seeks to cater to 50% of the total expected load by catering to only 31% of consumers, which is not conducive to a level playing field and genuine competition. In its rollout plan, TPC has not addressed the past directions issued and timelines prescribed by the commission. TPC has also not proposed a detailed methodology to ensure that laying of network will be done to ensure supply to all categories of consumers including the category of consumers with lowest consumption.

"TPC has faced several operational difficulties which have delayed its network expansion. Therefore, the commission deems it appropriate to specify a phasewise rollout to ensure that TPC lays its network in its entire area of licence in a time-bound manner," the order pointed out.

BEST had strongly opposed TPC entry, stating that its very existence will be endangered and around 47,000 employees would become jobless. It also informed MERC that that this could result in political and social unrest and may lead to a law and order problem. The commission, however, observed that the Electricity Act allowed existence of two or more parallel distribution licencees in the same area and, as held by the Supreme Court, no exemption was provided for a local authority to that extent.

The order stated: "TPC has been authorized to supply to all consumers in areas which include those covered by BEST. Thus, two licencees are already operating in the area of BEST. Considering this fact, the commission is of the view that there is no merit in the apprehension of BEST that owing to the grant

of a licence in its area to any other person, the very existence of BEST will be endangered. BEST would require to address the competitive environment through its own performance."

Tata Power also got a transmission licence granted for the transmission and the receiving stations (or Transmission Receiving Stations) located in and outside the Mumbai area, owned by TPC or proposed to be constructed and owned by TPC in future and form ing part of Intra-State Transmission System of Maharashtra.

In a statement issued on Friday , TPC said it will "support BEST's case for transport subsidy to be rationalized across each electricity unit collected so that it's not just left to BEST to collect the same. It will also make sure that BEST's margin of business is not affected adversely as it has been a longterm participant in power supply system in Mumbai."





Modi makes a clean break, ends Plan era, wants to build Team India





PM Makes Strong Pitch To Involve People In National Reconstruction Project Suggests 10-Yr Freeze On All Divisive Issues
Prime Minister Narendra Modi on Friday made a marked break from the past in his maiden Independence Day speech with many firsts --notably by scrapping the Nehruvian vestige, the Planning Commission, and by ending his 65-minute extempore speech with the slogan of "Vande Mataram".

Unlike in the past when prime ministers announced government schemes from the ramparts of the Red Fort on August 15, Modi exhorted countrymen to rise to their full potential, realize their responsibilities and shape their own destinies.

To this direction, he pushed people towards cleanline ss, sought protection of women by urging parents to ensure their boys are raised right, told MPs to create model villages with their MPLAD funds, nudged industry to move towards "zero defect" manu facturing, and asked bureaucrats to stop fighting among themselves and get on with their common task of governance.

Instead of the traditional "mai-baap sarkar" that prov ided goods and services to a passive populace, the prime minister sought to involve the people in a national "cando" reconstruction project. Some of the things that he said sounded repetitive but that was possibly to emphasize their importance in his scheme of development.
On India's fractious politics of caste and religion, he came up with another first -a 10-year moratorium on violence triggered by these divisive issues.

"Let's resolve for once in our hearts, let's put a moratorium on all such activities for 10 years, we shall march ahead to a society which will be free from all such tensions," he said. Modi made a pitch for a sub-continental project to eradicate poverty , saying how that was once issue that dragged India and its neighbours down. While his emphasis on neighbours isn't new, what was new is that he avoided mentioning Pakistan in any adversarial context.

The one big government measure that the Prime Minister announced for the poor was a mega financial inclusion plan as well as an accident insurance cover of Rs 1 lakh. The other big announcement was, of course, the dismantling of the Planning Commission, which would be replaced, said sources, by a new body called the National Development and Reforms Commission which would have active participation from states and whose brief would extend to collaborating with the private sector.

The winding up of the Planning Commission was an important, but not the sole symbol of the change that Modi wants to bring in. As he said, "I am saying from the rampart of the Red Fort that it is a very old system and it will have to be rejuvenated, it will have to be changed a lot. Sometimes it costs more to repair the old house, but, it gives us no satisfaction." Modi's speech reflected his attention to details and his focus on shoring up governance.
But Modi moved beyond his known concern about delivery mechanisms and invoked the need to develop a national character and a sense of national purpose. This was reflected in his call for improving public hygiene standards and building toilet for women and the girl child. He had already moved the issue high on the hierarchy of public concerns, but the speech saw the PM seeking to turn the government goal into a national mission by linking it to the issue of gender justice and dignity of the poor.

For the full report, log on to http:www.timesofindia.com








Wednesday, August 6, 2014

Message from all faiths is loud and clear: It's the biggest act of giving



`Donating Organs Can Help Overcome Death Anxiety, Make People Feel Better Connected With Life'
Religious beliefs are considered one of the biggest hurdles preventing people from donating organs. Yet, a look at how different faiths view the giving of organs -to save and improve lives -calls the bluff on this perception.

Truth is most religions are open and straightforward on the issue.
The Puranas, for instance, cite many instances of people cheerfully donating their body parts organs. In Peria Purana, Kananappa Nayanar offers his eyes to Lord Shiva.

Despite this, many are worried that donating organs may impact the soul. As Sri Sri Ravi Shankar says: "Do not worry about the soul.
You'll certainly not be born blind in your next life if you pledge your eyes after death this time."

Sri Sri labours on the point that organ donation is a "sacred offering, a noble gesture". People are often misled by `beliefs' (read superstitions) that have no space in any religion, he says. " As far as belief systems go, if religion contradicts science, go with science."

He invokes the Gita to explain.
"What does Krishna say in the Bhagvad Gita? In the last chapter (Chapter 18, Verse 63), he says: If you are faced with a challenge or doubt, think over it. If your logic accepts it, accept it. Ponder over it fully , then do as you like." Expounding the power of reason, Sri Sri urges followers to heed Krishna's words to Arjuna on the battlefield: "Reason it out, discuss it, think about it in entirety , don't leave any aspect out. Then do as you like."

In short, if logically you are comfortable donating organs, do not let vague religiosity influence you.

Sri Sri suggests a scientific approach to religion. The underlying point being: We should make ourselves useful and of service, in life and death. As far as belief systems go -if religion contradicts science, science should prevail.

"You donate your organs after death for someone's benefit -this is scientific; there's nothing wrong in it," says Sri Sri. "If your religion says, you'll go to hell if you donate your organs, I'd say: Stick to science.
Not only has the recipient of the organ benefited, but also his family and community . When a blind person gets to see, he becomes independent, confident and is able to help himself and others."

Continuous Charity Organ donation is an act of value worthy of reward. In fact, some religions say an artificial transplant is no substitute for a natural organ transplant.

In Islam, organ donation is believed to be sadqa jariyah, that is, continuous charity . For example, if a blind person receives another's eyes after the person's death and can see, that is sadqa jariyah, because even after death the benefits from his donation continue to be received by another. Organ donation signifies living with the spirit of compassion, say scholars. The donor loses nothing, but gives others something precious -the gift of life. There is a saying: `The measure of life is not its duration, but its donation'. This could well apply to organ donation.
The Big Connect Spiritually speaking, when deciding to pledge organs some have reported experiencing a larger connect with humanity . By pledging their organs, they say it's easier to de-link themselves from the body and focus on the soul.

A Delhi psychologist recounts his experience in dealing with the ageing. "We tend to be possessive about our physical form," and the very thought that our bodies will be cut post-death and body parts utilised to give life to others can be repulsive and scary . Yet, as we mature, psychological wellbeing is heavily dependent on the ability to extend ourselves beyond the self and body .

"Till the time we are obsessed and identified exclusively with our body , we remain anxious about ageing and mortality . Donating organs in reality can help overcome death anxiety . A 71-year-old gentleman was depressed by the idea of death. Once he decided to donate his organs and told his family , he reported positive changes in his personality. He lost his preoccupation with illness, and his fear of death reduced.
He became calm and joyful. He began to say , `When I think that my organs will give life to someone, I don't feel alone. I feel connected to life. I find myself as part of a large chain or web of life.' " Then there's the story of a teacher whose doctor went out of his way to treat him though the teacher couldn't pay his bills. The teacher felt grateful and to express this, decided that rather than subject his body to useless rituals post-death, it should be given to a medical college to help students become good doctors. Noble cause, yes, but as leading theologists say , it's still not easy.

On God's Duty A lighter take on the Bible says Adam was perhaps the first organ donor -after all, "God took a rib out of Adam and created Eve" (Genesis 2:21). Christianity views organ donation not only as a moral deed, but also as commendable, even recommending it as a religious duty .

At the forefront in pushing the issue, have been the papal heads.
"Transplants are a great step forward in science's service of humankind.... There is need to instil in peo ple's hearts, especially in the hearts of the young, a genuine appreciation of the need for love that can find expression in deciding to become an organ donor," said late Pope John Paul II in August 2000, adding that systems and regulations must be in place so that organ donation does not get commercialized.

The Catholic Church teaches: "Organ transplants are in conformity with moral law... Pledging one's organs to be donated after death is a noble and meritorious act and is to be encouraged. It is not morally acceptable if the donor or his next of kin hasn't given explicit consent. It is not morally admissible to bring about the disabling mutilation or death of a human being, even to delay the death of others."

Pope Emeritus Benedict XVI said: "Organ donation is a special form of witness to love.... In a period like ours, often marked by various forms of selfishness, it is ever more urgent to understand how the logic of free giving is vital to a correct conception of life.... As Jesus taught us, only whoever gives one's own life can save it (Luke 9:24)."

Grow With Religion There was a time when Jewish law prohibited organ donation and transplantation as procedures were not in place, or matters were still at an experimental stage. Today , that is not the case. Rabbis and scholars across the spectrum of Jewish life have upgraded their views on this.
Organ donation from a dead body is seen as an act of saving life, pikkuah nefesh. Organ donation from a living donor is fine too as long as it does not significantly risk the donor's life; then it is a mitzvah kiyumit, praiseworthy . One of the most compelling arguments for organ donation is the love, mercy and compassion involved in such an act. Saving a life is a fundamental imperative in Judaism, says Rabbi Malekar.

That said, all faiths advise abundant caution to ensure that organ donation retains the spirit of charity .
For that, education plays a big role, says Sri Sri, who has pledged his eyes. For starters, the family must be taken into confidence that one has pledged to donate an organ or organs so they can peacefully do the needful when it's time.








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Saturday, August 2, 2014

THE WORLD AT YOUR FEET - High income, low tax... House that!




Buy that new penthouse, reap lakhs in tax savings. Here's how the math works
The upside of being a `high-net-worth individual' (HNWI) is that you get a fatter pay cheque than most people.
The downside is that a big chunk of it will be taken away by the taxman. But there are ways of getting around that; in fact you can save a lot of tax by buying a house -as long as you let it out and not live in it.

Kuldeep Kumar, executive director of PricewaterhouseCoopers, says that's because, under Sec tion 24 of the Income Tax Act, you are al lowed deduction of the entire interest payment on your home loan from your taxable income -provided you club the rental income from the house with it.

After the new Budget, home buyers are allowed a deduction of Rs 2,00,000 on interest payment of their home loan. But no such limit exists if you can show your purchase as an investment, and not for personal use. The tax benefit is huge, says Vivek Jain, a senior chartered ac countant. If you are wonder ing how, the math is simple: with interest rates at around 10% per annum and rentals from a residential property hovering around 3% of capital value even in the metros, your actual outgo amounts to about 7% every year. This "net loss" is what you can rightfully claim as deduction from your taxable income.

LOSS IS GAIN

Here's how the calculation works out. Let's say you have an income of Rs 1.20 crore per annum, putting you in the 33.99% tax bracket. You buy a house worth Rs 3.30 crore for which you pay Rs 30 lakh up front and get financing of Rs 3 crore from a bank. At 10% interest rate, your EMI will be Rs 2,89,506. In the first year, your total payout will be Rs 34,74,072 -Rs 29,77,656 as interest payment and the rest towards repayment of principal. Going by market trends, your annual rental income would at most be Rs 11,50,000, or 3.5% of capital value. After deducting 30% as maintenance expense, your net taxable rental income will be Rs 8,05,000 (70% of 11,50,000). Deduct this from the interest amount (Rs 29,77,656) and your "net loss" stands at Rs 21,72,656. This amount will be deducted from your taxable income, reducing your tax liability by as much as Rs 7,38,486.

RETURNS OF RENT

With part of EMI being used to pay the principal, the interest burden will decline with each year; the second year, it will be reduced to Rs 29,25,675.
With rental income rising by , say, 5% during the period, the net loss will come down to Rs 20,80,425 and you get to save Rs 7,07,136 as tax in Year Two.
Interest amounts will fall further but a simple calculation shows that even if rentals keep increasing at 5% CAGR, your income from rent will exceed your interest outgo only in the 15th year.

FLOOR POWER

Buyers who are yet to get possession of their flat stand to gain as well, says Kumar.
The entire accumulated interest payout during the construction period can be claimed as deduction over the next five years once possession is taken.

After 15 years, you can sell the house and reinvest the money in a new one. Of course, you can always invest in more than one property and save even more tax. All it takes is an even fatter pay cheque.



 

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