Security against loss of credit cards and convenience of blocking them at once

Credit cards provide us a wide range of flexibility and options which have made these cards an integral part of middle class and upper middle class people in India. With the convenience, also comes the vulnerability of credit card misuse through frauds and theft. Most people who hold credit card in India hold more than one and when they lose it or misplace it they seldom realize often noticing they have lost their card only on seeing monthly statements.

Consider a situation where you are running for your flight and in the neck moment find that you have lost your wallet with few credit and debit cards. The options for you are to call all the credit card customer care lines and intimate them to block your card. But it is not as easy as you say. First you must remember your credit card number, your card end date, some banks even ask for last 2 transactions, the day which you lost the card and few more questions to verify your personal identity before blocking the card. Not to forget that you must also remember the customer care numbers of respective banks. All this process will surely make you sweat before you block all your cards and show a sigh of relief that it is not misused or will not be misused further. If there were any transactions made by misuse between the time one lost the card and blocked it the customer will have to bear the charges. Not to mention that you would have also lost your flight or may not be able to make the payment that you intended to while carrying the credit cards. The same process has to be followed for debit cards though the risk of misuse is little less as most of the debit cards ask for PIN verification. Thanks to RBI’s directive that from 1st August for all online transactions IPIN is mandatory so that way, misuse may not happen. But RBI has mandated only for Indian sites and misuse in International sites is always possible.


What if we have the convenience of just calling one number and blocking all the credit cards and if we get replacement cards just by making that one call. Sounds simple isn’t it?

Thanks to CPP which exactly does this.

What is CPP?
CPP Card Protection is India’s first 24-hour Card Protection service for use in the event of card loss, theft and related fraud. One free call to CPP ensures that all the registered cards are cancelled immediately; and not only those we also get emergency travel and hotel assistance. We can now protect all the credit, debit, ATM, membership or loyalty cards & also valuable documents including passport, driving license, insurance policies.
CPP Assistance Services, India is part of the CPP group, a pioneer and a world leader in the emerging assistance services market. CPP launched card protection in Asia as far back as 2004, starting with Hong Kong, followed by Singapore, Malaysia and now from early 2009 in India.

Buying a CPP Card Protection Membership

• Call 6000-4000 (prefix city code if calling from a mobile)
• Choose your preferred plan
• Make payment (through MasterCard or Visa)
• You will get welcome kit after a week
• Register cards for which you need membership
• You can send filled registration mail to CPP office in Delhi, or call 6000-4000 to register
  Membership valid for one year
  

Reporting a Loss and Making a Claim

• Call 6000-4000 as soon as you realize that you have lost a card and notify them
• To make a claim, ask for a claim form and submit it with all necessary bills in original. claims should be sent not later than 28 days from date of reporting card loss
• In case of further problems, call 6000-4000

Courtesy: money.outlookindia.com (Above 2 subtitles)

Is this service Free?
Of course, a big ‘NO’. No service comes free of cost especially which involves financial transactions and protection. Minimal charges are applicable for this service. This should be just treated like a Term Life Insurance. The chances of meeting with an accident in a short term are very less but yet we pay premium in a Term Life Insurance for the financial cover and security it provides. CPP should be taken the same way as in business no one gives a free meal. With a host of benefits available at less than Rs. 3 to 4 a day, a complete peace of mind is assured.

What are the plans available?
The best option is to call CPP and get the information. You could also visit CPP’s website www.cppindia.com and find even more details not just about the rate but also about the wide range of services CPP provides.

This is not a marketing effort for CPP and is just an effort to let you know the options and convenience of blocking all credit cards at once in case the need arises.

All about Tax Refund

What is Tax Refund?
Tax refund is the amount paid back by government to a tax payer who has paid excess amount of Income Tax.

Are all taxpayers eligible for IT refund?
No. As mentioned above, only tax payers who have paid excess tax can get IT refund.

How one pays excess tax?
For an individual earning salary from his employer, and when employer does a TDS and the TDS amount is greater than the actual tax to be paid by the individual.

Can I get back the excess tax paid?
Of course yes, As mentioned above, government pays back the excess tax.

How do I get a refund? / What makes me eligible for a refund?
The refund amount is calculated when an individual files his IT returns. Just tax filing will make the individual eligible for tax refund if he/she has paid excess tax.

Is it true that if tax returns are not filed within time, I will not get refund
No, this is not true. It is not mandatory to file returns on time to get a refund if eligible. But the later you file the later it is going to take to get refund.

How long will it take for tax refund?
In ideal cases the amount will be refunded within 12 months time. Though it is dependent upon lot of factors like refund amount, whether there is a change in jurisdiction, time of tax filing(the earlier you submit the earlier you receive refund for a particular FY)

Will IT department give me interest for the refund amount?
Yes and No.
Yes, if the tax refund amount is greater than 10% of the actual IT to be paid. No, the tax refund amount is less than 10% of actual IT to be paid.

How will I receive the refund amount?
In major towns and cities tax department credits the amount directly through ECS. So it is essential to maintain the same bacnk account if you are eligible for a refund. I nother locations tax department sends the refund order with your bank account mentioned in the back side of the refund order. Refund order is similar to a cheque sent by tax department. The refund order can be deposited to any of your bank account after signing on the backside of the refund order.

What if refund amount is not received?
If tax refund amount is not received within 12 months from the date of filing the tax return below are the options to do:

• Visit the tax return office and follow up.Write a letter to Income Tax officer along with the photocopies of acknowledgement of tax return.
• If not redressed, then write a letter to the jurisdictional Chief Commissioner of the Income Tax with a copy to the Grievance Cell and the concerned Income Tax Officer. Also enclose copies of previous written communication to IT department.
• If still not redressed file a RTI online at: http://www.rtiindia.org/forum/10393-income-tax-return-refund.html
• Alternatively you can consult a Auditor and ask him to follow up on your refund amount. The procedure is the same and yes of course you will have to pay his/her consultation charges.
  

Tax Exemption on Medical Expenses

Can tax benefits be availed for medical expenses incurred? What are the various sections of Income Tax act and how to avail the benefits.

Section 80D of Income Tax Act:
Medical Insurance premium for self, spouse, children and parents are eligible for exemption under section 80D up to a maximum of Rs.15000 for individuals and Rs.20000 for senior citizens.

Section 80 DD of Income Tax act:
Deduction under this section is available to an individual who:

• Incurs any expenditure for the medical treatment, training and rehabilitation of a disabled dependant; or
• Deposits any amount in schemes like Life Insurance Corporation for the maintenance of a disabled dependant. An annuity or a lump sum amount is paid to the dependant or to a nominee for the benefit of the dependant in the event of the death of the individual depositing the money, from the said scheme,

A deduction of Rs 50,000 is available. Where the dependent is with a severe disability, a deduction of Rs 75,000 is allowed.

To claim the tax benefit under Section 80DD, the dependent person means a person having any disability of not less than 40%, as per section 2(i) of the Persons with Disability Act, 1995.
Section 80DD deduction is available only towards medical treatment of dependents with specified disabilities.

Section 80DDB of Income Tax act:

An individual, resident in India spending any amount for the medical treatment of specified diseases affecting him or his spouse, children, parents, brothers and sisters and who are dependant on him, will be eligible for a deduction of the amount actually spent or Rs 40,000, whichever is less.
For any amount spent on the treatment of a dependent senior citizen an individual is eligible for a deduction of the amount spent or Rs 60,000, whichever is less is available.

Section 80DDB allows deduction of expenses on medical treatment of specified ailments prescribed under Rule 11DD of the Income Tax Rules.
The list of diseases/ ailments falling under this section:

1. Neurological diseases where the disability level has been certified to be of 40% and above. These include: Dementia, Dystonia, Musculorum Deformans, Motor Neuron Disease, Ataxia, ChoreaHemiballismus, Aphasia Parkinson's Disease
2. Malignant cancer
3. Full blown Acquired Immuno Deficiency Syndrome, (AIDS)
4. Chronic renal failure
5. Hematological disorders. These include: Hemophilia and Thalassaemia

Is NRE remittance taxable?

Is it possible to avoid taxes by remitting to NRE account instead of salary account?
Remitting into any type of account makes no difference in tax exemption.
Is NRE remittance taxable?
Yes if you are resident and ordinarily resident in India. If you are a NRI then you claim tax exemptions.

So now one wonders who is a resident and who is an ordinary resident and who is a non-resident.

Under section 6 of the Income Tax Act, an individual is resident in India if he is in India for 182 days(182 days if he leaves India to takes up employment outside India if he is a citizen of India or being outside India comes to India on visit if he is a citizen of India or a person of Indian origin) or more in the previous year, or he is in India for 60 days or more in the previous year and for 365 days or more in the four years preceding the previous year. He/She is a resident but not ordinarily resident if he satisfies any of the following conditions: He is non-resident in nine out of the 10 years preceding the previous year; he is in India for 729 days or less in the seven years preceding the previous year; if an individual is resident but is not resident but not ordinarily resident then he/she would be resident and ordinarily resident.

For a resident and ordinarily resident in India (decided based upon the above) the income earned by way of salary outside India will also be taxable in India. If there is a Double Taxation Avoidance Agreement between India and a foreign country in which one earns salary, claim benefit can be claimed under the agreement. If there is no such agreement, benefit can be obtained by way of credit of the tax paid in the foreign country on such salary income in India. The credit will be the lower of the tax paid on such doubly taxed income in that other country or the tax payable on the same in India.

From the taxation point of view, it will not make any difference whether one remits his/her earnings into a NRE account or into a regular savings bank account.

Tax rebate on Principal amount of an Education Loan?

Most of us know that the interest paid on an Education Loan can be used for availing tax benefits. But the Principal of an Education Loan can also be used effectively for tax rebate which many tax payers evade without realizing.

Tax Rebate on Interest Paid on an Education Loan:
As per Section 80 (E) of Income Tax Act 1961, as amended by Finance Act 2006, any individual availing education loan for his own study from a recognized financial institution can have the entire interest amount deducted from his/her taxable income.
Conditions for availing the benefits of Section 80 (E):

• The benefit is available only to individual assesses and for their own education.
• The purpose of loan should be to pursue higher education i.e., full time studies in graduate or post graduate course.
• The loan should have been taken from any bank, notified financial institution or an approved charitable institution.
• Only the interest amount is eligible to be deducted and not the principal.
  If the above conditions are satisfied, the entire amount paid by way of interest is deductible from income under Section 80 (E) .
• This deduction is available for next seven succeeding years (or until the interest is being paid) from the initial financial year from which the assessee starts paying the interest on loan.
• The deductions under Section 80 (E) are over and above the deductions under section 80C.
  

Tax Rebate on Principal Paid on an Education Loan:

Tuition fees are tax deductible under Section 80C but not the principal of education loan. No that's not the case for education loans taken for the studies of children.

Tuition fee of children paid out of the borrowed funds, are eligible under Section 80C because the Section no longer insists on the prescribed format of payment being made out of taxable income.
But if the education loan is taken for education of self or spouse, the principal would fall on the other side of tax rebate as Section 80C allows tuition fees only for children.

Tax Credits available in the Annual Tax Statement for A.Y.2008-09

The Income Tax Department (ITD) has started transmitting the Annual Tax Statement of taxpayers as a part of its citizen centric exercise. The object is to give tax payers feedback regarding the tax credits as reported by the tax deductors/collectors besides showing taxes deposited by way of self assessment tax, advance tax etc.

This statement is also relied upon by the ITD while giving tax credit at the time of processing of the Income Tax returns.

The procedure for creation of this Annual Tax Statement is in accordance with section 203 AA of the I.T. Act, 1961 or the second provision to sub section (5) of section 206C of the I.T. Act, 1961.2. The purpose of undertaking this exercise is to ensure that the tax credit available is complete, correct and up to date.

The tax credit reflected in such statement may increase or decrease in case the deductor revises the information/updates the information or files the TDS returns after finalization of Form 26AS (Annual Tax Statement).3.

In case of missing entries or entries against which 'unmatched' is indicated, you are advised to contact your deductor immediately and ascertain whether the deductor has either

i) erred in quoting the correct PAN or not quoted your PAN; or

ii) not filed the TDS return; or

iii) has not paid the required TDS to Government account.

3.1 In such a case, you may approach the deductor and persuade the deductor to rectify the deficiencies. Kindly note that the tax statement will be the basis for giving you tax credits. Hence, absence of tax credit will bind the Officer to adhere to the tax credit available.

4. Tax Credits appearing in the Annual Tax Statement are on the basis of the details given by the deductor in the TDS/TCS statement filed by him. The same should be verified before claiming tax credit and only the amount which pertains to you should be claimed.

5. From the current financial year onwards you can also view your tax credits by undertaking a one time registration. Detailed procedure for registration is available at http://www.incometaxindia.gov.in/ and http://www.tin-nsdl.com/.

6. To open the statement, a password is set in the format of DDMMYYYY. For example, if your date of birth / incorporation is January 1, 1985 then the password will be 01011985.

6.1 The date of birth / incorporation should be same as furnished to the Department and available in the Income Tax Department PAN master (as printed on the PAN card).

7. For queries on the issue one may contact TIN Call Centre at Tel.: 91-20-2721 8080 Fax: 91-20-2721 8081 Email: reply@nsdl.co.in Further communication on this matter could be sent on reply@nsdl.co.in