Tax Planning under MAT - Minimum Alternate Tax
Monday, October 29, 2012
Sunday, October 28, 2012
The King without Fishes: Kingfisher
The King without Fishes: Kingfisher
[The case of financial crisis of Kingfihser Airlines]
Saturday, October 20, 2012
Wednesday, October 17, 2012
Saturday, October 13, 2012
Monday, October 8, 2012
ONLY 10% STUDENTS WORK IN THE SECTOR FOR WHICH THEY QUALIFIED...!!!
ONLY 10% STUDENTS WORK IN THE SECTOR FOR WHICH THEY QUALIFIED...!!!
With changing economic scenario and increasing choices, many youngsters are choosing careers that are different from what they are academically qualified for, according to experts.
The trend of people opting for different career paths are seen more among engineering students, they said. Going by data compiled by Youth4work.com, a portal mainly for those pursuing graduation, only about 10 percent of engineering students surveyed were planning to take up a job in the same sector.
Experts believe that pursuing different careers is also much dependent on prevailing economic conditions. “… the choices are also governed by the economy and the booming sectors. For example for quite sometime in late 1990s, students form across the engineering domains, focused on IT jobs as that was booming across the world,” Edukart.com CEO Ishan Gupta said.
Also, students nowadays have more options beyond their formal education by way of online and offline courses. In addition, increasing number of companies are hiring people on the basis of their attitude and skills rather than just academic knowledge, experts added.
Data based on 4,000 students around the country by Youth4work.com showed that among those doing engineering courses, nearly 15 percent were interested in careers related to writing, while 12 percent wanted to move to fine arts area.
Among students doing business and administration courses, as much as 85 percent showed interest to go into other areas like IT and animation. Meanwhile, the trend of choosing a different career from what you are qualified for academically is also noticed in professionals.
Professional networking site ApnaCircle.com founder and CEO Yogesh Bansal said that 55 percent of professionals registered with the portal have changed their industry in past one and half year. Lack of job satisfaction, professional stagnation and monetary issues are some of the factors behind professionals changing their job fields, Bansal added.
“Job switches remain high. However, sticking with one organisation at an initial stage, helps in your career growth. “It also provides a solid foundation and gives a candidate’s resume much needed credibility in terms of loyalty and sincerity towards his/her work,” Bansal said.
From; Firstpost Economy.
Friday, October 5, 2012
Mutual Funds: New Regulations by SEBI
Mutual Funds: New Regulations by SEBI
Recently SEBI has announced some new regulations for mutual funds. According to the experts, the changes will more useful to AMCs and distributors, rather than investors. After analysing all the announcement of SEBI, the major decisions are as under, let's see effect of each change on AMCs, Distributors and Investors.
Increase in Expense Ratio: SEBI has proposed to increase the Expense ratio by 30 basis points (0.3%) if the mutual funds are able to increase their reach to smaller towns in India and increase their contribution to 30% . The big effect, is that now there will be higher expense ratio for everyone. So inflow from smaller cities will affect investors from bigger cities. Investors from big cities will have to bear the burden of increased expense ratio.
No Internal Limits in Expense Ratio: A very big change which goes in favor of AMCs is the removal of internal limits on the expense ratio and for what it can be used. Earlier there was a limit on the AMC to charge up to 2.5% expense ratio (up to 100 crores AUM), but it was allowed to charge only 1.25% as Fund Management Charge and 0.5% as distribution charges. The rest was taken as their profits. So earlier suppose a Mutual Fund charged 2.25% as the expense ratio, then they compulsorily had to allocate 1.25% as Fund Management Charge and 0.5% for distribution.
But now, that sum limit has been removed and mutual funds are allowed to allocate expenses the way they want. This means you can now see more advertisements, more commissions to the distributors and more aggressive selling. While this is a very big change which will make AMCs happy, they will still have to keep a check on the expense ratio because of competition from other AMCs.
Exit Load is Back: When a investor got out of a mutual funds , he was charged an exit load if he quit before 1 year. That money was not transferred back to mutual fund, nor was it the profit of the mutual fund. It was actually transferred to a separate fund, which was used for sales, distribution and marketing. But now, when a investors exits prematurely, the entire exit load money will be credited back to the scheme account and will not be treated as AMC profit. However an equal amount (capped at 20 basis points) can be included in expense ratio back to compensate the AMC loss due to outgoing investors, which means that overall, for the investors on one hand, the AUM gets increased (NAV increased marginally because of exit load money coming back to them), while at the same time they’re paying more in expense ratios, so the net effect of this would be, no gain no loss to both the parties.
Direct Plans with Lower Expense Ratio: SEBI has directed that for each mutual fund, there has to be a equivalent Direct Plan with a lower expense ratio. So for every mutual fund XYZ, now you will see XYZ and XYZ-Direct options. So XYZ will come with higher expense ratio, and XYZ-Direct will have lower expense ratio. Many people who research mutual funds and like to buy it on their own directly from AMC by passing agents and other online distributors, this option will be cheaper and makes sense. However, many distributors are not happy with this move and think this will “kill” their business, all because investors will then just invest into the direct options.
Investors have to bear Service Tax: SEBI has ruled that service tax that has thus far been borne by the AMCs can now be passed through to the investors. Basically, this is how it is done in all other industries. Anybody who has received an invoice for a service will be familiar with the “Service tax extra” caveat to the quoted amount. AMCs provide a service (fund management service) to investors and will rightfully start charging the investors the requisite amount. This charge, however, is apparently likely to be 2-3 bps (according to the press release). My thought is that this 2-3 bps is more likely to be the blended overall impact across schemes. For equity schemes, it is likely to be higher, more in the 7-8 bps range for big funds and 10-12 bps range for smaller funds (service tax is charged on the amount that an AMC gets to keep from the expense ratio, so it will differ from AMC to AMC and scheme to scheme).
Seperation between Financial Advisors and Distributors: There will be some minimum qualification, registration and guidelines for financial advisers. They will have to register with SEBI and a separate body of regulators will soon be created for this. A financial advisor is a professional who advises his clients on investments for a “fee.” The important distinction being, he wont be able to earn any money from commissions by selling financial products. If a person wants to sell financial products and earn commissions out of it, then he will not be able to “advise” the clients. But CA, MBA, and several other professionals are kept out of this rule and even mutual fund agents who have a valid ARN code are kept out of this rule because their basic advice is seen as the extention of their work. There is still more clarity required on this, so don’t conclude anything yet.
From Jago Investor
Wednesday, October 3, 2012
Tuesday, October 2, 2012
Job Creation through Retail FDI
Job Creation through Retail FDI
The recent reforms push by the government is likely to have a positive impact on organized employment sector in the country and the retail sector alone is expected to see as many as 10 million jobs in the next 10 years’ time, experts believe.
Pursuant to FDI in the retail, international MNCs are likely to enter India either directly or through Indian companies and they in turn are going to recruit people for sales, customer service, back end logistics and IT, which would mean substantial job creation.
According to experts, FDI in retail can create 3 million jobs in three years including both direct and indirect jobs. In the next 10 years’ time the figure could touch as much as 10 million, wherein 4 million would be direct jobs and around 5-6 million indirect jobs including contractual employees, says Indian Staffing Federation (ISF), an apex body of the flexi staffing industry in India.
“The reforms push will have a very good impact on the organised employment. If more retail happens then lot more jobs are going to get created,” Randstad India President (Staffing) Aditya Narayan Mishra told PTI.
According to ISF, FDI in retail will have a much wider impact on organised employment than what happened in IT, 12 years back as it shall open doors for less skilled and less educated people as well.
Moreover with the recent reforms push, foreign investors are showing renewed interest in India, which is likely to result in more investments and thus more number of jobs.
The government has taken a number of reform initiatives like opening the multi-brand retail sector to FDI, hiking diesel prices by over Rs. 5 a litre, capping the number of subsidised LPG cylinders to six per family a year, allowing foreign carriers to pick up stake in domestic airlines and liberalising FDI rules for broadcasting sector.
For the economy it is going to be good, lot more people are going to be enrolled in the organised field but it also brings new challenges, experts say.
“As the demand suddenly increases and the same could not be said for supply, which could put a pressure on salary and attrition… And hence retention efforts would become much more difficult and employer branding would become more challenging than what it is today,” Mishra said.
After the opening up of the retail sector the only challenge there will be is to create enough skilled workers to cater to the demand that shall follow, ISF said.
IIT Delhi, Professor and Head (retd) Department of Management Studies, Rajat K Baisya said: “India is a difficult market. In order to sustain and be a success they (Walmart and the like) will have to invest in supply chain, improve efficiency, reduce wastage, and that might help”.
firstpost.com
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