Service Tax burns a hole

I have often wondered why we need to pay service tax. I can't fathom why I should pay the government service tax when I visit a parlour - Okay I am financially illiterate and probably there's good reason as to why the government is asking me to pay tax when I want to cut my hair!

When I speak to my parents (who are living on a fixed income) I realize that for the older generation it’s quite a whammy. With falling interest rates and mounting expenses it sure gets difficult. Service tax on basic medical requirements translates to more expenses. My father recently had to undergo some pathological tests, the service tax they had to pay on a Rs 13350/- bill further burnt a hole in his pocket.

Look at the way cost of living has escalated. Today we not only pay for the actual call made or electricity consumed, we pay a service tax too resulting in added expense. We also pay for premiums paid and what not!

I personally believe that some services need to be out of the scope of service tax. Especially medical services! In a country with poor medical services, where half the population doesn’t have access to medical aid, why should the common man increase his financial burden by paying service tax? And while we pay all these taxes, are we getting the best possible service? Electricity companies quietly keep increasing their per unit price, we pay service tax on top of it, and still have no power!

Read that our Government has brought down excise & service tax rates, which is good news. I wish the Government evaluates the list of services currently under the purview of service tax and really trims the list. Hopefully the new government will do so.

Oscars

Finally the Oscars are over and Slumdog won in multiple categories. Whether deserved or not (depending on camps, viewer perception etc) the fact of matter remains that it won across categories and all the hype & hoopla surrounding the movie is only increasing.

When I hear our "bollywood" bigwigs claim, "Oscars? - no big deal", it is terribly funny! The same set of people are chasing foreign agents trying to get 2 minute roles in Hollywood movies; keep aatempting to get 2nd rung Hollywood stars to appear in their movies in guest roles / item numbers; alternately brand ambassadors pass of as jury members at various festivals with funny "america meets europe meets India accents"; try to get pictures clicked with anything that looks "white";pull all strings to get nominated for the same Oscars (and other similar awards) and then they trash it! But such is life!

Whether an Oscar award is the benchmark for being an iconic movie or a box office hit is debatable but the truth is that the Oscars matter! And main stream film makers / documentarians care for the recognition that the Oscars bring.

As I haven't watched Slumdog Millionaire, I cannot opine about it. But it sure looks like it has fired up extreme views not just from the film fraternity but viewers too. Am planning to see the movie- lets see what's all the hype about!

Tax saving saga

AEGON Religare Life Insurance guys have been very nice. Due to a very hectic life at work and having no spare time at all, haven’t been able to meet the representative. Surprisingly he hasn’t been breathing down my neck like most insurance agents! As have already rescheduled 3-4 times, told him that will call for a meeting when I actually have time to go through their products/plans properly. And as I don’t want to invest in a rush, will most likely do any further investment in April only.

And yes, my PPF opening at my local SBI branch was an experience! . The moment I said PPF, their interest waned. Earlier banks used to try to con you into opening a savings bank account too, but thanks to RBI stating that a savings account is not required to open a PPF account, they can no longer force you to do so. But service was very slow, none of the personnel seemed interested and responded to most questions with a single word. However as I was desperate, I persisted and finally managed to complete all formalities. Plenty of forms to fill up and had to go back yesterday too. But finally managed my PPF account!

This completes my Tax saving saga for 2008. But 2009 will be different! Most of my friends have and are in similar state trying to plug in their respective savings to get tax breaks. I realize (late as always) that it’s critical to plan your savings based on retirement plans much earlier in life. Yes, at 20 no one wants to think of 58, but smart people are those who do!

LIfe Insurance & PPF

Disaster at work has left me miserable & with no time to do proper research for my tax planning.

Came across this article the other day, think its quite informative. http://www.rediff.com/money/2009/feb/05tax-planning-tips-for-salaried-people.htm

This article helps in understanding sections under which we can claim decuctions and also gives good suggestions.

Due to paucity of time & approaching deadlineam investing my money in PPF, which seems to be the safest bet now. I read about LIC launching a new plan, but don't want to blindly invest without understanding the product correctly. With so many life insurance products floating, one really needs to know exactly what will be the right product and not get fooled by an agent. So often I have come across people who have policies that they dont even understand or know benefits of. And off course I can say this from personal experience too! In my case my parents suggested a policy, but honestly i don't know the details even after paying premiums for the past 4 years. Sad but true.

However for the new financial year am going to work out my financial goals and work towards fulfilling them. I realise like most people I keep putting off financial planning through the year and wake up only in the month of February to arbitarily invest in products to save tax. Its a very wrong thing to do and something I won't recommend to youngsters starting out now.

Am taking some time off tomorrow to go to the bank SBI to start my PPF account. I read on one of the sites that PPF accounts can be opened at ICICI, but can't see any link on their website and have no time to go bank hopping tomorrow. So it's got to be my local SBI bank.

Will give an update on how good / bad my experience was!

Tax planning help required.....

It's that one time in the year when all & sundry relatives, neighbours,long lost friends who moonlight as insurance agents swarm around you. Even our local postman caught me on Saturday and said he was an agent for a private insurance company and he would be happy to help. So much for promoting postal services!

But with February 20 approaching, I have to put INR 15000/- further to reach my 1L limit, else (like we all know) taxes will be deducted and will see my salary for March disappearing!

The dragon (named for the way he’s always fuming) at accounts has put up a notice stating 20th as the FINAL date for all submissions. We old timers know that he sticks to his word. As I don’t want to stick my money in a dud ULIP or low yielding plan I think will go ahead with PPF as the last option... I promise myself that 2009 is the last time I am going through this mad scramble.

Help from online friends will be highly appreciated. Any advice on how to do last minute tax planning?

Some good information

As part of my becoming more aware financially in 2009 have been going through the wide web world. Going through a lot of company sites and most importantly blogs. Some of the sites & blog are very comprehensive and easy to read and most importantly explanations are in lay man terms.

What scares off financially challenged people like me are big words / jargons! Off course this is a tiny list as its been only half a month’s research:). Will keep updating this list regularly.

So here’s listing some of the good ones. Enjoy reading!

TheStrump

Moneying

Aegon Religare Pension Plan

Personalfn

We are like this only

What a time we are living in…at one end Ramalinga Raju swindles billions (or trillions) and gets VIP treatment in jail; Ram Sene goons roam around scot free and now threaten to marry of “couples in love”;on the other hand commuters frustrated with Western Railway and protest peacefully impromtu one fine day, are treated like hard core criminals. What an irony for India!

While there are many perpetrators of economic crime, most of them don’t have to pay for their sins thanks to web of political friends. Like most Indians I believe that Mr. Raju of Satyam fame will also never have to pay for his crimes. Obviously there are many more worms in the can but looking at past records they too will wriggle away from justice.

Actually we have only ourselves to blame for this mess. We as individuals are always looking for easy way out. Parked on the wrong side? Broke a signal? What do we do? Try to bribe off the traffic constable! If it makes life easier for us, we have no problems in bribing or indulging in corruption. We even take pride in talking of our connections. When a “big story” breaks out, we all are hurt / shocked etc but all for a few days. And then it’s all over and things can go back to normal.

Isn’t it hilarious to see our usual motor mouth politicians making “justice will take its course” statements on all sundry channels? Knowing fully well that the only thing that will take its course is money flowing into their pockets.

The worst fall out of economic crimes is the employees who are caught unaware – just imagine living in a vacuum not knowing whether you will have a job or not! For so many sole earners it’s a question of survival with no support from any quarter. I recollect a F.R.I.E.N.D.S episode where Monica is without a job but her parents are confident that she has money as they have taught her well. And what’s that? Save 10% of her salary for a rainy day!! But the question arises for how long will a tiny saving help? Especially in today’s economic situation.

Anyway let’s see what change our elections bring in this year. My fervent prayer is that one political party emerges victorious and this coalition rubbish stops!!

Personal finance study is on....

Where did I disappear? well work has been HECTIC! 2 colleagues missing (one ill & one travelling) and i am down under.

But I have kept my promise to myself on gaining financial knowledge. As of now have fixed a meeting with Aegon Religare (http://www.aegonreligare.com/) rep to meet me. Have had to postpone the meeting due to paucity of time, but will do so this week.

Post that will try the others too. Am going with an open mind and have made it clear that will not get forced into buying their product. As of now he's been really nice..lets see how it goes. Have also managed to visit a few online sites & blogs - will put an update here shortly. Some are really insightful and can not only help to cut costs but also help in understanding the world of personal finance.

Ciao as of now