Governments

IT department´s stock and flow problem

Governments, Press, Taxes / By /

Lakhs of tax payers receive notices from the Income tax dept. regarding their expenses or investments being disproportionate to their taxable income for the same year – implying that the expenses or investments are from unaccounted sources. Most cases have simple explanations – the income was declared in a previous year or it is exempt income – facts already available in the tax dept database. Yet lakhs of tax payers have to duel with the tax authorities to prove their credentials. Most people emerge victorious after a long and arduous ordeal costing time and money. The tax department resources are used up in dealing with the honest tax payers & the tax evaders may escape. Harsh’s article in Business Standard on why the tax departments Data Analysis Package can cross tally more information and thus have more pointed search results more likely to net tax evaders while being bothersome for fewer honest tax payers.

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Usher in competition between EPF and NPS

Financial, Governments, Personal Finance, Press / By /

Employees earning Rs. 15,000 pm pay “tax” @42% (the same rate as those earning more than Rs. 5 crores do). Finance minister late Arun Jaitley in his budget speech for 2015 mentioned “the situation with regard to the dormant EPF accounts and the claim ratios of ESIs is too well known to be repeated here. It has been remarked that both EPF and ESI have hostages, rather than clients. Further, the low paid worker suffers deductions greater than the better paid workers, in percentage terms.” He went on to advocate the solutions listed here. These solutions though promised a decade ago in a budget speech on the floor of the parliament have been stonewalled by the powerful EPFO and ESI establishments. Bureaucrats can justify anything as exemplified by the fictional UK bureaucrat Sir Humphrey in the BBC series “Yes Minister”. Watch how he justifies continuing a hospital with no patients but with 500 administrative staff https://shorturl.at/pdau2 . Don’t let the Sir Humphreys win this battle.

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How to make tax officials accountable

Governments, RIA, Taxes / By /

Individual Tax payers have become more vocal as compliance by them has improved significantly and aggregate taxes paid by individuals has overtaken taxes paid by corporates. With that the demands for the tax department to be held accountable have also increased. Unfair treatment such as indefinite delays by the tax department or very low interest paid by them on delayed refunds are no longer acceptable. Harsh’s article in the Business Standard on how accountability can be infused in the Income Tax department using the model of Public Service Guarantee Act enacted by almost all state governments. comments welcome.

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Usher in transparency, not price controls

Governments, Insurance, Press / By /

Hon’ble Supreme Court has asked the Union Health Ministry to coordinate with the states to roll out of a common pricing structure for hospital services across the country. This is impractical for many reasons – Real estate prices – which is a significant part of the cost of hospital services – vary widely from location to location, the quality of equipment and personnel also vary widely making availability of hospitalisation services within a standard price range impractical. Harsh’s article in Business Standard on how enforcing transparency on pricing of hospital services might be a better first step towards achieving the goal of similar pricing across the country. Disclosure : Harsh is not connected to the medical services industry/hospital sector in any manner.

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Simplifying nominations can boost financialisation

Financial, Governments, Investments, Personal Finance, Press / By /

Indian securities market regulator SEBI has recently sought public comments on a consultation paper that seeks to comprehensively revamp the entire process of transferring assets to the nominees on the death of the investor. It seeks to remove hurdles and standardise the process so that the transfer to nominees can happen in a few weeks (the dream is the transfer happening in a few days of applying and God willing even that will happen eventually as the system stabilises). The paper also deals with providing access to the investor themselves in case of their incapacitation (unfortunately many such cases are coming up as longevity of Indians increase due to advances in medical science) . This is a giant step towards making Investments in Indian securities market convenient and easy and will aid in spurring the ongoing process of financialisation of household investment assets.

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Unclaimed assets: Create searchable databases

Financial, Governments, Press / By /

Give a gift worth lakhs to your loved ones this new year without costing a penny to you. Visit iepf.gov.in, click on “Search unpaid/unclaimed amount” under the “Services” tab, and enter their names in the search box and discover unclaimed shares in their name on the #IEPF website. The probability of discovering lost treasures for your loved ones is much higher if they are born before 1970.
IEPF has recently changed its search functionality to display potential unclaimed amounts/shares based on the inputted name without requiring any more information. Unclaimed shares/dividends worth Rs. 52,000 crores are with IEPF. Similarly large amounts (bank deposits – Rs. 35,000 crores), Insurance-Rs. 25,000 crores, Inactive/unclaimed Mutual Funds (Rs. 18,000 crores) , Provident fund/Small saving schemes (amounts unknown) exist throughout the financial sector. The Finance minister has already announced an integrated portal to ease the process of searching and claiming such amounts.

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Unified death reporting is the need of the hour

Governments, Press / By /

A loved one has passed away. You are the nominee in all the mutual funds and shares owned by the deceased. You dread the multiple trips and the time to be spent and efforts required to follow different rules at each of the 7 MFs in which the loved one had investments & the 2 Depository participants where the shares were held. Now Imagine this. You submit the death certificate and the PAN of the deceased at one of the MFs. Within a week all the 7 MFs and both the DPs reach out to you proactively on their own with the details of the standard forms and steps required to get the assets transmitted to your name. If that sounds like Fantasy – it will be true starting on January 1, 2024 – many thanks to a path breaking circular issued by SEBI. No comparable mechanism exists anywhere else in the world Thanks to the white paper – written by Pramod Rao (in his personal capacity) – foreword by Mr K V Kamath – inputs & published by ARIA. Read Harsh’s article in Business Standard for more..

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Appeal to ‘slow mind’ to wean investors off F&O

Financial, Governments, Investments, Press / By /

Can you solve this puzzle : A bat and a ball together cost ₹ 1,100.
The bat costs ₹ 1,000 more than the ball.
How much does the ball cost?

If your answer was ₹ 100, that´s incorrect.
The right answer is ₹ 50.
Nobel Laureate and behavioural economist Daniel Kahneman cites this example in his book, Thinking Fast and Slow, to introduce the concept of the ´fast mind´ (which provides intuitive answers without conscious deliberation), and the ´slow mind´ (which is supposed to deliberate and endorse or reject the fast mind´s intuitive answers).
The fast mind´s immediate answers can be frequently wrong.
The slow mind is lazy and prone to biases.
Yet, with the right training, the slow mind can be tutored to amend the fast mind´s intuitive answers.
So what does this interesting puzzle have to do with weaning Individual Indian investors away from speculating in Futures & Options ? Read Harsh’s article in Business standard to know more..

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