Fight Against Black Money

SIT – Special Investigation Team

SIT constituted as per Supreme Court order to fight against Black Money .

According to various estimates Quantum of Black Money can be upto $ 1.4 trillion.

SIT members include following:

Secretary Revenue of Ministry of Finance

Deputy Governor of RBI

Director of Intelligence Bureau

Director of Enforcement Directorate

Director of Central Bureau of India

Chairman of Central Board of Direct Taxes

Director of Research & Analysis Wing

"The highest level of financial, revenue and economic management of the country are members of the SIT. This indicates the commitment of the new government of India," said the minister. 

[Source: Times of India]

How to Improve Working Capital?

[Published by www.caconnect.in]

1.   What is Working Capital?

      Working Capital is the Capital needed to fund normal, day-to-day operations of a business.

      A positive Working Capital ensures that an organization is able to continue its operations and it has     sufficient funds to satisfy both short-term expenses and upcoming operational expenses.

Gross Working Capital equals to Current Assets and Net Working Capital is Current Asset minus Current Liabilities.

The Working Capital Cycle means time taken to turn net current asset and current liabilities into cash.

If Working Capital Cycle is longer, the cash will be tied for a long period in the business and Vice Versa.

2.    How to Improve Working Capital?

·          Issuing Shares for Cash:

How it Works	Risk Involved
Issuing Shares for Cash will not increase Current liabilities but will increase level of Current Asset.	Liquidity of Ownership rights

·         Replace Short-Term Debts with Long-Term Debts:

How it Works	Risk Involved
Short-term Debts directly increase the Current Liabilities; Using Long-Term Debts in place of Short-term Debts will   help to keep amount of Current Liabilities low.	Generally Long-Term Debts carry more Financial Risk over Short-Term Debts

·         Sell Long-term Assets for Cash:

How it Works	Risk Involved
Long-Term Assets do not form part of Working Capital, so selling Long-Term Assets for Cash will directly increase amount of Working Capital.	Long-Term Assets are required in a business for day-to-day operations, unnecessary selling of Long-term assets will hamper normal operations of business

·         Earning Profits:

How it Works	Risk Involved
The most commonly method to enhance working capital is by earning profits. On one hand, it will increase the owner’s capital and on the other hand, it will increase the current asset of organization.	It is well-known saying, “Higher the Risk, more will be the profits”. So there is always a business risk associated with earning profits.

·         Accounts Receivables Management:

How it Works	Risk Involved
Accounts Receivables are generally stated after deducting some provisions for bad and doubtful debts. The Working Capital can improve, if the organization is able to collect amount more than expected.	Provisions are always made on past-experiences and market scenario, so it is very difficult to manage accounts receivables.

·         Settling Short-term debts for amount less than expected :

How it Works	Risk Involved
If Organization some-how manage to get some discounts from the short-term debt providers, the discount earned by the organization will serve as indirect income for the organization and thereby improving working capital.	Whenever an organization earns some discount, it has to face certain terms & conditions like early payment, such cases should be properly evaluated.

·         Manage your Inventory:

How it Works	Risk Involved
Avoid overstocking inventory; it will lead to unnecessary blockage of working capital. Set a maximum level for all the stock, do not order further stocks until you reach the safety level.	No Risk Associated, it’s a cost saving measure.

·         Reduce Fixed Costs:

How it Works	Risk Involved
Fixed Cost such as Rent, Salary, Interest, Insurance Expense etc. should be checked periodically. Try to save fixed business cost.	No Risk Associated, it’s a cost saving measure.

[Published by: www.caconnect.in]

The Night Before Exams Result

It is 31st January, 2014 around 00:15 am and the CA IPCC result is going to be declared today at 16:00 pm. But keeping trend in view, I think result will be announced around 14:00 pm (two hours earlier).
It's gonna be sleepless, most thrilling and frightening night of my life. I have already calculated my CA IPCC Expected marks more than ten times and I think I may get pass with a very little margin.
Last time CA IPCC result was very low around 11.78% and this time it is expected that result will be even lower around 9.78%.

Had I attempted the Exams well?
I think my efforts in exams were satisfactory,
1. Starting from Advance Accounting, there were tittle-tattle that paper was Tough, I think yes paper was good and unexpected but I attempted it very well and hoping for good marks in it.
2. Auditing and Assurance is a theory paper, others are saying paper was very as easy as ABC, but for me it was not so. I am expecting passing marks in this paper, neither so good nor so bad.
3. Information Technology and Strategic Management (ITSM) is a theory paper, it was my strong area but it disheartened me the most. This is the paper due to which I am still in dilemma whether I will pass or not. Paper was not so tough but some doltish and habitual mistakes by me worsen the situation.

What am I doing now?
I am struggling to keep myself engaged in some stuffs like surfing internet, listening to music, chatting with friends, blogging and watching youtube videos, anything just to ignore agitation of results.

What I learnt for my life? Hobbies are necessary to make us happy in Anxiety.

Rohit Jain
frohit@live.in

My First GD

On Last Thursday, it was 23rd January, I received a mail from BMR Advisors, the leading taxation firm in India, for GD round.
I was very much jubilant at that time. It is my dream workplace.
After going through the mail, I called up all my seniors and peers for advises and suggestions.
The day before my GD I practiced for it a lot, I googled many topics and viewed many youtube videos.

Finally The GD day:
Metro Train was the best route for BMR (Gurgaon DLF Phase 3). In the way to Gurgaon, I received a call from PWC (one of Big4, world's leading auditing firm). Again I was on cloud nine but tried to maintain a normal body posture as I was in a public place. While giving my telephonic interview, the call got disconnected due to network problem in the metro.
After some time I tried to call them back, but got no answer from their side. Finally I decided to first complete my GD with BMR.
This was the first time I traveled in a Rapid Metro Train, more cleaner, more endearing and almost deserted. After leaving Metro, I start looking for Building no. 5, finally after asking several persons I reached to Building No. 5, it was already 2 pm, the GD time and I have to reach 22nd Floor. One thing I want to quote here is that it was first time I was in building with 22 floors.

At BMR Advisors:
Finally on 22nd Floor, it was a very big gallery with around 4-5 offices (all of BMR) and more than 10 lifts.
At reception they gave me an entry form and told me to fill that in the waiting room. In waiting room there were already Six persons waiting for their turn.

Group Discussion:
Finally they called me for the GD. The HR told us to take seats. Before starting GD, he asked if other than CA anyone is in regular college.
Out of twelve contestants in the group Seven Aspirants were from regular colleges, two were from SRCC (best college of Delhi), one from Saheed Bhagat Singh College (Best College of South Delhi), two girls from Gargi College, two other from different colleges. I got very Anxious at that time.
The topic given for the discussion was "You or the Country". The HR gave us 60 seconds to analyze the topic and 10 minutes to discuss. I heard it wrongly as "You are the Country". So all my evaluation got wasted. The HR gave signal to start the GD, out of twelve, it was very much clear only three persons were performing very well. I was in rest of nine.
I missed all opportunities that I thought can work in my favor like Initiating the GD, Making sensible additions to the Discussion, moving discussion to right path and finally concluding the Discussion.
I was totally disheartened at that time. Finally the GD got over and without having further Chit Chat with any of participants I moved outside. At that time I was feeling very Demoralized. I am not expecting any call from BMR for Personal Interview. The day got ended here.

What I learnt for my future GD? Don't hesitate from the other contestant, you all are on the same table because you all are equal.

What I learnt for my life? It is not possible to win every situation but you can always try.

Rohit Jain
frohit@live.in

Deduction in Income Tax for Interest on Education Loan

              [This article was shared by www.CAConnect.in ]

Q.1 Who can claim deduction?
Only Individual can claim deduction under section 80E.

Q.2 What is Expenditure Qualified for deduction under section 80E?
Interest paid on Loan.
Loan should be taken:
1. for Study after Senior Secondary or its equivalent
2. from a Bank, Financial Institution or an Approved Charitable Institution
Interest must be actually paid for claiming deduction.

Illustration: Rohit has taken a loan  for MBA from a Bank. He has not paid any interest upto 4 Years. The accrued interest after 4 years is Rs. 40,000. He pays entire interest accrued today. What is the amount of deduction?
Answer: Rs. 40,000 because deduction under section 80E is allowed on the basis of actual payment.

Q.3 For whom education loan taken is deductible?
Deduction is allowed if loan is taken for
- Individual (himself/ herself)
- Relative (Spouse, children or any other student for whom individual is legal guardian)



Q.4 What is the Period of Deduction?
Deduction is allowed in the year when individual starts paying the interest and in subsequent 7 years or until interest is paid in full. However, Interest should be paid out of Income Chargeable to Tax.

Q.5 Does it matter the Education/ Course pursued is Full Time or Part Time?
No, it does not matter now.
Earlier, deduction was allowed only for the full-time courses.
But, the budget of 2009 changed all this and now you can claim tax benefits in respect of part-time courses too. What is required is that the course should be pursued from any government-recognised school, board or university, though not necessarily under the central government. It may be recognised even by a local authority. Even a part-time course or a diploma course will qualify for the purpose of claiming this interest deduction, provided the institution imparting such course is recognised

Illustration: Mr. Jain has taken a loan for Part Time MBA of Rs.100,000 and Rs.2,50,000 for his son for Full Time MCA. Interest paid on loan is 10%. What is amount of deduction?
Answer: Deduction will be available to Mr. Jain under section 80E. Amount Rs. 35,000.

Note: Deduction is also available for education pursued outside India.

Q.6 Is there any maximum ceiling on the amount of deduction?
Earlier the maximum ceiling was Rs. 40,000.
But, currently there is no limit on maximum amount of deduction uder section 80E.

FAQ1. Suppose Ram has taken Loan of Rs. 1,00,000 for his higher studies but his father has paid the interest. Is there any deduction available under section 80E for the interest paid?
No, Interest must be paid by the person, who has taken the loan only.


FAQ2. Other Relevant points:
1. You need to obtain a Certificate from your Bank to claim deduction under section 80E by specifically segregating the principal amount and interest paid by you during the financial year.
2. You have to pay the entire amount within 8 Years from the year you starts paying the interest, otherwise after 8 years, no deduction will be allowed.

Rohit Jain
frohit@live.in

[This article was shared by www.CAConnect.in ]