Service tax and Sales tax.

Of late the topic that's been spoken about most often once your bill arrives the dinner table at a restaurant  is service tax and sales tax. Two words that seem similar to a person who has no idea of it. Let us first understand what both mean exactly. 

According to wikipedia service tax is defined as "Service tax is a part of Central Excise in India. It is a tax levied on services provided in India, except the State of Jammu and Kashmir. The responsibility of collecting the tax lies with the Central Board of Excise and Customs(CBEC)."

According to investopedia service charge is defined as A type of fee charged to cover services related to the primary product or service being purchased. For example, a concert venue may charge a service fee in addition to the initial price of a ticket in order to cover the cost of security or for allowing electronic purchases. Another example would be a fee for using the ATM of a competing bank.

From calculation point of view the "service tax" amount is charged on the service charge @4.94% and not the items consumed. Most of the hotels tend to misguide their customers on this point.They calculate service tax on the items consumed. The difference here is huge. This thereafter becomes an income to the owners.

Here is an example to illustrate this.

Food and beverages			Rs. 2,000
Service charge			Rs. 200
Service tax 4.94%			Rs. 9.88
Total			Rs. 2,210

This is how the charges are actually suppose to be. But what most of the hotels do is given below.

Food and beverages			Rs. 2,000
Service charge			Rs. 200
Service tax 4.94%			Rs.108.68
Total			Rs. 2,309

There is Difference of Rs.99 this becomes a income for them. So now the next time you at a hotel with a bill in your hand you know exactly what to do.

Financial planning???

The first question that pops up in most people's mind.

Investopedia definition "A comprehensive evaluation of an investor's current and future financial state by using currently known variables to predict future cash flows, asset values and withdrawal plans."

Let me just take a situation into consideration: God forbid an emergency pops up in your house and one among your family member needs to under go a operation or a treatment, what would you do in such a situation? There are so many things to be taken care at the moment.

For example understand whether the problem is genuine (thanks to the doctors who now a days magnify and probably even add up things), take second opinion, look after the finance and, in case existence of health insurance run around for the claim. Lets look at the same situation from another aspect. What if you just have to go the hospital get treated and come back? Doesn't it sound a little more comfortable? 

Let me share a case. There was this person(Mr. A) who had severe stomach pain. After a few tests the doctor practicing at one of the biggest hospitals declared it as Cancer. Mr. A was shattered. Fortunately he had a medical cover. Just to accelerate his claim settlement he got in contact with Certified Financial Planner(CFP) with some medical knowledge and a good network.  On checking the reports the CFP did not find any traces of cancer but felt it was a case of Kidney stones. On getting a second opinion the doctor agreed with the CFP. All this matter was then handled and settled by a CFP. The doctor was made aware that he cant get away by fooling innocent people and a claim for Kidney stones was raised and instantly settled by the insurance company. That's the reality of the world.

CFP is a person who looks after all aspects of a personal finance. They first Secure your present by checking your insurance covers. Help you in understanding and putting down your goals. Invest in such a way that all your dreams are fulfilled. They offer you services like Insurance Planning, Investment Planning, Tax Planning, Child education planning, Child marriage planning, Retirement planning and Comprehensive Financial Planning.

Once a Financial Planner takes over all these aspects then an individual's problems are reduced to a great extent. During times of market crises a CFP doesn't promise growth but would definitely design and implement a value based strategy to minimize the possible loss.

For people who are interested in knowing there current financial position and want to over come their shortcomings by seeking the assistance of a professional financial planner (CFP) please fill in the form in the link below.

https://docs.google.com/spreadsheet/viewform?pli=1&formkey=dGxTOENXejVKdUVUWXJyalBXa29rb3c6MQ#gid=0 

We would be glad to assist you and help you in achieving your financial goals   

Find cfp certification services in Hyderabad on Freeads.in

Find cfp certification services in Hyderabad on Freeads.in

Pre retirement counselling

Pre-retirement counseling is primarily concerned with developing an adequate corpus for retirement.

Key areas to be focused -
1. What is the inflation rate expected to prevail during post retirement
2. What could be required medical expenses / emergency requirement post retirement
3. Selection of investment as well as annutiy vehicles post retirement
4. Activities desired to be performed or executed post retirement.

Areas of concern -
1. Increase in life spans
2. Quantum of money that can be spent for piligrim and other tour during retirement.
3. Individual fear including loss of identity, loss of social contacts, boredom, and loss of income.

The right mix of enjoyable and interesting leisure activities will help people maintain a strong sense of identity and an active social network.

Senior Citizen Savings Schemes

Interest payable, Rates, Periodicity etc.

• 9.30% per annum, payable from the date of deposit of 31st March/30th Sept/31st December in the first instance & thereafter,
• Interest shall be payable on 31st March, 30th June, 30th Sept and 31st December. 

Investment limits and Denominations

• There shall be only one deposit in the account in multiple of INR.1000/-
• Maximum 15,00,000.
• Account in multiple of INR.1000/- maximum not exceeding rupees fifteen lakh.

Salient features including Tax Rebate

1. Maturity period is 5 years.
2. A depositor may operate more than a account in individual capacity or jointly with spouse. 
3. Age should be 60 years or more, and 55 years or more but less than 60 years who has retired on superannuation or otherwise on the date of opening of account subject to the condition that the account is opened within one month of receipt of retirement benefits.
4. Premature closure is allowed after one year on deduction of 1.5% interest & after 2 years 1% interest.
5. TDS is deducted at source on interest if the interest amount is more than INR 10,000/- p.a. 
6. The investment under this scheme qualify for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.

Post Office Monthly Income Account Scheme

Interest payable, Rates, Periodicity etc.

• 8.50% per annum   w.e.f. 01.04.2012
   

Investment limits and Denominations

• In multiples of INR 1500/-
• Maximum INR 4.5 lakhs in single account and INR 9 lakhs in joint account.

Salient features including Tax Rebate

1. Maturity period is 5 years.
2. Can be prematurely encashed after one year with some conditions. 
3. No Bonus is admissible on maturity in respect of MIS accounts opened on or after 01.12.2011.

National Savings Certificate (IX Issue)

Interest payable, Rates, Periodicity etc.

• Rate of interest 8.90%.
• Maturity value of a certificate of INR.100/- purchased on or after 1.4.2012 shall be INR. 238.87 after 10 years. 

Investment limits and Denominations

• Minimum INR. 100/-
• No maximum limit.

  • Denominations available - INR. 100/-, 500/-, 1000/-, 5000/- & INR. 10,000/-.

Salient features including Tax Rebate

1. A single holder type certificate can be purchased by an adult for himself or on behalf of a minor or to a minor.
2. Interest on these certificates shall be liable to tax under the Income-Tax Act, 1961 (43 of 1961, on the basis of annual accrual specified in rule15, but no tax shall be deducted at the time of payment of discharge value.