Latest Expert Exchange Queries

Make your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TDS :: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India :: VAT RATES :: list of goods taxed at 4% :: empanelment :: cpt :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARD :: due date for vat payment :: VAT Audit
 
 
« General »
 Accounting relief for IndAS companies
 How you can reduce your tax to zero if you have income within Rs 10 lakh
 NRIs’ overseas bank info needed only for tax refund
 Non-performance: I-T dept transfers 245 commissioners
 Income Tax efiling: Tax implications resulting from clubbing of income
 Guidelines for selection of cases for scrutiny during the financial-year 2017-2018-regd
  GST: How companies are gaming the system
 Goods And Services Tax transparency: Elimination of added taxes to boost investment in realty
 In a first, Income Tax department to charge govt official under new benami law
 Income Tax Return Filing: 10 common mistakes people make while filing return of income
 Income Tax efiling: A few essential facts for senior citizens to keep in mind

Savings may get level field
August, 25th 2008

In a move that would impact the small investor, the government has decided to revisit tax treatment of the new pension scheme (NPS), employees provident fund (EPF), unit-linked insurance plans (ULIP) and mutual funds. This follows demand from regulators such as SEBI and IRDA for a level-playing field between the windows which serve as major avenues of savings and investment for a large number of people.

Chief economic adviser Arvind Virmani has initiated a study to identify the tax changes necessary for a level playing field for NPS and EPF, ULIPs and MFs. For example, withdrawal from NPS is subject to exempt-exempt-tax (EET) while the levy is not applicable on EPF withdrawals.

A similar disparity between ULIPs and MFs has been discussed by an apex panel comprising financial sector regulators. Entry load has been scrapped on open-ended and close-ended MFs. However, there is no restriction on ULIPs, which are aggressively marketed by insurance companies, doling out huge commissions. A technical paper covering all the aspects would be prepared by Mr Virmani.

The paper would be presented to the High-Level Coordination Committee On Financial Markets (HLCCFM), which comprises representatives from RBI, PFRDA, IRDA and SEBI, that discussed the issue at its recent meeting. The panel had decided the inconsistencies in the tax system, particularly with respect to instruments in the financial markets, should be studied by the chief economic adviser.

Disparities in the tax treatment of various schemes also figured in the meeting. It may be pointed out that NPS is subject to EET regime, denying tax benefit at the time of withdrawal of the proceeds, in contrast with tax-free EPF withdrawals. Even though both schemes are similar in nature, tax treatment is different.

The view within the panel is that all contractual savings such as investments in PF and insurance schemes should enjoy tax benefits. There is no need to extend such benefits to non-contractual savings, the regulators feel. However, the decision has been left to the chief economic adviser.

In the MFs-versus-ULIPs debate, SEBI has circulated a paper seeking level playing field to serve retail investors better. The parity should be extended to all areas including tax benefits, regulations governing marketing, operations and expenses. In response, IRDA has argued about the uniqueness of ULIPs and the logic behind the different regulations. However, both the regulators will discuss the issue to examine the nature and characteristics of ULIPs and MFs and see if there is a need for level-playing field between them in terms of regulations and tax benefits.

As the capital market is hit by volatility and downturn, investment avenues such as MFs and ULIPs are of significance to the small investor. For the salaried class, returns on EPF and NPS are important as they serve as key post-retirement support.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Bath SEO Company Birmingham SEO Company Bradford SEO Company Brighton and Hove SEO Company Bristol SEO Company Cambridge SEO Company Canterbury SEO Company Carlisle SEO Company Chester SEO Company Chichester SEO Company Coventry SEO Compan

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions