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| Smart Money India |
| Personal Finance blog targeted at Indians and Non-Resident Indians. Collection of incisive and well researched articles related to topics such as PERSONAL FINANCE, MUTUAL FUNDS, STOCKS, INSURANCE, INVESTMENTS, LOANS, TAX PLANNING, EQUITY, DERIVATIVES |
| Language: English |
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| Total Unique Visitors: 1534818 |
| Visitors Out: 4605 |
| Total Visitors Out: 28752 |
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| All you need to know about ASBA - Application Supported by Blocked Amount |
| 2009-09-24 12:04:40 |
ASBA means “Application Supported by Blocked amount”. ASBA is an application containing an authorization to block the application money in the bank account, for subscribing to an issue. If an investor is applying through ASBA, his application money shall be debited from the bank account only if his/her application is selected for allotment after the basis of allotment is finalized, or the issue is withdrawn/failed. In case of rights issue his application money shall be debited from the bank account after the receipt of instruction from the registrars.It is a supplementary process of applying in initial public offers (IPO), right issues and follow on public offers (FPO) made through book building route and co‐exists with the current process of retail investors using cheque as a mode o...
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| Check your Demat Account Holding Statement |
| 2009-09-20 05:23:06 |
After depositing a cheque in the bank account, we normally check the account statement to ensure funds have been credited to the account. But how often do we check our demat account statement, to check whether the purchased shares have been credited to the demat account. Please read on to find out why you should be doing that.
Shares are kept in the dematerialized or electronic form in two depositories – National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). Depositories receive shares through Depository Participants (DP) and not directly from investors. DPs are registered with the Securities Exchange Board of India (SEBI) and acts as agents for depositories. To trade in shares, you need to have two accounts – a trading account with a share broker and a demat account with a DP.
You can have these two accounts with different entity, but it is advisable to keep trading and depository accounts with the same entity to avoid settlement issues. I...
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| Withdrawal of IPO Application Post Issue Closure |
| 2009-09-20 04:33:01 |
Yes, withdrawal of Initial Public Offer (IPO) application can be done even after the issue closure!
It is quite commonly known that in book built issues applicants can revise or withdraw their bids till the issue closure date. However not many investors know that they can cancel their application even after the issue closure date. In a book-built issue the applicants can withdraw their applications anytime before allotment of shares/securities by the company. Investors have the right to withdraw application before finalization of allotment even if the application money has been realized by the company.
Issue of securities in an IPO is, inter alia, governed by SEBI (Disclosures and Investors Protection) Guidelines, 2002 - popularly known as SEBI DIP Guidelines, which provides that an applicant can withdraw applications in a public issue. However, note as per the SEBI DIP Guidelines, Qualified Institutional Bidders (QIBs) are not allowed to withdraw their bid after the closure...
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| Charges on Closure of Demat Account |
| 2009-09-14 03:06:33 |
Shares are kept in the dematerialized or electronic form in two depositories – National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). Depositories receive shares through Depository Participants (DP) and not directly from investors. DPs are registered with the Securities Exchange Board of India (SEBI) and acts as agents for depositories. To trade in shares, you need to have two accounts – a trading account with a share broker and a demat account with a DP.Investors are free to change their DP if they are not satisfied with the service provided by the DP, or the DP is not prompt with settlement of shares bought or sold or the charges are high, or for any other reason whatsoever.To close a Depository Account, application has to be submitted in the pr...
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| Medical / Health Insurance Premium - Mediclaim deduction under Section 80D |
| 2009-03-17 08:10:23 |
Section 80D of the Income Tax Act provides for deduction of Health Insurance premium or Medical Insurance premium or Mediclaim premium from Gross Total Income. Just like Life Insurance premium payment can help you save tax under Section 80C, even Medical Insurance premium payment can also help you save tax under Section 80D.Note that the Income Tax benefit available for Medical Insurance premium under Section 80D is separate and distinct from the tax benefits available under Section 80C. To know more about section 80C deductions, please read “Saving Income Tax through Smart Tax Planning – Guide to Section 80C Deductions”.Eligible AssesseesIndividuals and Hindu Undivided Family (HUF) only.ScopeMediclaim premium paid under:Medical insurance scheme of General Insurance Corporation appro...
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| Medical Expenses Allowance vs. Medical Expenses Reimbursement |
| 2009-03-07 06:01:49 |
"What's in a name? That which we call a roseBy any other name would smell as sweet."- William Shakespeare, "Romeo and Juliet"But sometimes a name can make a lot of difference. For example whether you are in receipt of Medical Allowance or Medical Reimbursement from your employer, will make lot of difference to your tax liability. Let’s understand by way of an example.Mr. Smart is getting Medical Expenses Reimbursement from his employer to the extent of Rs. 15,000 every year. On the other hand, Mr. Fool is in receipt of Medical Expenses Allowance of Rs. 15,000 every year from his employer. As per provisions of the Income Tax Act, Mr. Smart will not have to pay any tax on the Medical Expenses Reimbursement, while the Medical Expenses Allowance will be fully taxable for Mr. Fool. Let’s un...
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| Tips on Effective Credit Card Usage |
| 2009-02-13 00:23:55 |
No don’t worry, this is not another spiel on how you should use credit card within your income limits. This is neither a guide on how you should not overburden your finances by splurging on credit cards as if there is no tomorrow. Certain level of financial prudence is assumed on the part of the card user. Then what exactly is the theme of this article?Well this article is about how to use credit card most effectively or efficiently. In other words how to extract the most out of your credit card – WITHOUT paying any charges. I repeat, WITHOUT paying any charges. Am also including some practical tips gained by using multiple credit cards over the years.First and foremost, NEVER regard your credit card as a financing mechanism. Use it just for operational convenience and “float” enjo...
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| Charges other than Brokerage for Stock Exchange Transactions |
| 2009-02-10 07:33:49 |
Are you a day trader or active trader? One of the most pertinent question you should ask yourself is - What is your trading cost? Simple question, but not so simple answer. Did you just say - “30 paisa for Delivery and 3 paisa for F&O”. Wait, have you considered all the charges you are paying for executing trades on stock exchange. Quite often you recall and consider only your brokerage cost. But there are so many other charges which are levied on Stock exchange transactions apart from brokerage.Take Check out the contract note and examine. You will see the following charges in addition to Brokerage charges – Securities Transaction Tax (STT), Stamp Duty and Other Charges. In most of the cases the break up of “Other Charges” is not provided, but note it consists of Transaction...
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| Non-Resident Indian (NRI) – Different type of Bank Accounts |
| 2009-02-10 07:00:51 |
Just became a Non-Resident Indian (NRI)? One of the first practical issues you face is regarding your bank accounts in India. What kind of bank account can be maintained and operated – NRO / NRE / FCNR account? Note that NRI for the purpose of bank accounts is as per FEMA definition.NRIs / PIOs / OCBs are permitted to open bank accounts in India out of funds remitted from abroad, foreign exchange brought in from abroad or out of funds legitimately due to them in India, with an authorised dealer. Such accounts can be opened with banks specially authorised by the Reserve Bank in this behalf. NRIs can open and operate the following five types of Bank accounts.1. Ordinary Non-Resident Rupee Accounts (NRO Accounts)These are Rupee denominated non-repatriable accounts and can be in the form of ...
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| Non-Resident Indian (NRI) - Definition under Income Tax and FEMA. Tax Implication of Residency |
| 2009-02-06 23:51:00 |
"To be, or not to be, that is the question" – thus pondered Shakespeare in Hamlet. Well there isn’t really a choice we have “To be, or not to be” Resident or Non-Resident, but for a person moving outside India or traveling frequently to India, residency is of paramount importance, since that is what determines what Income is taxable and also what sort of bank accounts he can open and operate.Who is a Non-Resident Indian?An Indian abroad is popularly known as Non-Resident Indian (NRI). NRI is legally defined under the Income Tax Act, 1961 and the Foreign Exchange Management Act, 1999 (FEMA) for applicability of respective laws.NRI as per FEMA NRI is defined under FEMA as a person resident outside India who is either a citizen of India or is a Person of Indian Origin (PIO).PIO means ...
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