Time Wasters

"Time Wastage" means time spent by someone on non-productive activities or that do not serve any useful purpose.

In day to day life generally, one may not waste his/her time knowingly on any activity(s) that do not serve any purpose. However, there could be certain factors that may crop up during useful or productive activities, which may lead to wasting of the time. These factors may be termed as "Time Wasters", which may be generically applicable everywhere, or may be specifically applicable. 

Below are some of the key time wasters that are not classified for any specific duration or for any location (like office or home):

Interruptions: It means when a person is involved in some activity and some external agency (living or non-living) attempts to get the attention of this person on an another activity that is unrelated to the original activity hampering to the progress of the original activity that was being carried out by the person, then that another activity is an interruption for the person involved in the original activity. Examples of such interruptions could be the ringing phone, barking of a dog, doorbell, loud music in the neighborhood, etc.

Unclassified Task: When a person involves him/herself randomly on a task that has not been classified for some priority criteria, which may have been judged on the basis of Urgency and Importance, such a task is a time waster unclassified task. For example, if a person has to go to the office, or has to prepare food, or has to clean the bookshelf, or checking social media messages, or has to read a book. S/he needs should prioritise these tasks on the basis of urgency and importance. However, if s/he randomly selects one of these activities, there is a likely possibility of selecting a wrong task, leading to time wastage.

Dis-organised Place: If the place of carrying out the activities is not organised in a specific manner, it may lead to extra time involvement for searching an item, which may to the spending of extra time then the regular time needed to search that item. Then such a place poses to be a time waster.

Unnecessary Breaks: If the time gaps taken during the execution of an activity are more than the required gaps in terms of count &/or durations, then such breaks pose to be time wasters. For example, checking social media messages, coffee breaks, etc.

Social Media Messaging: If a person involves him/her regularly on checking and posting the messages on the social media like Whatsapp or Facebook, etc. in an uncontrolled manner, then such messaging becomes a time waster.

Chit-Chats: If the person involves in chit-chats with some person or group, in-person or over any other medium like telephone or group discussion, which is expected to lead no constructive results, such chit-chats may be considered to be time wasters.

Miscellaneous: There could be other time wasters that may or may not be appreciably considered as time wasters. Such as ineffective multitasking of the activities, unnecessary travelling, extensive socialisation, unwanted/unnecessarily putting own views in some other person's matters, etc.

- The author is a management professional reachable on agarwal.tanmay@gmail.com.

Importance of ITR Filing After 31st May Every Year

Though, Indian Income Tax Department (ITD) may introduce the Income Tax Return (ITR) forms for the previous year in the month of April itself. The usual last date of filing ITR is generally 31st July for the individuals (not auditable u/s 44AB). 

People may start filing ITRs from the month of April. However, there are certain benefits of filing ITRs after 31st May, especially for the salaried people, where employer issues Form-16 (Form-16A for professionals / others) and TRACES generated Form-26AS forms the basis for filing the ITRs.

Form-26AS is a statement of TDS deducted by the employer(s) or financial institution(s) or any deductor(s) who had paid some taxable amount to a person / entity for his / her / their services / products and had deposited in the ITD as per the prevailing IT laws. The credit of TDS in Form-26AS is reflected only after the filing of TDS returns by the employers / institutions / deductors.

These days Form-16 & Form-16A are directly generated from ITD TDS website known as "TRACES" after the filing of TDS returns by the employers / deductors. The due date of filing TDS returns for the January to March quarter is 31st of May. Therefore, one may not get his / her Form-16/16A from the employer before 31st May. So, it also means that one may not get the updated TDS entries in his / her Form-26AS before 31st May.

If one files his / her ITR before 31st May, it might be a possibility that there could be some differences in the TDS reflected on Form-26AS with the TDS depicted in the salary / payment slips. This could lead to the issue of notices u/s 143(1) issued by ITD stating the mismatch of TDS claimed in the ITR and TDS entries available in Form-26AS. This could further result in demand of tax and interest by ITD from the taxpayers. 

So, the ideal duration to early file the ITRs without last minute rush is to file between 01st June to 15th July every year.

File your ITR well in time and relax!

- The author is an ITD Certified ITR Filing Practitioner reachable on agarwal.tanmay@gmail.com.

Tax Free Gifting!

Giving gifts to near and dear ones is very much prevalent in our Indian culture. Generally, gifts are given to express love and affection. Sometimes, we may also help the needy one by providing some monetary help. However, Gifts can also be good tax planning tools.

As per Income Tax Provisions the following income shall be chargeable to Income Tax under the head ‘Income from other sources', Where an individual or a Hindu undivided family receives, in any previous year, from any person or persons:

a) Any sum of money, without consideration, the aggregate value of which exceeds Rs.50,000/-, the whole of  the aggregate value of such sum;

b) Any immovable property:
i) without consideration, the stamp duty value of which exceeds Rs.50,000/-, the stamp duty value of such property;
ii) for a consideration, which is less than the stamp duty value of the property by an amount exceeding Rs.50,000/-, the difference between the stamp duty value of such property and the consideration received.

c) any property, other than immovable property,:
i) without consideration, the stamp duty value of which exceeds Rs.50,000/-, the stamp duty value of such property;
ii) for a consideration, which is less than the stamp duty value of the property by an amount exceeding Rs.50,000/-, the difference between the stamp duty value of such property and the consideration received.

Provided further that this clause shall not apply to any sum of money or any property received:
(a) from any relative; or
(b) on the occasion of the marriage of the individual; or
(c) under a will or by way of inheritance; or
(d) in contemplation of death of the payer or donor, as the case may be;

Please, note that gifts received from following relatives (donors) are tax free for Donor as well as Donee.

List of Male Donors: 
Father, Brother, Son, Grand Son, Husband, Sister‘s Husband (Jija), Wife’s Brother (Sala), Husband’s Brother (Dewar), Mother’s Brother (Mama), Mother’s Sister’s Husband (Mausa), Father’s Brother (Chacha/Tau), Father’s Sister’s Husband (Fufa), Grand Father (Dada,Nana), Daughter‘s Husband (Jamai), Spouse’s Father (Sasur), Spouse Grand Father (Dada Sasur)

List of Female Donors: 
Mother, Sister, Daughter, Grand Daughter (Poti) Wife, Brother’s Wife (Bhabhi), Wife’s Sister (Sali), Husband’s Sister (Nanad), Mother’s Sister (Mausi), Wife’s Brother’s wife (Sala Heli), Father’s Brother’s Wife (Chachi or Tai), Father’s Sister (Bua), Grand Mother (Dadi, Nani), Son’s Wife (Bahu or Putra Vadhu), Spouse’s Mother (Saas)

In other-words, any lineal ascendant or descendant of Individual or Spouse of Individual is a relative.

Keeping in mind the above provisions, we can plan our gifts so as to reduce final tax liability. 

Tax Planning through Gifts to Wife or Son’s Wife:
Though gift received from a Relative is Tax Free, however, Gifts given to Wife or Son’s wife attract clubbing provision. This means any income arising from investment of such gifted sums will be clubbed in the hands of Donor i.e. Husband or Father-In-Law, as the case may be. So, it is always better to invest the gifted amount in such investment options, which are tax free. E.g. the amount can be invested in Listed Company Shares, PPF, ELSS Mutual Funds etc. As Long term Capital Gains earned on selling of these investments or any income accruing on these investments (like interest on PPF account) will be tax free, so it will not increase the tax liability of Husband. And later, wife can invest the earned income anywhere she likes and income on that investment will not be clubbed in Husband’s income.

Tax Planning through Gifts to Parents or Major Children:
If your income is taxable in 30% tax slab than you can plan gifts to your Parents, who are not having taxable income or the income is taxable in lower tax brackets. E.g. if one has surplus funds of 50 lacks, s/he can gift 25 lacks to his/her parents. And suppose his/her parents invest these funds in the bank FDR then each of them may get annual income of Rs.2,25,000/- (say @9%), which will not be liable to any tax. If the same income is taxed in the individual hands, the tax liability would have been Rs.1,35,000/- (@ 30% on 4,50,000/-). In this way, one may save substantial amount of tax year after year. Similarly, if one has major Childrenm who are yet to earn any income then money can be gifted to them. So, that an additional exemption limit and benefit of lower taxation slab can be utilized.

Tax planning through Gifts on occasion of Marriage:
1) Gifts received on occasion of marriage of an Individual are tax free in the hands of Giver and receiver both,
2) Clubbing provisions are not attracted, 
So this provision can be utilized to its utmost benefit.
Gifts valuing below Rs.50,000/- (in aggregate during a year)
Gifts of aggregate value upto Rs.50,000/- can be accepted from any one without attracting any tax liability.

Gifts under a WILL:
Gifts to any person under WILL are Tax Free.

In Gist: 
Gifts can always be planned from a person in a higher tax bracket to a lower tax bracket or Nil Tax bracket. Please note that the gifts should be reasonable and justifiable. It’s always better to prepare a Gift Deed for proper recording and valid proof of transaction. Duly incorporate therein the PAN and Address of the Donor, nature of Gift, Value of Gift, Reasons for Gifting, etc. Take the benefit of same before they disappear!

Official Music Video: Anjana Main Chala

First musical love story video titled "Anjana Main Chala" produced by my sister Priyanka Agarwal under her own production house, Creative Sailor Productions.

Know Meaning of Characters in Income-Tax PAN

Most of the readers of this blog would have PAN (Permanent Account Number) issued by the Indian Income-Tax Department. However, do you know what does the characters in the PAN mean?

Below is the format of a PAN:

It is a 10 digit alpha-numeric number, where first five characters are letters, the next four numbers & the last one a letter again. These 10 characters can be divided in five parts explained below.

1. First three characters are alphabetic series running from AAA to ZZZ.

2. Fourth character of PAN represents the status of the PAN holder.

C — Company

P — Person

H — HUF(Hindu Undivided Family)

F — Firm

A — Association of Persons (AOP)

T — AOP (Trust)

B — Body of Individuals (BOI)

L — Local Authority

J — Artificial Juridical Person

G — Government

3. Fifth character represents first character of the PAN holder’s last name/surname. In case of all other assesees 5th field will be first letter of Name/First Name.

4. Next four characters are sequential number running from 0001 to 9999.

5. Last character in the PAN is an alphabetic check digit.

Now a days, the DOI (Date of Issue) of PAN card is mentioned at the right (vertical) hand side of the photo on the PAN card.

-Tanmay

What is Ferrite Core?

In electronics, a ferrite core is a type of magnetic core made of ferrite on which the windings of electric transformers and other wound components such as inductors are formed. It is used for its properties of high magnetic permeability coupled with low electrical conductivity (which helps prevent eddy currents). Because of their comparatively low losses at high frequencies, they are extensively used in the cores of RF transformers and inductors in applications such as switched-mode power supplies, and ferrite loop stick antennas for AM radio receivers.

Difference in ‘Contract of Employment’ & ‘Contract for Employment’?

When there is ‘Employer/Master’ & ‘Employee/Servant’ relationship:

Where employer not only directs ‘what & when a thing has to be done’ but also ‘how it has to be done’ & the employee is bound to carry out employer’s instructions, it is called ‘Contract of Employment’. E.g. an employee of ABC Limited has a ‘Contract of Employment’. Here the fee received comes under ‘Salaries’.

Where As

When the employer merely directs ‘what has to be done’ while the methodology for carrying out the job is left to the discretion of the employee, it is called ‘Contract for Employment’. This applies especially to professionals & technocrats who take up assignments. E.g. Chartered Account working for ABC Limited has a ‘Contract for Employment’. Here the fee received comes under either income from ‘Business or Profession’ or income from ‘Other Sources’.