• You see a gorgeous girl at a party. You go up to her and say, “I’m fantastic in bed.” That’s Direct Marketing.
• You’re at a party with a bunch of friends and see a gorgeous girl. One of your friends goes up to her, and pointing at you says, “He’s fantastic in bed.” That’s Advertising.
• You see a gorgeous girl at a party. You go up to her and get her telephone number. The next day you call and say, “Hi, I’m fantastic in bed.” That’s Telemarketing.
• You’re at a party and see a gorgeous girl. You get up and straighten your tie, walk up to her and pour her a drink. You open the door for her, pick up her bag after she drops it, offer her a ride, and then say, “By the way, I’m fantastic in bed.” That’s Public Relations
• You’re at a party and see a gorgeous girl. She walks up to you and says, “I hear you’re fantastic in bed.” That’s Brand Recognition.You’re at a party & when you approach to that gorgeous girl with a line that I’m fantastic in bed.” and she reply you with a Slap on your face .. That’s “Customer’s Feed Back”

There are basically two categories of applicants:
1. Individuals / HUFs
2. Others.

1. Individuals and HUFs

ITR 1
This form can be used only by an individual having a salary and interest income. Form ITR-1 cannot be used if the individual has any income under other heads like:

a. Property rental income

b. Capital gains

c. Dividend income from shares of foreign companies (which income is not tax free in India)

d. Winning from lotteries or any other prize money

Thus, even under the head “Income from Other Sources”, if the taxpayer has any income other than interest income then he cannot use ITR 1. The IT department websites offers two versions of ITR 1 — Version 1 is two pages and Version 2 is three pages — though honestly the font size seems to be the only difference between the two.

It may be noted that this form is likely to be of use to a very limited number of taxpayers since most salaried taxpayers have income from other heads as well as income from sources other than interest (which would be chargeable to tax under the head ‘Income from Other Sources’). Therefore, one can only wonder about the actual utility of this form.

ITR 2
This form has to be used by Individuals/ HUFs having income from any source other than business or professional means. Thus, this form is to be used if, besides salary and interest income, the Individual / HUF has income from house property or capital gains (short or long term), or income from other sources. This is probably one that most salaried professionals will be using.

This form is 12 pages long. But don’t get alarmed. Out of the 12 pages, six pages are only by way of guidance notes. The actual form is only six pages long.

ITR 3

ITR 4
The last, ITR 4, is to be used by Individuals/ HUF having a proprietary business or profession. Thus, any person who has his own business/profession (even if he is also a partner in a partnership firm), then he would have to use ITR 4. This form is 30 pages long with 10 pages of guidance notes.

2. Others

ITR 5
This form is to be used by Firms/ AOPs/ BOIs to file their returns. It is a 22-page Form with 30 schedules to it. In addition, there are 10 pages of guidance notes to help taxpayers fill up the form. Apart from the details of the income and tax, this form requires the taxpayer to fill in details of the FBT. ( Fringe Benefit Tax)

ITR 6
This form is to be used by companies to file their returns. It is a 24-page form with 34 Schedules to it. This form replaces the earlier Form no 1. In addition to 24 pages, there are nine pages of guidance notes to help taxpayers in filling up the form. Apart from the details of the income and the tax, this form also requires the taxpayer to fill in details of the FBT.

ITR 7

ITR 8
This form is to be used by those who are liable to file returns for fringe benefits and not the Return of Income. It is a four page form with three additional pages of guidance notes.

So, Am I succeeded in confusing or clarifying? If it’s the latter then my is done. The above should help you to select the form which is most appropriate for you and that is half the battle won for paying your tax. The other half of course is finding creative ways to save your tax! Lets leave that for another article.

Disclaimer: While I have made efforts to ensure the accuracy of my content neither this website nor the author shall be held responsible for any losses/ incidents suffered by people accessing, using or is supplied with the content.

We’ve known for years that antioxidants can help prevent heart disease and cancer, reduce blood pressure and slow the effects of aging. These naturally occurring compounds protect the body from harmful, excess free radicals, sweeping them up before they can cause damage. And the best way to lay an antioxidant-rich foundation that’s inhospitable to toxins and free radicals is through a combination of whole foods.

 BERRIES 

Few fruits have quite the provocative allure, the fragile charm or the nutrients of berries. They’re full of fiber, minerals and vitamins, and loaded with healing antioxidants. Blueberries, raspberries and blackberries are rich in proanthocyanidins, antioxidants that can help prevent cancer and heart disease. Strawberries, raspberries and blackberries contain ellagic acid, a plant compound that combats carcinogens. Blueberries also appear to delay the onset of age-related loss of cognitive function.

Quick Tips: Stir raspberries into vanilla yogurt, add whole blueberries to salads, or dress up sliced strawberries with a little honey, balsamic vinegar and black pepper.

 BROCCOLI 

Maybe you never listened when Mom said, “Eat your broccoli.” So listen now. Broccoli and other cruciferous vegetables like cabbage, cauliflower and Brussels sprouts, can help prevent cancer and ward off heart disease. Cruciferous vegetables contain a compound called indole-3-carbinol (I3C - a potent antioxidant that breaks down estrogen in the body) that reduces the risk of breast cancer and other estrogen-sensitive cancers, like cancer of the ovaries and cervix. Other studies have shown that broccoli can help fight cervical dysplasia, a precancerous condition. Broccoli also contains other protective constituents like beta-carotene, which can help prevent cancer and heart disease.

Quick Tips: Wrap cooked, chilled broccoli with roasted pepper strips, or toss steamed broccoli with olive oil, chopped black olives and crushed red pepper flakes.

 TOMATOES 

Tomatoes are fast becoming one of our favorite modern foods, and for good reason — they can ward off certain kinds of cancer, prevent macular degeneration and cataracts, and help maintain mental function as we age. Tomatoes contain lycopene, a relatively rare member of the carotenoid family, also found in pink grapefruit and twice as powerful as beta-carotene. Studies have shown that men who eat more tomatoes or tomato sauce have significantly lower rates of prostate cancer. Other studies suggest lycopene can help prevent lung, colon and breast cancers. Tomatoes also contain the antioxidant glutathione, which helps boost immune function. Note: cooked tomatoes are preferable, since heat allows more desirable antioxidants in tomatoes to be made available to the body. And because lycopene is fat-soluble, eating tomatoes with oil can improve absorption.

Quick Tips: Add minced sundried tomatoes to mashed potatoes, or toss Roma tomatoes with chopped fresh basil and olive oil and serve over pasta.

 RED GRAPES 

A little red wine can keep your heart beating longer and stronger. Why? Mostly because of substances called resveratrol and quercetin found in red grapes. These potent antioxidants boost heart health by acting as free-radical scavengers, reducing platelet aggregation and helping blood vessels remain open and flexible. Resveratrol can also protect against cancer and reduce the risk of inflammatory diseases, gastric ulcers, stroke and even osteoporosis.

Quick Tips: Snack on frozen red grapes for a sweet treat, or heat organic red wine with cinnamon sticks and a few whole cloves.

 GARLIC 

The “stinking rose,” perhaps the world’s oldest known medicinal and culinary herb, is packed with antioxidants that can help fend off cancer, heart disease and the effects of aging. The sulfur compounds that give garlic its pungent odor are thought to be responsible for its healing benefits. Studies have shown that garlic keeps the heart healthy by lowering cholesterol levels, reducing blood pressure, fighting free radicals and keeping blood from clotting. Other studies suggest that eating garlic regularly can help prevent cancer. It also has potent anti-fungal properties and can help treat asthma and yeast infections.

Quick Tips: Roast whole heads of garlic until soft, and spread on warm baguette slices or puree roasted peppers with garlic for a fast sauce.

 SPINACH 

Popeye may have thought eating spinach gave him strength, but it also allowed him to hit a nutritional jackpot. Because lutein (an antioxidant found in spinach) is the main pigment in the macula - the region of maximum visual sensitivity - it can help protect your vision. Studies have shown that people who eat spinach are less likely to develop cataracts and macular degeneration, the two most common causes of vision loss. Lutein appears to work by shielding the retina from sun damage and fighting free radicals that can harm the eyes. Some preliminary studies have suggested that lutein can also help prevent heart disease.

Quick Tips: Stir chopped, fresh spinach and crushed walnuts into steamed brown rice, or lightly wilt baby spinach leaves and toss with olive oil.

 TEA 

The most frequently consumed beverage in the world may also be one of the best ways to prevent a number of degenerative diseases. Tea has been shown to significantly reduce the risk of cancer, heart disease, stroke and other diseases. It was originally thought that green tea had more antioxidants than black tea, but recent studies suggest that they are equally beneficial. The catechins in green tea are oxidized in the manufacturing process of black tea, forming free-radical fighting theaflavins.

Quick Tips: Poach salmon in an infusion of green tea and ginger. Or boil soba noodles in green tea and toss with sesame seeds and a dash of toasted sesame oil.

 CARROTS 

Carrots are loaded with a potent antioxidant called beta-carotene, a member of the healing family of carotenoids. Also found in beets, sweet potatoes and other yellow-orange vegetables, beta-carotene provides protection against: cancer, especially lung, bladder, breast, esophageal and stomach cancers; heart disease, and the progression of arthritis by as much as 70 percent. Note: Cooked carrots have considerably higher levels of antioxidants than uncooked, probably because heat breaks down the active compounds and makes them more available.

Quick Tips: Puree cooked carrots with low-fat chicken broth, rosemary and a dash of cream, or steam whole baby carrots and toss with nutmeg, honey and a little butter.

 SOY 

The enduring favorite of health-foods aficionados, soy can help prevent cancer, lower cholesterol, ward off osteoporosis and lessen the effects of menopause. Most of the health benefits of soy have been attributed to its content of Genistein and other isoflavones, which resemble natural estrogens in the body. Studies have shown that Genistein can help prevent breast, colon and prostate cancers. Additionally, soy can reduce both overall cholesterol levels and LDL (low-density lipoprotein or “bad”) cholesterol levels, without affecting the levels of beneficial HDL. Soy can also prevent osteoporosis and help alleviate the symptoms of menopause, such as hot flashes.

Quick Tips: Add cubed tempeh to pasta sauce, spread soy butter on a whole-wheat pita instead of peanut butter or toss soy sprouts on a salad or in stir-fry dishes.

 WHOLE GRAINS 

Your morning bowl of cereal may be a more potent source of phytochemicals than you think — as long as it’s whole-grain variety. Vitamin E in grains is a potent antioxidant that plays a role in preventing cancer, especially prostate cancer. Other studies have found that it can boost immunity, slow the progression of Alzheimer’s disease, treat and possibly prevent arthritis, prevent sunburn and treat male infertility. Grains are also rich in phytic acid, known as IP-6, a potent antioxidant that can help protect against breast, colon and liver cancers.

Quick Tips: Combine cooked bulgur wheat with chopped parsley, scallions and olive oil, or add raisins, dried apricots and minced basil to brown rice.

BANKS today offer a slew of services to the customer, which only seem to increase by the day. However, remember this: there’s no such thing as a free lunch. Let’s take stock of what you pay to avail of services for a typical savings bank account.

1. Non-maintenance of minimum balance
You must maintain a stipulated minimum balance in your account (Rs 1,000 for a nationalised bank, Rs 5000 for a private bank).

If you fail to maintain this average quarterly minimum balance, you attract a bank charge of Rs 750-1,500 respectively. You could also face fines for cash transactions at branches and ATMs.

2. Cheque book charges
Most nationalised banks provide chequebooks free as per your requirement. Many private ones, on the other hand, charge you Rs 50-200 per chequebook, if you use up more than 2-3 per quarter.

3. Account closure charges
Some banks charge Rs 50-200 if the account is closed before six months elapse.

4. Charges for certificates
Unlike most nationalised banks, private banks charge Rs 50-Rs 250 for documents such as balance certificate, interest certificate, address confirmation, signature attestation, photo attestation.

5. Cheque return charges
Nationalised banks fine you Rs 50-Rs 200 in case of cheque return (due to insufficient funds, signature mismatch etc) but private ones charge you Rs 100-Rs 500.

6. Cash transaction at other branches
In case of a cash transaction at a branch other than where your account is opened, 1-3 transactions are free per quarter. Beyond that, be prepared to be charged at the rate of Rs 5 per for every Rs 1000 transacted.

7. ATM charges
If you use the ATM of another back for balance enquiry or cash, you could be charged anything from Rs 10-100 per transaction.

8. Account statement
RBI directs that all banks must send free quarterly statements to their customers. Should you require more statements (in case of loss etc), you may have to pay Rs 50-500 per statement.

9. ATM or Debit Card fees
Most banks offer ATM cards free of cost but some do charge their customers for debit cards. For example, ICICI Bank provides a combo ATM/ Debit card, for which it charges Rs 99 per annum.

Over and above these, there are several other charges, such as outstation clearing charge (Rs 50- 500), pay order/ demand draft charge (based on amount), standing instruction charges, home cash delivery charges, old records retrieval charges, activation of dormant account charge etc.

Note: Visit the bank’s web site or any of the branches, for a copy of these expenses. It is mandatory for every bank to give it to you.

ING MF has unveiled a new fund called ING Latin America Equity Fund and it is a an open-ended fund of fund scheme. The primary investment objective of the scheme is to seek capital appreciation by investing predominantly in ING (L) Invest Latin America Fund. The scheme may, at the discretion of the Investment Manager, also invest in the units of other similar overseas mutual fund schemes, which may constitute a significant part of its corpus. The Scheme may also invest a certain portion of its corpus in money market securities, in order to meet liquidity requirements from time to time.

ABN Amro mutual fund announced that ABN Amro Asset Management (India) Limited, a public limited company is converted to a private limited company ABN Amro Asset Management (India) Private Limited.

We have received one circular that the amount as donation will be deducted from our salary to pay to recognized charitable trust (which has 80G deduction number allotted by IT Department) for the hospitalization of cancer patient. Accordingly, amount is directly deducted from our salaries and the lump sum amount is paid by the Employer to that charitable trust through cheque. Charitable trust has issued 80G certificate in the name of the Employer and saying that employees can not claim deduction for this donation. My question is that “Can Employees claim deduction for this donation?” & How? Geeta Thakur , Mumbai

Yes, employees can claim deduction u/s 80G provided a certificate from the Employer is received in which employer states the fact that

• It has not claimed the deduction u/s 80G

• The contribution was made out of deduction from salaries of employees.

• The quantum of deduction made from the employee whom the certificate is being issued If you get this certificate, keep it in record and claim the 80G deduction. Since no documents required to be attached with the return , the certificate kept in your record will come handy of the income tax department wants to verify such claims.

Courtesy- http://www.taxworry.com/

Many times we come across some blog, information or news about new IPO and urging people to go for it. A number of investors, especially, beginners do not know What is an IPO at all? what are the benefits or demerits of going for IPOs. What are the term used? They want to know about listing process, book building process etc. Here we tried to put all this information in questions and answers form. Hope it comes out to be useful for all.

1 What is an IPO?
An IPO is defined as an exercise when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public.
The exercise refers the issue of shares to the public by the promoters of the company. The shares are made available to the investors at the face value of the share or with a premium as per the perceived market value of the share by the promoters.
The IPO can be in the form of a fixed price portion or in the form of a book building portion. The IPO paves way for listing and trading of the issuer’s securities.

2 What are primary/secondary market transactions?
Primary market transaction is usually referred to the purchase of shares in an IPO. The purchases are made through applications for the shares on a prescribed form. Once the shares are allotted, the share transactions are carried out in secondary market or stock exchanges.
Secondary market transactions refer to those transactions under which an investor purchases shares from another investor at the prevailing market price or at whatever price the buyer and seller agrees upon.
The primary and secondary markets are governed by a regulatory authority Security and Exchange Board of India (SEBI).
3 What are eligibility norms for making an IPO?

SEBI has laid down eligibility norms for entities planning to enter the primary market through public issues. An unlisted company needs to satisfy following criteria to be eligible for making a public issue:

• Net tangible assets of at least Rs 3 crore for three full years• Distributable profits in at least three years• Net worth of at least Rs 1 crore in three years• If change in name, at least 50 per cent of revenue for preceding one year should be from the new activity• The issue size should not exceed five times the pre-issue net worth

SEBI also provides alternate routes to the companies not satisfying any of the above parameters, for accessing the primary market.
The alternative conditions are as follows:

• Issue shall be made through book-building route, with at least 50 per cent to be mandatory allotted to the QIBs.• The minimum post-issue face value capital shall be Rs 10 crore or there shall be a compulsory market-making for at least two years.
4 How can one apply for an IPO?

An investor needs to first obtain an IPO application form through a share broker, an investment consultant or from the collecting banks. The investors are required to fill up the form and remit the amount after calculating the number of shares applied for in the bank, which has been designated as a collecting centre for the particular IPO.
An investor holding a demat account can either apply for the shares directly through the account or can opt for physical delivery of share certificates. There are certain IPOs, which offer only demat form of shares, while others offer both the demat and regular shares. Application forms can be rejected due to incomplete details.
Every week SEBI issues press releases for information of the public, details of offer documents filed with SEBI and observations issued. The required details can be obtained from the ‘Primary Market’ section of the SEBI website. The draft offer document can also be purchased from the SEBI office. The draft offer document/letter of offer remains posted on SEBI website for a period of 21 days from the date of filing the same to SEBI and can also be downloaded from there.
Application forms can also be obtained from the lead manager and brokers to the issue. The application forms are also generally available at collecting bankers. Name and addresses of the lead manager are available in the prospectus/letter of offer.

5 What is book-building process?
SEBI guidelines defines book building as “a process undertaken by which a demand for the securities proposed to be issued by a body corporate is elicited and built up and the price for the securities is assessed on the basis of the bids obtained for the quantum of securities offered for subscription by the issuer”.
This process provides an opportunity to the market to discover price for the securities on offer. In common words, book building is a method for public offer of equity shares of a company. The process is named so because it refers to collection of bids from investors, which is based on a price range. The issue price is fixed after the closing date of the bid.
A company planning an IPO appoints a merchant bank as a book runner. Then the company issues a prospectus that does not mention the price, but provides other details related to the issue size, the company’s operating area and business, the promoters and future plans among other disclosures.A particular time frame is also fixed as the bidding period. Then the book runner builds an order book that collates bids from various investors. Potential investors are allowed to revise their bids at any time during the bidding period.
At the end of bidding period the order book is closed and consequently the quantum of shares ordered and the respective prices offered are known. The calculation of final price is based on demand at various prices and also involves negotiations between those involved in the issue.
The book runner and the company finalise the pricing and allocation to each syndicate member.

6 What is the main difference between a book-building route and the normal public issue?
Unlike the book-building route, the price is known in advance to investors in case of offer of shares through normal public issue. On the other hand, the demand can be known everyday as the book is built in case of book building, which demand is not known until the close of the issue in case of the normal public issue.

7 What is the minimum number of days for which a bid should remain open in book building?
Book should remain open for a minimum of five days.

8 Can open outcry system be used for book building?
No. As per SEBI, only electronically linked transparent facility is allowed to be used in case of book building.

9 Is the issue price for placement portion and net offer to public the same?
Yes.

10 What is the floor price in case of book building?
Floor price is the minimum price at which bids can be made. The issuer company in consultation with the book-running lead manager fixes the floor price.

11 Can the individual investor use book building facility for making an application?
Yes.

12 Can the bidder revise his bids?
Yes.

13 What proof can a bidder request from a trading member for entering bids?
A bidder can request for a transaction registration slip as proof of his/her having entered the bid. Whenever a bid is entered by trading members into the system, a unique transaction registration slip is automatically generated. Transaction registration slip gives details regarding number of shares bid for, price, the client name among other details.

14 Is it possible to enter bids less than floor price?
No. The system automatically rejects the bids if price is less than floor price.

15 Are there any restrictions on pricing by companies?
The companies can freely price their equity shares. However they have to give justification of the price in the offer document.

16 Who are syndicate members?
Syndicate members are the intermediaries registered with the board and permitted to carry on activity as underwriters. The book-running lead managers to the issue appoint the syndicate members.

17 What is an order book?
It is an ‘electronic book’ that shows the demand for the shares of the company at various prices.

18 What is a red herring prospectus?
A red herring prospectus (RHP) is a preliminary registration statement that must be filed with the regulatory authority describing the IPO and the prospects of the issuing company. There is no price or issue size stated in the red herring, and it is sometimes updated several times before being called the final prospectus.
It is known as a red herring because it contains a passage in red that states the company is not attempting to sell their shares before the registration is approved by the regulatory authority.

19 What is the difference between an offer document, an RHP, a prospectus and an abridged prospectus? What is a “draft offer doc”?
“Offer document” means a prospectus in the case of a public issue or offer for sale which is filed with Registrar of Companies (RoC) and the stock exchanges. An offer document covers all the relevant information required to help an investor to make his/her investment decision.
“Draft offer document” refers to an offer document in a draft stage. The draft offer documents are filed with SEBI at least 21 days prior to the filing of the offer document with the registrar and the exchanges. SEBI may specify necessary changes in the draft offer document and the issuer or the lead merchant banker is required to implement changes in the draft offer document before filing the offer document. The draft offer document is available on the SEBI website for public comments for a period of 21 days from the filing of the draft offer document with SEBI.
A red herring prospectus does not have details of either price or the number of shares being offered or the amount of issue. However, this prospectus mentions the number of shares and the upper and lower price bands. An issuer can also state that the issue size and the number of shares would be determined later. In case of a book-built issues, RHP is a process of price discovery and the price cannot be determined until the bidding process is completed. Hence, such details are not shown in the RHP filed with the RoC. Only on completion of the bidding process, the details of the final price are included in the offer document.
The offer document filed thereafter with ROC is called a prospectus. “Abridged prospectus” refers to a prospectus that contains all the salient features of a prospectus. It accompanies the application form of public issues.20 What does one mean by ‘lock-in’?
Lock-in refers to a freeze on the shares. SEBI guidelines have stipulated lock-in requirements on shares of promoters primarily to ensure that the promoters, who are controlling the company, shall continue to hold some minimum percentage in the company after the public issue.

21 Who is a promoter?
The promoter is defined as a person (or persons, as the case may be) who is in over-all control of the company, is instrumental in the formulation of a plan or programme pursuant to which the securities are offered to the public and who is named in the prospectus as promoter. A director/officer of the issuer company or person, if they are acting as such merely in their professional capacity are not be included in the definition of a promoter.
‘Promoter group’ includes the promoter, an immediate relative of the promoter (i.e. spouse of that person, or any parent, brother, sister or child of the person or of the spouse).
In case the promoter is a company, a subsidiary or holding company of that company; any company in which the promoter holds 10 per cent or more of the equity capital or which holds 10 per cent or more of the equity capital of the promoter; any company in which a group of individuals or companies or combinations thereof who holds 20 per cent or more of the equity capital in that company also holds 20 per cent or more of the equity capital of the issuer company.

22 What are the requirements regarding promoter’s contribution and lock-in?
In case of an IPO, the promoters have to necessarily offer at least 20 per cent of the post issue capital. In case of public issues by listed companies, the promoters shall participate either to the extent of 20 per cent of the proposed issue or ensure post-issue share holding to the extent of 20 per cent of the post-issue capital.
In case of any issue of capital to the public the minimum contribution of promoters shall be locked in for a period of three years, both for an IPO and public issue by listed companies. In case of an IPO, if the promoters’ contribution in the proposed issue exceeds the required minimum contribution, such excess contribution shall also be locked in for a period of one year. In addition, the entire pre-issue share capital, or paid up share capital prior to IPO, and shares issued on a firm allotment basis along with issue shall be locked-in for a period of one year from the date of allotment in public issue.

23 What is the basis of allotment?
In case of over-subscription in a fixed price issue, the allotment is done in marketable lots and on a proportionate basis. In case of a book building issue, allotment to Qualified Institutional Buyers (QIBs) and Non-Institutional Buyers (NIBs) are done on a discretionary basis. Allotment to retail investors is done on a proportionate basis.
After the closure of the issue, the bids received are aggregated under different categories, such as firm allotment, Qualified Institutional Buyers (QIBs), Non-Institutional Buyers (NIBs) and Retail Individual Investors. The oversubscription ratios are calculated for each of the categories as against the shares reserved for each of the categories in the offer document. Within each of these categories, the bids are segregated into different segments based on the number of shares applied for.
The oversubscription ratio is then applied to the number of shares applied for and the number of shares to be allotted for applicants in each of the buckets is determined. Then, the number of successful allottees is determined. This process is followed in case of proportionate allotment. In case of allotment for QIBs, it is subject to the discretion of the post issue lead manager.

24 Can the public give their comments/complaints on the issuer company or others connected with the issue?
Yes, the objective of making offer document public is to invite public comments. The comments should be given within 21 days of the filing of the draft offer document with SEBI.

25 Within how many days should an investor receive the refund order/allotment advise?
The investor is entitled to receive a confirmatory allotment note (CAN) in case he has been allotted shares within 15 days from the date of closure of a book-built issue. The registrar has to ensure that the demat credit or refund as applicable is completed within 15 days of the closure of the book built issue.
The refund orders/allotment advice is to be despatched within two working days of finalising the basis of allotment. Companies are required to finalise the basis of allotment within 30 days from the closure of the issue in case of a fixed price issue and within 15 days from the closure of the issue in case of a book building issue or else they are liable to pay interest at the rate of 15 per cent per annum

26 In case of non-receipt of the refund order/share certificate/allotment advise, what is the course of action available to the investor?
The investor should complain in writing to the lead manger/registrar/SEBI’s Investor Grievance Cell.

27 Within how many days should the company get its securities listed after the issue?
The post-issue lead manager ensures that all steps for completion of the necessary formalities for listing and commencement of trading at all stock exchanges where the securities are to be listed are taken within 7 working days of finalisation of basis of allotment.

28 Is it mandatory to have a demat account for applying in public issue?
An investor has the option to apply for and receive the shares in physical form. However, it is advisable to get the allotment in demat form as the shares in IPO shall be compulsorily tradable in demat segment in stock exchanges. In case of an IPO of any security of issue size of Rs 10 crore or more, security shall be issued only in dematerialised form.
In book built issues, for QIBs and large investors (applying for more than 1,000 shares) allotment shall be only in demat form and hence they should have a demat account.

29 What are greenshoe option and safety net?
Greenshoe is an option that allows the underwriting syndicate of an IPO to sell additional shares to public if the demand is high.
The name comes from the fact that Green Shoe Company was the first to issue this type of option.
A safety net means investors who subscribe to the IPO of a company can sell those shares to the entity offering safety net at the IPO price. Safety net is actually a put option given to the investors, but not by the company issuing the shares. A put option gives the right but not the obligation to the investors to sell the stock to the entity offering the option at a particular price before a certain period.
Any safety net scheme or buy-back arrangements of the shares proposed in any public issue shall be finalised by the issuer company with the lead merchant banker in advance and should be disclosed in the prospectus.

30 What are fixed price offers?
An issuer company is allowed to freely price the issue. The basis of issue price is disclosed in the offer document where the issuer discloses in detail about the qualitative and quantitative factors justifying the issue price. The issuer company can mention a price band of 20 per cent (cap in the price band should not be more than 20 per cent of the floor price) in the draft offer documents filed with SEBI and actual price can be determined at a later date before filing of the final offer document with SEBI/RoCs.

31 What is a price band?
The RHP may contain either the floor price for the securities or a price band within which the investors can bid. The spread between the floor and the cap of the price band shall not be more than 20 per cent. The price band can be revised also and any such revision is required to be widely disseminated by informing the stock exchanges, by issuing press release and also indicating the change on the relevant website and the terminals of the syndicate members.
In case the price band is revised, the bidding period shall be extended for additional three days, subject to the total bidding period not exceeding thirteen days.

32 Who decides the price band?
The regulators do not play a role in setting the price for issues. The company decides the price or the price band in consultation with merchant bankers. The basis of issue price is disclosed in the offer document. The issuer is required to disclose in detail about the qualitative and quantitative factors justifying the issue price.

33 What is firm allotment?
A company making an issue to public is eligible to reserve some shares on ‘allotment on firm basis’ for certain categories. The shares to be allotted on ‘firm allotment category’ can be issued at a price different from the price at which the net offer to the public is made, provided that the price at which the security is being offered to the applicants in firm allotment category is higher than the price at which securities are offered to public.

34 What is reservation on competitive basis?
Reservation on competitive basis refers to allotment of shares made in proportion to the shares applied for by the concerned reserved categories. Reservation on competitive basis can be made in a public issue to the employees of the company, shareholders of the promoter companies in the case of a new company and shareholders of group companies in the case of an existing company, Indian mutual funds, foreign institutional investors (FIIs), Indian and multilateral development institutions and scheduled banks.
In a book built issue allocation to Retail Individual Investors (RIIs), Non Institutional Investors (NIIs) and Qualified Institutional Buyers (QIBs) is in the ratio of 35: 15: 50 respectively.

35 Is there any preference while doing the allotment?
The allotment to the Qualified Institutional Buyers (QIBs) is made on a discretionary basis. The discretion is left to the merchant bankers who first disclose the parameters of judgment in the Red Herring Prospectus. The merchant bankers are free to set their criteria and mention the same in the Red Herring Prospectus.

36 How is the Retail Investor defined as?
Retail individual investor refers to an investor who applies or bids for securities of or for a value of not more than Rs.1,00,000.

37 What is an e-IPO?
A company can also issue capital to public through the online system of the stock exchange. The appointment of various intermediaries by the issuer includes a prerequisite that such members/registrars have the required facilities to accommodate such an online issue process.
38 What is open book/closed book?
In book-built issues issuers and merchant bankers are required to ensure online display of the demand and bids during the bidding period. This is known as open book system of book building. Under closed book building, the book is not made public and the bidders will have to take a call on the price at which they intend to make a bid without having any information on the bids submitted by other bidders.

39 What is hard/soft underwriting?
Hard underwriting refers to an exercise when an underwriter agrees to buy his commitment at its earliest stage. The underwriter guarantees a fixed amount to the issuer from the issue. If the shares are not subscribed by investors, the issue is devolved on underwriters and they have to bring in the amount by subscribing to the shares.
Soft underwriting refers to a process when an underwriter agrees to buy the shares at later stages as soon as the pricing process is complete. Subsequently, he places those shares with institutional players. The soft underwriter also holds an option to invoke a force majeure (acts of God) clause in case there are certain factors beyond the control that can affect the underwriter’s ability to place the shares with the buyers.

40 What is a cut-off price?
In book-building issues, the issuer is required to indicate either the price band or a floor price in the Red Herring Prospectus. The actual issue price can be any price in the price band or any price above the floor price. This issue price is called “Cut off price”. This is decided by the issuer and lead managers after considering the book and investor demand for the stock.

41 What is differential pricing?
Pricing of an issue where one category is offered shares at a price different from the other category is called differential pricing. According to regulatory guidelines, differential pricing is allowed only if the securities to applicants in the firm allotment category are offered at a price higher than the price at which the net offer to the public is made.

42 Who is qualified institutional buyer (QIBs)?
QIBs are those institutional investors who are perceived to possess expertise and the financial strength to evaluate and invest in the capital markets. A QIB is defined as
• Public financial institution as defined in section 4A of The Companies Act, 1956;• Scheduled commercial banks;• Mutual funds;• Foreign institutional investor registered with SEBI;• Multilateral and bilateral development financial institutions;• Venture capital funds registered with SEBI.• Foreign venture capital investors registered with SEBI.• State Industrial Development Corporations.• Insurance companies registered with the Insurance Regulatory and Development Authority (IRDA).• Provident Funds with minimum corpus of Rs 25 crores• Pension Funds with minimum corpus of Rs 25 crores

43 Why go public?
Usually it is not possible to buy shares in a private company. A potential investor can approach the owners, but they’re not obliged to sell any shares. However, public companies sell at least a portion of themselves to the public and they also trade on stock exchanges.
Public companies have thousands of shareholders and are subject to strict rules and regulations. They must have a board of director and they must report financial information every quarter. Public companies are regulated by governing bodies. The stock is traded in the open market and any investor, who has got money, can invest in them. The CEO and the owner can not prevent an investor from buying stock.
Going public provides an opportunity to raise cash for the companies, while opening many financial doors as well. Public companies can get better rates when they issue debts because of the increased scrutiny involved. A public company can always issue more stock, as long as there is market demand. Consequently, mergers and acquisitions become easier to execute as stock can be issued as part of the deal.

Amit asked, Dear Mr. Girdher, I want to know how one can save tax other than 80C, i hv read an article that by gifting to ur parents can save tax. As i am sending my parents approx. 5000 rupees per month in cash can i get the rebate on this? how? and if yes wether i hv to fill ITR for my parents and if cash can be considered as gift or should i send Cheque or DD? what is the limit of this gift?

Sushil Girdher answers, Gift made to relatives is not taxable in the hands of the receiver of the gift. But you would need to understand the essence of gift concept; a regular stream of payments would be difficult to prove that it carries the nature of gift. One time / periodic payments could definitely be considered for the purpose of gift. You would not get any deduction or rebate for such gift as it merely is application of income. You would need to file the returns of your parents only if they have any taxable income and as gift to your parent is not taxable there seems to be no need to file their returns.

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The following are some important items of income, which are fully exempt from income tax and which a resident individual Indian assessee can use with profit for the purpose of tax planning.

1. Agricultural income
Under the provisions of Section 10(1) of the Income Tax Act, agricultural income is fully exempt from income tax. However, for individuals or HUFs when agricultural income is in excess of Rs 5,000, it is aggregated with the total income for the purposes of computing tax on the total income in a manner which results into "no" tax on agricultural income but an increased income tax on the other income.

2. Receipts from Hindu Undivided Family (HUF)
Any sum received by an individual as a member of a Hindu Undivided Family, where the said sum has been paid out of the income of the family, or, in the case of an impartible estate, where such sum has been paid out of the income of the estate belonging to the family, is completely exempt from income tax in the hands of an individual member of the family under Section 10(2).

3. Share from a partnership firm
Under the provisions of Section 10(2A), in the case of a person being a partner of a firm which is separately assessed as such, his share in the total income of the firm is completely exempt from income tax since AY 1993-94. For this purpose, the share of a partner in the total income of a firm separately assessed as such would be an amount which bears to the total income of the firm the same share as the amount of the share in the profits of the firm in accordance with the partnership deed bears to such profits.

4. Allowance for foreign service
Any allowances or perquisites paid or allowed as such outside India by the Government to a citizen of India, rendering service outside India, are completely exempt from tax under Section 10(7). This provision can be taken advantage of by the citizens of India who are in government service so that they can accumulate tax-free perquisites and allowances received outside India.

5. Gratuities
Under the provisions of Section 10(10) of the IT Act, any death-cum-retirement gratuity of a government servant is completely exempt from income tax. However, in respect of private sector employees gratuity received on retirement or on becoming incapacitated or on termination or any gratuity received by his widow, children or dependants on his death is exempt subject to certain conditions.

6. Life insurance receipts
Under Section 10(10D), any sum received under a Life Insurance Policy (LIP), including the sum allocated by way of bonus on such policy, other than u/s 80DDA or under a Keyman Insurance Policy, or under an insurance policy issued on or after 1.4.2003 in respect of which the premium payable for any of the years during the term of the policy exceeds 20 per cent of the actual capital sum assured, is fully exempt from tax.
However, all moneys received on death of the insured are fully exempt from tax. Thus, generally moneys received from life insurance policies whether from the Life Insurance Corporation or any other private insurance company would be exempt from income tax.

7. Dividends on shares and units — Section 10(34) & (35)
With effect from the Assessment Year 2004-05, the dividend income and income of units of mutual funds received by the assessee completely exempt from income tax.

8. Long-term capital gains of transfer of securities — Section 10(38)
With effect from FY 2004-05, any income arising to a taxpayer on account of sale of long-term capital asset being securities is completely outside the purview of tax liability especially when the transaction has been subjected to Securities Transaction Tax (STT).
Thus, if the shares of any company listed in the stock exchange are sold after holding it for a minimum period of one year then there will be no liability to payment of capital gains. This provision would even apply for the old shares which are held by an assessee and are sold after the Finance (No.2) Act, 2004 came into force.

9. Scholarship and awards, etc
Any kind of scholarship granted to meet the cost of education is exempt from tax under Section 10(16). Similarly, certain awards and rewards, etc. are completely exempt from tax under Section 10(17A). Any daily allowance received by a Member of Parliament or by an MLA or any member of any Committee of Parliament or State legislature is also exempt from tax under Section 10(17).

10. Payment received from provident funds
Under the provisions of Sections 10(11), (12) and (13) any payment from a government or recognised provident fund (PF) or approved superannuation fund, or PPF is exempt from income taxPowered by Qumana

India’s position as the world’s largest talent supplier is under serious threat. According to leading manpower consulting firm Watson Wyatt, that slot may be taken over by China before long. In fact, China is projected to have twice as much skilled labour as India shortly - a fact that goes against the conventional wisdom that India’s abundance of skilled labour makes it ideal for outsourcing business processes.

The consulting firm gives three reasons for this: First, one of the main advantages India had vis-a-vis China is the much higher skill level among its women population. In fact, the percentage of skilled women living in urban areas at 14 per cent is close to that of skilled men at 16 per cent. The average annual growth rate in skilled women (7 per cent) is about 1.5 times higher than the growth rate in skilled men.

Yet, the irony is that Chinese women are much more likely to be in the workforce despite that country’s lower percentage of skilled women in the total population. This is because the workforce participation rate is twice as high for Chinese women as it is for Indian women.

Only 25 per cent of skilled Indian women participate in the labour market, exposing a major shortcoming of India’s talent pool. While Indian women represent 38 per cent of enrolment in higher education in 2004, the workforce participation rate for women remains very low, at about 18 per cent in urban areas.

The second reason is that China is pouring vast resources into education, and more Chinese young people are attending colleges and universities than ever before. Education is undergoing a massive transformation in that country where universities are building new facilities (30 new universities have come up in Nanjing alone in as many years). “Universities in China are coming up faster than hotels in Dubai,” Watson Wyatt says.

By 2010, 23 million students will be attending Chinese universities, one million of whom will be highly-skilled graduate students. That’s a remarkable progress from 6,00,000 such students in 1992 - a fact that prompted management guru Peter Drucker to remark that the greatest weakness of China is its incredibly small proportion of educated people. Not anymore.

By comparison, India’s education system is largely at a standstill, with the percentage of young university students hardly rising. India’s static enrolment, along with a similarly static investment of its gross domestic product into education, partially explains why China surpassed India’s 3.1 million annual college graduates three years ago.

Third, the most popular areas of study in Chinese universities also tend to be the most in demand, such as engineering, management and science. Most universities are also aggressively building global links through regular international conferences, foreign visiting professorships and collaborations on degree programmes.

Compare that with India. The quality of education in the country’s mushrooming private institutions continues to be a serious concern and the industry-academia linkages are growing only at a snail’s pace.

But all’s is not lost for India - yet. Watson Wyatt says there are essentially three areas where China has a lot of catching up to do with India.

For example, the immobility of labour in China. While there are no restrictions on mobility of talent in India, for some strange reasons, China still follows the “Hukou” system that discourages graduates and skilled or semi-skilled labour based in remote provinces from working in more developed areas. For example, a graduate from a second-tier city who wants to work in Shanghai will have to overcome considerable obstacles, including mobility restrictions. In general, employers are discouraged from hiring workers from other regions. As a consequence, many employers tend to hire mostly local graduates - a phenomenon that seriously compromises their search for the best talent.

The second area is the low proportion of Chinese students returning from study abroad. The study shows while the pace of Indian students returning home after higher studies abroad has been increasing due to better opportunities, it’s exactly the opposite in China. For example, in 2004, almost 24,750 students returned to China after graduating abroad, while around 1,14,700 left the country that same year.

And finally, poor English skills will continue to be one the biggest obstacles to China’s becoming the premier offshoring location for MNCs. If you take the mean scores of the Test of English as a Foreign Language, China’s results are lower than India’s in all subjects (although higher than worldwide averages), especially in listening comprehension.

These relatively low scores may be because Chinese students begin to study English later than students in India. Also, teachers and students focus more on exams than on assimilation of the language and far more attention is paid to reading and writing English than to speaking and listening.

(Source: Rediff.com/money)