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PAN Cards And FDs


wealthymatters.comUnder section 139A of the I-T Act,only persons whose income is chargeable to tax are required to obtain a PAN.However section 206 AA of the same Act, which became effective from assessment year 2010-11, makes it mandatory for every person to furnish PAN card in their transactions with banks and financial institutions.So section 206AA compeled even those without a taxable income to obtain a PAN, failing which tax would be deducted at source.

A writ petition was filed before the Karnataka High Court by A Kowsalya and two other small investors, who had made investments in financial institutions (F Is). They do not have any income other than the income received from F I s and they have declared this under Form 15G. Form 15G is usually used for declaring that a person’s income is below taxable limit, and therefore, the bank or FI is not required to deduct tax at source while making payments.The FIs, however, told the petitioners that tax would be deducted at source if they did not furnish PAN cards as required under section 206AA of the Income-Tax Act. The petitioners challenged the validity of Section 206AA of the Income-tax Act in their writ petition. Read more of this post

Legacy Drawer


wealthymaters.comDave Ramsey talks of the Legacy Drawer.It’s a drawer that houses all of the important information your family needs in case something happens to you.It might be the last gift you will give your family, so it’s worthwhile making it a good one.

The drawer should be somewhere in your home and contain everything your spouse or family needs to know if you aren’t around—anything that has to do with your financial life should be in that drawer. You must organize it in a way that anyone can find a specific document in 30 seconds. All files should be clearly marked, in order, and easy for a grieving family member to find. There’s no need to go into extreme detail when creating your Legacy Drawer. Simply include the appropriate documents in an easy-to-understand format, and you’re good to go!

Here is a list of things your Legacy Drawer should contain :- Read more of this post

Bank Fixed Deposits


wealthymatters.comA bank FD is a savings instrument where you deposit an amount with the bank for a fixed duration.You earn a fixed rate of interest on this investment. The interest rate is fixed at the time of the investment – even if interest rates change during the tenure of the FD, the interest that you earn on your FD remains fixed. A FD is also called a Term Deposit at times, as it is an investment for a pre-defined term.

All banks have their own rules on minimum deposits.Most nationalized banks will start a FD with just Rs.1000.

The tenure of a FD can be anywhere from 15 days to 10 years.The rate of interest offered on a FD depends on various parameters: the prevailing interest rates, the duration of the FD, the amount of the FD, your age, etc.Usually, the longer the tenure of the FD, the higher is the interest rate.However,when the economy has a liquidity crunch,banks do offer higher rates on short-term deposits too.They also come out with Special Term Deposits of more unusual tenures such as 555 days, 1001 days etc.Most banks offer a different rate of interest on FDs of more than a certain amount, usually Rs. 15 Lakhs.Also, most banks offer an extra 0.5% per annum to Senior Citizens.Some banks also offer different rates for Trusts and Societies. Read more of this post

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