GST Payment: Myths busted

The last couple of years have brought in great economic changes into the country, with demonetization during the end of 2016, and GST taking over 2017. With the launch of the good and services tax (GST) this year, a lot of discussions are being done on the extent of its effectiveness, and if this will be a simpler form of taxation system in comparison to the previous one. This has led to the rise innumerable rumours about goods and service tax payment.

Here are some popular myths about GST, and the actual truth behind them-

1. One system of tax for the entire nation- This is definitely a myth!
While this was the initial idea of GST, at the time of it launch certain products like petrol, diesel and liquor were exempted from GST payment. Which is why petrol prices are still high in some states of the country while comparatively lower in other states.

2. Small business will face difficulties- No True!
Many were of the opinion that small business men will go through tough times with the launch of GST payment, primarily because they will have to switch to computerised billing. This is not true as manual billing is allowed under GST. Internet connection is only essential when the monthly return has to be filed. This can be easily done from a cyber-centre.

3. GST is the only direct form of tax, no other tax will be in place- This belief has proved to be a complete myth!
Primarily because GST is only charged instead of central and state taxes. Local body taxes are not included under GST payment. For example, the government of Tamil Nadu has permitted its local bodies to take a 30% tax on film tickets, excluding tax that needs to be given as GST, making movie tickets extremely expensive. This led to a strike in the state, which was called by cinema hall owners who were obviously not happy with this decision.

4. Prices will rise, creating inflation- This has also proved to be a myth!
While the government may have increased the tax rate on some goods, taxes have also been lowered in case of many consumer good items. Moreover, earlier there were a number of hidden taxes that one did not see in their bill. With the launch of GST, the full tax is now visible to the consumer. For instance, the prices of any chicken dish in Kerala should fall considerably, because earlier about 14.5% tax was charged on live chicken in the state, but now there is 0 tax on the same.

Why should you be making your online tax payment today?

Sorting out taxes has never been an easy job. It involves major paperwork and is generally quiet time consuming. But it is a necessary evil and cannot be ignored.

One effective way of dealing with taxes is switching to online tax payment. By doing this, one can save himself the trouble of extensive paperwork and stamps when it comes to filing taxes. Switching to online tax payment, will also allow one to organize his taxes better and make payments promptly.
You can pay a number of different taxes online, such as- Service tax, wealth tax, corporation tax, tax deducted at source (TDS), central excise tax as well as income tax.

Here are a few reasons why one should shift to online tax payment today-

It is a speedy process

Tax payments can be made within minutes when done online. All one needs to do is schedule their payment date and mark their calendar. You do not have to bear the burden of filing taxes through mail, and worrying if it will reach on time.

Convenient

One does not have to wait in long lines in order to file their taxes. Payment can be done online anytime from anywhere. All that one requires is an internet connection and a laptop or computer.

Easy to file taxes and make payments

Once you start online tax payment, one will have to follow a simple process that will help him schedule tax payments regularly. When this process is complete, all that is required is an online transaction of the amount on the scheduled date.

Safe to use

Online tax payment is quite safe. User information is confidential and has to be typed in every time in order to log in.

Timely payments

As payments can be scheduled well in advance, a person knows exactly when he needs to clear his taxes and is less likely to miss the date. This also helps with effective planning. While businesses are allowed to schedule online tax payment about 120 days before it is due, individual taxpayers can schedule their tax payment a year in advance.
 
Once the online tax payment is done, one will receive a digital copy of the acknowledgement of the same. In order to maintain a physical record just take a print out of the copy of the challan for future reference.

Online tax payment will greatly reduce the pressure and stress involved with the filing and payment of taxes every year. The process of enrolment may seem tedious initially, but it is for the best.

What is the difference between a trading account and a demat account?

In order to conveniently deal with shares in the stock market of the country, it is essential to have a trading account as well as a demat account. While before the 90s, shares were physically sold and bought, sometime during the mid-90s, the purchase and sale of shares shifted to electronic transactions, which made it necessary for share traders to hold a demat and a trading account.

To understand how the share market and trade works, one has to first establish the difference between these two types of accounts-

Nature of use

While shares purchased or meant for sale are stored in demat or dematerialised accounts, their transaction is done through a trading account. Thus, a trading account acts as an arbitrator between the bank and the demat account. The trading account takes shares from the demat account and makes them available for trade at the share market.

Hence, while a demat accounts acts as a savings account, the trading account works as a current account.

Difference in function

Financial instruments, for instance securities as well as shares, are retained by a demat account. A demat account can also convert electronic securities to their physical form. On the other hand, the purchase and sale of such financial instruments is done via the trading account. If one deals with trade in futures and currency only, just a trading account is enough. But if one also trades in stocks both demat and trading account are necessary.

Account fees and charges

While one can open more than one demat account or trading account, a certain fee is charged. In case of demat one needs to pay a yearly maintenance charge for each account he owns. Moreover transaction and custodian fees also have to be paid.

In case of a trading account a certain fee is charged when the account is opened. One incurs no extra costs afterwards.

Process of account opening

A PAN card and a Voter’s ID card have to be submitted so as to own a demat account. But in the case of a trading account, the only pre-requisite is the existence of a demat account.

To make the entire process of stock trading easier, a number of banks offer customers the convenience of managing 3 different types of accounts- demat, trading and a savings account through one single bank account. Therefore, when opening a trading and demat account check if the bank is offering this type of service. It will definitely make purchase and sale of shares more simple and convenient.

What are the dos and don’ts for a safe net banking experience?

Internet banking is simple, fast and extremely convenient. Most transactions, be it the payment of bills or fund transfers can be done from anywhere. One just needs access to a computer system and internet.

Although this facility is quite revolutionary and has changed the nature of banking, certain safety measures need to be taken in order to ensure security of one’s account and money.

Here are a few do’s and don’ts that should be kept in mind to ensure a safe net banking experience-

Do change the account password from time to time

For the very first account log in, the bank provides a password, but change it immediately. Thereafter, make it a point that the password is changed at particular intervals of times to ensure safety.

Do not login to the account through a public computer

To ensure safety do not access the account at a cyber café or from an office/library computer. There are high chances of malware which may put the net banking account at risk. In case a login is absolutely necessary, clear the browsing history and cache. All temporary files should also be deleted. Most importantly, do not click ‘save’, if a pop-up which asks for permission to save ID and password appears.

Do check the account from time to time

Keep a tab of the online transactions that are taking place through the net banking account. In case of any irregular activity, inform the bank immediately and lock the account.

Do not share account details

Account ID and password should not be shared with anyone. If you have to share the information, in case of an emergency, change the password as soon as the situation is under control.

Do log out after every session, and type net banking URL

While copy-pasting the URL is a convenient option in order to log into the net banking account, avoid it! Typing the URL is a much safer option. Also make sure to log out after every session, so as to prevent anyone from misusing the account. In case one has to leave the computer system even for a minute while net banking, take the trouble of logging out and logging in again, just to ensure safety.

Do not use open/ public Wi-Fi

It is best to undertake any bill payments or transfers online, through a personal Wi-Fi connection. Avoid the use of net banking when on an open Wi-Fi or public Wi-Fi, primarily because chances of getting hacked are higher.

Moreover, one should also ensure that they offer proper anti-virus protection to their system. It should be licenced for optimum safety.

Avoid these 4 mistakes with the education loan

Education all around the world is becoming more and more expensive. While primary and secondary education is government aided in many parts of the world, college education and higher studies is quite expensive. So much so, that many parents can only opt to send their children to college or university, if they have planned much beforehand and saved enough cash or if they can obtain a loan from a rich relative.

Today, the loan market has become quite competitive, and a number of education loans are offered by various banks to help youngsters pursue higher studies and obtain their dreams. But while getting hold of an education loan is very easy, one has to be careful when repaying the debt.

Here are 4 mistakes that one should avoid when repaying an education loan –

1. One should not borrow more than they can afford to repay- Be extremely realistic when calculating the loan amount that is required. It is quite easy to opt for an education loan, but sooner or later it has to be repaid along with interest. One may not need to pay the loan when in college, but it needs to be cleared afterwards. Keep this in mind, especially before opting for multiple student loans.

2. Do not wait to pay the interest after school is done- Most college students opt to work as well as purse their studies, there is a steady cash inflow. Thus, it is best that one starts paying the interest on the loan as soon as possible. This will reduce the pressure of re-payment later.

3. Do not be carless with monthly payments- While most individuals are aware of the total loan amount they have borrowed and the interest they need to pay, what they fail to estimate is the EMI. The monthly payment can be a great expense if not calculated beforehand. To calculate the EMI on your education loan, use a loan calculator and formulate a repayment plan carefully.

4. Do not loose contact with the loan servicer- In order to stay up-to-date with the timeline of your education loan repayment, always stay in touch with the loan servicer. Make sure that emails, letters and messages from your loan servicer reach you on time. In case of a change of address or phone number, keep the loan servicer in loop to avoid any communication gaps.

While keeping a tab on an education loan may seem overwhelming at first, it should be done in order to prevent any repayment stress in the future.

Basic facts you need to understand about GST payment

The Indian tax system has already been quite complicated. Dealing with direct as well as indirect taxes was a time consuming task for many a businesses. But with the set-up of the Goods and Services Tax (GST) this financial year, a major change has been predicted. In fact many have stated that this new tax system is going to be a ‘game changer’ for the economy of India.

Here are some basic facts which will help one understand GST payment-

Levy of GST

GST is levied anytime there is a ‘supply’. As per the GST Act, supply implies any goods and services sale. Exchange, barter, transfer, lease or rental also means supply as per the Act. Thus, businesses who undertake one or more of the above mentioned activities are entitled to goods and service tax payment. As per the Government, there are a few goods as well as services that do not come under GST payment. Thus, business should initially identity if good and services they deal with come under the GST payment bracket or not.

Application of GST

With the set-up of GST, one of the most important questions that have arisen is- which businesses should register for GST payment? It is mandatory for all businesses dealing in inter-state transactions and website sales to apply for GST registration. Those who are already registered under VAT and service tax can opt to transfer to GST registration. In case of businesses that have a turnover of about 20 lakhs, GST registration is not compulsory. In case of North East states the turn over value is 10 lakhs.

Registration with GST will help in making timely goods and service tax payment.

Process of GST payment

Under GST the payment will be primarily done electronically. Thus, it is important for most businesses to set up computer systems and methods of online payments. The challan will be electronically generated through the GSTN Common Portal. No manual challan will be available. Online payment mode has been adopted to facilitate the tax payer.

Mode of GST payment

Goods and service tax payment can either be done through the credit ledger or the cash ledger. The transfer of money into the cash ledger can be done through a credit or debit card and net banking. One can also deposit money in specified banks that have been authorized to collect GST payment.

In case of GST, payment needs to be on a monthly basis. Taxes should be cleared before the 20th of the next month. Those under the composition tax scheme need to clear taxes on a quarterly basis.

Credit card perks: Hidden perks that can save you funds

There are a number of credit card companies in the market, because of which the competition is extremely tough. There are quite a few perks that are offered to credit card users, but most of the time one is not aware of such benefits. This is primarily because such perks are not hyped by credit card companies.

Here are a few hidden perks that one can enjoy on their credit cards-

Price Protection

Very often one experiences that a purchase they made today at one store, is cheaper the next day at another store. In most cases stores do not offer the convenience of price matching, but this is where one can rely on their credit cards.

Most credit cards offer price protection, thus, one can claim a refund after filing a case and submitting proof that the same product is being sold for a less price. In some cases, price protection can also be claimed about 90 days post the purchase.

Purchase protection

Losing a phone or any other valuable item these days proves to be a great loss, especially if one does not have insurance on it. But the good news is that majority of credit cards offer purchase protection. Thus, one can claim re-imbursement for any stolen item. The facility of repair and replacement of items is also offered by credit companies under purchase protection.

Return protection

Many a times one may change their mind about a new purchase, but cannot return the product because the return period has expired. As per the return policies of most stores, a purchased item may only be replaced or returned within a span of 15 or sometimes 30 days of the purchase. In this case, one can depend upon the return protection offered by their credit card companies. Most credit card companies offer a return protection of about 60 to even 90 days. In case one does want to return their purchase, just send forth the product along with the necessary documents to the store.

Extended period of warranty

When purchasing a major electronic appliance, most individuals prefer a warranty in order to protect their investment. In this case a warranty may be purchased for a short period of time. But for an extended warranty, purchase it with a credit card. Most cards offer the benefit of extended warranty for up to a year at no cost.

To avail the benefits of the best credit card in India, choose wisely among various credit card companies. Compare the numerous offers they give before selecting one.