Month: August 2022

Categories
Investments and Savings

Can I get Section 80C deduction on my mutual fund investments?

Investments in some specific instruments qualify for tax deduction under Section 80C. For example, PPF, NSC, 5-year tax saving FD, etc quality for tax deductions under Section 80C. You can invest in an Equity Linked Savings Scheme or tax saving mutual fund schemes to claim deductions of up to Rs 1.5 lakh in a financial year. An ELSS comes with a mandatory lock-in period of three years. That means, you can withdraw your investments only after three years. Tata Dividend Yield Fund is not an ELSS fund. It is a regular thematic scheme. So your investments in it won’t qualify for deductions under Section 80C. If you are planning to claim deductions under Section 80C on your investments, invest in a tax saving mutual fund scheme. Here are our recommended ELSS schemes: Best ELSS or tax saving schemes.
Categories
Digital Thought

How To Be A Thought Leader In The Digital Age

James Blake is a Northern Ireland born entrepreneur and founder/CEO at Vindicta Digital, a UK digital marketing agency founded in 2016. Let’s start here by defining exactly what a thought leader is. According to the Thought Leadership Lab, “Thought leaders are the informed opinion leaders and the go-to people in their field of expertise.” The key concepts here are “informed” and “expertise.” Essentially, the unique selling point of thought leaders is that they are the beacons of knowledge within their particular industries and fields. And what sets them apart, even from those with similar skillsets and knowledge banks, is their ability to recognize an opportunity and their entrepreneurial drive to take full advantage.
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Audit

ICYMI | A 2020 Global Auditing Forecast

In the Big Audit model—by which the world’s large public companies engage the international networks of the Big Four to provide financial statement assurance for their use and that of the capital markets—the Big Four had collective 2018 worldwide revenue exceeding $143 billion. How confident can investors be that the Big Four have provided a level of assurance commensurate with these fees? In the United States, because the incidence of financial malfeasance is a trailing economic indicator, the resilience of the securities indices has meant a period of relative quiet. Further muting the rhetoric is the somnolent attitude of the major American regulators, notably the wholesale turnover of the members and senior staff of the PCAOB that has made it essentially a high-salaried housekeeper. What should be expected? Recent disclosures about Under Armour’s revenue recognition and Mattel’s accounting for taxes have put PricewaterhouseCoopers and the profession back under the spotlight; the next outbreak of corporate chicanery—inevitable but on an unpredictable timetable—will only turn up the wattage.
U.K. Developments
Public perception and attitudes vary across the globe. The United Kingdom, where the modern audit function was invented in the mid-19th century, differs considerably from the United States. There, the environment has been aflame for two years, bracketed between the collapse of Carillion in January 2018 and that of travel services giant Thomas Cook in September 2019. Pending for mid-January release is a report from Donald Brydon, former head of the London Stock Exchange, on his broadly conceived Independent Review into the Quality and Effectiveness of Audit, a mission launched by the government’s Secretary for Business. In December 2018, a committee charged by Parliament and headed by City grandee John Kingman issued its report, adopted by the secretary, recommending wholesale restructuring of the Financial Reporting Council (FRC), the country’s audit regulator. Kingman characterized the FRC as a “ramshackle house built on weak foundations,” and his report proposed it be supplanted by a new Audit, Reporting, and Governance Authority (ARGA). Two other reports in April 2019 are also in the mix, from the Competition and Markets Authority (CMA) and Parliament’s select Business, Energy and Industrial Strategy Committee (BEIS). On the regulatory and professional oversight front, implementation of Kingman’s lesser ARGA recommendations, which do not require legislation, has proceeded apace. More consequential restructuring and broadened agency authority will depend on unblocking the country’s Brexit-based legislative paralysis. Meanwhile, the headline proposals with the highest potential impact on accounting firms themselves are as follows:
  • Two from the CMA: first, required “joint audits” for most of the FTSE 350 companies—that is, two audit firms, of which one would be a non–Big Four challenger, would share engagement execution and responsibility. Second, the Big Four would undergo an “organizational split” between their audit and other practices, including separate management, governance, and financial statements, and would forego cross-practice profit sharing.
  • The BEIS committee, endorsing the CMA’s joint audit proposal, would go further—full legal separation of the Big Four’s audit practices, enforced reduction or caps on their dominant share of the large-company market, and shortened limits on the duration of audit engagements.
What would be the effects? An “organizational split” would appear to be within the large firms’ capacity to adjust, as they already display separate branding and identities for their audit and other practices and operate in compliance with country-specific limitations on ownership and licensing. At the same time, such a moderate step would allow the firms to retain the specialized resources necessary to meet the demands of large and complex audits in such areas as transfer pricing, valuation, actuarial, IT and cyber risk, data analytics, and financial instruments. As for the proposals for enforced large audit access for smaller firms, the advocates have yet to come to grips with the market reality: the challengers simply lack the scope and scale to carry out such a program. The Exhibit makes the point, showing the 18 international networks with global 2018 revenue above $500 million. The graph illustrates the smaller firms’ limitations in geographic scope, availability of personnel, and financial resources necessary for investment and risk acceptance—factors that would prevent them from advancing into the FTSE 350 market as well as impair their “joint audit” capability. It is no criticism of those firms’ claims to quality of performance that their capacity is simply not equal to the challenge, within the CMA’s proposed 10-year time span, to obtain and deploy the resources needed either to tender for or actually perform at that scale, when engagements would increase in number and complexity each year, and their work would be exposed beyond the United Kingdom to include the United States and other markets with their regulatory and litigation risks. What are the prospects? From an interview given by the new chairman of the FRC, Simon Dingemans, it seems reason may prevail—at least unless more aggressive politicians seize control of the process. Dingemans was quoted on November 6 as vigorously negative on joint audits, which he said “lead to duplications, confusion of responsibility and extra costs for no obvious added value.” In the same interview, his measured approval of “organizational split” implies that he would not be ready to take the more disruptive steps of legal separation or stripping away the Big Four’s nonaudit capabilities.
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Categories
Costing

2022 Cost of Production Increases, Expected Profit and Navigating a Riskier Financial Environment

Input prices for the 2022 crop year are poised to be substantially higher than recently experienced. The increases in input prices will undoubtedly increase production costs, however, the actual financial effect on your farm is not entirely clear. The lack of clarity can negatively influence input use decision-making in this period of high input prices. To clear up the picture, you must run the numbers through production budgets. Developing cost of production budgets can help keep your planning organized and focused and assist with key information in making management decisions on your cropping practices, input usage, and risk management as you go forward. We also link the current input cost level with fall 2022 commodity prices, allowing us to inspect profit potential. In this article we will discuss the 2022 cropping year by examining increases in input prices, expected profit and risk management.

Our discussion motivates a framework on how to conceptualize increases in production costs. Cost of production budgets act as a filter to give a clear picture of the actual financial implications. For example, suppose an input increases from $20 to $50, a substantial increase of 150%, and therefore something that will require a discussion. Also suppose that in the production budget we use 0.01 per acre of this input. Under the new input price, the cost per acre is now $0.50, up $0.30 per acre from $0.20.  The resulting cost increase per acre, identified through the budgets, is now clear. 2022 Input Prices While we don’t know for sure where 2022 input prices will end up between now and the time purchases are made, we can plug current estimates into our budget calculators to identify how cost of production changes. To provide insight on how the jump in fertilizer and fuel price projections affects the cost of production, we’ll look at two of the University of Nebraska 2021 corn budgets: one dryland corn budget #23 (Table 1), and an irrigated corn budget #36 (Table 2), with a series of input cost updates. Fertilizer and fuel are two primary expenses in producing corn that have recently experienced price increases. After inspecting the cost of production impacts due to changes in fertilizer and fuel, next the cost of production impacts of pesticides, seed and increases in equipment prices were added in.
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Taxation

Budget 2022 personal taxation proposals and how they will impact taxpayers

Union Budget 2022 has brought tax relief for those who invest in capital assets other than equity funds and listed stocks. The surcharge on the tax payable on long-term gains from these capital assets-property, unlisted shares, artifacts-would be capped at 15%. The Budget also gives taxpayers the chance to correct mistakes made in reporting income while filing returns even as it clamps down on getting away with undisclosed income. The surcharge on long-term capital gains tax from equity funds and listed stocks is already capped at 15%. But for gains from other assets, the surcharge is based on the income slab of the taxpayer. It is 25% for incomes from Rs 2 crore to Rs 5 crore and 37% for incomes above Rs 5 crore. This pushed up the effective tax on the capital gains from these assets to as much as 25-27.4% compared to 11.5% payable on gains from equity funds and stocks. “NRI investors and overseas funds are likely to benefit from the cap on the surcharge rate,” says Amit Maheshwari, Tax Partner, AKM Global. Bringing down the surcharge on capital gains from unlisted shares has also been a long-standing demand of startups. It will benefit those holding Esops of unlisted companies. “Rationalisation of surcharge rate on long-term capital gains will encourage investments in capital assets,” says Amit Singhania, Partner, Shardul Amarchand Mangaldas & Co. But the proposal will benefit only those with an income above Rs 2 crore, as the surcharge on income below that income level is already 15%. The Budget has also sought to give opportunity to taxpayers to rectify mistakes related to misreporting of income when filing income tax return for a financial year. It has created a provision for allowing such taxpayers to file an updated return within two years from the end of the relevant assessment year. This is irrespective of whether the taxpayer has filed a return previously for the relevant assessment year, or not. The filing of the updated return will be allowed only after payment of amount equal to 25% or 50% as additional tax on the tax payable on the additional income furnished. Currently, an individual gets time only till 31 December of the relevant assessment year to file a revised ITR. Amit Gupta, MD and Co-Founder, SAG Infotech, asserts, “The updated return filing provision is much better than the previous with the time bracket of two years at maximum to the end of the assessment year.” At present, if the income tax department finds out that some income has been missed out by the assessee, it goes through a lengthy process of adjudication. Instead, with this proposal, there will be trust reposed in the taxpayers that will enable the assessees themselves to declare the income that they may have missed out earlier while filing their return. Sudhir Kaushik, CEO, Taxspanner, observes, “Sometimes the tax filer misses out on reporting certain income either due to ignorance or otherwise, , but this gets captured in the Annual Information Statement. This triggers a notice to the taxpayer who then has to go through a lengthy process of appeal. This new provision will ease the burden on the taxpayer and gives sufficient time to get the tax return rectified without punitive action.” However, some other conditions also need to be fulfilled to be able to file updated income tax returns. According to the Memorandum to the Budget, there should be no decrease in the income tax liability.
Categories
Marketing

9 Marketing Trends You Need to Jump on in 2022

Social media is constantly evolving, and keeping up with the trends is difficult. People who deliberately made marketing plans for 2021 had to accommodate many shifts to make through. As an industry expert, I helped many influencers and businesses to formulate strategies to enhance engagement and growth. A plan must focus on long-term goals and be subdivided into short-term welfare. So, as we proceed to a new year, what marketing trends will pervade in 2022?
1. Personalization, a way to win a place in the heart
When a choice is given, a customer chooses a product that shares a relationship with them. Ads and campaigns that evoke a particular emotion or hook consumers to the content are more likely to succeed in this game. One of the most recent technologies that enable advanced personalization is Deepfakes. It uses machine learning and artificial intelligence to generate visual and audio content that can be leveraged for marketing. Even though it’s infamous for its exploitation, this technology can do wonders with the right strategies. Moreover, one can always use personalized emails or messages to communicate with potential consumers. When united with data collections, AI can generate great insights through social media, aiding you with product designing and user’s choice.
2. Using video-based content, live streaming, and more
People spend most of their time at home instead of attending live events or product launches. The key to marketing is focusing on influencers with a loyal audience. When surveyed, 80% of the people like to engage with live videos instead of pre-recorded ones. This allows them to engage with the influencers, talk about the product, and shop while watching the live streams. Since most of the targeted audience is millennials or the Gen-Z, you can tap into the ‘FOMO’ and use it advantageously to familiarize them with the product. Instagram and Facebook saw a hike in users’ engagement with the live videos; TikTok’s advances in live video features can also become a sensation in 2022. Brands should also utilize OTT platforms to generate more live video content, for instance, using Amazon live to organize promotional events.
3. Discuss what matters; sustainability, goodwill, and more
As people acknowledge different perspectives regarding sustainability, goodwill, climate change, body-shaming, and many other issues, they are also scrutinizing the brands and businesses to choose the good in all standards. It’s hard for the consumer to connect with brands that are irresponsible towards humankind or the environment. Many brands have started designing cruelty-free products that resonate strongly with consumers’ choices.
4. Content that takes no effort
While brands are recommended to put their best in strategizing content, they should make sure that their audience is consuming it effortlessly. I would never prefer anything with a fancy word or an incomplete message.  
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Categories
Operation

What are the key accounting industry trends to watch in 2022?

Accounting firms around the world have been forced to drastically change processes, re-examine working environments, and support businesses’ economic recovery over the past two years. John Edwards, CEO of the Institute of Financial Accountants (IFA), unveils some of the key accounting industry trends expected to shape the year ahead

What are the key accounting industry trends to watch in 2022?


Digitalisation and technology adoption

New technology is changing the way people work and influencing client expectations. This shift to digital transformation has been accelerated by the pandemic, with changes to remote working practices that are unlikely to revert to pre-pandemic conditions.

What’s more, recent systemic changes from the likes of HMRC, including the previous and pending phases of Making Tax Digital, serve to ensure the adoption of appropriate technology – making familiarity with digitalisation an essential skill in the modern accounting industry.

Those who don’t commit will undoubtedly get left behind.

ESG: A growth opportunity for auditors

The pandemic and COP26 have shown that environmental and sustainability issues are fundamental to an organisation’s survival, with them becoming increasingly accountable not just for their finances but for the sustainability of their operations.

This is not just simply to ensure compliance, but increasingly, it is driving businesses short-term and long-term prospects. Consumer demand for environmental sustainability is likely to outstrip government-mandated action, but both should, and will, drive business adoption of sustainable practices.

This offers the accounting industry a significant opportunity, as managing that sustainability requires risk assessment and reporting skills, things that they are ideally placed to provide. As sustainability efforts evolve, so too is the sector primed to innovate through offering eco-conscious services to help their clients measure the degree to which they are operating sustainably.

Environmental, social and governance (ESG) issues are also now key concerns, as well as a major attraction, for global investors, with their sights fixed on sustainability and climate change. As a major part of that criteria, businesses will be required to measure and reduce their greenhouse gas emissions. As there aren’t yet any defined standards for ESG – although there are global standards under development – this offers a widespread growth opportunity for auditors.

Digital skills gaps

Artificial intelligence (AI) will change the face of accounting operations, delivering efficiencies, reducing errors, and optimising workflows, while assisting professionals with real-time business decision making based on data-driven insights. Demand for AI-based accounting software has increased thanks to the sharp rise in digital payments, fuelled by the pandemic.

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Categories
Legal

Important Document For Purchasing A Property

Purchasing a home can frequently be a mess. You may become confused by the legalese and the jargon that is utilised everywhere. For you, we made things simple. You can use this helpful information to assist you to avoid potential real estate traps while buying a home. It is important to ensure that the following documents are there. The basic documents for buying any property like plot, house apartment, commercial land, agricultural land etc.
Sale Agreement
The first document created in anticipation of a property transaction is the agreement to sell. It includes a thorough description of the property and outlines the agreement’s parameters between the buyer and seller, including the agreed-upon purchase price.
Absolute Sale Deed And Title Deed
The sale deed or title deed is the most essential document that outlines the precise transfer of property. The sub registrar’s office, under whose authority the property would fall, is where it needs to be registered.
Title Search And Report
Obtaining the chain of records pertaining to the history of the property that has been registered with the relevant authority is done through the property title search process. Names of title holders, joint tenancy information, and a description of the property are all included. It is especially essential when applying for a home loan.
Khata Certificate
This document is known by different names in different states and it provides proof that the property has an entry in the local municipal records.
Property Tax Receipt
According to the property tax receipts, the prior owner or occupant paid all taxes due and none were outstanding. They also provide the property’s legal standing, making them crucial pieces of supporting documentation.
Encumbrance Certificate
According to an encumbrance certificate, the property is free of all loans or encumbrances. It is an important document for getting a loan from a bank secured by the property. It contains all the information on all transactions involving the property.
Occupancy Certificate
The municipal corporation issues an occupancy certificate or completion certificate following the construction of a building to confirm that it was built in accordance with a sanctioned plan and is ready for occupancy.
Statement From The Bank If Loan Outstanding
It is advisable to obtain the loan statements if there are any loans due on the property being purchased so that there is complete disclosure in that regard.
Certifications Of Non-Objection
It is crucial to request copies of the many NOCs from several departments, including the Sewage Board, Pollution Board, Environment Department, Traffic and Coordination Department, etc. from the developer. This serves as an “intimation of disapproval” for the building’s construction.
Power Of Attorney
If anybody is acting with the owner of the property’s consent, an original Power of Attorney is required. It could be general or particular. Your property ownership is complete after it has been registered. Therefore, it is essential that you fully comprehend the procedure before moving to your new residence. To register your property and take legal ownership of your home, undertake these steps: Consider the circle rate of the area where you purchased your property when determining the value of your property. The circle rate will be used to determine how much stamp duty you will pay. After figuring out the stamp duty, purchase non-judicial stamp paper. Based on the property value at the time of registration, this is collected. The sum varies depending on the state and the type of property (old or new). You must be aware of this expense prior to finalising your property purchase. All information on the property and the property transaction is written down and used to prepare the stamp papers. The topic varies depending on the transaction. To complete the registration process, the buyer must go to the Sub-Office Registrar with two witnesses. Each party involved in the registration process is required to have their documentation, including a photo ID and any necessary property paperwork. Make sure your name, address, and other information are printed correctly when you register. These can also be fixed afterwards, although doing so will cost money. A legal professional can assist you with all the fine details of the paperwork and registration procedure. At the moment of registration, all joint owners whose names are listed on the property must be present. Keep your money safe and do not entertain anyone randomly besides the person you have appointed to complete the process. These days, all you need to do to complete the procedure is visit the lawyer’s office that your builder has designated for you. While the price may be more, the process is simple. You will receive a receipt for your payment after the selling deed is registered. Within the following 10-20 days, you can obtain the sale deed with the help of this receipt. Conclusion: The Indian Registration Act of 1908 governs the procedures for registering property, and it is necessary to do so within the allotted time frame in order to avoid paying a penalty to the sub-registrar and to protect one’s legal claim to the property. Once the registration is complete, the buyer becomes the property’s legal owner.
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Finance

Moody’s upgrades Yes Bank rating, changes outlook to ‘stable’: Here’s why

Moody’s on Thursday said it has upgraded Yes Bank’s rating while changing outlook to ‘stable’ on the back of its equity capital raise plan announced last week. The global rating agency has upgraded the private sector lender’s long-term foreign currency issuer rating and long-term foreign and local currency back deposit ratings to ‘Ba3’ from ‘B2’. It has also changed the outlook on Yes Bank’s ratings to ‘stable’ from ‘positive’ and also adjusted the Baseline Credit Assessment (BCA) to ‘b1’ from ‘b3’. “The upgrade of Yes Bank’s BCA and ratings reflects the bank’s planned equity capital raise, which will support its credit profile and strengthen its resilience against potential asset quality risks arising from headwinds such as higher inflation and tighter global financial conditions,” Moody’s Investors Service said in a release. On July 29, Mumbai-headquartered Yes Bank announced the raising of nearly Rs 8,900 crore (about USD 1.1 billion) through a mix of shares and warrants to be issued to global private equity players Carlyle Group and Advent International. On the rationale behind the ratings upgrade, it said ‘stable’ rating outlook reflects “Moody’s expectation that the bank’s credit profile will improve” at a gradual pace. It will take time for the bank to establish its competitive strengths, it said. Under the capital raise plans, each of these two investors will acquire up to a 10 per cent stake in the bank. The capital raise comprises two parts — Rs 5,100 crore (USD 640 million) in equity shares and Rs 3,800 crore (USD 475 million) through equity share warrants which can be exercised only after April 1, 2023. “Moody’s estimates that the first part of the capital raise will result in an increase of 2.2 percentage points in the bank’s consolidated Common Equity Tier 1 (CET1) ratio from 11.9 per cent as of the end of June 2022, after including profit for the June quarter. The second part of the capital raise will add another 1.6 percentage points.” On the flip side, Moody’s said given the stable outlook, bank’s ratings are unlikely to be upgraded over the next 12-18 months. “Nevertheless, Moody’s could upgrade the ratings and BCA if the bank establishes a credible and sustainable strategy to improve profitability, without compromising its asset quality and capital.” The global rater said it can downgrade the ratings on the lender in case there is a significant deterioration in its asset quality, which can lead to erosion of profitability and capital, or even if the turnaround of the bank fails because of an aggressive financial strategy and risk management. “Specifically, a decline in the total common equity to risk weighted assets below 6 per cent and net income/tangible assets below 0.5 per cent will exert negative pressure on the BCA. Any weakening in Yes Bank’s funding and liquidity will also be negative,” Moody’s added. Yes Bank had to be bailed out in March 2020 following a coordinated action by the government and RBI — and as many as eight lender led by SBI infused capital worth Rs 10,000 crore into the bank as part of the Yes Bank Ltd Reconstruction Scheme, 2020. The lender has now come out of the Reconstruction Scheme and posted a full year profit in fiscal year ended March 2022.
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Finance

Axis Bank to wind up UK subsidiary after deal with OpenPayd fails

Businessman presenting financial analysis with charts generated by big data displaying international success and dollar signs
India’s third largest private lender Axis Bank is winding up its subsidiary in Britain after a deal with financial firm OpenPayd failed, it said in a regulatory filing on Thursday. Axis Bank first said in 2020 that it will be winding down its UK operations. Currently, the bank’s international strategy is to focus on Indian corporates that have global operations, it said in an investor presentation in the results of the quarter ended June. At the end of June, the bank had an overseas loan book of Rs 38,928 crore, a contraction from Rs 45,750 crore in March quarter. Axis in March acquired Citigroup Inc’s local consumer banking firm for $1.6 billion to bulk up its credit card and retail business in the country.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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