7 topics which we all should know (Interview prespective)

Going for Interview ? Wait ....
Are you aware with your profile ? Company background ? etc...

Still we didn't get shortlisted why ?
This is mainly bcoz  few common things which are favourite of interviewer that we are not aware of .

While appearing  for interview we fumbled bcoz of  bouts of interviewer. We feel isolated when we are unanswerable to silly questions asked!!!

When going for interview do prepare thoroughly with your profile, background of the company in which you are going, current affairs, any recent related case studies etc, and conquer the race.

So next time while going for interview do prepare with few of common familiar topics and captivate the recruiter.

Basics things ask by recruiter when on Interview are :
 
1. Reverse merger: A reverse takeover or reverse merger (reverse IPO) is the acquisition of a public company by a private company so that the private company can bypass the lengthy and complex process of going public. The transaction typically requires reorganization of capitalization of the acquiring company.
The advantages is going public through a reverse takeover allows a privately held company to become publicly held at a lesser cost, and with less stock dilution than through an initial public offering (IPO).


2. Six Sigma: Six Sigma is a business management strategy, originally developed by Motorola, USA in 1986 that is widely used in many sectors of industry. Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes.
A six sigma process is one in which 99.99966% of the products manufactured are statistically expected to be free of defects

3. Blue ocean strategy : Go to that area where is no competition

4. CMM: 


5. Tele density:


6. Coso:


7. TRP:

KNOWING DIRECT TAX CODE

 

Direct Tax Code (DTC) will be effective from April 1, 2012 onwards and will bring several changes as regards how you invest across various asset classes. So you as an individual need to rejig your investments accordingly.

The original draft of DTC was much different from what it is in current form. Here’s some more in depth analysis:

Highlights of the Direct Taxes Code bill

• Common threshold income tax exemption limit for men and women proposed at Rs. 2 lakh per annum, up from Rs. 1.8 lakh
• 10 per cent tax on annual income between Rs. 2-5 lakh, 20 per cent on between Rs. 5-10 lakh, 30 per cent for above Rs. 10 lakh
• Tax burden at highest level will come down by Rs. 41,040 annually
• Proposal to raise tax exemption for senior citizens to Rs. 2.5 lakh from Rs. 2.4 lakh currently.(NOTE:-union budget 2011-12 already has proposed it.)
• MAT to be 20 per cent of book profit, up from 18.5 per cent
•  Exemption for investment in approved funds and insurance schemes proposed at Rs. 1.5 lakh annually, against Rs. 1.2 lakh currently (Refer- How insurance gets impacted)
• Proposed bill has 319 sections and 22 schedules against 298 sections and 14 schedules in existing IT Act
• Once enacted, DTC will replace archaic Income Tax Act.
• However, many provisions in Income Tax Act will be a part of DTC as well.
• FBT wiil be charged to the employee rather than the employer.

  Salient features

• DTC removes most of the categories of exempted income. Equity Mutual Funds (ELSS), Term deposits, NSC (National Savings certificates), Unit Linked Insurance Plans (ULIPs), Long term infrastructures bonds, house loan principal repayment, stamp duty and registration fees on purchase of house property will lose tax benefits.
• Only half of Short-term capital gains will be taxed
• Surcharge and education cess are abolished.
• For incomes arising of House Property: Deductions for Rent and Maintenance would be reduced from 30% to 20% of the Gross Rent.
• Tax exemption on Education loan to continue.
• Tax exemption on LTA (leave travel allowance) is abolished.
• Medical reimbursement : Max limit for medical reimbursements has been increased to rupees 50,000 per year from current rupees 15,000 limit.

How insurance gets impacted:

DTC will have significant impact on insurance. Under DTC, to be eligible for tax deduction, a policy should give life cover of at least 20 times the annual premium. If this condition is not met, you will not get any tax deduction on the premium and even the income from the policy will be taxable. Right now income received from insurance policies is free. So make sure if you are looking for tax deduction on insurance plan, make sure you buy a policy which offers a bigger cover. This is possible only if term plan is for duration of 20-25 years. Bigger the cover, better for the policy holder.

Another not so good news is that tax deduction limit for life insurance will get reduced from present Rs 1 lakh a year to Rs 50,000 an year*. This annual limit of 50,000 will include the amount paid for tuition fees of children as well as medical insurance for self and parents. So an insurance policy with a large premium, around 80,000 – 1 lakh will fetch maximum tax deduction of only Rs 50,000.

But, good move is,

Under the DTC Bill, what was previously available as the 80C deduction of Rs 1 lakh is now available as a deduction towards investments only in retiral accounts such as PPF, PF, NPS and in savings schemes as notified by the government. These are all eligible for taxation under EEE treatment.

EEE refers to the tax incidence - exempt at time of investment, exempt during accumulation and exempt at withdrawal. These will be available for the tax year starting April 1, 2012.

*Additionally, an aggregate deduction of Rs 50,000 is available for premium for pure life insurance, health insurance and tuition fees for two children.

As a result, the total deduction available is Rs 1.5 lakhs.

Please note that under the previous 80C deduction investments in ELSS and ULIPs were eligible for the Rs 1 lakh deduction, as was a deduction towards repayment of principal for an outstanding home loan. Under the DTC Bill all these three options are no longer eligible for a deduction.

The DTC will also nudge policyholders to take long term view on investments. Premature withdrawals from ULIPs will be taxed, so think twice before deciding on an insurance policy. Agent telling you that surrender charges have been waived off and you can withdraw money after 5 years without paying anything won’t hold true anymore.

How equities investment will be effected:

Exemption on long term capital gains continuing is definitely positive news here. Investors can continue with their investments as planned without any need to rejig them due to DTC.

However ELSS Mutual Fund scheme’s tax exemption will go and they will be treated at par with other schemes in market with no tax exemption. Investors who are looking for Mutual Funds for tax exemption should consider this factor while investing.

Definite impact on Pension Funds:

Under the DTC, most of current tax saving investment will not be eligible for deduction. Instead focus has shifted to long term options with pension funds leading the way. An annuity is an investment that gives out a regular income to the investor. Pension plans require an investor to put at least 65% of corpus received on maturity in an annuity which then gives him monthly pension. Though more details are awaited but DTC ahs proposed to make annuity income exempt from taxation which makes them good tax saving instrument. The New Pension scheme is low cost pension fund which an investor can consider.

DTC impact on Real Estate:

The repayment of principal of your home loan will not be eligible for tax deduction under the DTC. But there is also a bright spot wherein there is removal of tax on notational rent. Right now people who own more than one house have to pay tax on notational rental income even if second house is lying vacant. The DTC will remove this anomaly and make investment in second home more tax efficient. Another landlord friendly move is that advanced tax received from a tenant will be taxed in year it relates, not when it was received.

DTC, more importantly has retained tax benefit on the interest paid on home loan. The tax benefits reduce the effective cost of home loan thus making it affordable for borrowers.

DTC impact on debt schemes:

Most significant point here is that earlier proposal of taxing withdrawals from PPF is junked. Another significant change that will impact investments in debt funds is the new rule for calculating the indexation of capital gains. Indexation takes into account inflation during the holding period and allows investor to adjust his buying price. The DTC has changed this and the asset will have to be held for more than 1 year from the end of financial year in which it was bought to avail indexation benefits. This is a significant change and will impact the way investors in FMPs and debt funds use this benefit

In nutshell, let’s review the changes proposed on different investment instruments:

Investment Instrument	What’s Changed	Your strategy
Public Provident Fund (PPF)	Nothing at all. Earlier plans to tax withdrawals withdrawn	Continue your investment in this tax- free financial instrument as part of your debt portfolio.
Pension Plans	Annuity income to be exempt from tax	National Pension Scheme (NPS) will get a look in. Invest in this low-cost product and secure your life after retirement. Choose your fund manager carefully after proper research.
Real Estate	Deduction for interest to continue but not for principal. No more tax on notational rent	You need to save more to shelve out EMI’s
Fixed Deposits , Bonds	Nothing .Interest to be taxed at normal rates.	Keep investing as part of debt portfolio.
Equities and Equity Oriented Funds	No change for long term gains. Short term gains to be taxed at lower rate.	Continue investing as per your asset allocation. Use SIP for compounding. Exemption on ELSS will go.
Life Insurance	Deduction lowered to 50,000 per year. Life cover of 20 times the annual premium must for tax deduction, exemption.	Buy term plans for life insurance.
Debt Funds and Other Non Equity Schemes	Long term gains to be taxed as income	Go for arbitrage funds that are treated as equity funds. Buy before financial year ends to gain from indexation.

Courtesy: Wikipedia, Reuters

SHOULD ONE GO FOR REALTY DEBENTURES ?

 Debt, as experts have been saying, is in a sweet spot at present. Be it fixed deposits, bonds, fixed maturity plans or non-convertible debentures — all are offering attractive returns, luring investors by hordes.
But when you are a high net worth investor, ‘good’ is not necessarily good enough. You want to invest in debt and yet beat the regular debt instruments’ performance. If it means taking on additional risk in exchange for higher-than-market-returns, so be it.  If equity-linked debentures and other capital protected structured products were popular when the markets nosedived in 2008; it’s the real-estate linked debentures that seem to be the fad now.Real estate as an asset class never runs out of favour for HNIs. These debentures are created by developers. They are not regulated by Sebi or RBI, but the Companies Act

HOW THEY WORK A clutch of wealth management firms have been creating/facilitating these products, which essentially involve three parties. The real estate developer who issues such debentures; the HNI client who ‘buys’ them; and the wealth management firm that advises the clients, does the requisite due diligence to ascertain the developer’s creditworthiness and facilitates the entire transaction. Simply put, through such instruments, HNIs lend to the property developer in need of funds to start or complete a project. What HNIs stand to gain here is returns ranging from 16% to 23%, which is considerably higher than the regulated debt products. The tenure is between two and three years. Now, why would these builders knock on the doors of HNIs, instead of approaching banks or financial institutions? There was a period when real estate as a sector was not getting adequate funding through the banking and other financial channels. Traditionally, developers sourced funds from private money lenders who charge an interest rate of up to 30%. Borrowing from HNIs through real estate-linked debentures, which carry an interest rate of 16-23%, thus, is a beneficial proposition for property developers. These debentures are a secured form of lending. For instance, if the debenture is priced at Rs.10 crore, the collateral will be 2-3 times the amount. Typically, the builder pledges the land, plus any receivable and also some other properties with the HNI lender. 

THE DUE DILIGENCE : When financial institution identify such deals, they always co-invest in the real-estate debentures. This is a comforting factor for  HNI, as institution stay in the debentures together. Similarly as an intermediary they make clients meet the builder who is credible, financially sound and has a good pedigree. Sometimes, a developer may face temporary cash flow issues in the middle of a project. At such times, these debentures act as a good vehicle to raise money. Often wealth managers ensure the project is 80-85% complete so that the investor can be assured of its completion. For some reason, if the builder is unable to cough up the repayment at the time of maturity, the HNI can charge a penalty at a pre-fixed rate. This inculcates a financial discipline even in the builder with respect to his repayment.

THE RISKY PROPOSITION: Such transactions are usually not meant for retail investors, given the quantum of risk involved. Besides, the investment amount required puts such instruments out of their reach. Even HNIs who find such options lucrative need to enter with great caution after factoring in the risks, advise wealth managers. Investment in real estate debentures should ideally not exceed 5% of the portfolio. Also, these debentures, unlike the others that are open to retail investors, are not rated by any credit rating agency. So, the credit risk, or the risk of the builder turning a defaulter, cannot be wished away despite extensive due diligence by the HNI as well as his/her advisors. Here, the wealth manager’s assessment of the builder is the only assuring factor. Often, investors want to issue debentures to builders who are willing to borrow at a rate higher than the average. This should be avoided as a higher coupon rate implies a higher risk quotient, wealth managers say. Thus, like all exotic financial products, investment in real-estate debentures, too, call for high-risk appetite and a thorough understanding of inherent risks involved and, more importantly, resisting the temptation to take a large exposure to these products. 

Courtesy: ET

HIT BY RISING HOME EMI ? HERE'S WHAT U CAN DO

Building a home is a dream come true for most people. Most of them plan and save for years, as it calls for a large amount. Still, a home loan is what comes as a rescue to many buyers. It is with the aid of a home loan, that a person with a regular, stipulated income can afford to buy an apartment.
However, home loans have become a problem for many because of the rising cost of living and higher interest rates that have pushed up equated monthly installments (EMIs). 

The recurring rise in home loan rates has been hitting the borrower hard since some time now. The common man is forced to put many of his other financial plans on the back burner because of this.
Here is a classic example of how Rahul is still under a heavy debt burden despite regular repayment of his housing loan since 2002. Rahul took a housing loan of Rs.3 lakh in November 2002. His EMI was fixed at . 2,996. The loan was granted for 240 months initially. One of the leading private sector banks which has granted the loan started increasing the rate of interest periodically and consequently the EMI, as well.
What is intriguing is the allocation portion of EMI towards the principal amount. A very small portion of EMI, say just 10-15% of the EMI, gets allocated towards the principal portion of loan whereas 85-90% is towards interest. As a result, the tenure of the loan gets elongated.

As per the amortisation chart (a table that gives details of the periodic principal and interest payments on a loan and the amount outstanding at any point of time), from May 1, 2011, onwards till December 1, 2016, the amount adjusted towards repayment of principal is just in two digits varying from Rs.41 to Rs.98, which means the repayment of loan will get extended. The initial period which Rahul had availed was 240 months but with increasing rate and increase in tenure, he will be able to clear the loan only on March 1, 2038. This means a small loan of . 300,000 taken initially will now be repaid in 36 years. 

What is the interest amount which Paranjape will be paying?
Till October 1, 2011, Paranjape has already paid interest of  Rs.2,95,584. As on date, the present loan amount outstanding is shown as Rs.2,59400. (Out of the EMI, only Rs.40,600 have been appropriated towards the principal during the last nine years). If he chooses to continue till the extended period, he will have to pay a total interest of Rs.12,14,406 at the present rate of interest indicated by the bank, namely,17.25%.  
If the interest rate increases further, the interest amount too will go up, and perhaps the tenure as well.
 
What can be done under the given situation?
There are three options:
a) Pre-pay a part of the amount so that the EMI and tenure do not change
b) Shift to a new lender as you will be granted loan at a rate which is applicable to new borrowers and generally at a better rate
c) Try to manage for payment at a higher EMI by cutting down expenses wherever possible so that you save on the interest cost. 

Courtesy: ET

Income Tax Department facilitates a PAN holder to view its Tax Credit Statement (Form 26AS) online.

Form 26AS contains

• Details of tax deducted on behalf of the taxpayer by deductors
• Details of tax collected on behalf of the taxpayer by collectors
• Advance tax/self assessment tax/regular assessment tax, etc. deposited by the taxpayers (PAN holders)
• Details of paid refund received during the financial year
• Details of the High value Transactions in respect of shares, mutual fund etc.

The Tax Credit Statement (Form 26AS) are generated wherein valid PAN has been reported in the TDS statements.
Tax Credits Statement (Form 26AS) can be viewed/accessed through 3 ways :1. View Tax Credit from https://incometaxindiaefiling.gov.in
Taxpayers who are registered at the above potal viz. https://incometaxindiaefiling.gov.in can view 26AS by clicking on 'View Tax Credit Statement (From 26AS)' in "My Account". The facility is available free of cost.

For "New Registration", Click on 'Register' on the portal. The registration process is user-friendly and takes minimal time.2. View Tax Credit (Form 26AS) from bank site through net banking facility


The facility is available to a PAN holder having net banking account with any of authorized banks. View of Tax Credit Statement (Form 26AS) is available only if the PAN is mapped to that particular account. The facility is available for free of cost.List of banks registered with NSDL for providing view of Tax Credit Statement (Form 26AS) are as below


      1. Axis Bank Limited 
      2. Bank of India 
      3. Bank of Maharashtra
      4. Citibank N.A.
      5. Corporation Bank
      6. ICICI Bank Limited
      7. IDBI Bank Limited
      8. Indian Overseas Bank
      9. Indian Bank
      10. Kotak Mahindra Bank Limited 
      11. Oriental Bank of Commerce
      12. State Bank of India
      13. State Bank of Mysore
      14. State Bank of Travancore
      15. The Federal Bank Limited
      16. UCO Bank
      17. Union Bank of India
      18. Bank of Baroda
      19. Karnataka Bank
      20. The Saraswat Co-operative Bank Limited
      21. City Union Bank Limited
      22. State Bank of Patiala3. View Tax Credit (Form 26AS) from TIN website
The facility is available to PANs that are registered with Tax Information Network for view of 26AS statement. The PAN holder has to fill up an online Registration form for such purpose. Thereafter, verification of PAN holder's identity is done by the TIN-Facilitation Centre personnel either at PAN holder's address or at the TIN-facilitation center that has been chosen by the PAN holder. The verification involves a cost at prescribed rates. Once authorised, the PAN holder can view Tax Credit Statement online.