The post New GST Tax laws, boon or bane for the common man? first appeared on Corp India News.
]]>For beginners, let’s begin to understand what GST actually means before diving deeper into understanding the context of impact of the new notifications in tax laws.
What is GST?
GST , short for Goods and Services Tax, is a multi-stage-oriented tax imposed at every point of sale, replacing various multiple taxes such as VAT, service tax, custom fees, to name a few. GST centralizes tax returns under a single domestic indirect taxation law.
The GST model for India was concluded by task force headed by former finance ministry advisor, Vijay L. Kelkar under the vision of former Prime Minister, Shri Atal Bihari Vajpayee in 2000. After several attempts to propose a GST model since then, the four supplementary GST bills were approved by all cabinet ministers and members of the lower house, Lok Sabha, finally in 2017.
Before we proceed further into the articles, lets learn a few terms that will help you understand the GST updates and notifications after the recent amendments in central tax laws. To begin with, take a look at the brief below:
GST notification
GST notification is a regular update over central tax by the GST council of India. The GST revenue is collected by the central government from both, interstate and intrastate transactions.
To get accurate notifications, keep a tab of Cbec
Integrated Tax Rate
ITR also known as IGST (Integrated Tax Rate) is a tax that is levied on all inter-state supply chain of goods and services controlled and regulated by IGST Act. Any import or export made will be regulated under IGST. The Tax rate keeps changing, therefore, we suggest you keep a daily tab on schedules, notification, and due dates related to tax rate.
To get accurate information on IGST tax rate, keep a tab on GST Council of India
Income Tax Slabs
India is one of the only countries where there is a tax for all levels of employment process, be it individual, HUF, LLPs, partnership firms controlled and regulated by Income Tax India.. The tax applies to an array of income also known as Income Tax Slabs. The tax is levied as per the slab system if their income is above the minimum threshold limit (known as basic exemption limit ).
Let’s move forward with much discussed potential impact of the goods and services tax (GST) on inflation, and debatable rise in headline Consumer Price Index (CPI). The tax rates have impacted the consumption basket in various categories, challenging the composition of consumption of the end consumer.
Latest update in Common Man
As much as the new amended tax laws for GST remain indifferent for the business communities, on the flip side, the middle-class and lower-middle class communities may have to prepare themselves for one of the sharpest tax increases in areas of health, clothing and footwear, medicines and electricity, according to a report prepared by the Chief Economic Advisor of RNR. The expected tax increase is estimated between 8.8 % to 13.6% in healthcare products, excluding pharmaceutical drugs. While the forecast for clothing and footwear tax may rise up to 13.8% from 9.5%, currently. On the brighter side, the CPI shall witness a lower tax hike, exclusive of oil and fat making a decline in price rise by 0.6%.
In a survey conducted by Citizen Portal connected to Central Government Consumer Affair Department, nearly 40, 000 applicants displayed their disappointment with price hike in basic household items making the house cost go out of their monthly budget of spending.
New shockers in 28% and18% tax bracket for the common man
The shocking introduction of basic essential and miscellaneous needs such as sunscreen, pan-masala, weighing machine, vacuum cleaner, hair clippers, automobiles, fitness products have got many nodding their head in disdain. When it comes to service sector, any bill above 7,500 in hotels or restaurant, betting on casinos, racing, movie tickets will fall under 28% tax bracket. Prices of electronic device such laptops and mobile phones will now be treated under 12% from previously included in 8% tax bracket. With automobiles such as cars and bikes falling under the 28% bracket, citizens are afraid if they can afford it with contrasting price hike in essential goods and services. A relief revision would be much appreciated, as suggested by applicants on online forums and government portals.
However, on the brighter side, to impact the common man the government has revised five rules in tax laws functional since 1st January 2022. The amendments are said to decrease price of LPG cylinder, fewer charges on ATM cash withdrawals, deposit tax on India Post Payments Banks and transaction services related to ICICI.
However, to be on the safer side is to remain updated with changing tax rates under GST council.
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Dying hope for the poor
Data collected by RNR shows that the poor population has only 1 % stake in total expenditure on healthcare, which will rise up to 5.5% of total household expenditure after the new tax laws are implicated. To compare it with the rest of the population which spends 7.5% of their income on the same, it is expected that both strata of population are likely to be affected with the inclusion of some of the essential products in the 28% category. Read on to know what they are!
The national council of Economic Research in a study suggested that the implementation of new GST will result in drastic decline in the price of cotton textiles, silk and synthetic fibres by introducing them in 6% and 11% tax bracket.
Positive Impact of GST on the Common Man
- GST was certainly a better replacement of indirect taxes such as VAT, CST, service tax, CAD, SAD, excise, to name a few.
- Eliminated the overlapping situation of tax on tax, also known as the cascading effect of taxes.
- Decreased manufacturing cost by reducing the burden of taxes, as a result prices of consumer goods go down.
- Lower manufacturing cost is an invitation for more competitors which means the cost of automobiles and FMCG becomes affordable.
- Affordable product opens the opportunity for a common man to spend less money for the same goods and services that cost them their whole life.
- Increased demand is a key enhancer to supply chain. With GST the production is likely to increase, however this can only happen if the consumers are getting the products at a cheaper rate.
- A unified tax system enables a secure protection to the common man’s wealth against malpractice and fraudulent activities.
- Most importantly, experts expect to see a positive impact of GST on the Indian economy in the long run.
Negative impact of GST on the Common Man
- Minimized compliance burden on tax collector’s end while adding more on the plate of the tax payer with the filing of GST.
- Additional professional cost for filing GST services
- Even with several attempts from the government to ease the tax filing process, to make return filing easier has not been successful
- Small traders, service providers and merchants face challenges with the new complex model of GST
- With the current rate of 15% being charged on services, GST at 28% proposed for services like telecommunication, air-travel, banking and financial services is sure going to dig a big hole down the pocket for many from their monthly expenses.
- The common man is compelled to reset their budget to bear the cost of additional services.
- To prevent the risk of loss, additional cost comes with obligatory dependencies on tax experts and professionals, which mean more business expenses.
- GST is a new model, hence every new change in the law affects the structure and budgets of every individual, businesses and household.
- GST is a consumption-based tax, therefore, revaluating the accounts on which the service tax should be applied needs a revisit.
- If the consumers is not treated equally as the seller, the seller can increase the price of commodities during crisis.
- The rise in inflation can be observed initially, however, it may also come down gradually.
Based on the above discussion, it is safe to say that the new amendments and notifications in GST laws are not forgiving the common man. However, it is not okay to judge a book by its cover. GST as a tax model is fairly new, therefore, challenges are paramount, however, we look forward to the brighter side of the amended laws as we enter into yet another gloomy financial year.
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The post New GST Tax laws, boon or bane for the common man? first appeared on Corp India News.
]]>The post India’s wheat exports reach 7.85 million tonnes first appeared on Corp India News.
]]>India has emerged as a global food supplier in such challenging times with its increased share in wheat exports. India’s wheat exports shot to 7.85 million tonnes in 2021-22, a sharp increase from 2.1 million in the previous year.
As per reports, India had achieved its target of exporting 7 million tonnes of wheat on 21st March, ten days early. A total of 7.85 million tonnes of wheat were sold to India’s neighbouring country, Bangladesh. Apart from Bangladesh, India exported its wheat to South Korea, Sri Lanka, Oman and Qatar.
India’s wheat exports from April-December 2021 were pegged at 5.04 million tonnes against 1.06 million tonnes during the same time in 2020.
The Agriculture Ministry had declared that India would record 111.32 million tonnes of wheat production by the end of the fiscal year. At the same time, India has procured 34917 MT of wheat during the Rabi Marketing Season 2022-23.
34917 MT of Wheat procured in RMS 2022-23 (up to 03.04.2022)
3510 farmers benefitted in RMS 2022-23 with MSP value of Rs. 70.36 crore
750.29 LMT of Paddy procured in KMS 2021-22 (up to 03.04.2022)
Read more: https://t.co/c75O7R0BtH pic.twitter.com/FFjJkb4E09
— PIB India (@PIB_India) April 4, 2022
While India is the second-largest producer of wheat with 13.53 per cent of the world’s total production, after China, a large portion of the production goes towards domestic consumption.
Hence, India only contributes less than 1 per cent of its wheat production in global wheat exports. Yet, this year, the global shortage of foodgrains and record foodgrains production has pushed India’s wheat exports upwards.
Reason Behind Bumper Wheat Export
Prices of farm commodities were already on a tear before due to the Covid pandemic; however, the Russia-Ukraine war had fueled the dramatic rise in food inflation in the world.
Ukraine and Russia both are among the top wheat exporters in the world. Together they account for 29 per cent of global wheat exports.However, Russia’s Ukraine invasion has created a massive blockage in global markets.
Moreover, the destruction of the supply chain in Ukraine and economic sanctions on Russia crushed both countries’ exports.
The post India’s wheat exports reach 7.85 million tonnes first appeared on Corp India News.
]]>The post Six FinTech Trends of 2022 first appeared on Corp India News.
]]>With the new year 2022 in the NEW NORMAL phase, the FinTech industry has accelerated, unlocking its true potential and value to the financial sector actors. The previous year, 2021, witnessed a lot of money exchanged through FinTech. As per Statista, “FinTech investment value increased in 2021 to 210.1 billion U.S. dollars.” Nevertheless, the FinTech industry is transforming itself every year with new terms in the financial arena. Thus, 2022 can be a milestone year with path-breaking innovations in FinTech. Therefore, we have listed some trends that we believe are going to rule in 2022 and shape the future of FinTech; so, without further ado, let us see discuss six FinTech trends to keep an eye on:
- Digital-Only and Neo Banking
Digital-only banks are the new-age banks that provide financial services to their customers without having any physical presence anywhere. Instead, it provides virtual banking services like P2P transfers, international remittance, buying various cryptocurrencies like bitcoin and Ethereum, contactless Mastercard with free transaction fees, and more. These bank has achieved immense popularity thanks to their offerings, such as the elimination of paperwork/physical presence/long queues. Moreover, the good part is these technologies have contributed to the transition from a centralized, standard banking model to a more broadcasted, technology-driven one.
Noe banks are also taking the monopoly of a few big names in the industry by making the banking world convenient and breaking the chain of conventional markets. While in India, where banks are not permitted to 100% digitalization, FinTech companies have started functioning as Neo banks. With the rapid growth of smartphone users, Neo-banking has an unprecedented scope to evolve.
2. Blockchain Technology
Blockchain technology has created wonders in transforming the FinTech industry, and hence it is among the top trends of the year. This cutting-edge technology with cross-border payment systems is extremely popular as digital transactions, and the data are entirely secure with Blockchain. Therefore, you can make your product stand out with efficacy, speed and security. Many banking and financial institutions adopt this technology because of the decentralized payment system. Moreover, it helps reduce expenses, enhance internal procedures, and improve workflow dynamics. Also, this technology has inspired the development of various P2P financial platforms to perform monetary transactions and thus enhance their investments.
3. Artificial Intelligence (AI) and Machine Learning (ML)
Worldwide, the banks are exploring prospects of integrating Artificial Intelligence (AI) backed by RPA in their business operations to save an extreme amount of money. AI and ML have enabled the banks to process an extensive amount of data set and reach closings due to their ability to analyze real-time patterns, assisting with fast decision-making. Further, FinTech firms are constantly researching the areas of AI that will be helpful for banks with their fraud detection processes, loan decisions, and credit/customer services.
In 2022, the FinTech applications will continue to use AI and ML in independent finances to save consumers money. In addition, this will help the users make instant decisions about their money investments, manage cybercrimes by identifying financial frauds, and use chatbots to address customer queries. Moreover, it is beneficial to automate backend processes like customer onboarding, security checks, etc.
4. Voice-Enabled Payments
Voice technology has evolved nowadays not just to announce the weather forecasts or play songs but to become a key element in the financial transactions of the banking sector. AI-powered voice technology can act as an automated support agent to perform challenging tasks like replying to typical client questions, providing primary card balance and account data, scheduling/categorizing calls, setting up recurring payments, etc. Furthermore, the consumer’s voice can be used as biometric data to begin a payment which relieves consumers. Although consumer trust is a pressing issue for implementing this technology with a concern of security breaches, the potential of voice payments is sky-high, from transferring funds between accounts to sending money to friends from various platforms.
5. RPA
Robotic process automation (RPA) is a process automation technology that uses software robots or digital workers to automate the tasks humans usually perform. RPA enables firms to obtain adequate work efficiency with a reasonably small investment. Therefore the industry has already started implementing RPA to cut costs and improve organizational efficiencies. Further, RPA digital workers also ease the account maintenance/closing, security checks, credit card processing, trial balancing, customer onboarding, etc. Moreover, RPA already handles several tasks in the industry, such as fraud detection, tax reporting, streamlining accounts and more. Therefore, RPA allows the institutions to focus on other important areas like customer service, and it will also be a vital part of FinTechs soon.
6. White-Label FinTech
The predominant FinTech trend that you should not miss out on is White Labelling. White-label FinTech is a service in which a FinTech company buys from a provider and rebrands before they are sold. White label FinTech solutions quickly let businesses of all sizes create a global payment gateway. In addition, it gives users a win-win situation as the distributor gets a more extensive customer base, minimizes launch costs, and saves the reseller’s time. Moreover, it allows companies to outsource financial applications to get into the market faster while maintaining relevance in the ecosystem.
In a nutshell, the FinTech trends are ever-evolving, with rapid digitalization and technological advancements every day. Although the nature of Fintech is inconsistent and thus causes it to be vulnerable to sudden changes, we can expect FinTech to continue to expand its presence and scope. Consequently, it is most likely that the coming year will make financial services better and more fruitful for the FinTech sector.
The post Six FinTech Trends of 2022 first appeared on Corp India News.
]]>The post How to Start Investing in Stocks: A Beginner’s Guide first appeared on Corp India News.
]]>There is no fixed amount of money that you require to begin investing, however to put it to experiment, let’s suppose you have an extra $10 a week that you’d like to invest, in this article, we walk you down the easy steps into your investment journey and show you how to maximize your returns while minimizing your costs. But, before that it’s crucial to identify which kind of investor are you! Read on to learn more.
What kind of investor are you?
Investing blindly may not be our first advice to you since there are risks involved in investing without appropriate knowledge. When opening a brokerage account, online broker such as Charles Schwab or Fidelity ask you about your investment goals and the levels of risk you’re willing to take, so it becomes crucial for you to ask yourself, what kind of investor am I, after all?
You can either take an active participation in managing your growth or you can prefer to “set it and forget it”. Traditional online brokers allow you to invest in stocks, bonds, exchange-traded funds (ETFs), index funds and mutual funds. Before that, lets learn about the various brokerage services that are available to you and how to choose what fits your bill!
Online Brokers
Investment brokers either provide full-service or discount. As the name suggests, full-service brokerage ranges from financial advice for retirement, healthcare and everything related to monetary processes. Full-time services come with substantial fees, including a percentage of your assets, transactions and yearly membership fee. Usually, the full-service brokers prefer charging according to your net worth. Traditional brokers justify their high fees by giving advice detailed to your needs.
Discount brokers
Once upon a time, discount brokers were treated as an exception, but with growing investment needs, they have become the norm. As the landscape of financial services in 21st century progresses, online brokers provide you with tools to select and place your own transactions, along with educational materials on their sites and mobile apps. They also offer a set-it-and-forget-it-robo-advisory service.
In addition, if you are an investor willing to invest in stocks, you must take into account that there are number of discount brokers with minimum deposit bars against certain fees that are charged to accounts that don’t have a minimum deposit, or you could try Robo-advisors.
Robo-Advisors
After the devastating global depression in the financial market in 2008, RoboAdvisor was introduced as a new breed of investment advisor by Jon Stein and Eli Broverman. Their primary aim to introduce RoboAdvisor was to utilize technology to lower costs for investors and streamline investment advice.
Since Betterment (the first robo-advisor company) launched, other financial services companies have stepped up their game by establishing robo-like advisory services. According to a report by Charles Schwab, a renowned online broker, suggested that approximately 58% of Americans would like to take to robo-advice by 2025 for an easier investment process. And we wonder, why not? Algorithm has taken over the internet to solve many problems that were once manually solved. If you prefer algorithm to make decisions for you, including tax-loss harvesting and rebalancing, then look further than a robo-advisory. It’s also best suited for investors looking for a long-term wealth building.
Investing through your employer
It’s not easy or ideal to invest into your retirement plan while you have just begun your career. You may find yourself on a tight budget for investment in the beginning, but the truth is you probably won’t even miss a contribution that small when you work based retirement plans deduct your contributions from your paycheck before taxes are calculated. Suppose you are comfortable investing 1% of your total salary, gradually you can increase it as you get annual raises. You’re unlikely to miss the additional contributions. If you have a 401(k) retirement account at work, then you may be investing in your future already with allocations to mutual funds and even your own company’s stock.
Minimums to Open an Account
Contrary to how easy stock investment marketers make it sound to enter the investment game, let us tell you, there is no such thing as a free lunch. It’s more like one-hand-give-one-hand-take policy that works best in stock investment. One of the basic requirements to begin investment is to invest into your Demat account. Every financial institute demands for a certain minimum deposit to keep it as a security without which your account application remains incomplete. Some firms won’t precede your application the sum of below $1,000. Others may often reduce costs, such as trading fees and account management fees if you have a balance above a certain threshold. Still others may offer a certain number of commission-free trades for opening an account.
Commissions and Fees
As economists like to say, there’s no such a thing as free lunch. Though many attempts to eliminate commissions on trades by ETFs offering index investing to everyone who wants to trade with bare-bones brokerage accounts, however, brokers will find their way to make money from their customers in one way or another.
With every trade stock that you earn, a certain surcharge goes to broker by default, either through buying or selling. The minimum brokerage fees charge beings with $2 per trade, and can be as high as $10 for some discount broker. Some brokers may charge nothing for commissioning, but will make up for it in some or the way since no charitable organizations running brokerage services.
Fees can add up and affect your profitability depending how frequently you trade. Stock investment can cost you a lot if you roll-in and roll-out frequently, especially with a small amount of money available to invest.
How it really works
It’s crucial to remember that a trade is an order to purchase or sell shares in one company. If you wish to buy 5 different stocks at the same, this will be considered as five separate trades for which you will be charged for each one separately.
Suppose you want to buy stocks of five companies with a budget of $1,000. To put perspectives together, you will incur $50 as trade cost—assuming the fee is $10—which is equivalent to 5% of your $1,000. If you fully invest the $1,000, your account balance will be reduced to $950 after applying the trading costs. This decline represents loss before your investments even before you trading. Don’t you worry, losses lead to new gains and stock market is the perfect playground to play!
Plot twist
Suppose you sell these five stocks, you will have to incur the trade cost all over again which is $50. To begin the round trip of buying and selling, another $100 is debited, or 10% of your deposit amount of $1,000. You are not eligible to regain the initial invested expenses if your investments cannot make it enough to cover these basic expenses. The world of stock market has its high, don’t let the lows discourage you.
If you plan to trade frequently, check out our list of brokers for cost-conscious traders.
Mutual Fund Loads
Mutual is another effective way to grow your finances, and very popular in Indian family systems. Besides the trading fee, there are miscellaneous costs associated with this investment type. Mutual funds are pools of investor funds managed by highly skilled professionals who invest in an organized manner, for example, large-cap U.S stocks, Muthut Finance, Kotak Mahindra, Sharekhan, to name a few large and small finance companies providing mutual funds service.
The process is tad more like “the-long-way-home” with many fees associated with the process of mutual funds. MER (Management Expense Ratio) is one of the crucial fees that are charged by the management team each year based on the number of assets in the fund. One weird thing about MER is that the higher the MER, the more it affects the fund’s overall returns.
To acquaint you with finance jargons, you must remember a number of sales charges called loads at the time of purchasing your mutual fund. There are also front-end loads, no-load and back-end load funds. Its crucial to understand that has a prior load before buying it. To be sure, check out your broker’s list of no-load funds and no-transaction-fee funds if you save on extra charges.
On a brighter side of mutual funds for beginners is the advantage of fees compared to commissions on stock. The advantage is that fees remain same regardless of the amount that you invest. You can invest as little as $50 or $100 in a mutual fund as long as you meet the minimum requirement. The term for this is called dollar-cost averaging (DCA), must try!
Diversify and Reduce Risks
If you are looking for your free meal ticket in investing, look no further than diversification. Diversification allows you to invest in a range of asses in order to reduce the risk of one investment’s performance and secure your overall returns on investment. To help you remember this better, we’d like to say “Don’t pull all your eggs in one basket.”
The challenge with diversification is that is nearly impossible to have a well-diversified portfolio, so be careful while investing. Suppose with a $1,000 deposit you must invest in one or two companies at the most. This may increase you risk, but to be honest, that when the major benefit of mutual funds or ETFs’ comes into focus.
In terms of diversification, the greatest difficulty in doing this will come from investments in stocks. As mentioned earlier, the costs of investing in a large number of stocks could be detrimental to the portfolio. With a $1,000 deposit, it is nearly impossible to have a well-diversified portfolio, so be aware that you may need to invest in one or two companies (at the most) in the first place. What makes a single stock more diversified than the other is large number of stocks and investments within a stock fund.
Stock Market Simulators
One of the most valuable tools of the 21st century is stock market simulators. If you are someone who wants to gain experience in trading without risking money in the process, good news is there are an array of trading simulators available for you to choose from. Our favorite one is Investopedia’s simulator which is entirely a free-ware tool.
What’s better than imaginary money being used for wide portfolios of stocks options, ETFs and other securities? Stock market simulators are exactly this dream come true. The good part is that some of these simulators typically track real-time price movements of investments and other notable considerations such as trading fees or dividend payout which allows you to pitch your ins and outs strategy, consequences of virtual investments without any risks so that when you take to trading in real-time and with real money, you are well-equipped with accurate knowledge to prevent financial losses. Some simulators even allow users to compete against other participants, providing an additional incentive to invest thoughtfully.
Now that we you know it’s more complicated than just selecting the right investment (a feat that is difficult enough in itself), you must keep being aware of the restrictions that you may face as a new investor, we hope this piece was helpful enough to inspire you get you started with your investment venture. However, having said that, we would never stop recommending you to do your homework to choose brokers with whom you would like to open an account.
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The post How to Start Investing in Stocks: A Beginner’s Guide first appeared on Corp India News.
]]>The post Share Markets close higher on the first of FY23: Sensex recaptures 59k mark first appeared on Corp India News.
]]>The Sensex jumped 828.11 points or 1.41% to 59,396.62 during the day and settled at 59,276.69, while NSE Nifty rallied 205.70 points at a 1.18% rise, settling at 17.670.45.
NTPC, PowerGrid, State Bank of India, HDFC, IndusInd Bank, Mahindra & Mahindra, HDFC Bank, Bajaj Finance and Axis Bank from the 30-share Sensex pack were the star players during the first trading session of the new financial year. While shares of Tech Mahindra, Sun Pharma, Dr Reddy’s, Titan and Infosys remained sluggish.
What about other stock markets?
Talking about other Asian stock exchanges, Seoul and Tokyo ended lower, while Shanghai and Hong Kong too performed well.
European stock exchanges mainly were trading higher, while the overnight trading session of the US stock exchanges ended on a negative note.
Talking about the over market sentiments this week, Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said, “Indian equity markets gave positive returns this week. Globally too, equity markets remained broadly resilient, led by optimism on progress in Russia-Ukraine negotiations,”
“On the other hand, commodities saw some correction from the recent highs. In India, markets saw broad-based gains with most sectoral indices giving positive returns”, he added.
Speaking on the current inflation in the Crude Oil market, he said, ” Crude oil prices corrected this week, and that is some positive for import-dependent countries including India,”
Notably, the international oil benchmark Brent crude jumped 0.22% to USD 104.94 per barrel.
Reason behind good opening:
As per the stock exchange data, Foreign Institutional Investors (FIIs) bought shares worth Rs 3,088.73 crore on the last day of the previous financial year. This move had set the momentum for the opening day of the new financial year. For 2021-22 fiscal, the BSE Sensex jumped 9,059.36 points or 18.29%, while the Nifty rallied 2,774.05 points or 18.88%.
Additionally, the official data suggested that the production of eight infrastructure sectors expanded by 5.8% in February, the sharpest growth in the last four months, on the back of better output of coal, natural gas, refinery products and cement industries.
The post Share Markets close higher on the first of FY23: Sensex recaptures 59k mark first appeared on Corp India News.
]]>The post Quick guide on how to open a Demat Account first appeared on Corp India News.
]]>What is a Demat Account?
A Demat account is a shortened version of a dematerialization account is an account to hold financial securities in the electronic form, whether it is equity or debt. Specifically, these accounts are meant to convert share certificates from physical to electronic format, thereby providing greater accessibility for account holders. In addition, unlike past times, where stocks and shares used to be exchanged as certificates, the Demat account simplifies these exchanges without burdening of paperwork.
An online Demat account carries your financial securities in a safe form, just like a bank account that guards your liquid cash. There are two open depositories in India, CDSL (Central Depository Services Limited) and NDSL (National Depository Services Limited). You can seamlessly operate your equities, bonds, ETFs (exchange-traded funds), mutual funds, and invest in IPOs (Initial public offerings) through a Demat account.
There are minimal documents required for opening a Demat account, and you can go through the following list for easy preparation of collection documents:
- Proof of photo identity cards such as Aadhaar, PAN, voter ID, driving license, etc.
- Two passport-sized photographs.
- Evidence of your residence includes electricity bills, lease agreements, license, passport, telephone bill, gas bill, apartment maintenance bill, ration card, etc.
- Evidence of your bank account with a bank’s passbook or account statement (not older than three months) and a cancelled cheque.
- Proof of income with a copy of your most recent paycheques or tax return (compulsory for the currency and derivatives segment).
Steps involved in opening a Demat account in India
Step 1: You need to choose a depository participant (DP), a financial organization like a bank, broker, financial institution, or online investment platform. DP works as a mediator between the investor and the depository. Thus, select your depository participant wisely, suitable for your requirements. You will get the statement of fees for maintaining your account on DP’s website. So, be aware of all charges before selecting your DP.
Step 2: Visit DP’s official website and fill out the online Demat account opening form details. Don’t forget to assign a nominee name, as it will be crucial to handle future transactions. Furthermore, linking your trading account to your Demat account is necessary for trading in stock markets.
Step 3: After completing the form, fill out KYC information (Know Your Customer).
Step 4: You need to submit scanned copies of KYC documents, including identity, income, address proofs, and bank account statements.
Step 5: You will need to go through an ‘In-Person Verification’ process (IPV) after providing KYC details. IPV is a mandatory process to check the validity of your records. DP can either do this online using a webcam/smartphone or at their office, where the investor needs to be physically present at their office for verification.
Step 6: Next in-line, you need to sign a contract with your DP. This contract lists all responsibilities and rights of both the DP and the investor.
Step 7: Once you have signed the agreement, your DP will thoroughly check your Demat account application. After you get the approval of DP, you will be assigned a unique BO ID number (Beneficial Owner Identification Number) that you can use to access your online Demat account.
Benefits of a Demat account:
- A Demat account gives the convenience of holding your securities without maintaining physical records. You can even sell one share as there is no odd-lot problem.
- It nullifies the possibility of forged shares as it is safer than paper and all shares in your account are genuine.
- A Demat account saves a lot of paperwork in the transfer of securities, change in the address, etc.
- You can smoothly access your investment information anywhere and anytime, giving traders an extra advantage of handling multiple accounts.
- It reduces transaction costs, handling charges, and stamp duties on physical share certificates.
- You benefit from multiple securities with a Demat account as it holds the equity share market, bonds, mutual funds, and debt securities under a single roof.
- Depository participant takes care of the transmission of securities, and thus, you need not worry about notifying companies.
- You get an automatic credit in your Demat account for shares out of split/bonus, a merger of companies, etc.
- Closure of the Demat account is as swift as the opening procedure. You need to submit a closure application form signed by all the holders (in case of multiple holders) to DP and transfer all the holdings before closing.
Now that you are aware of all the procedures involved in opening a Demat account hassle-free, you should always be watchful of your financial securities and investment in shares and the stock market with all its risks. In addition, you need to supervise the key market players such as stockbrokers as they can manipulate the market. Nevertheless, if you are eager to invest in equities and relish the benefits of compounding by long-term investing, a Demat account will be ideal for you. Many agents in the market can help you open a Demat account with minimal additional charges. But, you can follow the above discussed easy process of opening a Demat account.
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]]>The post BSE signs MOU with Federal Bank to list SMEs first appeared on Corp India News.
]]>The collaboration will enable BSE to take advantage of Federal Bank’s SME and Startup clientele to encourage them regarding listing their companies on the stock exchange.
Ajay Thakur, Head of BSE, SME and Startups, said: “We are excited to partner with Federal Bank, and this collaboration will enable us to tap the large SME & Startup client base of Federal Bank spread across the country and educate them on the benefits of listing.
He further said that this step is stepping stone in BSE’s endeavour to further penetrate the SME and Startup ecosystem and provide them with the platform for equity financing.”
BSE, India’s premier stock exchange and a leading private sector bank, Federal Bank, will jointly evaluate the SMEs and startups undergoing the listing process.
Harsh Dugar, Group President and Country Head, Federal Bank, said: “We are delighted to partner with BSE on the SME and Startups space. As one of India’s foremost tech-led banks, this is an area of sharp focus for us. Our full-stack product suite and our deep understanding of this sector make us a banker of choice to the SME ecosystem, and we are confident of significant synergies that both our institutions can derive from this partnership.”
It is to be noted that there are 364 SMEs listed on the BSE SME platform, and 14 companies have been listed on BSE Startups platform until today.
The post BSE signs MOU with Federal Bank to list SMEs first appeared on Corp India News.
]]>The post India’s mobile phone exports to cross the Rs 43,500 Cr mark: ICEA first appeared on Corp India News.
]]>According to the India Cellular and Electronics Association (ICEA), mobile phone exports have increased up to 75 per cent from Rs 24,000 crore in 2020-21 to Rs 42,000 in just 11 months this year.
ICEA chairman Pankaj Mohindroo “After an uncertain start in 2020, owing to multiple Covid waves, the industry stabilized operations in 2021 and has delivered results that exceed expectations. Increase in mobile phone exports also marks an important shift in the export basket which is gradually transforming from primary commodities to more value-added, high-end products driven by technology industries.”
He gave credit to the government-industry partnership under Production Linked Incentive Scheme ( PLI ) for large scale electronics manufacturing that helped keep the industry afloat under the most trying circumstances.
He said, ” Government-led with its vision and trust in the mobile industry. The industry, in turn, has redefined Atmanirbhar Bharat as Make in India for the World. We are just getting started.”
PLI Driven Growth
The government’s flagship PLI scheme has helped shift global value chains to India and also acquire a substantial share in exports in the global market.
Earlier, mobile phones manufactured in India were majorly exported to South Asia, Africa, the Middle East and Eastern Europe. However, the government’s industry-friendly policies boosted confidence in manufacturers to enter more competitive markets in Europe and Asia.
“These markets demand the highest levels of quality, and manufacturing units located in India are up to the task,” ICEA said.
The growth is driven by major smartphones companies such as Samsung, Apple, Foxconn Hon Hai, Rising Star, Wistron and Pegatron and Indian champions, including Lava, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Optiemus Electronics, entering India via PLI scheme.
Under the Smartphone PLI Scheme, the government has allocated Rs 40,951 crore between 2020-21 and 2025-26, where participating companies can choose any five years out of the six years to meet their production targets.
The post India’s mobile phone exports to cross the Rs 43,500 Cr mark: ICEA first appeared on Corp India News.
]]>The post Personal Finance: Tasks to accomplish before March end first appeared on Corp India News.
]]>Here is a reminder of the important financial tasks to be accomplished before the year ends
- Link Aadhaar number to PAN Card
It is now mandatory to submit your Aadhaar Card details while filing income tax returns. As per the government’s notification, individuals must link their Aadhaar Number to their PAN card by March 31. Your PAN will become inactive if not linked with your Aadhaar number. Moreover, as per Section 234H of the Income-tax Act, individuals will be charged a heavy penalty.
If you are yet to link your Aadhaar with PAN, tap on the link below
https://eportal.incometax.gov.in/iec/foservices/#/pre-login/bl-link-aadhaar
- Update Bank KYC
Bank customers must update their PAN number and address proof such as an Aadhaar Card, passport, or electricity bill with their bank as per the Reserve Bank of India (RBI) guidelines.
- Linking Term Deposits with PO Saving Accounts
The Department of Post recently notified its customers to link their post office term deposit with their post office savings account. The department has decided to directly credit the interest earned on fixed deposits to savings accounts from April 1, 2022. “
- Update KYC to your Demat/trading accounts
If you hold a Demat account, you must update the following details as a part of KYC as per the instructions issued by SEBI.
Demat/trading account holders are required to update the following:
a) Name
b) Address
c) PAN
d) Valid mobile number
e) Valid email ID
f) Income range
- File late ITR
Considering covid pandemic induced difficulties, the Central Board of Direct Taxes had extended the ITR filing dates for FY 2020-21 from November to March 2022. As a result, the last date to file pending income tax is on March 31. So if you are yet to file your returns for the last fiscal year, hurry up!
- Update KYC in PM Kisan
Farmers eligible to receive the next instalment under PM Kisan must update their details under KYC before March 31, 2022.
The post Personal Finance: Tasks to accomplish before March end first appeared on Corp India News.
]]>The post Paytm debacle brings tightened IPO valuation in India first appeared on Corp India News.
]]>India’s push comes after the flop listing of SoftBank-backed payments firm Paytm’s (PAYT.NS) $2.5 billion IPO in November which sparked criticism of lax oversight of how loss-making companies price issues at what some say are lofty valuations.
SEBI seeks stricter disclosures
The Securities and Exchange Board of India (SEBI) last month flagged concerns in proposing stricter disclosures, saying more and more new-age tech firms which “generally remain loss-making for a longer period” were filing for IPOs, and traditional financial disclosures “may not aid investors.”
But even before the proposal is finalised, SEBI has in recent weeks asked many companies to get their non-financial metrics — KPIs, or key performance indicators — audited, and then explain how they were used to arrive at an IPO’s valuation, five banking and legal sources said.
Typically for a tech or app-based startup, KPIs could be figures like the number of downloads or average time spent on a platform — metrics sources said are disclosed but difficult to audit or link to a company’s valuation.
SEBI is asking us to “justify the valuation,” said one Indian lawyer advising several companies eyeing IPOs, adding it was “creating uncertainty and increasing cost of compliance.”
Indian digital healthcare platform PharmEasy, which had filed papers for an $818 million IPO in November, is one company that was hit by such scrutiny: one source with direct knowledge said the company raised concerns with SEBI about auditing and supplying such details, and is likely to get some relaxations.
It is not clear if the additional information requested by SEBI would be released to potential investors.
SEBI’s growing concerns
The tighter scrutiny comes when India’s startups and other companies have become a darling for foreign investors and increasingly hit the markets.
Last year, more than 60 companies – including high-profile tech ones – made their market debut and raised more than $13.5 billion, with many like ride-hailing firm Ola and hotel aggregator Oyo still in the pipeline.
The Paytm listing, though, raised concerns about valuations. After tanking on listing day, the Indian payment firm’s shares are currently trading 64% below their issue price, and some fund managers had said the episode will “hopefully bring some realism to valuations.”
The post Paytm debacle brings tightened IPO valuation in India first appeared on Corp India News.
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