INTRA DAY NIFTY FUT TIPS FOR 14TH DEC 2011

NIFTY FUT 4854 CRUCIAL

ABOVE 4865,4878,4893,4901.

BELOW4834,4811,4782,4771.

Today's provisions and tomorrow's DTC: Plan your taxes

By Umesh Rathi

When it comes to planning our taxes, most of us make impulse decisions because of the last minute planning and in the process we may end up buying products which are not right for us. Efficient planning of your taxes is crucial for your long term financial health.

Tax planning should be done a few months in advance so that you have ample time to understand and evaluate different options that are specific to your financial situation. Instead of waiting for the March month to arrive when your insurance agent or neighbourhood advisor will coax you into products you don’t need, start tax planning now for assessment year 2011-12.

The tax planning investment avenues require long term commitment, for e.g., if you take up an insurance policy for the term of 10 years then you have to pay premium for 10 years. Similarly for PPF it is for 15 years. This long term investment commitment requires that we take the investment decision very carefully and diligently taking into consideration our future inflow and outflow of funds. This aspect becomes more pertinent in view of the proposed direct tax code (DTC) that will be enacted in the forthcoming financial year.

In the proposed DTC, remarkable changes have been proposed. It is important to know that some of the securities will not fetch the tax benefit in coming year which are available in the current year. Hence it is necessary to understand all the aspects of various provisions and proper befitting tax planning and keep ourselves abreast with the provisions and tax slabs.

It is important to note that in the current financial year (2011-12) the eligible age for senior citizen is 60 years instead of 65 years. Along with this a new category of Very Senior Citizen has been introduced in which a person of 80 years and above is entitled for the basic exemption of Rs 5 lacs i.e. they need not have to pay tax up to the income of Rs 5 lacs.

Tax Slab for FY 2011-12(AY 2012-13)

Male	Female	Senior Citizen(Male and Female 60-79 years)	Very Senior Citizen (80 years and above	Tax Slab
Up to Rs 180000	Up to Rs 190000	Up to Rs 250000	Up to Rs 500000	0%
From Rs 180001 to Rs 500000	From Rs 190001 to Rs 500000	From Rs 250001 to Rs 500000		10%
From Rs 500001 to Rs 800000	From Rs 500001 to Rs 800000	From Rs 500001 to Rs 800000	From Rs 500001 to Rs 800000	20%
Rs 800001 or above	Rs 800001 or above	Rs 800001 or above	Rs 800001 or above	30%

The various provisions of IT act pertaining to investments (the tax savings exemptions) during the current financial year 2011-12 (AY 2012-13) available to individual and HUF and from the FY 2012-13 after the enactment of DTC are outlined below:

Under section 80C, 80CCC and 80CCD one can claim deduction up to Rs 1 lac. The various investment options in these sections are -

Section	Investment/contribution/payment	Eligible Tax Payer	Proposed DTC Provision
	Life Insurance Premium	Individual & HUF	Should not exceed 5% of sum assured maximum of Rs. 50000 (including Tut ion fee, Mediclaim premium)
	Tution Fee for Children	Individual	Same as above
	PPF- Public Provident Fund	Individual	Maximum of Rs. one lac in approved funds ( EPF,PPF New Pension Funds)
	EPF- Employees Provident Fund	Individual
	NSC- National Saving Certificate	Individual
	ELSS- Equity Linked Mutual Fund	Individual & HUF
	Housing Loan Principal Repayment	Individual & HUF	No Provisions for Tax Exemptions
	Registration and Stamp fee on House Property	Individual & HUF
	Tax Savings Fixed Deposit (PO/Bank)	Individual & HUF
80C	Senior Citizen Saving Scheme	Sr. Citizen
80CCC	Contribution in Pension Fund	Individual	Maximum of Rs. one lac in approved funds ( EPF,PPF New Pension Funds)
80CCD	Contribution in New Pension Scheme	Individual

While selecting the options under these sections one should keep in mind their need, goals, time horizon and risk profile.
Infrastructure Bonds (Section 80 CCF)

Current Provision - In budget 2011-12 finance minister announced to continue the additional deduction of Rs 20,000 for individual and HUF in respect of long term infrastructure bonds under section 80CCF. This deduction is in addition to the deduction of Rs 1 lac allowed under sections 80C, 80CCC and 80CCD of the Income tax act.

Proposed DTC - This deduction is not proposed in DTC.

Health Insurance Premium (Section 80 D)

Current Provision - If you have taken a medical insurance plan for yourself, your spouse and/or children then you can claim deductions up to Rs 15,000 and an additional Rs 15,000 can be claimed for your dependent parents’ under Section 80D for the premiums paid via cheque. In case of senior citizen one can claim deductions up to Rs 20,000.

Proposed DTC - The DTC provides the deduction up to Rs 50,000 for the premium paid for life insurance premium (restricted up to 5% of sum assured), mediclaim insurance premium and children tution fee.

Disabled Dependents (Section 80 DD)

Current Provision – Under section 80DD, deduction is available for expenditure for the medical treatment, training and rehabilitation of a dependant, being a person with disability; or paid or deposited any amount, under any scheme framed by the LIC or any other insurer or UTI and which is approved by the CBDT. The deduction of Rs 50,000 is available from gross total income, irrespective of the actual expenditure incurred/ amount deposited. Where such dependant is a person with severe disability deduction of Rs 1lac is available instead of Rs 50,000. This exemption is available to both individual and HUF tax payers.

Proposed DTC -This deduction is available in the proposed DTC.

Medical Expenditure on prescribed aliments (Section 80 DDB)

Current Provision – Under section 80DDB, deduction is available in respect of any expenditure incurred for the medical treatment of the individual or a dependant or for any member of the HUF in case of HUF. The deduction is available of Rs 40,000 or amount actually paid, whichever is less. However if the person for whom such expenditure is incurred happens to be a senior citizen, the maximum deduction shall be allowed for a sum of Rs 60,000 instead of Rs 40,000.

Proposed DTC -This deduction is available in the proposed DTC.

Education Loan (Section 80 E)

Current Provision -Under section 80 E, deduction is available for payment of interest on a loan taken for higher education for self, spouse or children from any financial institution or an approved charitable institution. The loan should be taken for higher education in specified fields of study to be extended to cover all fields of study, including vocational studies, pursed after completion of schooling.

Proposed DTC -This deduction is available in the proposed DTC.

Donation (Section 80 G)

Current Provision – Under section 80G, deduction is available on account of any donation made by the assessee to specified funds or institutions. The rate of deduction is either 50 or 100 per cent, depending on the choice of the charity fund. There is no restriction on the amount given to charity. However, donations must be made only to specify trusts and also donation up to 10 per cent of gross total income qualify for such deduction. Remember to get receipts whenever you make any charitable donation. Note that tax exemption is only an added advantage of charity and it should not be the primary reason for doing so.

Proposed DTC -This deduction is available in the proposed DTC.

House Rent (Section 80 GG)

Current Provision –Under Section 80GG, maximum deduction of Rs 2000 is allowed to an individual who pay rent for his residential accommodation and individual is neither entitled to any house rent allowance nor a rent-free- accommodation.

Proposed DTC -This deduction is available in the proposed DTC.

Person with Disability (Section 80 U)

Current Provision – Under section 80U, deduction of Rs 50,000 is available in case individual tax payer is a person with disability and deduction of Rs 1 lac is available in case of a person with severe disability.

Proposed DTC -This deduction is available in the proposed DTC.

Interest on home loan (Section 24 B)

Current Provision -The interest component of home loan is allowed as a deduction under the head ‘income from house property’ as per Section 24 up to the limit of Rs 1.5 lacs in case of a self-occupied house. The claim can be made up to Rs 30,000 even on loan taken for repair, renewal or reconstruction of an existing property.

Proposed DTC -This deduction is available in the proposed DTC.

INTRA DAY NIFTY FUT TIPS FOR 13TH DEC 2011

NIFTY FUTURE

INTRA DAY SUPPORT IS 4787

BELOW IT CAN TEST 4775,4770,4756,4744,4716.

Euro zone agreement only partial solution -IMF

By Tova Cohen and Ari Rabinovitch

TEL AVIV (Reuters) - An agreement reached by European countries for deeper economic integration was a step in the right direction but not a complete solution for the euro zone's debt crisis, International Monetary Fund chief economist Olivier Blanchard said on Sunday.

"I'm actually more optimistic than I was a month ago, I think there has been progress," Blanchard told the Globes business conference in Tel Aviv.

"What happened last week is important: it's part of the solution, but it's not the solution."

He did not say what further steps were needed.

European leaders agreed in Brussels on Friday to draft a new treaty for deeper euro zone economic integration, although Britain, the region's third-largest economy, refused to join the 17 euro states and nine other EU countries in the fiscal union.

Asked whether diverse statements from policymakers in Europe were causing volatility in markets, Blanchard said: "A lot of the volatility is coming from statements from Europe, showing the range of opinions and inability to get to a logical decision process."

EU leaders also agreed euro zone states and others should provide up to 200 billion euros in bilateral loans to the IMF to help tackle the crisis, with 150 billion euros coming from countries in the euro currency.

"The commitment to give us 200 billion euros makes a major difference in the sense that we can now go out and talk to other countries and say, 'the Europeans have given us money, can you help?," Blanchard said.

"Whether this gives us the whole bazooka or not, I hope so."

Asked by Reuters on the sidelines of the conference whether Britain's decision to isolate itself was right for its economy, he said: "I think that's an issue for the Europeans to decide."

Adding a tone of scepticism regarding the treaty's chances of success, Jim O'Neill, chairman of Goldman Sachs Asset Management, said the most important thing that happened this week is not "this bungled European deal", but the release of data that showed a slowing trend of growth in China, the world's number two economy.

"The problem in Europe, this isn't really a debt crisis, it's a crisis about the structure of leadership ... Europe needs to organise itself properly and show proper leadership," he said.

"Everything around the world is being driven by some idiotic statement from some policymaker in the EU."

But he added that now might be the best time in 20 years to invest in Europe, saying, "Never let a good crisis go to waste."

O'Neill and Blanchard had diverging forecasts for growth in the United States next year.

"I think 2012, in the end, will not be as good as 2011," IMF's Blanchard said. "Part of it is that 2011 came out a bit better than expected. I'm not sure this will be repeated."

O'Neill disagreed, saying he was optimistic on the U.S. economy and thinks growth will exceed 3 percent this quarter.

"I think that corporate America is in an exceptionally competitive position," he said.

(Reporting by Tova Cohen and Ari Rabinovitch; Editing by David Hulmes)

Government to free diesel, LPG prices after weighing impact

New Delhi, Dec 12 (IANS) The government would deregulate diesel and liquefied petroleum gas (LPG) prices only after considering their impact on the weaker sections of the society, Minister of State for Petroleum and Natural Gas R.P.N. Singh said Monday.

'We as policy makers and politicians have to mediate between the social, economic and environmental attributes of energy. We have to move cautiously to ensure that our decisions are equitable and lead to balanced growth,' said Singh, addressing the 10th Petro India conference here.

While the government had in June last year decontrolled petrol prices, it continues to dictate retail rates of diesel, cooking gas (LPG) sold to households and kerosene sold through the public distribution system (PDS).

The minister said that while the government was protecting consumers, it had to shield the state-run oil and gas marketing companies from the impact of selling subsidised products.

'We import about 75 percent of our crude requirement from overseas. The government therefore has the huge responsibility of protecting not only consumers but also our major oil and gas companies,' Singh said.

Singh said there was a need to target subsidies directly to the weaker sections of the society in the case of cooking gas.

'While certain subsidies may be necessary in view of the larger social objectives, they need to be administered directly to specific targeted end-users and provided in a transparent way through clear budgetary mechanism,' he added.

The minister also urged well-to-do sections to give up subsidised LPG voluntarily.

The government in the current fiscal will have to bear a energy subsidy burden of more than Rs.180,000 crore, which might increase due to a depreciating rupee.

Singh said there was a need to carry out energy pricing reforms across the segment of petroleum and gas products in order to attract investment and technology in the sector.

'Energy pricing reforms need to be carried out across the entire energy basket rather than segments of it so that there is neither inter-sectoral nor intra-sectoral cross- subsidization.'