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2011 July 13 [Wednesday]

E-filing IncomeTax returns in india

The Indian government agency that runs the Income-Tax portal  "incometaxindiaefiling.gov.in" has very thoughtfully provided an electronic filing facility for its citizens which enables all tax-payers to file their Tax returns without a trip to the local Income Tax Office. However, their thoughtfulness only extends to Windows users as they have provided the e-forms only in the MSOffice .xls format which will not run any macros on a non-Windows platform. Now, I have not used Windows for many years now and having been forced to pay for a half-baked edition pre-installed on my laptop, I could not wait for my warranty to finish and free up that disk space.

Last week, I found two Open-Office hacks for the ITR forms 1 and 2 at:

However, the Open-Office  supported ITR-2 form from KSEB is borked -- has locked cells which will not work nor retrieve macros in Open-Office and many fields and cells are protected, making it impossible to enter data so that the Tax macros work properly. The ITR-2 form (available from the above link) has some errors in the conversion for Open Office --In Part B - TI in Computation of total income. It does not allow you to enter any figures in the following fields:

1. Salaries (6 of Schedule S)
2. Income from house property (C of Schedule-HP) (Enter nil if loss)
3. Capital gains
4. Income from other sources
This prevents the macro from tabulating the Total (Example: A + B +Total of (I) for all fields), due to which its not possible to tabulate the final tax payable.

Does anyone know how to get locked cell macros to work in Open-Office? All help and pointers to get these hacks working on Open-Office would be a big help. TIA.

PS: FWIW, I had asked this question on the local LUG list, which was a waste as one list member, who didnt read the question, chose to focus his undivided attention on the terrible mistake I made -- used the word  'company'. Thereafter, it was a fun exercise in "I-am-the-loudest-jerk-and-bully-here" ad hominem and logical fallacies. Yeah, total WIN on the technical help scale. The smartz knocked my socks off! 

2011 May 28 [Saturday]

buying LIC Jeevan Dukh insurance policy from L&T Finance

L&T Finance, Bangalore, sells personalized financial solutions, like LIC's life insurance policies to retail customers and a very pushy marketing person managed to hound us since last year until we finally succumbed into buying a Jeevan Anand insurance policy. Little did we know that instead of 'Anand' (joy) it would be the beginning of a period of "Dukh" (sadness) -- after the INR 54,157/- cheque was encashed by them, the sales agent says there would be a medical test and their office would call us to schedule it. WTH?

Thereafter, S.I.L.E.N.C.E.

The silence lasted for two months as the sales agent at the Bangalore office would not take our calls nor did he call us back with details of when the medical test would be scheduled -- So why did the sales guy NOT mention an important detail like a "medical test" BEFORE taking the INR. 54,157/- cheque when he knew it was a senior citizen taking the policy, nor was this mentioned during the zillion phone calls when he wanted to sell the policy?

More S.I.L.E.N.C.E.

After some hassle, we got the Bangalore office number and it was our duty to keep calling them to find out the status of our policy. Finally, we heard that the sales agent had left their employment, talk to a manager --Err..what happened to the INR. 54,157/- cheque that L&T had encashed on 02-Feb-2011 --were they going to return the money to us or grant the Jeevan Anand policy? Nobody at the L&T Finance office in Bangalore knew who was handling the case, atleast that is what we were told upon repeatedly calling them, being shunted around to speak to different employees, and after many weeks of excuses and false assurances it took them only TWO months to schedule the first medical test.

Medical done, we still had no idea if they were actually going to issue a policy, or not. More silence followed and a week of calling them incessantly (the bane of mobile phones and people not picking your calls) were told that the medical test results would go to the L&T Hyderabad office which would make a decision. Upon more calls from us (the L&T Finance Bangalore employees just dont bother to inform us of the policy status) we were told that there would be another medical test....wait, did the Bangalore office realize this TWO months after the first medical test? That they would need to reschedule the second medical test and we were supposed to await a call (which would never come) informing us when to go for the test.

Days have passed, but there was no call, only S.I.L.E.N.C.E for company.

As usual, we called the local L&T Finance employee -- if they dont wish to schedule the second medical test and make a decision regarding the health eligibility, the least they could do was to return the money. Instead, we were given the excuse that it was the Hyderabad office making the decision and their local Bangalore office was just collecting documents and couriering it to Hyderabad for final decisions.

L&T Finance, if you dont intend to give the LIC Jeevan Anand policy, the least you can do is return the 54,157/- Rupees that you encashed FOUR months ago. Is this the way you treat senior citizens, by keeping their money in limbo, without interest for FOUR months while you take your own sweet time to make a decision? Is this is the "emphasis on systematic and planned investments" service L&T Finance provides? Why do the L&T Finance sales agent NOT mention important deal-breakers like a "medical tests" BEFORE encashing the INR.54,157/- cheque or during the zillion phone calls when they hound you to sell their insurance policies --or is that also a part of the "continuous monitoring and active re-balancing depending on changing needs and market dynamics" service that LT sales agents use to divest the senior citizens of their life-savings? I wonder how many other senior citizens have paid you their hard-earned money for which you dont pay any interest whatsoever, while taking half a year to make a simple decision.

I had always thought that L&T was a respectable brand name and enjoyed so much goodwill that I would have trusted them blindly BUT the L&T Finance employees have managed to destroy the enormous goodwill that the company enjoyed. Being a Finance company they would know that had this amount been invested in the simplest investment plan in any government bank's fixed deposit scheme, it would have earned around 10% interest for the last half year. Shame on you L&T Finance --do the math and return INR. 54,157/- with interest if you are not interested in allotting the Jeevan Anand policy immediately!

UPDATE [2011may28]:: Others personal experience and public opinions on LIC's Jeevan Anand policy:

[0] http://www.vinayahs.com/archives/2011/01/18/how-to-surrender-and-close-your-lic-jeevan-anand-life-insurance-policy/
[1] http://hubpages.com/hub/MY-VIEW-ON-LICS-JEEVAN-ANAND
[2] http://www.mouthshut.com/product-reviews/Jeevan-Anand-925037407
[3] http://ritusays.wordpress.com/2011/01/21/lic-life-insurance-corporation-of-india-jeevan-anand-endowment-assurance-and-life-insurance-policy/
[4] http://www.r2iclubforums.com/forums/showthread.php/20963-LIC-Jeevan-Anand-1


UPDATE [2011jun30]:: Soon after this blog was published, the L&T company representative contacted us and quickly arranged for the second test but a few days after that they were still unable to tell if LIC would issue the policy or not. The LIC agent also contacted us and they came up with a new scheme to enroll in (read, which entails us spending more on premiums with very little to show in terms of returns). In all it sounded like a terrible bargain and we insisted they return the 54,157/- Rupees without interest. There was some back-and-forth and we finally decided that if they didnt return the money (we were not even asking for the 6 months of interest at 10%), we would go the legal route where we would claim interest and harassment damages. LIC decided to return the money and we got the check this week. End of story.

2009 November 4 [Wednesday]

Online banking and browser neutral accessibility standards

Online Internet banking and financial transactions on most Indian bank websites is jinxed because every bank out there (atleast the ones I use) insist on paying their IT vendors to develop software that does not run properly on a Linux platform.

Their websites will display webpages on FF but verification of online transactions and shares trading will be supported only on IE.  For the last few days, I've been trying to access the BOB site to change the password for netbanking but it keeps throwing a "JavaScript Disabled in Browser" error.

Nope, this problem is not restricted to yet another "government bank", private banks are no better.

The HDFC website is also FF friendly and renders well but try verifying credit cards for online purchase. Earlier the Netsafe/Verified by Visa/ MasterCard SecureCode pop-up screen used to return a "your browser is not IE....." message but now it gleefully crashes FF in a very customer friendly way!

After a whole week of running around between branches and complaining online and talking to divisional heads... the status quo remains. Frustrated, I used IE and voila, everything just works. Ughh!!

Supporting transactions for non-IE browsers is almost non-existent and talking about standards with the bank staff will get the standard response "yahan sab log Windows use karte hain (here everyone uses Windows)". That is the managers cue to me : "Yo customer, I dont care about your problem so end this Linux conversation". Asking to speak to the technical folks will not materialise --see they would not speak to lesser denizens like me, their customers.

Yet another private bank, ICICI does not think a second layer of security verification for credit card transactions online is important. Simply using a https server is not good enough. A second layer of security for each transaction should be mandatory. Ideally before approving an online transaction the merchant website should redirect to a Visa or Mastercard verification page (via your bank) which will ask you to verify with the CCV pin#, email id, password, etc... (exact procedure differs slightly from bank to bank) for EACH transaction. Currently ICICI simply approves the transaction which is a security lapse on the banks part because someone can memorize the card number, the expiry date, $name and simply flip over your card to read the 3-digit CCV overleaf and voila, you just gave a stranger access to your money!

While we were in Delhi, a restaurant printed the name, the 16-digit CC number (in all its glory) with expiry date on the POS receipt. So sans the second layer verification from Visa/MC, anyone with access to the merchants copy of the CC payment receipt can misuse the card online. All s/he has to do is memorize the 3-digit CCV number on the back of your card. _That_ is a BIG security hole. I didnt bring this to the merchants attention as I didnt want to alert them to a possible route to a financial fraud. 

Now, if ICICI had a II-layer verification, for the online transaction to be approved the fraudster would need to know your email id, password, answer to your security question, etc.. before they can (mis)use your card online. This II-layer verification (besides the IP verification, etc)) will help to narrow down the culprit(s) to: 1) an internal source who has access to your bank records, OR 2) social engineering, where you gave the details to your confidant/relative/friend/family and it was (mis)used sans your permission.

I suspect that the second layer verification is provided by  Visa/Mastercard  only to those banks that pay them for this service and I've experimented with multiple cards for the _same merchant_ and ICICI is still approving the online transaction sans the second verification layer. Now, if a second layer security feature service provided by VISA and MasterCard is being withheld by not informing and not providing the service to the customer, then it is a security lapse on the banks part. 

The other scary bit with online banking with some Indian merchants is the practice of auto-debiting your Credit Card  for annual subscriptions. If I want to re-sub to your service, I will.  I would prefer the merchant sending me a email notice instead of directly debiting my card without my approval or request. This tells me that the merchant is storing my Card details, without my knowledge and permission, which is not good security practice and most likely I will not use their service again.

Another problem area is the live trading on BSE. Currently this data is available deferred live if you use a non-IE browser. The merchants I spoke to are un-willing to support live trading on a Linux platform, partly because the share traders and banks are so used to IE that they dont support any neutral standards or system platforms.

The European Union's Internet accessibility laws are pretty strongly enforced and India should also have such laws. RBI, http://www.rbi.org.in, has a list of all the circulars sent to all Indian banks under its jurisdiction, including small branches which as per law are required to publicly display rules and regulations in B&W on a notice board within their offices. Maybe a PIL on behalf of the Persons With Disabilities Act will get browser neutral compatibility standards enforced across the board in India.

UPDATE: Now the Reserve Bank of India has made it mandatory to have an extra level of authentication called VBV (Verified by Visa) or MSC (Master Card Secure Code) password. This password is required to use while you are making an online transaction. All customers are requested to visit your respective card issuing bank’s website or VISA/MASTER sites and register your card for Verified by Visa or Master Card Secure Code to get your password.

For VISA Credit Card registration process, click on the following link
http://www.visa-asia.com/ap/sea/cardholders/security/activate.jsp

For MASTER Credit Card registration process, click on the following link
http://www.mastercard.com/us/personal/en/cardholderservices/securecode/sign_up.html

2008 December 12 [Friday]

Registering a NPO in India

Many many many moons ago I got a low down on registering non-profits (NPO) in India (thanks Kallol :)) but I took a few months to blog about it so thanks for the strong poke :) 

NON-PROFIT ORGANISATIONS in India

There are 3 kinds of Non-Profit organizations that can be setup : a trust, a society or a section 25 company.


1. Trusts:

A trust can take donations and is meant for charitable purposes. Validity extends only in original state it was registered in. Example: If the NPO was registered in Karnataka state it is exempt from I-Tax only there and 80G is applicable.

TAX : Donations and any other form of income (membership, registration fees, sponsorships) in trusts are exempt from income taxes.

REG Cost (as of 2008) : Around INR.5000 to register and in Bangalore, the registrar of societies office is on Church street.



2. Society (or association)

Not very different from a Trust but a Society (or association as it is sometimes called) has a little more scope with a slightly open organisational structure. A society cannot have chapters (branches) outside Karnataka, although members could be from anywhere in India.

If it is registered in Karnataka state it is exempt from ITax there. It needs 7 members including 4 office bearers (chairman, vc, treasurer, secretary) and all of them must be from the state where the society is registered.  Annual meetings : treasurer prepares all the accounts year ending and get them signed by the secretary and the chairman and vice chairman and the secretary files them.

TAX : Service tax on sponsorships. Membership income is tax free (including service tax). 80G again requires the accountant. Donations and any other form of income (membership, registration fees, sponsorships) in trusts are exempt from income taxes.

REG Cost (as of 2008) : Takes 14 days to register and costs around INR5000 to register the same. In Bangalore the registrar of societies office is on Church Street.


3. A section 25 company :

Sec25 companies are different from a Trust and Society in every way. Some salient features ::

  • Sec25 can be registerd as a private or public limited company and the difference is in the number of minimum directors the company needs to have.
  • If the sec 25 company is private limited, then 2 directors are required, otherwise, 3 or 5 are required.
  • Directors can be from anywhere in india
  • Its different from normal companies, as in, that they can not distribute dividend to promoters/founders.
  • Exempt from ITax.
  • One time Pan-India registration.
  • The difference between a Society and Sec 25 is that the latter can enter into contract with any national or international institution. For example : a Sec25 NPO can sign a MoU with another organisation/firm/company
  • It need not be registered in every state and like a society its recognised all over the country, but for it to enter into a contract with another organisation that is outside the state it is registered, it need needs to be registered in that state as well.
  • It can have branches anywhere in India and have people working part / full time as regular employees.
  • Annual meetings : Regular AGM (annual general meeting) like all corporates do But the AGM requires quorum (members to be present or be represented by proxies) and annual returns and IT returns are filed by the accountants/company secretary. This depends on the MoA (memorandum of association) which will contain these details.
  • Donations and any other form of income (membership, registration fees, sponsorships) for sec 25 companies needs a separate application to the IT dept to get tax exemption. Sponsorship income attracts service tax everywhere. {HINT: Add service tax to sponsorship fee and invoice sponsors including taxes.}

REG Cost (as of 2008) : INR.15,000 + small expenses. Requires 2 months to register including a visit to the Regional Director's office in Chennai (if you are in South India).

GENERAL NOTES :

  • Although Trusts, Societies and Sec 25 companies are pan-India NP bodies, only a sec25 company can sign contracts with bodies outside the state. Societies and Trusts have limitations in this regard.
  • Members of a non-profit are not assessable or liable for taxes for income raising out of the organisation's activities. It applies to trusts, societies and sec 25 companies.
  • Even if the not-profit does not have any annual income, it WILL need to file a IT-return. The return will simply put income as 'zero'. For activities in the adhoc period of operation, one can lump it as 'pre-operative expenses' and include it in the books when the not-profit is formed.


Below is a comparison chart for the main differences between a trust, a society and a section 25 company


 

Public Trust

Society

Section 25 Company

Statute/ Legislation

Public Trust Act like Bombay Public Trusts Act of 1950

Societies Registration Act of 1860

Companies Act of 1956

Jurisdiction of the Act

Concerned State where registered

Concerned State where registered

Concerned State where registered

Authority

Charity Commissioner

Registrar of Societies

Registrar of Companies

Registration

As Trust

As society (and by default also as  Trust in Maharashtra & Gujarat)

As Section - 25 company  

Main Document

Trust deed

Memorandum of Associations and Rules & Regulations

Memorandum and Articles of Association

Stamp Duty

Trust deed to be executed on non-judicial stamp paper of prescribed value

No stamp paper required for Memorandum of Associations and Rules & Regulations

No stamp paper required for Memorandum and Articles of Association

Number of persons needed to register

Minimum two trustees; no upper limit

Minimum seven; no upper limit

Minimum seven; no upper limit

Board of Management

Trustees

Governing body or council/managing or executive committee

Board of Directors/Managing Committee

Mode of succession on board of management

Usually by appointment

Usually election by members of the general body

Usually election by members of the general body

Source:  Mathew Cherian, Director CAF India, New Delhi (Source : Internet)


2008 April 19 [Saturday]

moola(h) mantra

ML walked in with a temper one morning and i was curious... her first grouse was the noise (construction work) in the adjacent building and as she did the dishes, I made breakfast for us all and we continued our general chatter, a daily routine now ! The few weeks that i've known her i've hardly seen her grumble, rather she always has a pleasant and smiling disposition, despite her difficult life[*0].

She spoke about issues pertaining to her children, family, money etc.. which is how I learnt that she has not opened a bank account, which in-turn got her a sermon from me. I never can understand why women dont take finance seriously. AFAIK, the story echo's with many maids working at every indian home and as a kid i remember my g'ma urging our maid to open an account and learning to use the government banks facilities, and so save money (atleast some rupees) every month. Evenso she did not initially but when she wanted to borrow a huge sum of money for personal reasons[*1], her 4 employers decided that it would be better to put that money in the bank or the men of the house would fritter away the money in drinking, gambling or what not.
So although ML does take money seriously, her husband is not an alcoholic and does repay debts, manages to educate the children, she still does _not_ have a bank account which means she does not save money imho. Cant blame her since according to her every penny earned is spent either on husbands health, daily expenses or childrens books/fees[*1],....

Fine ! Great ! BUT what about learning to manage finances? Most women leave the finances to their husbands. Well... one person i know does it all herself, rather her husband and in-laws trust her more than themselves but then such cases are a rarity. The vast majority still leave the decision making to the men (in whose absence they may take a leading decisive role) as far as finance is concerned. She says most women from her community get married at a young age, have kids before they are 18. Her daughter has taken up a summer job for two months as she was worried that keeping the girl at home alone when she went out to work is fraught with risks with too many frisky young boys her age doing nothing in summer. Didnt want her daughter to spoil her life as she has plans to put her through school/university.

Reverting, ML is terrified that they (bank) will ask for minimum INR.1500 as balance but after I explained the options to her she agreed. I promised to help her open a bank account with her daughter's first salary in the hope that she and her daughter learn to use financial services to their advantage.

For women (and some men) like her the fear factor revolves around illiteracy (usually inadequate English knowledge which imho is not illiteracy[*2] but then who can argue with the system), lack of knowledge (of their rights), fear the legal system, and i can go on and on. Is there a parallel financial economy running ...yeah, they are called money lenders and they can charge 40-60 % interest rates for small amounts and usually fool folks into signing away their village property/home or (in the case of women) pawn jewellery, etc.. Most times the interest rates repayment takes a lifetime ensuring that they will never repay the principal amount and forgo everything. Gah... its a pretty slimy industry and the circle of debt for these people just goes on endlessly.

Talking of finance, banking and credit, I am utterly annoyed with a particular bank which does not understand security in financial applications and insists of shoving a credit card down your throat. Since the call centre employees are just doing their job I hear them out each time and decline politely. End of conversation ! ... or so I thought... apparently, they dont take NO for an answer and a manager called (as if his team members calling daily wasnt enough) to say my application was pre-approved... doh, when i did not even apply !? So now I am supposed to take a pre-approved credit card when i have clearly told the QA manager that their **employee** was keeping tabs on me, leaking personal financial information and inshort harassing me. What is the guarantee that he cant access my credit card number by virtue of being an employee (hence priviledged) and misuse it - None whatsoever. I just dont trust private banks anymore !
= = = = = = = = = =

= = = = = = = = = =
[*0] - Folks who dont fall in the BPL (below poverty line) strata, form a bulk between the lower middle class and the poor, also have a tough life with rising aspirations, desires and needs and wants, albeit a different struggle from the rest around them.
[*1]- The Indian government does not have a social health scheme like many developed nations and the taxpayers money poured into government run schools (including the public education system) is a joke but that is an issue for another blog post.

[*2] - Once an old man in the bank asked my help to write his name on the withdrawal slip (a cash withdrawal instrument used by folks who give a thumb impression as they are unable to sign/write their name -- usually in english -- , or maybe because they dont maintain a minimum balance of INR1500, hence are not given cheque book facility) and i spelt it wrong since Hindi is a phonetic language and English isnt. When his name did not match the entry in the system the bank manager flew into a rage and yelled at him, refusing to accept the withdrawal slip but accepted it when the old man pointed to me (a tale best left for another post). Incidents of public humiliation like that are enough to keep even the most thick-skinned person away.

2007 October 25 [Thursday]

CreditCard fraud in the making

It all started...

More than a month ago, when I had filled an HDFC bank credit card application form i got a verification call within 3-4 days from the outsourced agency handling the bank's credit card processing. The caller took a lot of personal information and something about his questions made me suspicious and I asked him his name. He took offence to that and said "You are not supposed to ask questions, only I can ask" followed by "Do you want the card or not? I can reject your application now." (those were his exact words). Alarm bells rang in my head at his outburst but keeping my cool I asked him (yet again) for his name and if he was really a bank employee as he had taken sensitive private infoormation during the phone call and his reaction made me suspect whether he was an actual bank employee. Then he became more rude and threatened to reject the application, so I asked for the call to be escalated to the Bank manager and he and his colleague (he was repeating what I said to his colleague) started laughing. When I insisted he give his name he gave me a false name (as I came to know later), mumbled something about the Manager not being available and disconnected the call.


The harassment begins ...

Two or three days later I get a call from a HDFC bank employee(?) again asking me for my residence address which I gave. When he said he will send a person to collect a photocopy of my salary slip, pan card, photo and other documentation for a credit card, I told him NO, as that was already given with the first application so why did he need them again. Then he changed the track and said it was for a fresh credit card application, which I refused as I had applied once and didnt need 2 credit cards from HDFC bank.

Very often I would get a call from different numbers claiming to be the callcentre of HDFC bank asking if I wanted a credit card? Each time I would decline but I was getting suspicious since the calls were from different numbers and the caller had a standard, -- I am a bank employee and will send person to your house, keep docu's ready -- line. His overeagerness to collect documentation proof told me something was amiss, despite my repeating that one card was enough.


Clueless HDFC Bank...

I was busy and had forgotten all about the application, by which time 3 weeks had passed so I decided to go to the bank to check on things, where I was told that the application was declined (but they didnt know how) and I could re-apply only after 6 months. I explained the incidents with the verification call and wanted to know on what basis the application was declined but the manager said that he could not access that information. I find that totally unacceptable, as that meant that an HDFC bank employee had less powers (cant even get access to data) than an outsourced employee who could reject applications on a whim, be vindictive and rude and harass a customer privately. While I was talking to the Manager, two other customers came up and said how they had been harassed by the credit card division and had to make payments for no fault of theirs. Most people are so thrilled about owning a plastic, want to flaunt their credit card that they dont read or see the fine print, dont ask uncomfortable questions and later end up in trouble, paying interest rates as high as between 35-55%.


Glaring security issues ...

Well strange things were about to happen, as I learnt later when by chance I met another employee and mentioned this harassment. They connected me to their QA person who was very helpful especially when I explained the glaring loopholes in the security. A little later they confirmed what I already knew, that my application was rejected, but strangely the order for verification process which is initiated by the bank was not initiated by the bank.

What the heck ......?

0] So how did my application reach the hands of the verification caller if the bank did not initiate /act on the application?

1] They checked and found that the number the first caller had called me from belongs to some government office. Hmm... so much for security of your sensitive data ...and my suspicions were right all along :-/

2] According to the bank only the bank employee has a right to do verification for credit-cards... then how did I get a call from a person who claimed to be a bank employee but they say Mr.XYZ does not work there. Now this HDFC employee has access to my personal information, had powers to reject it, be vindictive, call me at odd times later asking me to apply for more cards, and all this without an application following due procedure and not being sent for verification.

3] Even if a credit card is issued in future, the person indulging in this fraud can easily gain access to the credit card number and misuse it, simply due to the privileged employee (insider) status he enjoys.

In sum, I for one will not trust credit card division of the bank as

- they have no control over their own/outsourced employees,
- are not proactive about customer complaints and grievances,
- are utterly clueless and careless about existing and potential security loopholes,
- seem to take financial fraud lightly and totally reluctant to take action and/or preventive measures.