Companies Bill 2013 - Highlights

The new Companies Bill will replace the 60 year old regulations of Companies Act,1956 .The Companies Bill 2013 provides for modifying the rules and regulations that earlier governed the companies in the country. It mainly focuses on the social welfare and protection of the investors against the fraud committed. It mainly aims to bring transparency in the working of the company. As many new amendments has been made in the  Companies Bill 2013.  Some of the key highlights on the Companies Bill 2013 are:-

• The concept of “One Person Company” has been introduced for the first time.
• Compulsion of e-governance on all compulsory process.
• Mandatory transfer of 2% of average net profit of preceding three years for corporate social responsibility (CSR).
• It says about compulsory internal audit for different class of companies.
• The tenure of appointment of auditors at annual general meeting(AGM) of company has extended to five years , instead of annual appointment /retirement(other than government company)
• In case of listed companies 1/3^rd of total no of directors must be “independent directors”
• The Companies Bill 2013 considers manager or managing director or chief executive officer, whole time director, chief financial officer and company secretary as key “managerial personnel”.
• It prohibits insider trading of securities.
• The maximum no. of member for private company has increased to 200 from 50.
• National Advisory Committee on Accounting Standards (NACAS) has been renamed has National Financial Reporting Authority (NFRA).
• It also highlights on annual ratification of appointment of auditors.
• There is no ceiling on no. of members/partners as to associations or partnership formed by professionals by special acts.
• It highlights on the appointment of at least one women director in the company.
• The companies bill redefines’ the term “subsidiary”, “control” and associate “company”.
• Under the Companies Bill 2013   statutory   status will be conferred upon the Serious Fraud Investigation Office (SFIO).

Apurv Gourav

Improve your Credit Score

Credit Information Bureau (India) Ltd; CIBIL is India’s first Credit Information Company, also commonly referred as a Credit Bureau. We collect and maintain records of individuals’ and non-individuals’ (commercial entities) payments pertaining to loans and credit cards. These records are submitted to us by banks and other lenders on a monthly basis; using this information a Credit Information Report (CIR) and Credit Score is developed, enabling lenders to evaluate and approve loan applications. A Credit Bureau is licensed by the RBI and governed by the Credit Information Companies (Regulation) Act of 2005

How to Improve your Credit Score 

You can improve your Credit Score by maintaining a good credit history. This will be viewed favorably by lenders and it can be done with 6 simple rules:

1. Always pay your dues on time
   Late payments are viewed negatively by lenders
    
2. Keep your balances low
   Always prudent to not use too much credit, control your utilization
    
3. Maintain a healthy mix of credit 
   It is better to have a healthy mix of secured (such as home loan, auto loan) and unsecured loans (such as personal loan, credit cards). Too many unsecured loans may be viewed negatively.
    
4. Apply for new credit in moderation
   You don’t want to seem Credit Hungry; apply for new credit cautiously
    
5. Monitor your co-signed, guaranteed and joint accounts monthly 
   In co-signed, guaranteed or jointly held accounts, you are held equally liable for missed payments. Your joint holder’s (or the guaranteed individual) negligence could affect your ability to access credit when you need it
    
6. Review you credit history frequently throughout the year 
   Purchase your CIR from time to time to avoid unpleasant surprises in the form of a rejected loan application

Factor Affecting Credit Score

There are 4 major factors that affect your score

1. Payment history
   Making late payments or defaulting your EMIs or dues (recently or consistently) shows you are having trouble to pay your existing credit obligations and will negatively affect your score.
    
2. High utilization of Credit Limit
   While increased spending on your credit card will not necessarily affect your score in a negative manner, an increase in the current balance of your credit card indicates an increased repayment burden and may negatively affect your score.
    
3. Higher percentage of credit cards or personal loans (also known as unsecured loan)
   Having a balanced mix between the secured loans (such as Auto, Home loan) and unsecured loan (such as Personal loan, Credit Card) is likely to have a more positive affect on your score.
    
4. Many new accounts opened recently
   If you have recently been sanctioned multiple loans and credit cards, then lenders will view your application with caution because this behavior indicates your debt burden has increased increase, which will negatively impact your score.

Apurv Gourav

Have You Disclosed Other Source of Incomes?

The due date for filing personal income-tax returns for the financial year 2012-13 is 31^st July 2013.

There are a few more sources of income which one MUST disclose. The disclosure can be done either to our employer (so that they are taken care of in Form 16) or while filing our returns.

Some of the very important disclosures are:

1	Interest earned from Savings Bank Account	Interest earned from savings account is tax free up to Rs 10,000/-. Any interest earned above that is taxable and should be declared.
2	Interest earned from Fixed Deposits	Interest received from fixed deposits is taxable as per ones income tax slab. Most of the times banks deduct 10% TDS when the interest accrued is more than Rs 10,000/- (unless one submits a Form 15 G/H). However, the actual tax liability will be more or less, depending upon the tax bracket one falls under after all incomes and deductions are claimed.
3	Interest earned from Recurring Deposits	Interest received from recurring deposits is taxable as per one’s income tax slab. Banks do not cut any TDS on interest earned on recurring deposits and hence it becomes even more important to declare this source of income.
4	Interest earned on Postal deposits and National Savings Certificates (NSCs)	Interest earned on Postal deposits and National Savings Certificates (NSCs) is taxable and needs to be declared.
5	Cash Gifts	Cash gifts received for more than Rs 50,000/- should be declared as they are taxable (unless for specific occasions like marriage, will etc)
6	Capital Gains/Losses	Any Capital gains/losses made from trading equities, selling mutual funds, gold etc should be declared even though they may be non-taxable (e.g. for equities long term capital tax is NIL). Similarly, any losses should be declared as these help in offsetting gains for subsequent years
7	Exempt Income	Exempt Income (e.g. Interest earned on PPF/EPF accounts) should be declared for auditing purposes only. This is a tax free income
8	Dividend Income	Dividend income is tax free in the hands of the investor. However this should be declared while filing income tax returns