How To Calculate Perquisite Value In Concessional Loan / Interest Free Loan

As per Income Tax rules if Interest free/concessional loan is provided by the employer to employee , it will be treated as perquisite to the employee and it as per Income tax rules , it valuation should be done and added to the income of the the employee.For interest free/concessional loan valuation interest rate of State Bank of India as applicable on first day of the financial year is to be considered. For Financial year 2012-13 , interest rate as applicable on 01.04.2012 is required ,which has been provided in the table below.

State Bank of India: Interest Rates on 1st April, 2012 ,For the purpose of computing perquisite valuation

Interest rates as on 1st April, 2012 on various loans in Personal Segment advances are as under –

Calculation of Perquisite Value In Concessional Loan /Interest Free Loan

Home Loan Scheme
Loan Amount	Linkage with Base Rate over the tenor of the loan		Effective Rate
Upto Rs. 30.00 lacs	0.75% above Base Rate		10.75% p.a.*
Above Rs. 30.00 lacs and upto Rs. 75.00 lacs	1.00% above Base Rate		11.00% p.a.*
Above Rs. 75.00 lacs	1.25% above Base Rate		11.25% p.a.*
No fixed rate option in any limit bracket.
* A concession of 0.25% in card interest rate over the tenor of Home Loan is available under ongoing special Home Loan campaign upto 30.09.2012.
SBI Car Loan Scheme
For all tenures		For Term Loan:
		1.25% above Base Rate, i.e. 11.25% p.a.
		For Overdraft:
		1.75% above Base Rate, i.e. 11.75% p.a.
NRI Car Loan
		1.25% above Base Rate i.e. 11.25% p.a.
For all tenures
Two- Wheeler Loan
Up to 3 years		8.25% above Base Rate i.e. 18.25% p.a.
Used Vehicles
Up to 3 years		7.25% above Base Rate i.e. 17.25% p.a.
Above 3 yrs		7.50% above Base Rate i.e. 17.50% p.a.
Certified Pre-owned Car Loan scheme
Up to 3 years		6.00% above Base Rate i.e. 16.00% p.a.
Above 3 yrs		6.50% above Base Rate i.e. 16.50% p.a.
SBI Student Loan Scheme
For loans upto Rs.4 lacs		3.50% above Base Rate, currently 13.50% p.a.
Above Rs.4 lacs and upto Rs.7.50 lacs		3.25% above Base Rate, currently 13.25% p.a.
Above Rs.7.50 lacs		2.00% above Base Rate, currently 12.00% p.a.
Xpress Credit
Type		Facility		Rate of Interest
Demand Loan		Check-off from Employer		5.00% above Base Rate Floating, currently 15.00% p.a.
SBI Saral Personal Loan
Demand Loan		Check-off from Employer		8.50% above Base Rate Floating, currently 18.50% p.a.
Loans against NSCs/KVPs/RBI Relief Bonds/Surrender Value of SBI Life /LIC/SBI Magnums, etc.
Upto 3 years		4.50% above Base Rate, currently 14.50% p.a.
More than 3 years and below 6 years		4.50% above Base Rate, currently 14.50% p.a.
Loan against Gold Ornaments
Upto Rs. 1,00,000/-		4.25% above Base Rate Floating, currently 14.25% p.a.
Above Rs. 1,00,000/-		4.75% above Base Rate Floating, currently 14.75% p.a.

Looking forward to your comments and feedback

Siddharth Desai
(BLOG: http://desaisiddharth.blogspot.in/ )
(Email: desaisiddharth09@gmail.com)

Benefits of Rajiv Gandhi Equity Savings Scheme, 2012

Rajiv Gandhi Equity Savings Scheme, 2012 (RGESS) is a new equity tax advantage savings scheme for equity investors in India, with the stated objective of “encouraging the savings of the small investors in the domestic capital markets.” Vide notification dated November 23, 2012 the scheme has been notified by the Department of Revenue, Ministry of Finance (MOF). It is exclusively for the first time retail investors in securities market.

The objective of the scheme is to encourage flow of savings in the financial instruments and improve the depth of the domestic capital market

• A new section 80CCG under the Income Tax Act, 1961 on ‘Deduction in respect of investment under an equity savings scheme’ has been introduced to give tax benefits to ‘New Retail Investors’ who invest up to Rs. 50,000 in ‘Eligible Securities’ and have gross total annual income less than or equal to Rs.10 Lakhs. The investor would get a 50% deduction of the amount invested from the taxable income for that year.
• Gains, arising of investments in RGESS, can be realized after a year. This is in contrast to all other tax saving instruments.
• Investments are allowed to be made in installments in the year in which the tax claims are filed.
• Dividend payments are tax free.
• This scheme has a long run benefit of educating the retail investment segment and thereby moving towards financial inclusivity in the country.
• Success of this scheme can lead to transfer of assets from traditional savings instruments such as bank deposits and FDs to the capital markets, leading to diversification in retail investor portfolio and also leading to more productive “capital formation” assets.

Eligibility Criteria for Rajiv Gandhi Equity Savings Scheme (RGESS)

The deduction under the Scheme will be available to a ‘new retail investor’ who complies with the conditions of the Scheme and whose gross total income for the financial year in which the investment is made under the Scheme is less than or equal to ten lakh rupees.

The deduction under the Scheme shall be available to a new retail investor who:-

• Is a Individual Resident of India.
• Who has not opened a demat account and has not made any transactions in the equity or derivative segment as on the date of notification of the scheme i.e., November 23, 2012. OR
• Who has opened a demat account as a first holder, but has not transacted in the equity or derivate segment till November 23, 2012. OR
• Who has a demat account as a joint holder.
• Who has gross total income for the financial year less than or equal to Rs. 10 Lakh.

Process to claim Benefit under Rajiv Gandhi Equity Savings Scheme (RGESS)

A new retail investor can make investments under the Scheme in the following manner:

• Open a demat account with a Depository Participant by providing an undertaking (Form A) that he wishes to designate his existing account or open a new account as RGESS account.
• An investor can invest in eligible securities in one or more transactions during the year in which the deduction has to be claimed.
• An investor can make any amount of investment in the demat account but the amount eligible for deduction, under the Scheme will not exceed fifty thousand rupees.
• The eligible securities brought into the demat account, as declared or designated by the new retail investor, will automatically be subject to lock-in during its first year, unless the new retail investor specifies otherwise and for such specification, the new retail investor will submit a declaration in Form B indicating that such securities are not to be included within the above limit of investment.
• An investor will be eligible for a deduction under subsection (1) of section 80CCG of the Act in respect of the actual amount invested in eligible securities, in the first financial year in respect of which a declaration in Form B has not been made, subject to the maximum investment limit of fifty thousand rupees.
• An investor, who has claimed a deduction under sub- section (1) of section 80CCG of the Act, in any assessment year, will not be allowed any deduction under the Scheme for any subsequent assessment year.
• An investor will be permitted a grace period of three trading days from the end of the financial year so that the eligible securities purchased on the last trading day of the financial year also get credited in the demat account and such securities will be deemed to have been purchased in the financial year itself.
• An investor may also keep securities other than the eligible securities in the demat account through which benefits under the Scheme are availed.
• An investor can make investments in securities other than the eligible securities covered under the Scheme and such investments will not be subject to the conditions of the Scheme nor will they be counted for availing the benefit under the Scheme.
• The investment under the Scheme will consist of an investment in any of the eligible securities covered under the Scheme.
• Deductions claimed will be withdrawn if the lock-in period requirements of the investment are not complied with or any other condition of the Scheme is violated.

Looking forward to your comments and feedback

Siddharth Desai
(BLOG: http://desaisiddharth.blogspot.in/ )
(Email: desaisiddharth09@gmail.com)