NRI Tax Info

A N Shanbhag, the highly respected investment guru, and his son Sandeep, answer your questions on NRI investment.

A Rediff India Abroad feature:

My brother is working in New York on an H-1B visa for the last eight years. His status here in India is Non-Resident Indian. His funds in the United States hardly earn 2 to 3 percent. He files his tax returns in the US. Please suggest how to invest his dollars in India.

-- Jatin Shah

Subject to the local laws of the NRI, he or she is free to invest funds in equity, mutual funds, property and insurance related products in India. Moreover, if the funds are remitted to India, full repatriability is maintained.

The interest rates in India are currently in the region of 10-11 percent p.a. Ideally, your brother should invest in a mix of mutual funds and fixed income securities.

My daughter is a green card holder in the US. In India she was employed with the state government and went to the US in February 2006. Currently, she is not working. In India she had invested in bank FDs, Post office MIS, PPF and NSC.

Total earning from the above is less than the exempted limit of Rs 150,000. As per the bank's advice, she had submitted 15G form and tax was not deducted from April 1, 2007 to March 31, 2008 on the above investments. She has also not converted her accounts to Non-Resident Ordinary accounts.

1. Is it necessary to change the present bank accounts to NRO accounts?

2. Is it possible to change to NRO accounts from back date?

3. Is it necessary to deposit 30 percent of income earned through above investments during the year 2007-2008 now as income tax and then claim this amount from IT department by filing ITR.

-- Kanhaiya Lal

Yes, it is necessary to redesignate all her resident savings accounts to NRO. An NRI cannot have and operate resident accounts. It is not possible to do so retrospectively.

If her total income is less than Rs 150,000, then no tax is due from her and hence there is no requirement of filing a tax return.

I work on a ship. My employers have their head office in Hong Kong. I earn my wages working on ships which have a foreign flag and are not registered in India. In this financial year, I have worked for two months and, due to certain reasons, will only be able to resume work in January. This means that my stay in India will be for a total of about seven months in this financial year. Since I will be considered to be a Resident, will my earnings be taxable even though my employers are not based in India and I have earned my wages while being out of India?

-- Sharukh Cama

Tax is determined based on your residential status and not that of your employer's. Secondly, for a Resident Indian, global income is taxable. Therefore, since you have been in India for over 182 days this year, your total income including that earned while being out of India will be taxable in India.

I am an NRI for the last 12 years and have a Non-Resident External savings and NRO savings and fixed deposit accounts. I have a valid PAN Card too. I have no income from India except interest earned on my NRO fixed deposits. This year I was slightly late in filing my tax return. I understand that the last date was July 31. However, I have been advised that even now I can file the return under 'Belated Return' facility. Is this true?

Also, while going through the return form, I was not able to understand the requirement of Item 24 in the form. This item is described as 'Other Information (transactions reported through Annual Information Return) (Please see instruction number-9(ii) for code).' Could you elaborate on this also please?

-- Sundar

In India, the financial year runs from April to March and tax return for income earned during this period has to be filed by July 31. If you haven't been able to do so, you may still file your tax return till the next March 31. This will be known as a belated return.

If any tax was payable originally, you would need to pay such tax and interest thereon @1% per month till the date that you finally pay the tax.

Regarding your other question, under section 285BA of the Income Tax Act, read with Rule 114E, the transactions of all persons, including NRIs, undertaking any one of the following seven specified financial transactions, equal to or over specified financial limits, are required to be reported to the IT department through Annual Information Return (AIR):

1. Cash deposits in a year in any bank SB account are of or more than Rs 10 lakh (Rs 1 million).

2. Payments in a year credit card are of or more than Rs 2 lakh (Rs 200,000).

3. Purchase of units of mutual funds of or more than Rs 2 lakh.

4. Acquisition of bonds or debentures of or more than Rs 5 lakh (Rs 500,000).

5. Purchase of shares of or more than Rs 1 lakh (Rs 100,000).

6. Purchase or sale of immovable property of or more than Rs 30 lakh (Rs 3 million).

7. Purchase of RBI bonds of or more than Rs 5 lakh.

If you do not have any of such transactions, you may write 'nil' in the space provided.

I am a marine engineer (Merchant Navy) having permanent residence in Kolkata. What will be my tax status and tax treatment? Will I be a NRI even though I sail for less than six months an year? Can I hold a normal savings account along with NRE account in India? Can I invest directly into the market as a resident individual?

-- Saurav Agarwal

If any person spends 182 days or more in India, he would get the status of Resident as per the Income Tax Act. Therefore, if you sail for less than 6 months and thereby end up staying in India for 182 days or more, you would not be termed as NRI but a Resident.

One can either be a Resident or an NRI. Accordingly, one can either have a Resident savings account or an NRE / NRO account. As a resident individual, you can directly invest in the stock market. An NRI to do the same would require the PINS permission.

 

 

Thanks

Sankar Chinnathambi

Senior Manager - Oracle Applications

Herbalife International of America Inc.

Phone: 310-410-9600 Ext. 22359

 

Parents: When to back off, when to step in

Do you speed over to your child's school, or even college, whenever something goes wrong?

Parents should try to teach their children how to handle situations themselves, experts say.

Many parents today insert themselves into even the most minute activities in their children's lives, a phenomenon that's known as "helicopter parenting."

But two child experts told CNN that parents should aim to empower their children to do things on their own.

"Parenting should be increasingly in the background as the child gets older," said Vivian Friedman, child-adolescent psychologist at the University of Alabama at Birmingham. "If you do for your child for too long, they never learn to do for themselves."

Dr. Kenneth Ginsburg, M.D., associate professor of pediatrics at the University of Pennsylvania School of Medicine and author of the book "A Parent's Guide to Building Resilience in Children and Teens," said it's important to show children you believe they are capable of handling situations themselves, but always put safety first. Read more about helicopter parents »

The "helicopter parent" trend may have arisen because the focus of marriage has shifted from the spouse to the child, Friedman said. An increase in divorce and a greater prevalence of two working spouses also contribute to parents' habits of spoiling their children.

"When [the kids] have little failures, they feel like our own failures," Ginsburg said. "What we need to understand is that our job as parents is not to finish our kids or produce perfect kids. It's to start our kids." Watch more on when helicopter parents go too far »

Here's what Friedman and Ginsburg recommended for various situations that may arise in your child's life:

1. The elementary school is putting on "Peter Pan" tomorrow. While you prepare a presentation for an important business meeting, your daughter calls and tells you she forgot her Tinkerbell costume for the dress rehearsal. "I'm the only one who's not dressed up," she tells you.

Friedman and Ginsburg agreed that it's OK to take care of it the first time she forgets the costume, but not if it becomes a habit.

"The first time: Find a housekeeper or neighbor to bring it over," Friedman said. "But if she does this routinely, she needs to suffer consequences to learn from the experience."

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How to ground a helicopter parent

"One time, two-time mistake -- it's wonderful to pick up the pieces," Ginsburg said. "If, in fact, you always end up picking up pieces, you can't expect a kid to learn the valuable lesson that they can do it themselves. Learn from failure -- failure's a great thing when you learn how to recover yourself."

2. You're at the playground reading a newspaper and suddenly your daughter runs up to you crying. "They won't let me make sand castles with them," she whines.

Friedman said this one depends on age. For a 3- or 4-year-old, it's appropriate for the parent to go over to the group as a neutral adult and help the children learn that they need to include everybody.

But for a 7-year-old, it's borderline. "You could say, 'What seems to be the problem? Do you think there's a way we could all play together?' rather than 'You can't exclude my child,' " she said.

Ginsburg, on the other hand, said you can suggest to your child what to say, or recommend that she find someone else to play with, but you shouldn't communicate that your child isn't capable of handling the situation.

"Learning how to play nice with other people in the sandbox is a great metaphor for life," he said.

3. Kids in the seventh-grade class just won't leave your son alone, not even online. Besides shoving him against the lockers once in awhile, they've also set up a MySpace page making fun of his appearance and name.

Experts agree that you should step in here and notify the school. Friedman would also notify the parents of the children involved -- "Most rational, reasonable parents would not support their child doing that," she said.

Ginsburg emphasized that safety always comes first. "You don't allow your daughter to put her hand in the oven to learn it's hot," he said. "You don't allow a kid to be bullied when there should be systems in place to prevent bullying. "

4. Your son started college a month ago, and every time you call him he has a new story about his messy, party-loving roommate who distracts him from studying and interrupts his sleep. "I wouldn't mind as much if it were my own vomit on the floor," your son tells you. He says he'll just stick it out for the rest of the year.

Health Library

MayoClinic.com: Children's Health

Friedman and Ginsburg said they would not approach the college housing department and ask to have the young man moved, except in extreme or difficult circumstances -- such as if the child is in a special needs program and can't help himself, Friedman said.

"There's nothing wrong with asking open-ended questions to help your son figure it out," Ginsburg said. "It's OK to say 'Who can you talk to at the university to change your living situation?' What's not OK is to call the dean and say 'Move my son.' " 5. Always a technical genius, your daughter majors in electrical engineering and will surely become a pioneer of great innovations. But this semester, the last of her junior year, she failed her 18th-century literature class, which she took to fulfill the subject-area distribution requirements. This is going to look pretty bad on graduate school applications.

While the daughter can speak to the professor on her own, Friedman and Ginsburg said they would not intervene in this situation.

Special circumstances would be if the grade was truly unfair and there was real foul play involved, or if the professor was drunk -- but otherwise, Friedman said, "It's her F, it's not your F. I would do absolutely nothing."

6. Your daughter has been in the real world for a year, but she says she's not ready to keep herself afloat financially. For the third time this summer she asks for help paying the rent -- "phone bill would be extra nice," she adds. You also notice that she's got a new pair of Manolo Blahnik pumps, and an iPhone is sticking out of her purse.

Friedman said she would not allow this to come up a third time -- she would have made the daughter set up an automatic debit system early on so her child's rent comes out of the account when her paycheck is deposited. "By the third month, I would let her sink, but I'm not a helicopter parent," she said.

Ginsburg emphasized again the safety component: He would never want his daughter to become homeless. He would pay the first month's rent with clear expectations: She needs to learn how to make a budget, she can't spend money on other things until things like rent and food are taken care of, and she needs to know that this is a loan. "Seven months in a row: she needs to find a roommate," he said.

Finally, note that there are no villains here, Ginsburg said.

"The parents who we think do too much are still doing their very best," he said. "Real success involves resilience: the capacity to learn to bounce back on your own."

Picture with Sania

Spotted: Sania Mirza in the US

August 27, 2008

Reader Sankar Chinnathambi sent us this picture from the United States.

'I met Sania Mirza [Images] at a store in Carson, California, before her match with Eva Hridinova at the US Open [Images] series East West Bank Classic,' writes Sankar.

'I watched the match too; she won in straight sets --  6-3, 6-4. It was a lovely match.'

Thank you, Sankar, for sharing this picture!

If you encounter your favourite cricket/sports personalities, send us the photograph or video on sportsdesk@rediff.co.in We will feature the best images right here on Rediff Sports or Rediff Cricket.

 

 

Thanks

Sankar Chinnathambi

Senior Manager - Oracle Applications

Herbalife International of America Inc.

Phone: 310-410-9600 Ext. 22359

 

10 Big Mistakes Parents Make

While we all love our kids, in this day and age of two working parents and insane schedules, we tend to cut corners and neglect important things. That being said, here are 10 big mistakes parents make.

By Craig Playstead

1) Spoiling kids 
There is no doubt that parents love their kids and want them to have all the things they didn't. However, this comes at a price. A ton of well-intentioned parents have ended up spoiling their kids to such a degree that the kids aren't even happy with all the stuff they have. This causes them to never be satisfied and always want more. Junior doesn't need one more piece of crap, what he needs is some special time with his parents. Think of it this way: How will they ever be prepared for disappointment throughout their life—or learn to be thankful for anything?

2) Inadequate discipline
When you're too lazy to adequately discipline your kids, you pass the little devil you've created on to your relatives, coaches, teachers, and his friends' parents. It's not OK to let your kids treat your house like it was a Jump Planet because that's exactly how they'll treat other people's homes. They should also be much better behaved when they leave the house and visit elsewhere. I've lived through this nightmare first-hand, with the same kid at my house treating my $1,500 couch like a trampoline, and then calling my daughter "ugly" while the kids were eating dinner. All within a 15-minute span. If you don't discipline your kid, someone else will—and you won't like it.

3) Failing to get involved at school
School is where your kids will spend more time than any place besides your home. It's also the place that will have the most responsibility for shaping their life—from teachers and their peers. That being said, how can you not want to be involved in what's going on there? It doesn't matter if it's you or your spouse: Your family needs to have a presence at that school. And don't use work as an excuse—take a vacation day if you need to. You'll see immediately that it's time well spent. You should also have at least an e-mail relationship with their teacher. It's a great way for that teacher to see that you're interested in your child's development, and the teacher can alert you to anything concerning that may be going on with your son or daughter. Your kid's teacher may take a much more active role with your child if they know you're keeping close tabs.

4) Praising mediocrity
While we all want to encourage our kids to do well and build their self-esteem, there is a point of going too far. Building a child's self-esteem is great, but having a big party for a mediocre accomplishment skews what they view as a real achievement. One big place I see this is in sports. A participation trophy for anyone over the age of 6 just ends up devaluing the meaning of a real trophy. It's happening in my own household. While I was against trophies for my 7-year-old son's basketball team, a few moms overruled. My son has played exactly four seasons of sports and has earned more trophies than I did in my 40 seasons growing up. Something is out of whack.

5) Not giving kids enough responsibility
Your kids shouldn't be expecting any payment for doing chores around the house. It's a home, not a hotel. That being said, an allowance is a great idea … for extra work. They should be pulling their weight as part of the family. If they grow up without enough responsibility, how in the world do you expect them to hold down a job, or get through college? When they get "of age," make sure they're taking some of the burden off you around the house—from unloading the dishwasher to picking up dog poop in the backyard. While they're not your slaves, they sure aren't on vacation, either.

6) Not being a good spouse
How you treat your husband or wife is very important to the way your kids will develop relationships, especially as adults. If you treat your spouse poorly, or if your only way to settle any kind of dispute is to yell and scream at each other, you're teaching your kids to handle themselves the same way. Kids learn from watching you much more than they learn from listening to you. If you treat your spouse with love and respect, it will also show your kids the value of their family. It will also make them feel their family is a safe haven in what can be a dark, scary world.

7) Setting unreal expectations
When dealing with kids, you need to set reasonable expectations for them—especially the little ones. If you want to go out to a nice dinner and expect your 2-year-old to sit there like a little prince, you are setting yourself up for major disappointment. Also, if you have visions of a football star and your son weighs 80 pounds and likes to play the clarinet, you need to reset those expectations. Don't have unreal expectations for your kids: The expectation you should have is for them to be happy.

8) Not teaching kids to fend for themselves
Many parents tend to baby kids these days and cater to their every need, and that eliminates the value of hard work and becoming independent as they grow into adults. I fear that we're raising a generations of wimps. Kids nowadays expect everything to be done for them, from cleaning their room to band-aids for hurt feelings. Teaching them to toughen up and do things on their own doesn't mean that you love them less; it means you love them more.

9) Pushing trends on kids
Let kids be kids. Parents shouldn't push their trends or adult outlook on life on their kids. Just because it was your life's dream to marry a rich guy doesn't mean we need to see your 4-year-old daughter in a "Future Trophy Wife" t-shirt. The same goes for the double ear piercing—that's what you want, not them. Teaching kids about your passions is great, but let them grow up to be who they are. And yes, this goes for you pathetic stage parents as well. It's hard enough for kids to figure out who they are in the world without you trying to turn them into what you couldn't be.

10) Not following through
I have trouble with this one sometimes. If you're telling your kids that they'll be grounded if they paint the neighbor's dog one more time, you'd better follow through. Unfortunately, following though on punishments or promises makes your life a little more difficult, but building trust is what's most important. If you're not true to your word, your kids will assume anything you say is just talk. Then you have a real problem on your hands. You'll also end up with kids who don't trust their parents.

 

 

Thanks

Sankar Chinnathambi

Senior Manager - Oracle Applications

Herbalife International of America Inc.

Phone: 310-410-9600 Ext. 22359

 

Coaching For The Bottom Line: Moving Beyond Talent

Coaching For The Bottom Line: Moving Beyond Talent

The legendary New York Yankee slugger Mickey Mantle put it succinctly: "I could never be a manager. All I have is natural ability."

Could Mantle's insight apply to some of the managers and supervisors in your organization, too?

When we talk to senior sales and service leaders, they tell us proudly how well their managers and supervisors are coaching and developing front-line representatives. But when we talk to the representatives themselves, we often hear a different story.

It turns out that what passes for "coaching" is - more often than not - just "evaluating."

What's the difference?

Evaluation is the process of measuring results against a standard. The focus is on reporting about past performance.

Coaching is the process of improving results by changing thoughts, beliefs, and behaviors. The focus is on changing future performance.

The distinction seems clear. So why are so many managers and supervisors just keeping score instead of getting into the game and actually helping their employees win?

Many Coaches Are Victims Of Their Own Talent

It turns out that in many sales and service organizations, the managers and supervisors are typically former representatives who were promoted because of their high performance. Like Mickey Mantle, many of these high performers are gifted with wonderful natural abilities. But they've never learned how to coach and develop other people - especially those who may not be blessed with the same innate gifts.

As a result, most managers and supervisors coach the same way that they were coached when they were front-line sales or service representatives. In practice, this means that they typically:

·                 Evaluate rather than coach.

·                 Do not look beyond the data to analyze the behaviors that are creating the data.

·                 Treat all employees the same way instead of tailoring their coaching approach to each individual.

·                 Do not gain their employees' buy-in and commitment to change.

·                 Over-utilize feedback as a coaching tool and underutilize other coaching techniques.

Focus On The Behaviors Behind The Numbers

Let's consider just one typical situation - not looking beyond the data to understand the behaviors that are creating the data.

Call centers have an understandable focus on efficient performance. One typical measure of representative efficiency is Average Handle Time (AHT) - the average amount of time the representative spends on each call including both talk time and hold time. In most centers, the AHT measure also includes "wrap" time, the additional time required to update customer records or complete other related tasks after the call. Average Handle Time plays a key role in helping call centers staff appropriately to handle customer call volume.

Imagine that one of the representatives on your team has high Average Handle Time. How would you coach for improved performance?

Before you answer, consider just some of the possible scenarios that might account for the rep's high AHT.

1.               The representative doesn't understand Average Handling Time or why it's important.

2.               The representative doesn't know what is considered to be the standard of performance in terms of AHT.

3.               The representative doesn't know how well she is doing relative to the standard.

4.               The representative spends too much time in unproductive chatting with her customers.

5.               The representative actually met the standard on most of her calls but had a few calls that were extremely long. These long calls had a big impact on her average.

6.               The representative can't talk to the customer and input information at the same time. After the call ends she needs a lengthy wrap time to update the customer's records.

7.               This rep generally ends up handling the difficult customer problems that were not resolved by other representatives.

8.               The representative doesn't know how to quickly access appropriate reference information.

9.               This rep is a top seller and feels that the extra time she takes with her customers is the key to her success. Your company provides big incentives for top sellers, and there are no negative consequences for high AHT.

10.            In the past, this rep had very good AHT. But many other reps in the office have high AHT and there are no expectations for them to improve. This rep got tired of carrying more than her share of the load.

Clearly, your coaching approach would vary significantly depending on which scenario you encountered. But with so many possibilities, how do you determine your approach?

Numbers Are Just The Beginning

Performance data provide you and your coaching team with a great starting point - but only a starting point. Be sure all of your coaches take the time to investigate what's behind the data before they start coaching for improvement.

One more thing. While you're working with your coaches to improve their performance, remember to take some time for yourself. Take a few minutes to get away from the office, to clear your head, or to get some exercise. And remember these words from Mickey Mantle: "If I knew I was going to live this long, I'd have taken better care of myself."

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Thanks

Sankar Chinnathambi

Senior Manager - Oracle Applications

Herbalife International of America Inc.

Phone: 310-410-9600 Ext. 22359

 

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