SERVICE TAX

Can service tax paid be deducted from income tax?
Service tax as such cannot be deducted from the income tax payable by an assessee. However, the entire cost of any service availed for the purpose of business, including the service tax paid, is considered a deductible expense while computing the income under the head income from business or profession. For example, your business telephone bill, including the service tax, is a deductible expense while computing the business income.

OOH!!!!!!!!!!!!!!! AAH!!!!!!!!!!!1 OUCH!!!!!!!!!!!!!

I was shopping online and just as I had entered my debit card details, the Internet connection broke. When I checked my account later, the amount was debited but the transaction was incomplete. The bank says the money will be credited to my account in the next billing cycle. What can I do if it isn’t?

Such issues usually get settled in the next billing cycle of the debit card, so it is better if you wait till then. However, if the correction doesn’t happen, raise a formal complaint and get an acknowledgment. A complaint raised over the telephone does not have any legal standing, so do it in writing or by email. If the bank does not take any action, you should complain to the banking ombudsman that has jurisdiction over your area (www.bankingombudsman.rbi.org.in).

ATM MACHINE IS A MACHINE AFTER ALL

An ICICI Bank ATM declined the transaction when I tried to withdraw money using my SBI debit card a month back but the money was deducted from my SBI account. Both the banks told me that SBI would resolve the issue. But the SBI manager concerned is refusing to take it up, saying that he hasn’t handled such a case before. What action can I take?
Since you haven’t been able to get a response directly from the person concerned in SBI, you can send a complaint through the bank’s website. If you do not get a satisfactory response in two to three weeks, approach the banking ombudsman (www.bankingombudsman.rbi.org.in).

I want to purchase land. Which banks give loans for that?
Not all banks or housing financing lending institutions extend land loans since there is difficulty in documentation and security of the property (risk of encroachments). Most banks that offer these loans insist that the land be purchased from a development authority or from a society. Some banks also permit purchase of land from a developer.
Banks and lenders such as Standard Chartered Bank, Indian Bank, Bank of India, UCO Bank, State Bank of India, HDFC Bank, Housing Development Finance Corporation (HDFC) and LIC Housing Finance give loans for purchasing plots or land.

ONLINE PREMIUM PAYMENT

I want the annual premiums of my policy to be automatically debited from my bank account, or get paid online. How can I do this?
First, you need to check with your life insurer if they provide an online payment service. Generally all insurance companies have a list of banks (where you need to have an account) or specific credit cards, through which payments can be made online. Also, you should have opted for net banking facility with that bank and/or credit card.
If you haven’t already done this, you can contact the bank, which will give you a form to fill in which you need to give a mandate for direct debit for the billed amount directly from your bank account. You will also have to give your bank account details and other requisite information to the insurance company. After this, your policy premium bill shall be sent to your bank and the bank will debit the amount from your account and remit the payment to your insurers.

LOAN AGAINST THE INSURANCE POLICY

I want to take a loan against my policy which will mature in another five years. How is the loan amount decided? What will happen if I am not able to repay the loan amount before the policy matures? Will the policy period be extended or put on hold?
The loan amount against a life insurance policy is calculated on the basis of the surrender value (SV) of the policy at the time of taking the loan. The loan amount is generally around 85 per cent of the SV. The interest rate charged varies from company to company and time to time. A policyholder can repay the loan amount either in part or in full, any time during the term of the policy. If the loan amount is not repaid during the term of the policy, or in case of an early claim, the amount of loan plus interest, if any, is deducted from the claim money and the balance is paid to the claimant. The policy period is neither extended, nor put on hold on account of settlement of the loan amount.

COLLATRAL OF LIFE INSURANCE FOR LOAN

I have given my life insurance policy as collateral for my home loan. For this I had to assign my policy in favour of the bank. Can I cancel this assignment at any future date? How will I get my policy back?
Assignment is a means whereby the beneficial interest, rights and title under a policy get transferred from the assignor to the assignee. ‘Assignor’ is the policyholder who transfers the title and ‘assignee’ is the person who derives the title from the assignor. When you assign the life insurance policy in favour of a bank or any financial institution, as a collateral security, the nature of assignment is conditional. This means that as and when the loan is cleared, the rights under the policy are transferred back to the assignor.
You can’t cancel the assignment yourself. Once the loan gets cleared, you will get the policy back.

SIMPLE POLICY

Which policies don't have high charges and are simple?

The simplest form of life insurance is the pure risk cover, also known as term plans. A pure risk cover works like a contract that provides a specified death benefit, but no cash build-up or investment component. The guaranteed sum assured is only for a specified term, usually one year, and the policy is renewable at the end of each term period. The policy term can be longer also, but will be effective only when premium is paid each year. Since the premium for risk cover is low, one can get adequately insured for a relatively low premium cost.
Normally, there are two types of term policies—one returns the premium at the end of the term and the other doesn’t. Since you don’t want returns, you can go for the second kind. In this case, the premium will be the lowest.