Self Management:

You are responsible for everything that happens in your life. Learn to accept total responsibility for yourself. If you do not manage yourself, then you are letting others have control of your Life. These tips will help “you” manage “you.”

Here is a list of things that help you in self management and which will in turn lead you to the path of success: –

  1.  Look at every new opportunity as an exciting and new-life experience.
  2.  Be a professional who exhibits self-confidence and self-assurance in your potential to complete any task.
  3.  Agree with yourself in advance that you will have a good attitude toward the upcoming task.
  4.  Frequently ask, “Is what I am doing right now moving me toward my goals?”
  5.  Do it right the first time and you will not have to take time later to fix it.
  6.  Accept responsibility for your job successes and failures. Do not look for a scapegoat.
  7.  Do not view things you do as a “job.” View all activities as a challenge.
  8.  Use your subconscious mind by telling it to do what you do want. Instead of telling yourself, “I can’t do that very well,” say, “I can do this very well.”-) Give yourself points for completing tasks on your “to-do” list in priority order. When you reach 10 points, reward yourself.
  9.  Practice your personal beliefs. It may be helpful each morning to take 15 minutes to gather your thoughts and say a prayer.
  10.  Make a commitment to show someone a specific accomplishment on a certain date. The added urgency will help you feel motivated to have it done.
  11.  Practice self-determination, wanting to do it for you.
  12.  Believe that you can be what you want to be.
  13.  Never criticize yourself as having a weakness. There is no such thing. You are only talking about a present undeveloped skill or part of yourself that if you so chose, you can change. You do not have any weakness, only untapped potential.
  14.  Be pleasant all the time-no matter what the situation.
  15.  Challenge yourself to do things differently than you have in the past. It provides new ideas and keeps you interested.
  16.  Talk to yourself. A self-talk using positive affirmation is something that is common among all great achievers. They convince themselves that they can accomplish their goals.
  17.  Create your own “motivation board” by putting up notes of things you need to do on a bulletin board or special wall space. It is an easily visible way to see what you need to work on. When an item is done, remove the note. Also keep your goals listed and pictured on your board.
  18.  Stay interested in what you are doing. Keep looking for what is interesting in your work. Change your perspective and look at it as someone outside your job would,
  19.  Establish personal incentives and rewards to help maintain your own high enthusiasm and performance level.



Simple Mantras to Secure Financial Freedom:

“A successful investor is not one who never loses, but who stays invested in the market.”
Contrary to popular belief, one does not have to earn a lot of money to become wealthy. Here are some simple Mantras to secure your financial freedom!
Dont procrastinate on wealth creation – Many people procratinate on saving money. They always wait for the next year, next increment, next bonus to start savings and then the cycle repeats again. You do not need to start investing large amounts, start small. Even a years delay makes a huge difference as wealth compounds with time.
Prepone Investments, Postpone expenses – Set targets on how much you want to invest and invest it as soon as you get the money. Do not spend first and save (whatever is left) later.
You do not need crores – It’s a myth that you need lots of money to start investing. Even small amounts over time become large due to the magic of compounding.
Go for the long term – Especially in Equity it is important to invest for the long term. They give the best returns in the long term. For short term look at debt.
Invest Regularly – This is very important. You can invest in SIP’s which average out your risk. For eg. investing 10,000 rupees a month would yield 1 crore in 15 years at a annual rate of 20%.
Don’t link your lifestyle to stock market – When the stock market is rising, our notional wealth increases. Soon we start believing that growth of our wealth is real and long term. This false state of suddenly feeling wealthy leads to change in lifestyle. One of the perils of increasing expenses on your lifestyle during stock market boom is that we get used to comforts and luxuries in life. When economic situation turns bad we will then struggle to curtail our expenses. In fact in reality while markets are rising, we should control our expenses and let our wealth grow. On the other hand when equity markets are down, our wealth is not growing in real terms. Things are also cheaper generally during such periods.
Ignore Rumours – If you are confident about the company you have invested in, leave it. Ignore rumours.
Research & Learn – Learn about budgeting, credit, and debt. Learn how credit cards work! If you get into debt early it can sabotage your progress. Whenever you buy a stock or fund, don’t do it on a tip or whim, but do solid research to back up your buy. Investing can be very interesting and rewarding!

Govt revises Interest Rate for Small Savings Schemes and PPF

The Finance Ministry (Budget Division) has issued an Office Memorandum O.M.No: 6-1/2011-NS.II (Pt) dated 26.03.2012 for revision of Interest Rates for various small saving schemes operated mainly through post offices and PPF.

Based on the recommendations of Shyamala Gopinath Committee for comprehensive review of National Small Savings Fund (NSSF), Government had earlier taken the decision that interest rates of various small savings shall be reviewed every financial year and revsions in the same to be notified before 1st of April of that year.

Accordingly the present revision in the interest rates of various small saving scheme has been made.  The following table provides the revision made:

Download Office Memorandum dated 26.03.2012:

Scheme Interest Rate w.e.f 1.12.2011 Interest Rate w.e.f 1.4.2012
Savings Deposit



1 year Time Deposit



2 year Time Deposit



3 year Time Deposit



5 year Time Deposit



5 year recurring deposit



5 year SCSS



5 year MIS



5 year NSC



10 year NSC






From farm labourer to US company CEO

Jyothi Reddy went from being a farm labourer in Andhra Pradesh to owning a recruiting firm in the US with a turnover of $5 million. Kavitha Shanmugamtraces her incredible journey

NOTHING SUCCEEDS LIKE SUCCESS: Jyothi Reddy now and (below) then

Sometime in the 1980s, a young woman labourer was toiling in the fields under a harsh, southern sun for Rs 5 an hour. Seated on her haunches, she lifted her head towards the sky as an aeroplane flew past. She wanted to be on the flight…

In 2012, she is the president-founder of recruiting firm Keys Software Services, which boasts of a $5 million turnover. The company in Phoenix, Arizona, sponsors H1 visas and supplies manpower to companies.

 Her rags to riches story is the stuff of the great American dream. But Anil Jyothi Reddy’s journey from an orphanage to the top of the world has been an arduous one.

Crushed by poverty after her father lost his job as a teacher, her parents decided to keep their son at home and leave their two daughters in an orphanage. Jyothi’s sister ran back to her parents. But young Jyothi — then barely nine — carried on.

“When I lived with orphans I knew the pain of life,” Jyothi, 42, says in a telephonic conversation from the US. It was a hard life, sleeping on floors without blankets and eating meagre meals. “I wanted someone to hold me, share my feelings when I did well at school or felt sad. Those hard feelings stayed with me. I needed my mother when I was in pain. The worst part was I had to pretend she was dead.”

Jyothi’s story is one of determination — her unhappy childhood incessantly pushing her towards seeking a better life. “These girls (from the orphanage) are hungry for love and are filled with a desire for a better life,” says Vimla Radharami, a former matron at one of the four Bala Sadan orphanages run by the Andhra Pradesh government in Warangal.

Jyothi is now the owner of a million-dollar company, has customised homes in the US and India, owns a Toyota Camry (an earlier car was a BMW) and has “enough” jewellery.

“Her years at the orphanage taught her how to grasp reality. She always hunted for a way to make life better. The zone of discomfort is the zone of learning,” reasons Uday Kumar, a Visakhapattanam-based motivational speaker and co-author of No Condition Is Permanent, a book on Jyothi’s life.

Jyothi attended a government school while at the Bala Sadan orphanage. She also took a vocational course while residing in the orphanage superintendent’s house and helping out with their housework. It was here she realised the power of a good job for a woman. But the dream at that age seemed distant, especially after her parents married her off when she was 16 to her jobless cousin.

After the birth of her two children, she became an agricultural labourer, working at her father-in-law’s fields and in other fields. In Mailaram village, agricultural workers still remember her as friendly, keen to learn work, but often bemoaning her fate. “She used to walk around with an umbrella,” recalls one labourer with a laugh.

What came to her aid was a central government scheme, the Nehru Yuva Kendra (NYK), which sought to create awareness among the young. She became an NYK volunteer and later started teaching.

“Jyothi was hardworking and developed leadership qualities here,” says Mandala Parashu Ramulu, a former NYK colleague who now runs a non-government organisation. “We would encourage villagers to pool in money to build a bus shelter, for example,” he adds.

She worked during the day and stitched petticoats at night to earn more. She learnt typing and studied for a postgraduate degree from the Dr B.R. Ambedkar Open University on weekends, after obtaining a BA from Kakatiya Open University at Warangal. In 1992, she bagged a special teacher’s job, earning Rs 398 a month.

She had to travel two hours to reach her school, but Jyothi made the most of it by selling saris. “I convinced my sister’s landlord to give me 10 saris and I got a profit of Rs 10 from each sari I sold,” she says. “There were women on that train gossiping or reading books but I did not waste time. I had to support my children and I needed money.”

Her job as a teacher was regularised and she was appointed a “girl development officer”. Her salary shot up to Rs 18,000 — but Jyothi wanted more for her daughters and herself.

The visit of a relative from the US prompted her to try her luck in the West. She studied computers, got an American visa, took long leave from her government job, placed her two daughters in a Christian missionary hostel — and left for the US in 2000. The daughters joined her later and are now married. Her husband lives in Hyderabad and occasionally visits them.

Jyothi started by working in gas stations and cleaning bathrooms in motels. She babysat and loaded and unloaded goods, and finally landed herself a job in a New Jersey cassette shop on a $420 salary.

One day an Indian visiting the shop offered her a job in his brother’s recruiting firm in South Carolina for $1,000 a month with free accommodation. Jyothi moved on.

“It was a crucial time for me. I had to deal with Americans but did not know English very well,” she recounts.

Jyothi often turned to the Bible for help. “I picked up key sentences from the Bible and repeated them. I’m a crazy learner, I love learning new things. I believe God will save you if you work hard,” she says simply. “That is the positive point about America. They don’t look down on you; I love working in America.”

She excelled in her work, picking up the trade. But a few ensuing hurdles — a company offered her a job and then backtracked, forcing her to go back to babysitting and gas station work — prompted her to start her own business.

The idea hit her when she went to Mexico to get her visa stamped: “I knew the ins and outs of the paperwork involved in getting the HI visa stamped.” With her savings of $40,000, she opened an office in Phoenix in 2001. “My first placement was a Gujarati boy — I fixed him in an IT firm. And I was on a roll,” she says happily.

The only dissenting note comes from her surviving parent — her mother. Recovering from a lung infection in a Warangal hospital, Swaraspathi Reddy is unwilling to accept her daughter’s tale of battling overwhelming odds. “We also helped her but she does not admit that,” she maintains.

Defensive about abandoning her, she says: “Our condition was very bad then. I too suffered, leaving my daughter behind and would cry for her. But I never let my sons work or suffer even for a day.”

And therein hangs the tale.

An inspirational, but a true story from a farmer woman, who grew on to become an entrepreneur in US.


Income tax Exemption limit proposed to be raised to Rs. 3 lakh

The Standing Committee on Finance on the DTC bill, headed by former finance minister Yashwant Sinha, has recommended raising the income tax exemption limit to Rs.3 lakh a year and the investment limit for tax saving schemes to Rs.3.20 lakh.

With regard to investment limit for tax saving is concerned, the committee has recommended that the proposal in the DTC for long term investments such as pension/provident funds may be raised to Rs.1.5 lakh from Rs. 1 lakh. The deduction in respect of premium on life insurance, tuition fees paid for children education, etc which are coming under a separate Rs.50,000 limit as per DTC bill has been proposed to be fixed with the maximum limit of Rs.1 lakh.

In addition to these deductions, the committee has also proposed a new deduction limit of Rs.50,000 for Higher eduction expenses. So the total deduction/savings limit, apart from interest deduction on home loan has been proposed to be fixed at Rs.3.2 lakh.

The Committee has also proposed that a 10 percent tax be levied on income between Rs.3-10 lakh, 20 percent between Rs.10-20 lakh and 30 percent on income over Rs.20 lakh.

The committee which was appointed to study the the Direct Tax Code proposals, submitted these recommendations to Lok Sabha Speaker Smt Meira Kumar last week.

The Direct Tax Code bill, if passed by Parliament this year, will replace the existing Income Tax Act.

As per the news reported in leading news papers, before enactment of Direct Tax code Government may change the Income Tax structure in the lines of these recommendations in this year Budget itself , which is to be submitted by Finance Minister on 16th March 2012.

Source: The Economic Times

Government invites your concerns and opinions on black money

Government invites your concerns and opinions on black money.

Taxability on Commuted Pension

One of GConnect Readers wanted to know about the taxability in respect of Commuted Portion of Pension and Dearness Relief paid on the Commuted Portion of Pension.

Income Tax Act 196 provides the taxability of pension depending on whether the pension received is periodical or lump sum.

Commutation of Pension means payment of lump sum amount in lieu of a portion of pension surrendered voluntarily by the pensioner based on duration of period in relation to the age. This is purely an optional facility provided by the employer to his employee. As per the Act following rules are applicable for the taxability of commuted pension:

Any commuted pension (i.e Lumpsum Pension) received by an employee of the Central Government, State Government, Local Authority or Statutory corporation is wholly exempt from tax.

Un-commuted Pension (Periodical Payment) is fully taxable as salary under section 15 of the Act. This provision is applicable for both Government and other salaried class. Apparently, the dearness relief payable on Commuted portion, which is received by the pensioner on monthly basis along with un-commuted pension is also taxable.

Payment in commutation of pension received by any other employee:

(a) in a case where the employee receives any gratuity, the commuted value of one-third of the pension which he is normally entitled to receive is exempt from tax.

(b) in any other case, the commuted value of one-half of such pension is exempt from tax.

Overview of Direct Tax Code Bill, 2010

In article on Tax code, posted by Shri.Govardhana Rao.H.S, Superintendent of Customs & Central Excise, Bangalore – Bitter for employees and Butter for rich he had requested for removal of tax liability on

* Commuted pension
* Retirement gratuity
* VRS emoluments
* Matured value of GPF, LIC, PLI
* Value of LTC
* Amount of encashment of un availed Earned Leave.
* Medical reimbursement.

Also in my article Revised Direct Tax Code – Areas of Concern to Salaried Class I had suggested for

* EEE method of taxation should be continued without any caveat for long term investments like GPF, PPF, RPF (Recongnised Provident Fund), Pension scheme approved by PFRDA, pure life insurance products and annuity schemes.
* Retirement Benefits like Gratuity, VRS benefit, Commutation of pension & encashment of leave should be exempted in full without any limit.
* Medical Reimbursement at actuals should be fully exempted.
* The principal paid in respect of housing loan should be qualified as allowed deduction from Income.

I am happy to inform that most of the requests have been acceded by the Government

Bill No. 110 of 2010 THE DIRECT TAXES CODE, 2010 was placed in parliament on 28.08.2010.

This is an overview of the bill with respect to individual tax payer like Government employees.

As per Section 6 of the Bill, Income will include the contribution from Government to the pension fund constituted for new recruits. Also in respect of any other fund if the balance accrued exceeds certain limit (the Government has to issue notification prescribing this limit after enactment) it has to be included in the total income.

As per Section 23 following deductions can be made

* Tax on employment (i.e. Professional tax in Karnataka)
* TA/DA benefits
* Any amount of contribution made by an employer, in the financial year, to the account of an employee under an approved pension fund notified by the Central Government, to the extent it does not exceed ten per cent. of the salary of the employee.
* Any amount of contribution by an employer, in the financial year, to an account of an employee in an approved provident fund, to the extent it does not exceed twelve per cent of the salary of the employee.
* Any interest paid on said fund subject to a limit of interest rate to be fixed by Government

As per Section 59 (3) (d), any amount including bonus, if any, received or receivable under a life insurance policy from a insurer on maturity or otherwise can be claimed as deduction from residuary income if & only if

* the premium paid or payable for any of the years during the term of the policy does not exceed five per cent. of the capital sum assured; and
* the amount is received only upon completion of original period of contract of the insurance;

As per Section 69 an amount of up to ` one lakh can be claimed as deduction for making contribution to approved fund. As per definition at Section 314 (18) Approved Fund includes provident fund, superannuation fund or gratuity fund approved by Government

As per Section 70, 71, 72 & 73 up to a maximum of ` . 50,000/- can be claimed as deduction in respect of

* Payment towards a life insurance (with a caveat that the premium paid in any year does not exceed 5% of S.A)
* Payment made to a health insurance
* Tuition fee in respect of Two children with a condition that tuition fee does not include payment to development fee or donations.

As per Section 74 up to ` 1,50,000/- can be claimed as deduction towards interest paid on a housing loan.

As per Section 75 interest paid on educational loan can be claimed as deduction for initial financial year & 7 financial years immediately succeeding the same.( details of these conditions & institution to which interest is paid will be in the notification to be issued after enactment).

As per Section 76 an amount up to .60,000/- in respect of senior citizen & Rs.40,000/- in respect of others, amount paid for medical treatment of the prescribed disease (these diseases are yet to be notified although Section itself prescribes many conditions) can be claimed as deduction

Section 77 prescribes deduction of up to One Lakh Rupees to a person with disability & Section 78 deals with Deduction up to Rupees One Lakh for medical treatment and maintenance of a dependant person with disability.

Section 79 deals with deduction in respect of donations made during he year.

Similarly there are other Sections for deduction towards, rent paid when HRA is not received, political contributions, income of investment protection fund, royalty income of authors, royalty on patents.
As per First Schedule Rates of income-tax have been prescribed as follows
Income Tax Proposed

(2) where the total income exceeds ` 2,00,000 but does not exceed ` . 5,00,000

10 per cent. of the amount by which the total income exceeds ` .2,00,000;

(3) where the total income exceeds ` 5,00,000 but does not exceed ` .10,00,000

` 30,000 plus 20 per cent. of the amount by which the total income exceeds Rs.5,00,000

(4) where the total income exceeds ` 10,00,000

` .1,30,000 plus 30 per cent. of the amount by which the total income
exceeds ` .10,00,000

Rates of income-tax for Senior Citizens
Income Tax Proposed
(1) where the total income does not exceed ` . 2,00,000


(2) where the total income exceeds ` 2,50,000 but does not exceed ` . 5,00,000

10 per cent. of the amount by which the total income exceeds ` .2,50,000;

(3) where the total income exceeds ` .5,00,000 but does not exceed ` .10,00,000

` 25,000 plus 20 per cent. of the amount by which the total income exceeds ` 5,00,000

(4) where the total income exceeds ` .10,00,000

` 1,25,000 plus 30 per cent. of the amount by which the total income
exceeds ` 10,00,000

1. As per Sixth Schedule followings Income are not included in the total income
1. The amount of accumulated balance in the account of an employee participating in an approved provident fund and any accretion thereto, to the extent provided in paragraph 8 of Part I of the Nineteenth Schedule.
2. Any payment from an approved superannuation fund made—

(a) in lieu of or in commutation of an annuity on his retirement at or after a specified age or on his becoming incapacitated prior to such retirement; or
(b) on the death of a beneficiary

1. Any payment in commutation of pension received under any scheme of any employer, to the extent it does not exceed – (a) in a case where employee receives any gratuity, the commuted value of one third of the pension which he is normally entitled to receive; and (b) in any other case the commuted value of one-half of such pension
2. payment received by the employee, from one or more employers, as the cash equivalent of the leave salary in respect of the period of earned leave at his credit at the time of his retirement, to the extent the aggregate of such amount does not exceed the limit as may be prescribed.
3. Any payment received by the employee, from one or more employers, by way of gratuity— (i) on his retirement; or (ii) on his becoming incapacitated prior to such retirement; or (iii) on termination of his employment; or (iv) any gratuity received by the family on the death of the employee, to the extent the aggregate of such amount does not exceed the limit as may be prescribed
4. Any sum received by any person from an insurer in respect of a life insurance policy upon death of the insured person.
5. Any payment from New Pension System Trust to an employee having an account with the Trust under the New Pension Scheme notified by the Central Government.

Certain drawbacks in the Bill according to me are

* There is no mention of deduction towards LTC availed by an employee. So LTC benefit has to be included in the Taxable Income. My suggestion is that avail the LTC benefit immediately up to December for the prevailing block & avail LTC for the next block before June 2011 & claim the benefit, which will still be exempted since DTC will come to effect only from April 2012.

* The Medical Reimbursement obtained also have to be included in Taxable Income. Although an amount of Rs.60,000 or Rs. 40,000 can be claimed as deduction in respect of treatment of specific disease as per section 76, these diseases are not common. As of now one can not take shelter under Section 76 in respect of Common diseases.
* The limit for senior citizen is paltry ` 2,50,000/- only. It should be Increased to at lest ` 5,00,000/-.
* Also to become a senior citizen one should attain the age of 65 years. This needs to be bought back to 60 years.
* Also gratuity, Commutation of pension are allowed to be tax free only for the limit to be prescribed by the Government. Government should have fully exempted these lump sum amounts since it is used for the welfare & well being of the Individual at their fag end of life.

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