Tax Travails of Seniors
This is with regard to the Union Budget 2015 and its implications for senior citizens with respect to their income-tax obligations. We are not having it easy, be it for random scrutiny or wrongful demands for more taxes. The Budget is supposed to have extended many tax concessions to senior citizens to help them breathe easy. Yet, taxes continue to give us (pensioners) sleepless nights.
No level field: Some of the inequalities in the Budget announcements include the fact that we cannot take advantage of the enhanced Section 80C deduction for NPS to save on taxes.
There is no level playing field between the two categories of senior citizens. In the case of senior citizens in the 60-80-year slot, the only enhanced benefit is medical insurance premium of Rs10,000, whereas those above 80 years are allowed deduction of medical expenditure up to Rs30,000. Presently, the exemption limit for above 60 and 80 years is Rs3 lakh and Rs5 lakh, respectively. A higher slab for the latter was probably based on the assumption that they would spend more on medical expenses which is now sought to be met with the deduction of Rs30,000. 
There is an urgent need to raise the exemption limit for those in the 60-80 years’ age group more generously. 
In the past five-six years, the basic exemption limit for the 60-80 years’ age group rose by a mere Rs50,000, while for those above 80, it has doubled from Rs2.5 lakh.
This apart, the real trouble for seniors arises from issues related to filing of returns. Among the most frequently heard complaints is the demand for more taxes due to TDS mismatches.
Magnifying glass: Another painful issue faced by senior citizens seems to be scrutiny assessments. Under this, the computer systems randomly pick up returns for further scrutiny, to make sure the assessee has not concealed anything. These assessments are predominantly based on information provided in the AIR (annual information return) which requires disclosure of certain high-value transactions and investments.
But, very often, these kind of assessments happen after three-four years; the officials don’t link new investments made with foreclosure, redemption or switches from older ones and they seek all kinds of documents, such as bank statements, balance sheet, net worth calculation, etc. How can everyone be expected to keep so much paper?
Possible way forward: With most cases causing unnecessary stress to seniors, I-T department should have a cell dedicated exclusively to seniors which will help expedite closure of deserving cases. 
The department can also obtain any documents needed directly from banks and other institutions instead of making us run from pillar to post. Should we, at all, be called to appear in person unless it is absolutely necessary?
Subrahmanian SH, by email

Woes of Low Cibil Scores

This is with regard to “Credit Information: Changing Scenario” by Sucheta Dalal. It is a good ad to make the people aware of CIBIL. But what about those who have already taken a loan and done the settlement? What if the CIBIL score is too low in such cases? Because of the low score, there won’t be any transaction happening with the bank other than a normal saving/ salary account. How can such people improve their CIBIL scores in an easy manner? 
As mentioned, “the credit bureau is obliged to mail each consumer a free credit report every year.” Why can’t we have this facility at least for those who have low scores, so that they could get over it?
Vishwanath, online comment

Impatient Voters?

This is with regard to “Delhi elections bring to the fore governance issues again” by Sucheta Dalal. AAP’s (Aam Admi Party) victory in Delhi against two stalwarts, i.e., BJP (Bharatiya Janata Party) and Congress Party, has clearly pointed out that our people (particularly, the illiterate oldies and edu-cated youngsters) have become terribly impatient and want results in 100 days. They waited for BJP to do that and now they might wait for AAP to do the same! 
Strangely enough, the uneducated oldies amongst the voters waited 60 long years to dislodge Congress Party out of Indian politics. But the same voters do not want to give NDA (National Dem-ocratic Alliance) even a year or two. If this ‘100 days’ incumbency and ‘throwing out game’ contin-ues, the very fabric of democracy will be disturbed. It will give way to either a revolution or a civil war-like situation in India. Was this what was expected at the end of rooting out the Congress Par-ty after 60 years of Gandhi-Nehru rule?
Prakash D Basrur, online comment

When is a share a better buy?

I have been a regular reader of Moneylife. I am not from finance background. Request your clarifi-cation: 
In 2 April 2015 issue of Moneylife, on pages 44 and 45, the author has given a list of stocks for value investing. The author has given the ratio EV/EBIT. As a layman, I am not able to make out whether the stock is a better buy if the ratio is lower, or the other way around. For example: 
Moil @ the ratio of 4.4 is a better bet than Mangalore Refinery @ - 3.17?
Coal India, considered one of the best, is @ ratio of—709. What does that mean?
The note on how to use the data does not clarify these aspects. Request you to add an explanation in future. It will be really helpful.
Girish Vyas, by email
Enterprise value in EV/EBIT is market-capitalisation plus debt. EBIT is earnings before interest and taxes. The higher the figure, the higher is the valuation of the company. In general, we should aim for companies with lower figures, like low PE (price to earnings ratio), but not those with negative figures. However, while those with higher ratios are expensive, they can continue to remain ex-pensive and go even higher. This ratio cannot be used independent of other ratios such as return on equity and governance issues. — Editor

Managing ill-health

This is with respect to ‘I have Parkinson’s but Parkinson’s will not have me’ in the Beyond Money section. Articles like these help readers familiarise themselves with the latest developments in certain areas of medical science. As those who really suffer such ailments have no access to websites or newspapers, the responsibility for sharing information is more on those who are healthy.


N Madhavan, Dr BM Hegde and Moneylife deserve special appreciation for their contribution in creating awareness about living a healthy life and ‘managing ill-health’. Perhaps, Moneylife could adapt an old slogan of a steel producer and say, “Moneylife also talks about money!”

MG Warrier


Senior citizens’ income tax woes

This is with regard to “Tax-proof Investment in the Name of Spouse & Children”. It is true that a taxpayer gets TDS (tax deducted at source) credit as per tax credits available in Form 26AS. But I have been receiving tax credit mismatch intimation for the past three years, despite the fact that TDS claimed matches 100% with Form 26AS tax credits and the tax credit mismatch tab in your account on the income tax department’s websites also says so. What is the reason for this? If there is difference, it should appear in Form 26AS.


Secondly, there is no chance for the taxpayer to explain his viewpoint, other than the limited options given under rectification. Thirdly, taxpayers, who are old, hard of hearing and not so proficient in Internet use, have to hire professional service-providers to do the job. Besides cost, running around is a problem for the older generation. There is need to allow various modes to respond to I-T notices/ intimations.


Will someone take note of an 80-year-old dog?

Joginder Sud


Pay your advisor

This is with regard to “Conflicted Advice” by Jason Monteiro. A simple solution to get rid of the conflict and get genuine advice: ‘Pay your advisor’ directly, rather than through commissions.

What are the advantages you get? (a) Get genuine advice that helps you achieve your goals and protect your money; (b) no worries about the ulterior motives of your advisor; (c) save costs through lower expense products where appropriate; (d) save costs by opting for direct plans; and (e) get assistance in negotiating lower expenses, wherever possible.


But there is no free lunch in this world. So, be ready to pay your advisor.

Anand Doctor



Funds Performers
Which equity scheme will outperform, especially if the market remains subdued or even goes down, given high current valuations? Nobody really knows for sure. Can we make an educated guess? This is what we have done in this Cover Story. We have applied the same financial metrics, that we normally use, to rank stocks to the portfolio of top 15 mutual fund schemes, to test the quality of stocks in the top schemes’ portfolio. Apart from this, we rated the portfolio based on cash levels, keeping in mind the high market valuation. Turn to page 26 to find out the results of this exercise.
On a similar note, if one has access to a method of picking quality stocks, should one invest in equity mutual funds? R Balakrishnan, in his article, asserts that shares of high-quality companies will give better return than equity mutual funds, a point we agree with more and more, especially given how high the expense ratios of funds are headed.
Poor customer service by banks continues. Taxpayers bear the brunt of repeated recapitalisation of public sector banks and, in turn, banks too find way to charge customers through a variety of essential services to cover up for their bad loans. Sucheta, in her Crosshairs column, discusses these issues. In the second part, she discusses the Realty Bill and the impact it would have on homebuyers.
In her Different Strokes column, Sucheta questions whether the black money law will really work. Would it succeed in getting people to bring back unaccounted overseas money when all previous efforts have failed in the past? The government firstly needs to create public confidence that it is serious about eliminating corruption that generates black money continuously.
Moneylife Foundation plans to start the process of a public discussion on the black money issue with a talk by Dr Subramanian Swamy on 24th April. Don’t miss this because Dr Swamy is a great speaker with amazing clarity on economic issues. To register visit –


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