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Estate planning has become an area of priority for high net worth individuals (HNIs), as they wish to transfer their riches to the next generation without acrimony. There are two popular options, will and trust. The latest edition of Kotak Wealth Management’s ‘ Top of the Pyramid’ report says, a will remains the popular instrument of choice for bequeathing wealth but trusts are gaining traction. A number of issues can arise when wealth is transferred through awill. This document can be easily challenged in a court. When a person dies after writing a will, his heirs need to get a certificate, called probate, from a court, saying the will is authentic and the heirs agree to abide by it. During the probate proceedings, inheritors can challenge the will. The probate certificate is issued only after the dispute gets sorted. This can delay the transfer of estate to the next generation. No probate certificate has to be obtained in case of a trust. “A will becomes effective after the d

When the GST is enforced, exemptions from central excise on tea, coffee, food might go PRUNING PLAN About 200 items, including premium tea and coffee, ready- toeat food and branded biscuits, could lose tax exemptions when the goods and services tax comes into effect. The Union government is planning to prune the list of excise duty exemptions from the current 300 to the states’ list of 90 items that are exempted from value added tax ( VAT). After the Rajya Sabha passed the Goods and Services Tax ( GST) Constitution (Amendment) Bill last week, the Centre and the states are working to make a uniform list of items that would exempt from the unified indirect tax. “The idea is to keep exemptions at a minimum. We have prepared a draft exemption list. The list will be pruned to 90 items to match the state level,” said an official The Constitution ( amendment) Bill will be introduced in the Lok Sabha on Monday. The lower House of Parliament has to pass it again — it had passed the Bill

Guess which department of the Union government had the dubious distinction of seeing the biggest increase in its headcount last year? Not the police or the postal department, not even the railways. It was the revenue department, whose staff strength improved by a whopping 84 per cent at the end of March 2016, compared to what it was in the same month of the previous year. From about 96,000 employees (mostly engaged in the business of tax collection) at the end of March 2015, the revenue department saw its manpower strength go up to about 177,500 by the end of March 2016. Among the big departments in the government, defence was the only other one that saw double- digit increase in the space of just one year with its civilian staff strength going up by 25 per cent from about 40,000 to over 50,000. The manpower strength of the police department under the Union home ministry went up by just three per cent in this period. And the railways that has over 1.3 million employees, accountin

Your insurance premium is likely to increase after the implementation of the Goods and Services Tax (GST), if the final tax rate is fixed at 18%. However, since a number of levies, which are currently part of your premium, will be subsumed into one tax, it is expected to bring down the compliance cost significantly. Though the exact impact will be ascertained only after the rate is fixed, rough estimates suggest an increase of around 2% in the premium paid. So, if your premium is currently R1,000, you may have to pay R20-30 more. At present, the effective service tax rate is 15%, which is applicable to most services. According to experts, companies will also look at ways to minimise the impact. “The premiums are likely to go up marginally depending on the rate set for premiums under GST…If the tax is 18% then the likely impact on premium will be about 3%. Insurers will evaluate options to minimise this impact on investors,” a spokesperson at Reliance Nippon Life Insurance s

The automobile sector is expected to be the biggest beneficiary of the Goods and Service ( GST) tax regime, says ratings agency Moody’s in a new report. Though the shift to the new indirect tax regime is positive for both growth and government tax revenues over the medium term, “ the short- term sovereign credit implications will be limited,” it added. Under the current architecture, companies have to contend with the issue of multiplicity of taxes, which inflates product prices. But under the GST, the problem of the cascading effect of taxes will be addressed. This, according to Moody’s, will benefit the automotive industry the most. While the tax rate is yet to finalised, Moody’s expects it to be lower than the multitude of taxes such as sales tax, excise duties, local taxes, and value- added taxes the automobile sector currently pays. Thus, shifting to the new system will reduce final prices of products, spurring consumer demand. Further, the new architecture will also make

With the government adopting an inflation target of four per cent, the Reserve Bank of India (RBI) is likely to keep its policy rates unchanged on Tuesday in the year’s third bi- monthly monetary policy review. Since January 2015, RBI has reduced its policy rates by 150 basis points to 6.50 per cent. With the adoption of the inflation target of four per cent, the chances for a further rate cut in the remaining part of the financial year seem slim, economists had warned in aBusiness Standard poll According to RBI’s projection, the rise in the consumer price index ( CPI) should follow a glide path to come down to five per cent by January 2017. With the government adopting an inflation target of four per cent, the Reserve Bank of India (RBI) is likely to keep its policy rates unchanged on Tuesday in the year’s third bi- monthly monetary policy review. Since January 2015, RBI has reduced its policy rates by 150 basis points to 6.50 per cent. With the adoption of the inflation targe

Senior Union ministers have advised the nine Bharatiya Janata Party ( BJP)- ruled states to call special sessions of their legislative assemblies to ratify the Goods and Services Tax (GST) Constitution amendment Bill by the end of this month. The Lok Sabha is slated to debate the Bill on Monday, a discussion in which Prime Minister Narendra Modi will intervene. Barring a tweet when the Rajya Sabha passed the Bill on Wednesday, the PM is yet to comment on the proposed legislation. Congress leader Jairam Ramesh has been critical of the PM’s absence during the debate in the Upper House, terming it “Modi mukt Parliament”. After the Lok Sabha’s approval, the Bill will be sent for presidential reference. The government plans to transmit the Bill to states by August 10. Government strategists are trying to ensure that the requisite 16 of the 31 states ratify the Bill by the end of this month. Finance Minister Arun Jaitley, Information and Broadcasting Minister Venkaiah Naidu and other