FLAME Newsletter - October 01, 2013


“I made a promise that I will do a full-fledged interview in Hindi a year from now. Given where market conditions are, I wouldn't trust my Hindi”— Raghuram Rajan, Governor, Reserve Bank of India


Understand the basic concepts of VAT

The value added tax (VAT) in India is a state level multi-point tax on value addition which is collected at different stages of sale with a provision for set-off for tax paid at the previous stage i.e., tax paid on inputs. It is to be levied as a proportion of the value added (i.e. sales minus purchase). VAT system is more transparent, uniform and less prone to tax evasion VAT is a consumption tax because it is borne ultimately by the final consumer. VAT is not a charge on companies. It is charged as a percentage of price, which means that the actual tax burden is visible at each stage in the production and distribution chain.

It is collected fractionally, via a system of deductions whereby taxable persons can deduct from their VAT liability the amount of tax they have paid to other taxable persons on purchases for their business activities. This mechanism ensures that the tax is neutral regardless of how many transactions are involved... Read more

What is minimum alternative tax?
Albert Einstein once said that the hardest thing in the world to understand is income tax. The statement rings true as tax laws are quite complicated and requires a great deal of time and effort to understand them. Most of us get by with a basic understanding of tax matters. Buy help is not at hand.

Direct tax in lay terms is a tax on income that you have to pay, it cannot be shifted to others. Some of its forms include income tax, wealth tax, etc. Direct taxes are directly levied on individuals, corporations and organisations and collected by way of income tax returns to be filed each year.

An indirect tax is collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the customer). Indirect taxes include sales tax, service tax, value-added tax, commodity transaction tax and securities transaction tax among others... Read more


What is GAAR?
GAAR is an essential part of dealing with international taxation. The Shome Committee describes GAAR as ‘an extremely advanced instrument of tax administration’... Read more


Lehman Crisis: The bankruptcy of Lehman Brothers was the largest bankruptcy filing in U.S. history. Although the stock market was in modest decline prior to these events, the Lehman bankruptcy, coupled with the earlier collapse of Bear Stearns, greatly eroded confidence and led to a precipitous decline across major U.S. Indices in late September and early October 2008.


US Federal govt starts first partial shutdown after 17 years

IRDA makes minor changes in health insurance norms

IRDA reckons investment in India Infra debt NCD issue

Life Insurance industry to grow 12%-15% in 5 years


FLAME (Financial Literacy Agenda for Mass Empowerment) is an IIFL initiative to promote financial literacy amongst the masses in order to make them an integral part of India’s spectacular growth story.

In an era of accelerating GDP and rising per capita growth, financial literacy has become more critical than ever before such that we all reap the tangible benefits of the nation’s economic prosperity. Financial inclusion has been quite high on the governmental agenda, given its emphasis on widening the Banking & Financial services network across the country. IIFL’s FLAME initiative stands committed to complement this effort by helping common people gain financial growth and security though better awareness and education on the variety of financial products while avoiding the lure of and loss from unrealistic claims made by unscrupulous agents and ponzi schemes.

Our objective is to light a FLAME, as the name suggests, which will set ablaze a chain of FLAMEs across the country. The new-found light of knowledge will undoubtedly dispel the dark clouds of financial illiteracy and ensure the bright sunshine of financial growth and prosperity.

This portal is but one of the various IIFL initiatives that would be part of FLAME.

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