Live Union Budget 2011 | Union Budget 2011 Highlights | Live Streaming 2012

The Indian economy is expected to grow at 8.75-9.25% in financial year 2012 according to the Economic Survey for the year 2011-12 announced on Friday.

Robust growth and steady fiscal consolidation have been the hallmark of the Indian economy in the year 2010-11 so far. The growth rate has been 8.6% in 2010-11 and is expected to be around 9% in the next fiscal year.

The growth has been broad-based with a rebound in the agriculture sector which is expected to grow around 5.4%. Manufacturing and services sector have registered impressive gains. Savings and investment are looking up while exports are rising. However, food inflation, higher commodity prices and volatility in global commodity markets have been a cause of concern underscoring the need of fiscal consolidation and stronger reserves.

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Below are the highlights:

On Growth

• Indian economy to grow 8.75-9.25% in FY12

• Expect Indian econ to top 9% growth rate FY12

• Maintaining growth with price stability key challenge

• Seeing fast, strong turnaround in Indian economy

• India growth likely to revert to pre-crisis level FY12

• Expect India’s economic growth to pick up medium-term

• Probability of second-dip recession very low

• FY11 GDP growth relatively broad-based

• Monsoon, crude prices pose risk to econ growth

On Inflation

• Inflation is clearly a dominant concern

• Inflation may stay elevated on West Asia crisis

• Food price, demand pressure to drive inflation outlook

• Inflation largely driven by food items

• High food inflation "dark cloud" on Indian economy

• High food prices driven by demand factors

• Inflation pressure seen exacerbated by global prices

• Rising purchasing power aiding spurt in food prices

• Economic recovery triggered demand-side pressure in economy

• Inflation pressures from both domestic, global factors

• Core inflation suggests inflation now generalised

• Need to prevent inflation slipping into core sector

• Food inflation stubbornly in double-digits

• Inflation likely to moderate on fiscal, monetary steps

• Committed to provide cooking fuel at affordable price

• Plan to increase diesel prices in staggered manner

• Government to cap auto fuel prices if crude oil spurts

• April-December average inflation of 9.4% highest in 10 years

• High food inflation not unique to India

• Inflation significantly above RBI’s comfort level

• Need to be vigilant against demand-side pressures

• Grain release in batches, not bulk, to tame inflation

On Fiscal Front

• Centre’s fiscal broadly on consolidation track April-December

• India FY11 fiscal gap seen 4.8% on higher GDP base

• India FY11 revenue gap seen 3.8% of GDP

• Current account gap likely to moderate on export spurt

• Need to lower fiscal deficit

• Liquidity crunch mainly due to large government cash balance

• Need more proactive fiscal steps to eradicate poverty

• Favours smart cards also for kerosene, fertiliser subsidy

• Buoyant tax revenue key driver of fiscal consolidation

• Rise in corporate, service tax mop-up noteworthy

• Prospects of revenue-led fiscal consolidation bright

• Better subsidy targeting improving fiscal management

• Direct Taxes Code proposed to be launched April 2012

• Tax buoyancy, 3G auction brightened FY11 fiscal health

• States likely to be back on fiscal consolidation FY12

• States’ consensus on GST yet to be achieved

• Deepening reforms key to sustain fiscal consolidation

On Monetary Front

• Need persistent anti-inflation monetary stance

• Government implementing gradual exit from stimulus

• Liquidity management major challenge for RBI

• Excessive cash crunch makes credit delivery difficult

• Need G20 co-operation to manage forex flow volatility

• RBI forex market intervention unlikely to be inflationary

• Don’t want total reliance on import to beat shortages

On Banking, Financial Institutions

• Minimum capital requirement for banks should be graded

• Two types of banking licences could be considered

• May mull separate licence for basic, full banking services

On Industry

• Deceleration in industrial output cause for concern

• Slowdown in industrial growth seen temporary

• Medium-term industrial growth prospect seen positive

• Plan to increase diesel prices in staggered manner

• Government to cap auto fuel prices if crude oil spurts

• Committed to provide cooking fuel at affordable price

• Need to keep all options open if forex flows hurt economy

On Food Prices

• Food price, demand pressure to drive inflation outlook

• Maintaining growth with price stability key challenge

• High food prices driven by demand factors

• Higher FY11 farm growth to help ease food prices

• Rising purchasing power aiding spurt in food prices

On Agriculture

• Need to review grain release, procurement policies

• Don’t want total reliance on import to beat shortages

• Ample scope for improvement in grain release policy

• Grain release in batches, not bulk, to tame inflation

• Urgent need to expand storage space, facilities

• Need to plug PDS slippages to expand, improve coverage

• Smart card, coupons to help target food subsidy better

• Favours smart cards also for kerosene, fertiliser subsidy

On Capital, Investment

• Need to deepen capital markets

• "Sluggish" bureaucracy impeding FDI inflows

On External Affairs

• Economic uncertainty prevails in Europe, US

• Probability of second-dip recession very low

• Need to keep all options open if forex flows hurt econ

• Slowdown in FDI partly offset spurt in FII investment

• Need G20 co-operation to manage FX flow volatility

• RBI forex market intervention unlikely to be inflationary

• "Sluggish" bureaucracy impeding FDI inflows

Miscellaneous

• Direct Taxes Code proposed to be launched April 2012

• Tax buoyancy, 3G auction brightened FY11 fiscal health

• States likely to be back on fiscal consolidation FY12

• States’ consensus on GST yet to be achieved

Speaking about it, Siddhartha Sanyal, Chief India Economist, Barclays Capital told CNBC-TV18 said the survey was on expected lines. He expects fiscal deficit at 5.3% of GDP in FY12. "Nominal GDP is expected to come in at 14.5-15% for next fiscal," he said.

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Union Budget & Economic Survey 2011-2012

Budget will be presented by Hon'ble Finance Minister in Parliament on 28th February, 2011

Economic Survey

Growing Faster, Improving Stability, Progressing on Structural Challenges. The Indian economy this year (2011-12) has been characterized by robust economic growth and steady fiscal consolidation. Inflation continues to be high even though it has come down markedly from where it was at the start of the fiscal year. There are structural challenges that we face, concerning economic governance, efficiency in delivery of subsidies and building up infrastructure. Policies formulated to take care of these can help moderate inflation, accelerate economic inclusion, boost investment and infrastructure, and enable agriculture, which has revived remarkably well this year, to be on a sustained high growth path.

The economy has emerged with remarkable rapidity from the slowdown caused by the global crisis, with growth of 8.6 percent (advance estimate) in 2011-12 and an expected 9 percent next year. This growth is also broader: agriculture is rebounding, manufacturing continues its momentum, and private services is picking up. Fundamentals are also stronger: savings and investment are up, exports are rising rapidly, and inflation is falling, after a prolonged hiatus.

Inflation, especially of food was very high in February 2011 (at 20.22 percent), declined steadily, with a small spurt in November and December and now stands at 9.3 per cent. This is a vast improvement but still a matter of concern.

A shift in the stance in macroeconomic management is underway. Now that growth is firmly in place, fiscal consolidation is progressing rapidly, and monetary policy has reverted to a stronger focus on moderating inflationary pressures, while ensuring adequate liquidity and credit growth.

With stronger growth, a widening of the current account deficit over several quarters became a concern; however, developments in the last two quarters show a falling current account deficit as a result of fast-rising exports, higher net services, and moderating imports.

Considering the critical role of agriculture, there is need to invest much more in agriculture, stepping up to a second green revolution to address the yield gaps.

• State of the Economy and Prospects

• Micro-Foundations of Macroeconomic Development

• Fiscal Developments and Public Finance

• Prices and Monetary Management

• Financial Intermediation and Markets

• Balance of Payments

• International Trade

• Agriculture and Food Management

• Industry

• Services Sector

• Energy, Infrastructure and Communications

• Human Development, Equity and Environment

• Statistical Tables

• Economic Survey (All Chapters)

For More Details Click hear: http://indiabudget.nic.in

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Karnataka Budget 2011 | Karnataka Budget Highlights 2011

Karnataka Chief Minister and Finance Minister B S Yeddyurappa will present the annual Budget for 2011–2012 in the State Legislature Assembly on Thursday, 24 February 2011. This will be the 4th budget of Karnataka Chief Minister B S Yeddyurappa after BJP government came to power in 2008 Assembly polls.

The B S Yeddyurappa will also present state’s first separate Agriculture budget. It will help to promote agriculture growth in Karnataka Stare.

The Budget session of Karnataka Legislature would be held from 24 February 2011 to 17 March 2011. Budget 2011 – 2012 will be presented on the first day of the session which would have a total of 15 working days.

Karnataka Budget 2011 – 2012 live telecasted on DD Chandana, TV9 Kannada and other leading Kannada news Channel.

The other salient features of the budget are as follows:

*Karnataka agricultural development policy to be strengthened
*World agriculture investment summit in June 2011
* New courses for diploma in agriculture
*Rs 2 lakh insurance for farmers
*Training to be given to five lakh farmers in organic farmers
* Rs 289 crore sanctioned to improve Krishna project
*Rs 17,850 crore allocation for the agricultural sector
*Rs 125 crore for Bio Farming and Rs 100 crore for drip irrigation
*Rs 3900 crore for supply of electricity to IP sets
*Better IP sets to be provided to farmers to reduce power consumption
*RS 2123 crore for uninterrupted power supply to farmers
*Rs 1000 crore for renovation of ponds and lakes
*Interest free loans for higher education for farmer’s children
*Agriculture revolving funds to be increased to Rs 1000 crore
*Rs 100 crore for small ports
*Rs 200 crore for organic farming
*Seeds to be supplied to farmers at 50 percent subsidy
*Rs 9 crore to encourage paddy and sugarcane production
*Single window scheme to help farmers
*Rs 25 crore for coconut cultivation
*More neera processing units to be set up
*Exemption of VAT for floriculture
*Rs 2 crore to combat diseases that afflict areca plantation
*Rs 10 crore for APMCs across the state
*Veterinarian Colleges to be set in Gadag and Athini
*Mega dairy at Mysore, KMF will mobilise funds for this
*Rs 2.5 crore for prevention of epidemics
*Rs 10 crore as incentives for fish farming

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Railway Budget 2011-2012

Railway Budget 2011  Expected Highlights

The union rail budget 2011-2012 is about to come by 25th of February 2011. The present railway minister, Mamataa Bannerji has called off a meeting of all the supervisors and officer of the 11 out of 14 railway zones of Indian Railways.

The expected budget claims as the budget for ordinary people.

• There shall not be any reduction or expansion in the fare of ordinary and Air Conditioned class.

• There were several demands of the people to start the train services including the Duronto and Shatabdis. A long chart have been prepared under approval of honourable Railway minister to claim in the upcoming rail budget of 2011-2012.

The following new 90 Train services are proposed for the rail budget, out of which only 75 services will be taken under consideration and will be announced for rail budget 2011-2012.

New Train services are proposed for the rail budget:

• New Delhi – Panipat AC Express (daily)
• Howrah – Malyaduthirai Express (tri weekly)
• Howrah – Rameshwaram Express (5 days a week)
• Secunderabad – Indore Express (bi weekly via. Nagpur)
• Secunderabad – Jabalpur Express (bi weekly via. Nagpur)
• Hajur Sahib Nanded – Okha Express (weekly via. Nagpur)
• Howrah – Jammu Super Express (daily)
• Howrah – Dehradun Express (bi weekly via. Agra)
• Howrah – Salem Express (weekly)
• Jodhpur – Ernakulam Express (bi weekly)
• Jodhpur – Howrah AC Express (daily via. Nagpur – Bhopal)
• Howrah – Jaisalmer Express (bi weekly)
• Howrah – Somnath Express (4 days a week)
• Dhanbad – Hubli Express (bi weekly via. Allahabad)
• Howrah – Nagarcoil Express (weekly via. Bhopal – Katni)
• Howrah – Firozpur Express (bi weekly)
• Ranchi – Ernakulam Express (weekly)
• Howrah – Rameshwaram Express (bi weekly)
• Howrah – Indore AC Duronto (bi weekly)
• Howrah – Guwahati AC Duronto (bi weekly)
• Howrah – Lucknow AC Duronto (weekly)
• Lucknow – Pune AC Duronto (bi weekly)
• Jaipur – Lucknow AC Duronto (tri weekly)
• Jaipur – Bhopal AC Duronto (tri weekly)
• Chennai – Mumbai CST Duronto (weekly)
• Mumbai CST – Ranchi Duronto Express (weekly)
• New Delhi – Vasco Duronto (weekly)
• New Delhi – Habibganj Duronto Express (tri weekly)
• Kanyakumari – Machilipatnam Express (weekly)
• Howrah – Kochuveli AC Express (tri weekly)
• Ferozpur – Puri Express (5 days a week)
• Chandigarh – Jabalpur Express (bi weekly)
• Bikaner – Gaya Express (weekly)
• Nagpur – Jaipur Express (daily)
• Nagpur – Kolhapur AC Express (daily)
• Miraj – Salem Express (daily via. Hubli)
• Malda Town – Amritsar Express (tri weekly via. Bhopal)
• Trivandrum – Mangalore Express (daily)
• Ernakulam – Dehradun Express (tri weekly)
• Indore – Tirunelveli Express (weekly)
• Bikaner – Jammutawi Express (daily)
• Howrah – Bareily Express (daily)
• Ranchi – Pune Express (tri weekly)
• Tirunelveli – Pune Express (4 days a week)
• Guwahati – Machilipatnam Express (bi weekly)
• Jaynagar – Bareily Express (daily)
• Jammutawi – Vizag Express (tri weekly via. Warangal)
• Pune – Mysore AC Express (daily)
• Pune – Udaipur Express (tri weekly)
• Ajmer – Palampur Intercity Express (daily)
• Chandigarh – Jaynagar Express (bi weekly)
• Amritsar – Malayaduthirai Express (weekly)
• Indore – Durg Express (daily via. Raipur – Bilaspur – Katni – Bina)
• Indore – Bangalore Express (bi weekly)
• Mumbai – Surat Intercity Express (daily via. Manmad)
• Vasco – Gorakhpur Express (bi weekly)
• Alipurduar – Shriganga Nagar Express (weekly)
• Alipurduar – Madgaon Express (bi weekly)
• Alipurduar – Amritsar Express (weekly)
• Sitamarhi – Valsad Express (weekly via. Manmad)
• Mumbai Central – Rameshwaram Express (tri weekly)
• Chandigarh – Mumbai Exp (4 days a week via. Surat – Ajmer – Jaipur – Ambala)
• Jaipur – Somnath Express (daily)
• Habibganj – Ranchi Express (weekly)
• Jabalpur – Dehradun Express (tri weekly)
• Bilaspur – Bhopal Express (daily via. Nagpur)
• Tirupati – Coimbatore Express (5 days a week)
• Vizag – Alipurduar Express (daily via. Howrah)
• Puri – Mumbai Central AC Express (bi weekly)
• Kanpur – Gaya Intercity Express (daily)
• Barbil – Vizag Intercity Express
• Kakinada – Udhampur Express (weekly)
• Dehradun – Pune Express (tri weekly)
• Indore – Pune AC Express (bi weekly via. Bhopal)
• Raigharh – Pune AC Express (weekly)
• Patna – Howrah Shatabdi Express (5 days a week)
• Guwahati – Howrah Shatabdi Express (bi weekly)
• Indore – Bhopal Jan Shatabdi Express (daily)
• Muzaffarpur – Jodhpur Express (weekly)
• Rameshwaram – Guwahati Express (weekly)
• Chennai – Ahmedabad AC Express (tri weekly)
• Varanasi – Kolhapur Express (daily)
• Sainagar Shirdi – Guwahati Express (tri weekly)
• Sainagar Shirdi – Jaipur Express (tri weekly)
• Sainagar Shirdi – Tirunelvelam Express (weekly)
• Tirupati – Hubli Intercity Express (daily)
• Ajmer – Vishakhapatnam Express (weekly)
• Asansol – Trivandrum Express (tri weekly)
• Howrah – Durg Sheonath Express (daily)
• Gwalior – Mumbai Express (weekly)
• Chhindwara – New Delhi Express (tri weekly)
• Chhindwara – Rewa Express (daily via. Jabalpur)

A list of passenger train services have been identified in between :

• Bhopal – Jabalpur via. Itarsi
• Varanasi – Agra
• Howrah – Barbil
• Patna – Ranchi
• Danapur – Gorakhpur
• Danapur – Bilaspur
• Mumbai – Pune
• Kolhapur – Pune
• Ahmedabad – Bhuj
• Tirunelvelli – Salem
• Hubli – Ernakulam
• Jammutawi – Una via. Amritsar
• Vadodara – Jaipur
• Samastipur – Gorakhpur
• Chengannur – Chennai via. Salem

Related Keywords:

Mamataa Bannerji railway Budget 2011, Date For Submission of Railway Budget 2011,Railway Budget 2011  Expected Highlights

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Top 10 Indian Stock Market Trading Tips

1. Do not over trade - If your trading capacity is Rs. 2,00,000 then avoid using margin. Infact trade with 1.5 Lakhs only.

2. Diversify- One should diversify his portfolio, invest in different sectors.

3. Buy when vibes are not good that is when stocks are on decline in other words buy at bad news. Sell when prices are high that is when there is good news.

4. Have realistic targets - Don't thinks of making crores in one single day. Market will open daily have realistic targets in your mind and trade with patience.

5. Stoploss - Always follow stoploss. Don’t be afraid of loosing sometime that is also learning experience.

6. Strategy - Don't cut positions in loss before stoploss and don’t exit in minor profit before target. Always wait for target.

7. Don’t always think of buying at low price and sell at higher price. Do not be afraid to buy at high price and sell at lower price.

8. Sell when everyone is buying and Buy when every one is selling.

9. Don’t be a buyer or seller always, Work as per market trend. Always follow market trend.

10. Take Long positions only in companies having strong fundamentally. For short term position find some good stock from speculation point of view.  

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Tips And Tricks of Indian stock market

Basic Rules of Indian Stock Market

1. Whenever Market is High It Will Fall
2. Whenever Market is Low, If there is no external Factor, It Will rise
3. Same Rules Applies To Stocks Scripts Also

How To Earn in Bullish Indian Stock Market

1. Always follow Indian stock market.
2. When market falls, don't panic, when market zooming don't be overjoyed as you can earn and loose both ways around.

Do and Dont's For Stock Market Investments

This is the question probably every equity investor would have asked himself a number of times

What you Must NOT Do in Stock Market

• Don't panic
• Don't make huge investments
• Don't chase performance
• Don't ignore expenses
• Don't Speculate

What You Must Do in Indian Stock Market

• Get Rid of the Junk
• Diversify
• Belive in your Investment
• Stick To your Strategy

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How Income Tax Audits Work

You get a letter in the mail, a letter emblazoned with the gut-wrenching acronym, IRS. You say to yourself: "But I filed on time! I paid all my taxes!" That may be, but unfortunately, that doesn't mean you won't be audited.

Yes, it’s nerve-wracking. But income tax audits, like death andtaxes themselves, are a fact of life in the United States. The Internal Revenue Service examined close to 1.4 million individual tax returns in 2007, about 1 percent of all individual tax returns. Compare this to 1.29 million returns examined in 2006, and you see that the IRS is becoming increasingly serious about getting its money.

An audit is frightening no matter what, but it doesn't have to be inscrutable. And it doesn’t always mean you will owe more money. There is, believe it or not, a method to the madness.

An income tax audit is an examination of a tax return. During an audit, an IRS examiner makes a line-by-line assessment of your tax return. If something doesn't add up correctly or the return contains something unusual, the examiner will point out the mistake or ask you to justify the unusual item. Depending on what the examiner finds, you may owe more tax, or you may be in the clear.

This article takes a look at the different types of audits -- office, field and correspondence. You’ll learn what to do if you get the dreaded audit notice. Finally, you’ll learn about the red flags that could attract the IRS examiners, and get some tips on how you can avoid investigation.

Preparing for Income Tax Audits

How do you prepare for an income tax audit? It depends on the type: correspondence, field or office.

Correspondence Audit
If the IRS examines one of your returns, the examination will likely take place via mail. The IRS uses correspondence audits to take care of the most common tax return problems, such as missing forms and schedules, illegible entries and mathematical errors.

Your first step is to return the audit notice along with any documentation and explanations the IRS has requested. Such documentation might include:

• home mortgage statements
• tax returns
• receipts
• brokerage statements
• retirement account records
• pay stubs

For example, if the IRS questions whether your business meal deductions are valid, you would include receipts from those meals, as well as any proof that these meals were, indeed, business related.

Field Audit
In a field audit, the examiner visits your home or business to verify the information on your tax return. For example, if you write off a massive amount of printer ink, a field examiner might want to know why you go through so much ink.

Office Audit
In an office audit, you go to an examiner's office. The examiner requires you or your representative -- such as your tax preparer or lawyer -- to bring documentation and information such as receipts, account statements or pay stubs.

At the end of the audit, the examiner will mail you or give you a 30-day letter. This letter consists of a copy of the examination report, an explanation of how the IRS wants to change your tax return to reflect the report's findings, an explanation of your right to appeal and a handy publication called "Your Appeal Rights and How To Prepare a Protest If You Don't Agree."

You have 30 days to respond, so if you're not sure about the IRS's findings and you want to consult a tax professional, don't rush to sign the examination report. If, within 30 days, you find the IRS is correct, indicate you agree and sign the examination report.

If you do not agree, however, you can appeal the findings before the 30 days is up. An appeal, handled by an IRS Appeals Officer, can take a year or longer.

Following the appeal, the IRS sends a 90-day letter, which gives you -- you guessed it -- 90 days to request an escalation to Tax Court, in case you don't agree with the Appeals Officer's findings. Most audits are resolved long before Tax Court comes into the picture.

But before you appeal the findings, it would be in your best interest to ensure that you are 100 percent right, because interest accrues on anyunpaid tax from the day you file your return, not the date of your audit. For example, if the IRS audits you for a return you filed two years ago, and it turns out you are in the wrong, you owe the unpaid tax plus interest that has accrued over that two years plus late-payment penalties. As you might imagine, these combined factors can make for a nasty bill.

Avoiding Income Tax Audits

A piece of IRS software called the Discriminant Inventory Function System analyzes tax returns for oddities and discrepancies. Based on a closely guarded formula, the system assigns each return a score that determines whether or not the IRS will audit you.

Here are some common red flags:

• significant income increase or decrease

• significant deduction-to-income ratio -- say, $80,000 in deductions on a $100,000 income

• business deductions consisting of fancy dinners and pricy trips to the Moulin Rouge

• home-office deductions

• low tip income for workers who traditionally make a lot of money from tips

• income exceeding significant benchmarks, such as $100,000 and $1,000,000

• self-employment

• computational mistakes and typos

• incorrect Social Security number

• incorrect reporting of income, deductions, et cetera.

• late filing without applying for an extension with Form 4868

• not paying your full tax liability without applying for an installment agreement with Form 9465

Obviously you can't avoid an income change if you get a better-paying job. And if you're self-employed, you're self-employed. But you can still do some things to decrease the likelihood you will be targeted for examination:

Keep Good Records: Three years is the statute of limitations on auditing returns that were filed on time. So, theoretically, the IRS could audit you for a return you filed three years ago. If you keep good records, you'll be able to answer any inquiries the IRS might have.

Explain Yourself: If your trip to the bowling alley is a justifiable business expense, include the receipts, a written explanation and any other appropriate documentation with your return. If you think the IRS might be curious, take care of it before they have a chance to ask you about it.

Just Because You Spent Money Doesn't Mean It's a Deduction: Don't go overboard with your deductions, especially if you're self-employed. Also, don't estimate your deductions -- use exact amounts based on receipts.
Beware of Tax Software: Tax software is great for returns at the simpler end of the spectrum. When you start getting into deductions and complex sources of income, consider verifying the accuracy of your return with a tax professional.

Compare: Compare your tax liability to the national average for your occupation. If there's a big difference between your tax liability and the rest of the country's, take another look at your return.

Be Tidy: A sloppy return is sure to get a thorough check by the IRS, especially if the all-important numbers are illegible.

Check and Recheck Your Return: Nip mathematical errors in the bud before you file.

There's no sure way to avoid an income tax audit. In fact, every year the IRS conducts a number of random audits to serve as benchmarks for its examinations. The best things you can do are file on time and pay what you owe. When it comes down to it, punctuality and accuracy are the only things the IRS really wants.

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Are some people really exempt from paying taxes?

Some people will tell you that paying income tax isn't mandatory. After all, the Internal Revenue Service (IRS) Form 1040 instruction book tells readers that the tax system is voluntary. And the U.S. Supreme Court's ruling in Flora v. United States includes the statement that "our system of taxation is based upon voluntary assessment and payment." But does that mean no one is obligated to pay taxes?

Not so fast. The word "voluntary" as used in the Supreme Court case actually refers to the fact that our system allows taxpayers to self-assess. That is, it lets people complete the appropriate returns to determine the correct amount of tax themselves, rather than the government determining it for them [source: IRS]. And contrary to what some believe, the IRS isn't legally obliged to prepare tax returns for those who don't file.

The 16th Amendment to the Constitution, ratified in 1913, states, "The Congress shall have the power to lay and collect taxes on income, from whatever source derived" Congress used this power to make laws requiring individuals to pay taxes and delegated the responsibility to administer the tax laws to the IRS.

These facts don't keep taxpayers from contesting the tax laws, with arguments based on frivolous reasons. Some contend that filing a Form 1040 violates the Fifth Amendment right against self-incrimination. Others argue that wages, tips and other compensation aren't income, but rather an exchange of labor for money. Still others have stated that they aren't required to pay taxes because the federal tax return form and instructions don't display the Office of Management and Budget control number required by the Paperwork Reduction Act.

The truth of the matter is whether you're a financial consultant or a fitness instructor, if you're a U.S. citizen or a legal resident who earns taxable income, you must file a tax return.

But does that mean everyone will pay income taxes? Not necessarily. In 2010, about 45 percent of U.S. households owed no federal income tax. What determines who pays and who doesn't?

Who is exempt from paying income taxes?

Certain groups of people who meet specific criteria don't have to pay income taxes. For example, if you're single, under the age of 65, and your yearly income is less than $9,350, or married, under 65, with income less than $18,700, you're exempt from paying taxes. If you're over the age of 65, single and have a gross income of $10,750 or less, you don't have to pay taxes. Or if you're married and over 65, you can earn up to $20,900 before paying taxes.

A widow or widower over the age of 65 with a dependent child making less than $16,150 doesn't have to pay either. On the other end of the spectrum, if you're 19 or younger or a full-time student under 24, you are considered a dependent and you don't have to pay taxes. The IRS also exempts self-employed people who earn less than $400.

Dependents and some disabled are also exempt. These include the legally blind, those depending on another for income, individuals dependant on welfare and Social Security, people with permanent disabilities and war veterans on disability.

The tax code is not only used as the basis for collecting revenue, but also to encourage and reward certain activities. Taxpayers who would normally pay taxes can limit or eliminate their liability by taking advantage of available tax credits, such child-care credits, saver's credit and education credits such as the American Opportunity and Lifetime Learning credits, which can be claimed for tuition, course materials and certain fees.

Paying other taxes

Even if an individual is exempt from income taxes for whatever reason, most will still pay some form of tax. You have to pay sales tax on items you buy and property tax if you own a home. There are also user taxes such as those paid on gasoline, tobacco or alcohol.

Most people are required to pay Social Security and Medicare taxes if they work, but there are exceptions. While the Amish community pays state and federal income taxes and property and sales taxes, the group is exempt from paying Social Security or Medicare.

This is because the Amish community views the Social Security tax as a form of commercial insurance and is adamantly opposed to it. The group believes in self-sufficiency rather than relying on government aid programs. Amish families take care of their dependents and their elderly, accepting support from their community if needed. After clashes with the government, controversy over their rights and public support of the Amish position, the U.S. Congress exempted the Amish from participating in Social Security in 1965. They neither pay into the system nor use the benefits. They also do not accept welfare or unemployment benefits.

Railroad workers don't pay Social Security taxes either. However, the group is subject to a separate and distinct set of taxes outlined by the Railroad Retirement Act. These taxes are used to fund railroad workers' retirement and to pay their unemployment benefits. The Railroad Retirement Board, an agency working independently of the government, administers these benefits, working closely with the Social Security Administration.

Although the requirement to pay taxes isn't voluntary, some people are exempt. Age, ability and income level all factor into the reasons for some exemptions. If you don't fall into one of the exempt groups, take heart by remembering that taxes aren't all bad. Tax revenues keep the country running and benefit citizens through organized law enforcement, Social Security payments, community development programs, social services and national defense. So this April, smile when you file!

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Diesel Engine Vehicle price May Hike After Union Budget 2011

Government of India consults a lot of Economic experts and other eminent experienced people before formulating the guidelines and rules in the annual Indian Budget. As per one of these reports, the recommendations make by “Kirit Parikh committee”, there are many suggestions related to the Oil industry. The report talks of proposals to reduce economic burden on the Govt. by increasing Kerosene and LPG prices and deregulating Petrol and Diesel prices. The most striking recommendation in the report is to increase the prices of Diesel engine vehicles

An additional excise duty on a diesel vehicle to bring it at-par with petrol driven cars. At the current levels of  usage, an additional excise duty payable amounts to about Rs.80,000/year.

This recommendation is enough to make the major carmakers in India worry about the Diesel car pricing and sales. Most of the small diesel cars in India are sold because of their low running cost. If the initial cost of the car is increased by a big amount (amount may be announced in this budget), the economic factor for low running cost will be automatically offset. This will mean a drastic drop in the sales of small cars powered by Diesel engines. Lets keep our fingers crossed and see if these recommendations will actually be implemented in the budget of year 2011 or not.

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Top 10 big deductions too many of us miss – tax preparation

10 big deductions too many of us miss – tax preparation

A lot of taxpayers don’t know they can save thousands of dollars with these tax breaks. Did you forget about any of these deductions and credits

Charitable non-cash contributions

1 Charitable noncash contributions

2  Points on refinancing

3  Old points on refinancing

4  Health insurance premiums

5  Educator expenses

6  Higher education expenses

7  Energy Savings Home Improvement Credit

8  Investment and tax expenses

9  Casualty deductions

10  Retirement tax credit

Charity, as I hope everyone remembers, begins with a tax deduction. Now, let’s say you emptied your closets and gave everything to Goodwill or a similar charity. The value of your donated items — clothes, furniture, whatever — is deductible. Get a written receipt. With noncash charitable contributions, the rule is simple: No receipt means no deduction if you get audited. Clothes and household goods must be in good or better condition to get the deduction.

If you’ve already dumped your old clothes in a Salvation Army box and walked away without a receipt, take the deduction anyway. You’ve legitimately made the contribution. You just may not be able to prove it in an audit. Starting with 2007 returns, the law has required a receipt or some sort of written confirmation for all charitable donations. Feel lucky? Play the audit lottery. You’re still an honest person.

If you can, reconstruct as much as you can the list of items you donated and then figure out their market value. The easiest way is to go to a thrift store and check prices there. The Salvation Army also has value guides for donated items on its regional websites. (Or see the valuation guideline schedule on page 257 of the 2011 edition of my book "How to Pay Zero Taxes." Borrow it from the library if you don’t want to buy it.)

And, of course, when you make your next donation, get that receipt

Points on refinancing

With interest rates remaining so low over the past few years, lots of homes have been refinanced, sometimes more than once.

Any points you pay to refinance your home can be deducted on a monthly basis over the life of the new loan. So if you refinanced your mortgage on June 1, 2010, for a 20-year term, seven out of 240 months will have passed before Dec. 31, 2010. If you paid $2,400 in points, you can write off $70 ($10 a month for seven months) for 2010.

You can write off $120 for 2011 and each year thereafter until the points have been deducted in full. The amount may not be huge, but every little bit helps

Old points on refinancing

This is one deduction lots of people miss. All unamortized points on an old refinancing are deducted in the year of a new refinancing.

So let’s say you refinanced on June 1, 2009, and paid $2,400 in points. You refinanced again on June 1, 2010. You can deduct all the remaining points on the 2009 loan on your 2010 return. That’s $2,280 plus the $50 you could deduct for January through May 2010. Likewise, if you refinance the 2010 loan in 2011 (provided interest rates stay low and a lender still likes you), you will be able to write off the remaining balance on your 2011 return.

Health insurance premiums

Any health insurance premiums you pay, including some long-term-care premiums based on your age, are potentially deductible. But you have to add these to your medical expense pot. Medical expenses have to exceed 7.5% of your adjusted gross income before they give you any tax benefit.

If you’re self-employed and not covered by an employer-paid plan, though, you can deduct 100% your health insurance premiums (to the extent of your net income) "above the line." Above the line means the expense is included in adjusted gross income and doesn’t get lumped in with itemized deductions. Not only do you not have to exceed the 7.5% floor, you don’t even have to itemize.

The Small Business Jobs Act of 2010 changed the rules again. Now self-employed individuals can also deduct their health insurance premiums in computing their Social Security tax obligation.

Educator expenses

If you’re a qualified educator, you can get an above-the-line deduction of as much as $250 for materials you bought in 2010. That includes books, supplies and even computer equipment.

You qualify if you’re a kindergarten through grade 12 teacher, aide, instructor or principal.

Higher education expenses

If your adjusted gross income isn’t more than $65,000 ($130,000 on a joint return), you get an above-the-line deduction of as much as $4,000 for any higher-education expenses you paid. Congress extended this 2009 tax break for 2010 as well.

See if you qualify for the American Opportunity Credit for the first four years of undergraduate work or the Lifetime Learning Credit, which includes postgraduate courses. The American Opportunity Credit is worth as much as $2,500 per student in 2010. The Lifetime Learning Credit is worth as much as $2,000 per return. Compare the credit with the deduction, and go with the one that gives you the bigger benefit. And if you don’t qualify for either credit, you may still be able to deduct up to $4,000 in education expenses. You can’t take both the credit and the deduction, though.

Energy Savings Home Improvement Credit

Credits are good because they are a dollar-for-dollar reduction in tax. This is a 30%credit for skylights, outside doors, windows, pigmented roofs, high-efficiency furnaces, water heaters and central air-conditioning units installed in your primary residence in 2009 and 2010. This credit for most improvements is capped at $1,500, but that’s $1,500 off the cost of the improvements — and you save energy as well. Homeowners who install alternative energy equipment, such as solar water heaters, geothermal heat pumps and wind turbines, can take a credit of 30% of the total cost, with no cap.

For a complete list of credits, see the IRS website.

• Bing: Find an energy savings contractor

Investment and tax expenses

Many of us forget tax-planning and investment expenses because they fall under miscellaneous itemized expenses. Further, the total must exceed 2% of your adjusted gross income before you get any tax benefit.

Expenses to track include your employee business expenses, tax preparation fees and even the portion of your legal or accounting fees relating to tax planning. For example, in a divorce, the legal time spent relating to the tax aspects of alimony and child support would qualify. So too would the tax aspects of estate planning.

Many people shortchange themselves on the deduction of investment expenses. They remember the safety deposit box fees. But how about the annual fee paid your broker and any IRA fees you pay directly? You may remember the cost of your investment publications on subscriptions — such as Forbes, Fortune, Business Week, Worth and Barron’s — but how about the investment newspapers you buy off the newsstands? You keep track of your long-distance phone calls to your broker and investment adviser, but how about the mileage to go see them?

• Bing: Check out tax-deductible investment expenses

Casualty deductions

Last year brought forest and range fires aplenty, as well as floods and huge snowstorms. If the president declared where you live to be a disaster area, you could have claimed your loss on either your 2010 or your 2009 return. If you didn’t file Form 1040X (.pdf file) before, do it now to get relief.

• Bing: Predicting natural disasters

Retirement tax credit

The retirement tax credit is designed to give moderate- and low-income taxpayers an incentive to save for retirement. If you make a contribution to your retirement account, that money isn’t taxed currently. So it’s like you get a deduction off your income. In addition, you get a credit of as much as 50% of the first $2,000 invested. That’s as much as a $1,000 reduction in your tax.

You get the $1,000 tax reduction as well as the $2,000 reduction in your income. That’s a nice rate of return on a $2,000 investment. Moreover, if you qualify, you can deduct as much as $5,000 ($6,000 if you’re 50 or older) in contributions to an IRA.

The tax credit disappears as your adjusted gross income increases. But singles with adjusted gross incomes up to $27,750 and joint filers with AGIs up to $55,500 qualify. The limit is $41,625 for heads of households.

Contributions to 401k’s, 403b’s, Simplified Employee Pension plans, traditional and even Roth IRAs qualify.

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The World’s Largest Economies | Top Most Economy in the world

Emerging economies are smaller than the developed countries – but they are growing faster and opening up, leading to greater investment opportunities than ever before.

There are two methods of GDP calculation: nominal GDP attempts to compare countries using current exchange rates to give an assessment of their clout within the global market. Purchasing Power Parity or PPP GDP, on the other hand, tries to take into account that one dollar can buy more in some countries and less in others. It is a better gauge of the internal size of each market.

In the nominal GDP method, we can see that the developed world leads the pack, but that PChina has already broken into this exclusive club.

When we look at PPP GDP, China, India, Brazil and Russia are all within the top 10.

Here is the Top 10, as listed by PPP GDP:

Ranking	Country	Approximate GDP- Purchasing Power Parity
1	United States of America	$13,860,000,000,000
2	China	$7,043,000,000,000
3	Japan	$4,305,000,000,000
4	India	$2,965,000,000,000
5	Germany	$2,833,000,000,000
6	United Kingdom	$2,147,000,000,000
7	Russia	$2,076,000,000,000
8	France	$2,067,000,000,000
9	Brazil	$1,838,000,000,000
10	Italy	$1,800,000,000,0

This map from the CIA World Factbook will help to illustrate the differences between calculating world GDP figures on a PPP or nominal basis.

For an analysis on nominal GDP comparisons read our article on .

A sectoral analysis of country GDP allows us to understand the paradigm shift now occurring within most world economies. Growth patterns generally show a shift from agriculture to manufacturing and ultimately to the services sector.

The following table shows the percentage of GDP contributed by each sector in the top ten economies of the world:

Country	Contribution of Services Sector in GDP (estimated for 2007)	Contribution of Industrial Sector in GDP	Contribution of Agricultural Sector in GDP
United States of America	78.5%	20.6%	0.9%
China	39.5%	49.5%	11%
Japan	73.3%	25.2%	1.5%
India	55%	28.4%	16.6%
Germany	69.5%	26.9%	0.9%
United Kingdom	75.5%	23.6%	0.9%
Russia	56.3%	39.1%	4.6%
France	77.3%	20.7%	2%
Brazil	64%	30.8%	5.1%
Italy	69.3%	32%	5%

The growth rate of these economies is also an important factor, and is directly related to the overall development of a specific economy. Group of Seven Countries such as the United States, France, Italy and the United Kingdom all typically have smaller growth rates – usually in the region of about 2% per annum.

By contrast, emerging economies such as India and China have growth rates of around 8% to 11%, while the ‘new’ emerging economies may experience even more blistering growth rates. Developed countries have already reached a saturation point, and thus expand less than emerging economies, where possibilities and opportunities are ripe,  are ready to take risks, and consumers are demanding more goods and services than ever before.

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Top 10 Common Mistakes During Tax Filing

1. Not Filing at All

2. Filing Under the Wrong Status

3. Filing the Wrong Tax Forms

4. Missing a Tax Break

5. Faking Your Death (and Other Dirty Tricks)

6. Not Keeping a Copy of Your Return

7. Falling Behind on the Latest Tax News

8. Math Errors

9. Missing or Incorrect Information

10. Not Filing on Time

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