Taxes are the fees or charge levied by the Central government of a country (in India by the Government of India and also by state governments) which is added to the revenue of the government. These taxes are important for the government as because this is the only source of income to the government for operation and to bring in the development in economy and infrastructure. These are the payments which one do to pay up the salary of all the defence and government officials.

There are various kinds of taxes in India. Few of which are common and few may be the first time you would encounter.

Direct Taxes :-

Direct taxes are imposition made directly by the government of India and paid to them directly. Some of which are:-

1. Income Tax

One can’t say if he hasn’t heard this ever in his life. This is the most common type of tax paid by the individuals whose income exceeds a certain limit fixed by the government. The present maximum no taxable income is up to Rs. 2, 50,000. If it’s a rupee above the person has to pay a tax of 10% of the income until Rs. 5,00,000 beyond which the rate changes.

2. Capital Gains Tax

Capital Gains Tax as name says is the tax on the capital gained by the sale of shares property etc. whichever earns profit to you. Here the capital gain is the profit you earned which is calculated by subtracting the amount of money which you received by sale of the asset and the amount you paid to buy the asset previously. It is further categorised into short term capital gains and long term capital gains.

3. Securities Tax

This is a tax which is not deniable. This tax applies to all the transactions of buying or selling of equity shares and derivatives, equity oriented Mutual Funds. This tax gets included in the price at the stock exchange so it is quiet undeniable and cannot be saved by people by showing wrong data to the people. The tax applied is so minimal that it is seldom noticed.

Indirect Tax :-

Apart from these taxes there are few other indirect ones too. Some of them are below :-

4. Sales Tax

These are taxes charged by the government on the sale of mobile goods. Those commodities sold on interstate basis are taxed by the Union government and those intrastate sales are taxed by the state government (which we know as VAT).

5. Custom duty

This is a type of indirect taxes payable during import of goods, generally at the entry on the port whether its airport or seaport. The taxes vary on the type of commodity imported.

6. Excise Duty

This is just the opposite of Custom duty where one has to pay the tax for importing goods in the country. This tax is imposed on domestic goods sold or exported out of the country.

Other Taxes :-

The taxes discussed above are quiet familiar. Though the following are some taxes may be you wouldn’t have heard.

7. Professional Tax

This tax is payable by people working professionally under private organizations. The employer deducts the amount of tax before crediting it into the account of the employee and is then paid by the employer to the government. This is just as inevitable as Income Tax.

8. Entertainment Tax

As the name suggests it is a tax on the entertainment related transactions like movie tickets, DTH recharges, sport events etc.

9. Surcharge or Education cess

This tax is a tax applicable on taxes like Income tax, excise duty and service tax. This tax is used for the education of the poor in India.

Surcharge is the extra tax applicable on the tax already applied on the calculated tax amount.

10. Wealth Tax

Wealth tax is a tax applied on the net wealth of the person where net wealth is the total asset minus the liabilities. Previously the wealth tax was 1% of the total value of net asset above Rs. 30 Lakhs. However the wealth tax has been dropped right now but surcharge of 12% is applicable on individuals earning 1 crore and above.

11. Dividend Distribution Tax

This is the tax applicable to the Companies which is applicable on the dividend paid to the investor of the company, though the dividend received by the investor is tax free.

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1. Weimar Germany (hyperinflation of the 1923)

After the World War I, Germany faced strong political and financial instability. The German treasury was all empty due to the world war outlay. The government with the inability to raise proper amount of taxes so that the economy blooms up again, the German government started printing money. But it didn’t go as such, the huge amount of money pumping in the economy caused hyperinflation, the prices skyrocketed which made the German currency less valuable.

2. The great depression

This was said to be one of the world’s most severe economic contraction. This spanned from around 1929 till the Second World War. IT started with the stock market crashing in US in 1929. By 1932 the stock prices were at the floor of the graph. This marked the breaking down of the banking system, unemployment and a huge fall in the GDP. Though the US was severely hit by this, there were many more countries who were hit by this and few of them survived too. However, US got into a better state by around 1941 exactly before the start of the World War II.

3. The Crisis of the 1973

The 1973 had one of the most severe war consequences which shook the world and the effect is still prevailing. The war between Syria and Egypt against Israel, also called as the Yom Kippur war. Due to some of the steps taken by the US for backing Israel in the war, Egypt and Syrian oil producers formed a cartel called OPEC (Organisation of Oil Exporting Countries) and reduced the supply of the oil which shot the oil prices up by 70%. This embargo was mainly for the US though every other oil importing nation was affected with the skyhigh prices of oil, which stumbled the economy of almost all the nations importing oil from Syria and Egypt.

Though the embargo was lifted up after five months yet the effect is still lingers. However the US was severely stuck with this problem and the NY stock exchange lost tens of billions due to this embargo.

4. 1998 Russian financial crisis

Around August 1998, after the split of The USSR, Russia was on a course of serious crisis. The Russian economy had a fixed exchange rate regime which was unstable and with its fragile fiscal management made it more vulnerable and unstable. The giant had to face the spill over of the world market regarding the financial distress. The result was that the stock and bond, and currency markets collapsed which was a consequence of investor’s fears that the government may devalue the ruble. The economy tapered by around 5.4%. Also the oil prices fell to a half of what was earlier.

5. The Lost Decade of Japan

Japan who had a sturdy economic growth in the 20^th century fell flat in the years 1990-2000. The name Decade is just a name, in reality the crisis still prevais. In around the 1980s the Japanese economy had to face a price asset bubble on a high scale which was due to abnormalities in the market. What actually happened was that the Banks lent out money more easily to those in need of investments without having a view of the quality and ability of the borrower to repay. This inflated a bubble in the economy. With an attempt to deflate the speculations the BANK OF JAPAN raised the inter-bank lending rates which burst the bubble and the stock market crashed. The Japanese bank and insurance companies had to face largely the loss. The crisis brought into existence four National banks in japan and also the interest rate has been 1% ever since 1994.

6. The Greece financial crisis

The Greece government joined the European Union by fraud, by showing the eligibility on papers when actually it wasn’t the reality. Greece Government started spending more than they collected in taxes. This caused a lack of fund within the economy which forced the Greek government to borrow funds from the European Union or IMF as loan. The government then cleared the immediate loans by borrowing thus keeping the government in debt. The lenders started asking for higher rates as there was also higher risk. There were bailouts where creditors helped the government to repay the loans by giving loans. The condition is as such that the country had to shut the banks for 10 days and even the ATHEX (Athens stock Exchange) was shut down. Greece currently is under debt of around 320 Billion EUROS.

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Which word strikes the very first moment when we say MONEY? BANK, for sure. Whether its your salary or its you shopping bank is involved. And have we ever thought how does bank actually work?  Can you guess? NO, it’s not the money, it’s something which we need to have with the bank and bank needs to have in us. Can’t guess it? It’s TRUST!!! Yeah, every bank in the world works on the base of a strong trust which the customers hold in with the bank company and the bank holds in the customers.

Just to make you believe TRUST is the critical part let’s take an example. You get your salary in hard cash in your hand; you take it home and keep it in a safe. But you always fear theft. So to keep it safe we give it to the Bank to store it and keep it secured.

HOW COULD YOU JUST GIVE OUT YOUR ENTIRE SALARY TO A BANK, TO A BANKER TO KEEP IT WHEN YOU DON’T EVEN KNOW HIM? TRUST! This is trust you have in the bank that your money won’t go away and the bank will take care of it. And so does every person on earth have trust in bank and so they just deposit their money in the bank.

DEFINITION: A bank is an institution that deals with the money storage and security and provides financial help to customers.

Economy won’t flourish if the banks aren’t working well. Without a bank an economy gets paralysed. When a person deposits the money in a bank, it’s deposited in the Bank’s store and is now a property of Bank. But yeah the bank entitles you to get the complete money back which you had deposited with the bank.

How does Bank earn money and lend to people?

You would be amused to know that it is your balance that you have submitted to bank that the bank lends to other people. But if you go asking for your money, they cannot deny giving it to you. They keep a summary of your deposits so that when you come to withdraw money you can get it. What actually happens is that on a day there are way many withdrawals and deposits in banks. When you deposit the money in the bank, the bank in return entitles you to have your money back when you come asking for it. Now the money you deposit becomes the property of the bank and can give it to anyone who withdraws or takes loan. So in short, the money or cash or note, (the substance) that you deposited keeps on rotating within people, but the amount of money (the figures) you have with the bank is kept recorded.

This money is lent to those who are in need and in return they pay interest at every fixed period of time. And after the specified period, the borrower has to pay the entire Principal amount that he borrowed back to the bank. So the Interest earned is the earning of the bank. These interest earned money from many other customers become so huge in figures that it can be lent to the next borrower.

Today, with the developing technological word, the use of hard cash has decreased and what has been trending is Plastic Money – Credit Card, Debit card etc. The use of cash is tiresome and somewhat time taking if it is a huge amount. Also people are scared of pickpockets. This has reduced the complexity of such things to a real high extent. Whether it’s a huge amount or a small, just swipe, enter your PIN and DONE! Payment Made.

So how does this work actually when you aren’t exchanging money for the good you buy?

Let’s deal this with an example. Suppose you bought some clothes from a shop whose bill broke up for an amount of Rs. 5000. The shop has an account with a bank where all the money gets deposited. So when, you swipe your card and enter your pin, the specified amount that you had shopped for is deducted from your account. As soon you enter Pin on the swiping machine, the bank is automatically directed by you to deduct that amount from your account and transfer it to the account linked with the swiping machine. This makes it hassle free for both the customer and the shop owner and to carry huge amount of cash.

Though the world is evolving day by day to more of a tech world, but the working of the essential part of an economy completely depends on the TRUST of the customers. If the customers stop trusting all at once, the bank is sure face bankruptcy.

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Stocks is one of the topic which is full of curiosity to public who aren’t into stock trading. Here are some of the terms one must have come through the newspaper or must have heard somewhere or the other, all of which relates to financial sector specifically stock market. Stock traders must be familiar with many of the terms.

1. Broker – A broker or stock broker is a person who is responsible to carry out transactions on behalf of a person (client). This person is registered with the SEBI or Securities and Exchange Board of India and also registered with the Stock Exchange. In share market, the Broker is the face of his Client and buys and sells on his behalf making sure his client has the best price in each of the cases.
2. Stocks or Shares – In the share market, Stocks or Shares are both with the same meaning. It means a portion or part of the company. In short, the shares and stocks which people buy or sell are the shares of ownership of a company that they buy or sell.
3. Equity – Equity in simple terms means the value of the total assets of the company minus the value of the liabilities that the company holds. In a way it is the profit earned by that company after all the debts and other liabilities have been paid. For eg – If a company say XYZ has an asset value of worth $5 Billion but owes $1 Billion as liability which include all the various expenses and debt, then the equity for the company would be $4 Billion.
4. Mutual Fund – Mutual Fund is an investment program that collects the money of its investors and invests in shares or securities which is regulated by professionals.
5. Systematic Investment Plan or SIP – This is a plan which allows you to invest a certain fixed amount of money at a regular interval in Mutual Funds. The amount is Auto debited provided you instruct the bank about the SIP. This makes it less tiresome for you as you don’t have to take out money everytime and invest as all of this is automatically done and taken care of properly.
6. NIFTY – NIFTY is a stock market Index which consists of 50 shares and which is managed by India Index Services and Products Ltd (IISL) which is a project of NSE ( National stock Exchange) and CRISIL. It covers much broader sector of India which is why it is said to be the economic Indicator for India.
7. Sensex – Sensex is also a stock market index which consists of top 30 companies of the Bombay Stock Exchange unlike NIFTY which has top 50 of the NSE.
8. ULIP – ULIP or Unit linked Insurance Plan is an insurance plan of its own kind. This involves insurance as well as investment. When a person pays for the premium for an insurance, some part of the premium is used in insurance and the rest in investment.
9. Bonds – Companies are always in need of money which they satisfy by taking loan or by bonds. When the money borrowed is by many investors then the borrower promises a timely payment of interest rates to the person from whom the money is taken. This is Bond.
10. Derivatives – These are products whose value depends on the assets underlying it. If there is any fluctuation in the price of the underlying asset the price of derivative too changes. For eg. The Milk is the underlying asset and the derivatives can be curd. So if there is a fall in price of Milk, the price of Curd also falls.
11. Futures – it is an agreement or contract between two teams which says the two teams have agreed to buy or sell a specific asset of a specific quantity with a price which has been decided today, and the final transaction which will be carried out on a date in the future.
12. Leverage – In general financial term, it involves borrowing funds and buying an asset with the borrowed fund with the faith that the price of the asset increases and to such an extent that it will be more than borrowing cost. In a way it means to grow profits or loss. It also means in a way that a small change in the underlying asset in context to the Derivatives, there is a large change in derivatives.

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You must have been called by some executives enquiring about you and trying to give out offers to you. Or you yourself intentionally must have enrolled to in their Loyalty program which spreads out a trap of cash backs and offers and you end up getting enrolled into them and then you find messages ringing many a times with offers and maybe sometimes calls. Did you ever wonder what and how are these companies keeping a record of all your Birthday and providing you offer? CRM is what helps them to please you and get into a deal. Every company tries to get hold of a long relationship with the customers and the CRM is one such boon to help them out with this.

CRM, the most uncommon term for a normal person. Customer Relationship Management, will it either ring a bell? For a few, this may relate to providing customers with service like as in Customer Care. This is somewhat correct. CRM or Customer Relationship Management is much vaster than this Customer Care and stuff. It involves services managing relationships and data of the customers so as to analyse them and improve Customer Business Relationship. Today in this digitised world where every work is done via internet and computers CRM has been proved boon to the companies, which has boosted up their quality of service and thus increased their brand value. CRM keeps an organised data of all the customers, their preferences, customer communication history and many more so that the company may get back to these titbits so as to increase the quality of service. The companies holding a CRM do get a much more benefit as they get to know the new trends among the customers and their preferences.  Before CRM came into life ERP’s were in use. However it has many a times misunderstood as an IT service which is completely false as the software only facilitates the working of CRM properly and the main work is done by the people by structuring the CRM.

Let’s take an instance. Whenever you call a customer care executive, that guy is already armed with CRM on his computer screen in front. As soon as your call is diverted to him/her, all your information pops up to his screen directly or by question and answer which you must have been asked for many times like Name or mobile number. This screen has all the information related to the transactions and communications done between the customer and the company. Right from the Products you bought, to the calls you made to the company regarding some feedback or complaints. So, now you know how much crucial it is for a company to be prepared with CRM.

Today there isn’t a country in the world which hasn’t taken up steps to keep up with the growing technological advancement and so does their entrepreneurs and firms. The use of CRM has boosted up in this decade. Today, each and every firm want to keep an eye on the customers so as to track them down on their habits and the trends in the market. Few of the Reasons why CRM has become a core issue of a company are as written below.

1. CRM helps out to tack down clients. This helps the firms and the companies to keep the clients informed and pleased. Also it keeps track of the complete ongoing trend in the market among the customers.
2. CRM technology has given a big boost to the companies so as to maintain and track the profits and keep an eye on the expenses too.
3. CRM has become an important constituent in providing an outline to the companies so that they can plan out their strategy of marketing and sales.
4. This service also has improved the customer response rate and customer service. This has also improved loyalty of customers towards the firms or the company.
5. CRM not only helps to keep the database of the old customers but also helps in acquiring new customers too. The CRM gets the details from the customers and the customer executives try to make business out of them by calling them and convincing them to say a yes.
6. Besides these the CRM keeps all the statistics and data on the fingertips so that whenever it is needed it can be produced quickly which adds up to its brilliant help for the company.

There are a wide variety of CRM services and software that are capable of keeping huge amount of data and collecting the same from the customers so that it is used for the benefit of the company and the customer. In a way, CRM is what keeps the company always on the toe to serve the customer and gain from all of these.

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The World Bank is a bank as the name suggests but it’s not a bank in common. It’s not a bank where a person may end up with an account in it. Rather, in a way countries get hold of account in this bank. It is logically feasible to understand that a national Bank won’t be able to loan the nation as the need for the nation is way too much and the country bank’s don’t really get that much turnover so that they may lend the money as the economy is already suffering crisis. And so the World Bank comes to the rescue at this very point. It is an international bank which generally deals with assisting the developing countries, financially and technically. It focuses mainly on broadening and straightening the economies which are the part of their group. It issues loans and funds to these countries with the aim of development and reducing poverty in these countries. The World Bank has around 188 member countries and is not owned by any country rather they work mutually to help each one.

International Development Association (IDA) and International Bank for Reconstruction and Development (IBRD) are the two constituent parts of the World Bank

From the above two IBRD lends money or funds to the government which they find are capable of returning or repay the loan with the interests. Whereas the other constituent does the same but lends to the countries that maybe incapacitated to do so.

So now coming to the question how the World Bank did come into existence. On July 1, 1944 at the U.N. Monetary and Financial Conference at Bretton Woods, New Hampshire, it was decided to bring an autonomous institution to help the countries financially and so the World Bank came to Life. The World Bank along with some more associates are referred to as the World Bank group. These are

• TheInternational Finance Corporation (IFC) which was founded in 1956. The FIC is responsible to finance private sector in the developing countries.
• TheMultilateral Investment Guarantee Agency (MIGA) which was founded in 1988. This is responsible to provide guarantees to investors in developing countries against risks.
• TheInternational Center for Settlement of Investment Disputes (ICSID) which was founded in 1966. This provides facilities for settlement of disputes related to investment.

The draftsmen of the World Bank were Harry Dexter White and John Maynard Keynes.

Now coming to the most probable question which must have been revolving in your head – From where does the World Bank get such huge amount of money that it loans to nations for the prosperity of that nation?

The World Bank has various ways to get or raise money so that it can help the nations financially. The World Bank is funded by donations which are donated by wealthy nations like US, UK etc. also besides this donation the huge amount of credit which nation repay is also another way of funds for the World Bank. The loans lent by the IBRD to the developing nations are backed with AAA rated bonds in the financial market of the world. Also the capital reserves built up from the member nation’s money paid constitute to the huge amount of stocks. This income is so huge that it pays for the World Bank expenses and funds IDA.  The AAA bond status is maintained by preserving severe financial discipline so as the Bank continues to extend its financing. The IMF finances for immediate emergencies i.e. for generally short period of time whereas the World Bank finances on a long term basis. Also the World Bank is stocked up from the private money investments with the help of government backing of that nation. The Bank then switches and starts lending the very same money that entered into their account to the nations in need so as for development. This is done at very low rates as the nation is already in need and asking them for high interest isn’t feasible. It must be noted that the World Bank revises their interest rates twice every year with once in six months. Also the rates are just 0.5% above the rate on which they borrow the amount. The World Bank terms the loan amount with the conditions so as the country’s economy is able to repay the loan after sometime.

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No one would have been spared out with the news of Shocking move of China to depreciate the value of chinese currency Yuan. The present condition of the world where every nation is trying hard to keep pace up with the USD, China did something unusual so as to meet up their target which they had set. Even India wouldn’t have thought of such move to act on INR. So what had been the Main reasons for the depreciation of Yuan and Why is so much of instability in market due to this.

On around August 11, 2015 China started the day in the Stock market with a shocking move which forced every nation to start working on their economic growth. China Devalued its Currency Yuan by 2% against USD. Even The US Super power whose Currency is made an Index for the trades weren’t spared to think about the consequences of such move. China actually gives preference to the Growth Rate and this move showed that they don’t care about their money but primarily focused on its growth. China announced that this step was taken to meet up with the growth target which China had set. This devaluation would decrease the imports and consumption in within China but boost the Exports which the Nation had been starving of. This can be seen as when the yuan devaluates the commodity gets more expensive within the country for the people to buy so they will loeer their consumption. Though this will make it more hard for western commodities to sell in China as because that would have become more expensive in one of the largest market of world.

It was said that this devaluation was a onetime depreciation so as to meet up with the growth target of 7%. But what actually china wanted was a more strong currency on mark with USD. This devaluation was used up by China to boost its exports and also for bringing up international use of Yuan. Though this step had a bad impact on currencies of Australia, South korea falling atleast 1%.

Let’s understand this with an example. Suppose china manufactures a mobile for 5$. Pre depreciation exchange rate was around 1$ for 6.2 yuan ie. 1yuan = 0.161$. and post Depreciaiton exchange rate wer 1$ = 6.35 yuan ie. 1Yuan = 1.57$. so now if the mobile is sold in US and comparing the prices we would see that the prices have fallen for the Chinese good after devaluation which would make people more attracted to it. People would go for cheaper products than for expensive ones and would buy the mobile manufactured in China. This would boost the exports for China.

Now the problem with this move. The depreciation and the increase in exports of Chinese goods make it harder for the exports of the other countries to be sold. This made the exports of countries to fall. Now in the Indian context this Chinese devaluation has affected the nation internally really badly. As now the Chinese goods are cheaper so now there will be more demand of these goods and thus there will be less production of that good in India. The logic is simple if you are getting a cycle at Rs 2000 made in china why would run for Indian Made Rs 3000 cycle. Surely this will fall the demand for Indian made cycle and thus this will cause turmoil in the industry. Now as the Indian industry isn’t able to sell the products in India so they are running low on profit and high on loss. To cope up with this low profit turnover and as companies want always to maximise profit, they will fire out workers and thus making tens of thousands and lacs of unemployment situation. The countries like India would face deflation which could get serious if India will not depreciate its currency too but as of till now India is firm on this and not taking any such step as this would be really harmful for the country and also that this wouldn’t recover countries’ exports.

Though Raghuram Rajan, The RBI Governor had a different take on this issue. He said the chinese move wasn’t a thing to worry and that India is not on the approach of any type of Crisis. India was in a good condition as compared to other nations.

The position for india may have been different but directly or indirectly india surely will be at loss as india is a trading nation dealing largely in exports. It noe completely depends on the autonomous banks and trade unions to look in the matter if it gets way much serious.

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Terrorism is the common desolate complication that every Nation is facing. Working out their own way terrorists deliberately terrorise people for their own interests and probably they think are right at their place. The Terrorism has been growing at an quite astounding rate. Whether its India or France none has been spared from these melancholy activity.

The wounds of Pakistan terrorist attack in school which killed the innocent children weren’t yet healed until another attack in assam caused another blow to the world. These two attacks surely confirm one thing the Pakistan and India are at the same position in terms of terrorist activities. These attacks weren’t even forgotten until another of the attack in France shook the world… The Charlie Hebdo Attack.

Charlie Hebdo is a satirical weekly newspaper in France that features cartoons, reports, polemics, and jokes. The publication is irreverent and stridently non-conformist in tone, is strongly secularist, antireligious and left-wing, and publishes articles that mock far-right politics, Catholicism, Islam, Judaism, Israel, Politics, culture and various other groups as local and world news unfolds. One such publication caused a severe blow to a certain community which made them freak out. This resulted in an attack over at the Charlie Hebdo Office. A lot of causalities were reported. It was a three day hell for france with terrorists ramming up sweet spots in France. People kept their fingers crossed with the hope that it wasn’t their family next. Now the questions arises that what had led them to do this. Maybe the newspaper bought out cartoons or article which had hurt the sentiments of these communities which erupted out as severly unacceptable notorious and harmful activity. Who are these people? where do they come from? why are they doing this? These questions often flood out in each and every one’s mind.

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