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Introduction to Financial Derivatives - Basic Understanding

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 In today's post we will introduce you the Financial Derivatives in the Indian Financial Market. So, What exactly is a Financial Derivative??  Derivatives are Financial Instruments that derive their value from other existing Asset Classes. The term Derivatives indicates the instruments derives its values entirely from the asset it represents. Given Below are the type of Asset Classes :  - Equity,  - Bullion,  - Currency,  - Commodity,  - Realty,  - Rate of Interest and  - Livestock. When you invest in Derivatives ,  you actually place a Bet on whether the value of the asset represented will increase or decrease  by a certain percentage and within a set period of time. There are 3 types of participants in a Derivatives Market: 1. Speculators - Speculators are the High Risk Takers . they take risk to earn profits by Buy in low and Sell in High or First Sell in High and later Buy in Low. 2. Hedgers - Hedgers are cautious players who p...
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Input Tax Credit ( ITC ) and Job Work - Practical Issues

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Q 1. When the goods of the principal are directly sent to the premises of the job worker, whether ITC can be taken by the said principal?   Ans.  Yes.  As per section 19 (2)  The principal shall be entitled to take ITC on inputs,  even if the inputs are directly sent to a job worker for job work without being first brought to his place of business.  The principal should avail the ITC based on proper tax invoice as issued under section 31 when the goods are delivered at the premises of the job worker by the supplier.  Q 2. What is the time limit for claiming ITC on capital goods sent from the principal’s place of business to job worker for job work?   Ans.  As per section 19 (4)  subject to such conditions and restrictions as may be prescribed (Rule 45),  The principal shall be entitled to take ITC on capital goods sent to a job worker for job work.  As per section 19(5)  Notwithstanding anything contained in section...
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BANKING SYSTEM IN INDIA AND LOAN SCHEMES OF GOVERNMENT

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We might be keeping our savings under the pillow or in the Gullak. But what happens?  We would always be worried about its safety. Someone may steal it or we may be tempted to use the money or others may borrow money from us.  Also money saved at home does not grow.  The best way to save is to deposit the money in a bank account. While small amounts can be kept in a Gullak, it is wiser to keep our savings in a bank as money kept in a bank is safe.  Apart from safety, banks pay us interest on our deposits, so our money grows in the bank. Banks can be classified into various types such as  Central Banks - Reserve Bank of India (RBI)  Commercial Banks - Public Sector, Private Sector, Foreign Banks and Regional Rural Banks Cooperative Banks RBI being the central bank is responsible for printing currency and managing money supply in the country. RBI also acts as a banker to the government and all other banks.  A commercial bank runs with the purpose of earn...
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