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Tax saving FDs: Why you should give these bank fixed deposits a miss this year

March 23, 2023 by economictimes.indiatimes.com Leave a Comment

Synopsis

Many individuals prefer investing in tax saving fixed deposits as they are less riskier as compared to ELSS mutual funds. Further, the tax saving FDs offer fixed returns. However, there are three reasons why individuals may be better off by giving tax saving FDs a miss this year. Read on to know all about it.

With few days to go to complete tax-saving processes under the old tax regime for the current financial year, many taxpayers might invest in banks’ tax-saving fixed deposits (FDs) as a last-minute option. This is because investing in these FDs is easy. The investment can be done either by visiting a bank branch or through net banking.

Many taxpayers invest in a tax-saving FD as it is considered safer than equity investments via equity-linked saving scheme (ELSS) mutual funds. Further, FD returns are fixed and not linked to market fluctuations. However, taxpayers may be better off exploring options such as National Saving Certificates ( NSC ), post office time deposits and Public Provident Fund ( PPF ) to save income tax this financial year, instead of using tax-saving FDs.

Here are some reasons to back this assertion.

Interest rate for 5-year FD yet to peak
The Reserve Bank of India ( RBI ) has been raising key policy rates since May 2022. Till the end of financial year 2022-23 (March 31, 2023), the central bank has hiked the repo rate by 250 basis points or 2.50%. At the start of the financial year, the repo rate was 4%; currently, it is 6.50%.

With the increase in repo rate, banks also started raising interest rates on fixed deposits. They have launched several special deposit schemes as well to attract FD investors. However, the interest rate of tax-saving FDs is still not the highest.

The RBI’s bulletin for March 2023 said that between May 2022 and February 2023, the medium term deposit rates hiked by 82 basis points (0.82%) for retail deposits for new investments. Only 33% of the rate hike of 2.50% has been passed on to the FD investors.

Most of the interest rate hikes have been passed on only to FDs with short-term maturities. Many banks are offering the highest interest rate on tenure between one and three years. For a bank FD to be a tax-saver, its tenure must be of 5 years. Currently, the interest rate on tax-saving FDs is lower than the highest interest rate offered by banks on other tenures of FD.

For instance, State Bank of India ( SBI ) is offering the highest interest of 7% on an FD with tenure of 2 years to less than 3 years. However, the interest rate on its 5-year FD is 6.50%, which is 0.50% lower than its highest interest rate.

Similarly, HDFC Bank is offering the highest interest rate of 7.10% on tenure of 15 months but less than 18 months. However, the interest rate for its 5-year tax-saving FD is 7%.

ICICI Bank is offering the highest interest rate of 7.10% for two tenures – 15 months but less than 18 months and 18 months to two years. However, the bank is offering 7% for its tax-saving FD.

Bank of Baroda is offering 6.25% on its tax-saving FD. However, the bank’s highest FD interest rate is 6.75% for tenure between 1 year and up to 3 years.

Generally, the interest rate on fixed deposits with longer tenures such as 5 years and above tends to be highest when compared with short-term and medium-term tenure. One can say that long-term FD rates are yet to peak. Hence, this may not be an opportune moment to book long-term tax-saving FDs in banks. Some bank FDs offer above 7% and are worth considering.

Though some major banks are offering an interest rate of 7% on tax-saving FDs, it is important to check the interest rate being offered by all major banks. This is to ensure that you do not lose out on higher interest rates while making an investment.

Do note that for senior citizens, banks are already offering a higher interest rate. For instance, SBI is offering an interest rate of 7% on 5-year tax-saving FDs. Similarly, ICICI Bank is offering 7.50% on tax-saving FDs. Hence, senior citizens may invest in tax-saving FDs to save on income tax.

Less risky alternatives are offering similar or higher return
A tax-saving FD with a bank has a tenure of five years. To save income tax, individuals have an option to invest in a 5-year post office term deposit and NSC. Both have a tenure of five years. Currently, both of them offer an interest rate of 7%.

Do note that a post office time deposit (POTD) and NSC are safer than bank tax-saving FD. This is because these two have a sovereign backing. Hence, any amount invested by an individual and the interest are considered completely safe – without any monetary limit. However, in case of a bank FD, an individual’s deposits and interest are insured up to Rs 5 lakh. Deposits include money held in savings accounts, fixed deposits, recurring deposits or any other deposit held with the bank.

Also Read: How to get cover of Rs 65 lakh on bank deposits

So, if an individual wants to save income tax, they can consider invest in either a 5-year POTD or NSC instead of a bank tax-saving FDs that offers a return of 7% or less. The interest rate offered by these small saving schemes is similar to what some prominent banks are offering on their tax-saving FDs; and there is a higher degree of safety.

Rinju Abraham, Vice-President, Scripbox, says, ” Bank fixed deposits currently offer slightly lower interest rates than post office term deposits. The 5-year term deposit at the post office is eligible for tax benefits under Section 80C and the implied safety on such deposits is usually high.”

An individual can also consider PPF to save tax if tenure is not an issue. The interest earned on a PPF investment and the maturity amount are exempted from tax.

Interest rate risk appears higher with bank FD
Lastly, if an investment is done at the current interest rate level, the interest rate will not change for five years. So, if you lock-in your investment in a bank tax-saving FD at a much lower rate of around 6.5%, and later the bank hikes the interest rate to 7% or above for long-term FD tenure, your tax-saving FD will continue to earn a lower interest rate. However, if you opt for a small saving scheme with interest at 7% or above, the chances are that you might not miss out on a lot of interest in case of a rate hike at a later stage.

Interest rates of bank tax saving FDs were taken from bank websites on March 16, 2023.

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These Florida brothers ran one of the largest opioid ‘pill mills’ in US history. The FBI says it was linked to thousands of deaths

February 3, 2023 by edition.cnn.com Leave a Comment

By Faith Karimi , CNN

Updated 2335 GMT (0735 HKT) February 3, 2023

(CNN) Throngs of people hang outside the American Pain clinic in Boca Raton, Florida, waiting their turn. Inside, a doctor greets them one by one and prescribes them pain medication, a handgun peeking out from under his white coat.

American Pain is a one-stop shop, supplying both prescriptions and painkillers. At the door, a hulking bouncer warns people not to snort their pills in the parking lot. That would attract the kind of attention that the clinic’s owners, twin brothers Chris and Jeff George, are trying to avoid.

But it’s too late. Local and federal investigators are nearby, watching every move.

These are scenes from a new CNN Films’ documentary, “American Pain,” which details the George brothers’ rise and fall as opioid kingpins. The film by Emmy Award-winning director Darren Foster uses FBI wiretap recordings and undercover videos — along with the brothers’ exclusive jailhouse interviews — to paint a picture of a ruthless pain-pill empire that turned the Georges into millionaires and enabled addicts from all over the country.

“The George brothers did not start the opioid crisis. But they sure as hell poured gasoline on the fire,” said retired FBI agent Kurt McKenzie, who was part of the investigation — nicknamed Operation Oxy Alley — that began after oxycodone from the twin brothers’ clinics showed up at scenes involving drug overdoses. Investigators bugged the clinic’s phones, recorded surreptitious video and sent undercover agents masquerading as a patients to buy drugs.

“They became the largest street-level distribution group operating in the entire United States,” McKenzie added. “Nobody put more pills on the streets than they did. Nobody … and they were operating in broad daylight.”

Twin brothers Jeff and Chris George of South Florida claim to have made tens of millions of dollars selling painkillers.

One brother described their operation as ‘the Disneyland of pain clinics’

Between them, Chris and Jeff George ran four pain clinics and other related businesses in South Florida.

Their operation coincided with surge in the opioid epidemic between 2008 and 2010, when the prescription painkiller business was booming, federal officials said. People across the country also were beginning to realize the toxic toll the legal drugs were taking on communities.

“Before this case, the public only knew that people were dying from drug overdoses, they had no idea how the ‘system’ worked,” McKenzie said. “The George brothers created the blueprint.”

Chris George with his silver monster truck. The twins lived flamboyant lifestyles and owned boats, flashy watches and multiple homes.

They advertised the clinic in local newspapers and recruited doctors to prescribe the medications, offering them incentives for large and frequent prescriptions. To avoid setting off red flags, the brothers’ clinics only accepted cash and credit cards — not insurance plans, according to court documents. They hired women through Craigslist to dole out the pills prescribed by the doctors.

The George brothers made it easy to get drugs at their clinics, where no appointments were necessary. Patients flocked to Florida from Tennessee, Kentucky, Ohio, West Virginia and other Appalachian states ravaged by opioid abuse.

“I believe we’ve created a new form of tourism,” Jeff George says in the documentary, in a phone interview from prison. “We were basically like the Disneyland of pain clinics.”

Some drug dealers drove to the clinics from Kentucky in rented buses marked “Tree of Life Baptist Church” to mask their criminal intentions, the film shows.

“It’s like a candy store down there,” one man told FBI agent Jennifer Turner, who led the federal investigation, when asked why he frequented the George brothers’ pill mills.

Meanwhile, the brothers were making millions and trying to outdo each other’s flamboyant lifestyles. They bought pricey watches, flashy cars, boats and multiple homes. Jeff George drove a Lamborghini while his brother Chris had an enormous customized monster truck.

The South Florida Pain Clinic was one of four that Chris and Jeff George owned between them.

The clinics operated like frat houses, said Derik Nolan, a longtime friend of the twins who describes himself in the documentary as their right-hand man. As customers waited for their next fix, clinic employees played with remote-controlled cars and shot each other with slingshots. The clinics’ fridges held beer and Patrón shots, Nolan said.

The clinics’ cash registers were too small to contain the incoming flood of bills, so employees stuffed the money in massive trash bags.

They bragged about making millions of dollars in profits

One clinic referred people without MRIs to a trailer behind a strip club, where they could get lap dances while waiting for new scans from sham radiologists, according to an FBI agent quoted in the film. The George brothers believed the imaging helped make their prescription process look more genuine.

The clinics’ doctors were paid per person, which provided an incentive to see as many patients as possible, federal officials said.

The doctors “did not obtain prior medical records or prescribe any alternative treatment. They did not make referrals to specialists. Virtually everyone examined by the co-conspirator physicians received a prescription for controlled substances,” court documents said. “There was no individualization of treatment as required under applicable federal and Florida law.”

These bottles of 30 mg oxycodone tablets — straight from the manufacturer — were seized from a George brothers clinic by law enforcement. The brothers’ main clinic, American Pain, ranked among the top nine purchasers of oxycodone in the nation, according to court documents.

Chris George brags in the film that the American Pain clinic alone generated $40 million in profits. American Pain prescribed 18 million units of oxycodone, ranking among the top nine purchasers of oxycodone in the nation, according to court documents.

“Of the 20 highest-prescribing physicians in the entire country, five of them worked at just one of Chris’ facilities,” said McKenzie, the former FBI agent. “These are real doctors. They have real licenses … and what looked to be a real clinic.”

Chris George says he took pride in his clinics’ volume.

“I wanted my doctors to be the top prescribing doctors in the country,” he tells the filmmakers in an interview from prison. “To me, that was an accomplishment.”

A grieving father helped bring down a pill mill

John Friskey owns a computer service business in Jacksonville, Florida. At the time a pill mill moved in to the same strip mall, Friskey was a grieving father who’d lost his son, Andy, to opioid addiction. Andy loved music and played the guitar.

“He was in a car accident in Tennessee. He had a ruptured spleen and was in pain,” Friskey told CNN. “He got medicine from the pill mills. I didn’t know they were pill mills. I didn’t even know he was getting medicine. He overdosed on it.”

The neighboring pain clinic was owned by a man named Zachary Rose, who was rivaling the George brothers for supremacy among Florida pill mills. Rose’s clinic brought crowds of drug users from out of state to the area, and Friskey wanted him out of the strip mall.

When the clinic asked Friskey to help them maintain their computer networks and security cameras, Friskey saw an opportunity. He approached the DEA and offered to help shut it down.

FBI informant gets emotional talking about his motivation

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DEA agents wired him and recorded his conversations when he worked on Rose’s computers, as doctors there bragged about how much money they earned per day.

Friskey said he would take out their hard drives, replace them with new ones and turn the old ones over to federal agents.

“They never questioned me, never tried to stop me,” Friskey said. “I was happy to shut him down.”

Rose pleaded guilty to a drug conspiracy charge in 2012 and was sentenced to 15 years in prison .

An estimated 3,000 people died from overdoses linked to the brothers’ clinics, the FBI says

Everything came crashing down in August 2011, when federal investigators raided the brothers’ homes and discovered illegal weapons, drugs and other items.

They also raided the home of the twins’ mother, Denice Haggerty, who worked at one of the pain clinics. There, they discovered safes in the attic stashed with $4 million.

The brothers were among 31 people indicted — including their mother — under the federal RICO Act, which targets organized crime. Thirteen doctors also were charged, and all but two pleaded guilty to lesser charges of money laundering or wire fraud.

Haggerty, the twins’ mother, pleaded guilty that year to one count of conspiracy to commit wire fraud and was sentenced to 30 months in prison.

Chris George pleaded guilty to one count of racketeering conspiracy and was sentenced to 17 years in prison. He served 11 years and was released in September 2021.

Jeff George: “We were basically like the Disneyland of pain clinics.”

Jeff George also pleaded guilty to a racketeering conspiracy charge and was sentenced to 15 and a half years. He also was convicted of second-degree felony murder in the fatal overdose of a patient, according to court filings. He received an additional 20-year sentence for the murder charge and remains in prison.

An estimated 3,000 people died from overdoses linked to the brothers’ clinics, McKenzie said. He said the FBI came up with that number after reviewing a random sampling of 300 patient files from the brothers’ clinics and noting how many of the patients had later overdosed.

As many of the clinics’ customers sold their pills to others, that estimate doesn’t include the secondary or even tertiary drug market, McKenzie added.

Chris George denied responsibility for clients’ fatal overdoses

The brothers, now 42, leave a legal legacy in Florida.

In 2011, the state passed a “pill mill law” that banned pain clinics from dispensing opioids and established requirements for medical examinations.

But Nolan, the Georges’ associate who also pleaded guilty to a racketeering charge and served 10 years in person, feels like law enforcement targeted the wrong people.

“They didn’t want to go after big pharmacy. They didn’t want to go after big distributors. They just wanted us — we’re nobody. The money we made is peanuts compared to what big pharma made over the years,” he said in the film.

In recent years large pharmaceutical companies such as Purdue Pharma, whose OxyContin painkiller has been widely blamed for kickstarting the opioid crisis, have agreed to pay billions of dollars in legal settlements. Drugstore chains such as CVS and Walgreens also have agreed to settle lawsuits brought by states and local governments alleging the retailers mishandled prescriptions of painkillers.

The George brothers in an undated photo. “They act like I’m the bad guy here ’cause I owned a business,” Chris George said after being released from prison.

Meanwhile, more than a decade after the FBI shut down their operation, Chris George believes he and his brother play no role in the fatal overdoses.

“In the end, it’s their responsibility. They’re responsible for themselves, I’m not,” he says in the film after his release from prison. “I don’t think we created more addicts. They were already here. They just had an easier way .. to get their drugs. And a safer way. Now they don’t even know what they’re getting.”

Chris George, who is out on parole, continues to deflect blame for his drugs’ deadly toll onto his former patients.

“They said they were in pain to my doctors. They got an MRI showing they were in pain. My doctors gave them medication. What they did with that is out of my hands.

“They act like I’m the bad guy here ’cause I owned a business,” he added. “You know, in this country, anybody can open a business.”

Chris George said he plans to start a real estate business with his friend Nolan.

And if the housing market crashes, like it did during their opioid empire’s heyday, Nolan told the makers of “American Pain” that he has another idea.

“We may have to venture back into the medical field,” he said.

Govt Unlikely To Roll Back Budget Proposal Of Taxing High-Value Insurance: Report

March 15, 2023 by news.abplive.com Leave a Comment

Amid the demand of the industry to roll back the Union Budget proposal of taxing high-value insurance policies, officials have said that the government is unlikely to make changes in its plan, reported news agency Reuters. In Budget 2023, Finance Minister Nirmala Sitharaman proposed “to limit income tax exemption from proceeds of insurance policies with very high value.”

The move was proposed to tax the returns upon maturity of life insurance policies if their aggregate premium was above Rs 5 lakh in a year. The plan comes into effect on April 1.

According to the report, insurance industry executives have met Finance Minister Nirmala Sitharaman and finance ministry officials to demand they reconsider the proposal. However, an official told the news agency, “The government is not keen to revise the Rs 500,000 threshold limit as it impacts only high net-worth individuals, and not the common man.”

Also Read: ITR Filing: CBDT Picks Up 68,000 Cases For E-Verification. Know About The Scheme

Although he added that the government will consider allowing these investments to be adjusted for inflation, also known as ‘indexation’. Indexation means adjusting purchasing price to the rate of cost inflation index (CII) that is published periodically by the income tax department.

Another official told Reuters that the Department of Financial Services has suggested to Prime Minister’s Office (PMO) to allow these indexation benefits, and the final call will be taken by the PMO.

Also Read: Govt Not To Pay 18-Month Frozen DA Arrears For Central Govt Employees: Report

An independent tax consultant Kuldip Kumar, according to the report said that if allowed, indexation will lower the policyholder’s tax liability. Kumar said that this benefit will mean insurance proceeds will be taxable as capital gains rather than “income from other sources”, as proposed in the budget, which will reduce the tax rate to 20 per cent from 30 per cent.

Now you can link 4 accounts on WhatsApp & use it even when you’re offline, easily discover common groups with contacts

March 23, 2023 by economictimes.indiatimes.com Leave a Comment

Synopsis

Your smartphone doesn’t need to stay connected to internet for you to use WhatsApp on linked devices.

Meta-owned WhatsApp is often working on new updates to roll out to make user experience on the platform smoother and secure. While WhatsApp rolled out the feature to link your account on more than one device ages ago, a new update makes it possible for users to stay connected to their WhatsApp account on four different devices and one smartphone simultaneously.

The instant-messaging platform will now allow users to link their WhatsApp account on four devices and a phone, making it easier to stay connected on web and desktop.

All your personal messages, media, calls will stay secure with end-to-end encryption that will work on all your linked devices. “Your personal messages, media, and calls are end-to-end encrypted. Each linked device connects to WhatsApp independently while maintaining the same level of privacy and security through end-to-end encryption that people who use WhatsApp have come to expect,” WhatsApp said.

Your smartphone doesn’t need to stay connected or be online for you to use WhatsApp on linked devices. However, your linked devices will automatically log out if you do not use your smartphone for over 14 days.

In order to use the feature or link any new device to your WhatsApp account, you need to register your smartphone on the instant-messaging platform.

Google employees write to Sundar Pichai for better handling of job cuts

March 23, 2023 by telecom.economictimes.indiatimes.com Leave a Comment

Almost 1,400 employees at Google parent Alphabet Inc. have signed a petition calling for better treatment of staff during the layoff process, after the company announced it was cutting 12,000 jobs.

In an open letter addressed to chief executive officer Sundar Pichai , employees made a series of demands of the company, including freezing new hires, seeking voluntary redundancies before compulsory ones, giving priority to laid off workers for job vacancies and letting workers finish scheduled periods of paid time off, such as parental and bereavement leave.

The workers also called on Alphabet to avoid terminating employees from countries with active conflicts or humanitarian crises, such as Ukraine, and provide extra support to those at risk of losing their visa-linked residency along with their jobs.

“The impacts of Alphabet’s decision to reduce its workforce are global,” the letter said. “Nowhere have workers’ voices adequately been considered, and we know that as workers we are stronger together than alone.”

The petition follows Alphabet’s announcement in January that it would cut about 6% of its workforce following investor pressure to reduce spending in the post-pandemic slump. Meta Platforms Inc., Amazon.com Inc. and Microsoft Corp. are among the other tech giants to slash headcount in recent months after years of growth and hiring.

A spokesperson for Alphabet didn’t immediately comment on the petition. When Pichai announced the job cuts on January 20, he said in an email to staff that the company hired for a “different economic reality than the one we face today” and that he took “full responsibility.”

Although some Google workers, particularly in the US, lost their jobs immediately, the process has been much slower for those in countries with stronger labor protections that are common in Europe. Googlers in Switzerland, for example, only learned which workers were cut this week, triggering a walkout on Wednesday.

The letter was organized by a group of employees supported by unions including the Alphabet Workers Union, United Tech and Allied Workers and UNI Global. It was born out of discussions via a Discord channel set up after the jobs cuts were announced.

Labor groups have helped organize several petitions regarding the layoffs at various Google units and in different countries where it is present.

Some of the people who signed the petition told Bloomberg they are concerned that the consultation processes required by law in some countries have become a box-ticking exercise. Feedback from staff to management, including results of surveys where people expressed interest in volunteering for redundancy or reduced hours, has not been taken into account, they said.

The workers plan to circulate the petition for a few more days before presenting a physical copy to Pichai at the Google’s headquarters in California.