E-Investing India - Online Community for Investors and Traders  

Go Back   E-Investing India - Online Community for Investors and Traders > Personal Finance & Investing > Money Management
Read All Rules Contact Site Administrator

Money Management Money Management

Reply
 
Thread Tools Display Modes
  #1  
Old 7th December 2011, 10:17 PM
Senior Member
 
Join Date: Jul 2010
Posts: 1,869
Rep Power: 4706
magnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond repute
Default Transfer Money from Current Account to Savings Account for a Short Duration



Well I have a sole proprietorship. And for that purpose, as we all know, current account is must.

I sometimes I have a good sum of 5 lakh-10 lakh in the account.

As we all know we don't get any interest on current account. And sometimes these sum remains for 10-12 days in my account.

What if say I know I won't be transferring the sum to someone and move the money to my savings account for 10 days and say on 11th I signed a cheque to someone and again re-transfer the some by evening into current.

Is that legal or illegal?

That way for 10 days i'll get some interest on savings rather than nothing on current.

Can I practice same? I did it earlier but my father says to avoid this practice as it looks an attempt for small benefit plus lot of unnecessary heads add up for income tax.
Reply With Quote
  #2  
Old 8th December 2011, 12:14 PM
ashish_jain11's Avatar
Regular Member
 
Join Date: Jul 2007
Posts: 415
Rep Power: 230
ashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond repute
Default

Quote:
Originally Posted by magnet View Post
Well I have a sole proprietorship. And for that purpose, as we all know, current account is must.

I sometimes I have a good sum of 5 lakh-10 lakh in the account.

As we all know we don't get any interest on current account. And sometimes these sum remains for 10-12 days in my account.

What if say I know I won't be transferring the sum to someone and move the money to my savings account for 10 days and say on 11th I signed a cheque to someone and again re-transfer the some by evening into current.

Is that legal or illegal?

That way for 10 days i'll get some interest on savings rather than nothing on current.

Can I practice same? I did it earlier but my father says to avoid this practice as it looks an attempt for small benefit plus lot of unnecessary heads add up for income tax.
Legally there is no issue.

For Proprietorship, it is same like keep in your right pocket or left pocket.
Reply With Quote
  #3  
Old 8th December 2011, 01:10 PM
San Yad's Avatar
Senior Member
 
Join Date: Apr 2008
Posts: 1,704
Rep Power: 1123
San Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond repute
Default

Quote:
Originally Posted by magnet View Post
Well I have a sole proprietorship. And for that purpose, as we all know, current account is must.

I sometimes I have a good sum of 5 lakh-10 lakh in the account.

As we all know we don't get any interest on current account. And sometimes these sum remains for 10-12 days in my account.

What if say I know I won't be transferring the sum to someone and move the money to my savings account for 10 days and say on 11th I signed a cheque to someone and again re-transfer the some by evening into current.

Is that legal or illegal?

That way for 10 days i'll get some interest on savings rather than nothing on current.

Can I practice same? I did it earlier but my father says to avoid this practice as it looks an attempt for small benefit plus lot of unnecessary heads add up for income tax.
Income tax department might spot both of you if you transfer big amount/cheque from your current account to other person's saving a/c.

It should be fine if you just transfer amount from your current a/c to saving a/c.

Happy Investing!
Reply With Quote
  #4  
Old 8th December 2011, 06:43 PM
Senior Member
 
Join Date: Dec 2007
Location: Kolkata
Posts: 1,221
Rep Power: 4163
Prudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond repute
Default

Any cash donation/transfer to other persons beyond a limit would attract taxes.

And banks won't allow you to frequently tussle funds between savings and current accounts of your own.

Best option is to park your surplus money in liquid or liquid plus debt funds. Link

This is what most large corporates do to earn that extra bit on idle cash.
Reply With Quote
  #5  
Old 8th December 2011, 07:03 PM
San Yad's Avatar
Senior Member
 
Join Date: Apr 2008
Posts: 1,704
Rep Power: 1123
San Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond repute
Default

Quote:
Originally Posted by Prudent_Investor View Post
Any cash donation/transfer to other persons beyond a limit would attract taxes.

And banks won't allow you to frequently tussle funds between savings and current accounts of your own.

Best option is to park your surplus money in liquid or liquid plus debt funds. Link

This is what most large corporates do to earn that extra bit on idle cash.
I think liquid/debt funds also have charges if you take out (exit) money before mentioned period (e.g 1 year)?

Any idea, how much they charge for exit load or no charge for all funds.

I just saw HDFC liquid fund has zero entry and exit load.

HDFC Liquid fund

Happy Investing!
Reply With Quote
  #6  
Old 8th December 2011, 08:19 PM
Senior Member
 
Join Date: Dec 2007
Location: Kolkata
Posts: 1,221
Rep Power: 4163
Prudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond repute
Default

Quote:
Originally Posted by San Yad View Post
I think liquid/debt funds also have charges if you take out (exit) money before mentioned period (e.g 1 year)?

Any idea, how much they charge for exit load or no charge for all funds.

Happy Investing!
Most of the liquid funds have zero entry/exit loads. Go to Valueresearch and check the category of liquid funds.
Reply With Quote
  #7  
Old 8th December 2011, 10:26 PM
Senior Member
 
Join Date: Jul 2010
Posts: 1,869
Rep Power: 4706
magnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond repute
Default

Quote:
Originally Posted by Prudent_Investor View Post
Any cash donation/transfer to other persons beyond a limit would attract taxes.

And banks won't allow you to frequently tussle funds between savings and current accounts of your own.

Best option is to park your surplus money in liquid or liquid plus debt funds. Link

This is what most large corporates do to earn that extra bit on idle cash.
Yes transfer above 50000 would attract tax as consider as gifts to others which are not close relatives or consider under gift tax law.

Liquid fund problem is even while re-transferring 2-3 days time it takes to get money in account.And most probably inter branch cheques get clear in a day.

HNI invest in liquid as returns is more than savings and its the excess which they park.

In my case hardly I have excess (sometimes its 5 lakh or sometimes 15000, AQB is 10000) and I don't know when I'll need it and some time that excess remains for even more than 15 days.

That's why something is better than nothing.

Yes I need to clarify what you said that banks won't allow frequent transfer within savings and current of same person if I abide with minimum balance rule of current account.

Also nowhere I had read about same.
Reply With Quote
  #8  
Old 8th December 2011, 10:41 PM
Senior Member
 
Join Date: Dec 2007
Location: Kolkata
Posts: 1,221
Rep Power: 4163
Prudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond reputePrudent_Investor has a reputation beyond repute
Default

Quote:
Originally Posted by magnet View Post
Liquid fund problem is even while re-transferring 2-3 days time it takes to get money in account.And most probably inter branch cheques get clear in a day.

In my case hardly I have excess (sometimes its 5 lakh or sometimes 15000, AQB is 10000) and I don't know when I'll need it and some time that excess remains for even more than 15 days.
If you activate your mutual fund account online, and NEFT enabled bank accounts for redemption, withdrawal should not be a problem.

Cut-off time for liquid funds is 1 day, meaning if you withdraw before 3pm on a business day, the accounts are credited on the next business day. I have myself used short term funds from HDFC and it works flawlessly.

Moreover, starting investment is as low 5,000 for some retail liquid funds with no entry or exit loads.

The other possible option is fixed deposits of 7-15 days duration using auto sweep if feasible.
Reply With Quote
  #9  
Old 9th December 2011, 09:19 AM
Senior Member
 
Join Date: Jul 2010
Posts: 1,869
Rep Power: 4706
magnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond repute
Default

Quote:
Originally Posted by Prudent_Investor View Post
If you activate your mutual fund account online, and NEFT enabled bank accounts for redemption, withdrawal should not be a problem.

Cut-off time for liquid funds is 1 day, meaning if you withdraw before 3pm on a business day, the accounts are credited on the next business day. I have myself used short term funds from HDFC and it works flawlessly.

Moreover, starting investment is as low 5,000 for some retail liquid funds with no entry or exit loads.

The other possible option is fixed deposits of 7-15 days duration using auto sweep if feasible.

Hmm,thanks.

I'll try and revert back regarding same.
Reply With Quote
  #10  
Old 12th December 2011, 11:20 AM
ashish_jain11's Avatar
Regular Member
 
Join Date: Jul 2007
Posts: 415
Rep Power: 230
ashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond reputeashish_jain11 has a reputation beyond repute
Default

For proprietorship firm, the PAN of firm and proprietor is the same.

Legally no issue: Just like either in this pocket or that.

Bank will not ask you why are you transferring frequently, you can transfer any times you wish.
Reply With Quote
  #11  
Old 12th December 2011, 11:30 AM
Senior Member
 
Join Date: Nov 2007
Posts: 1,065
Rep Power: 759
sudhashbahu has a reputation beyond reputesudhashbahu has a reputation beyond reputesudhashbahu has a reputation beyond reputesudhashbahu has a reputation beyond reputesudhashbahu has a reputation beyond reputesudhashbahu has a reputation beyond reputesudhashbahu has a reputation beyond reputesudhashbahu has a reputation beyond reputesudhashbahu has a reputation beyond reputesudhashbahu has a reputation beyond reputesudhashbahu has a reputation beyond repute
Default

As per my knowledge, moving between current and savings accounts for a sole prorietorship is not an issue.

However you should note that frequent large transactions in/out of savings account will definitely attract the attention of tax authorities.
Reply With Quote
  #12  
Old 12th December 2011, 04:34 PM
San Yad's Avatar
Senior Member
 
Join Date: Apr 2008
Posts: 1,704
Rep Power: 1123
San Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond reputeSan Yad has a reputation beyond repute
Default

Quote:
Originally Posted by sudhashbahu View Post
As per my knowledge, moving between current and savings accounts for a sole prorietorship is not an issue.
You are right.

Quote:
However you should note that frequent large transactions in/out of savings account will definitely attract the attention of tax authorities.
Tax authorities can only trace with PAN number that is mentioned in bank. So in both a/cs PAN is same.

I think that should be no problem too?

Happy Investing!
Reply With Quote
  #13  
Old 19th December 2011, 08:51 PM
Senior Member
 
Join Date: Jul 2010
Posts: 1,869
Rep Power: 4706
magnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond reputemagnet has a reputation beyond repute
Default

Quote:
Originally Posted by sudhashbahu View Post
As per my knowledge, moving between current and savings accounts for a sole prorietorship is not an issue.

However you should note that frequent large transactions in/out of savings account will definitely attract the attention of tax authorities.
I am not worried about tax authority as I plan to earn something than nothing on my money.

Thanks for all the help.
Reply With Quote
Reply


Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are On
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Single Demat Account with Multiple Brokers or Transfer of Demat Account Test_my_patience Financial Services 1 3rd October 2011 09:16 AM
Current Account Suggestions? Alchemist Financial Services 12 3rd March 2011 10:53 PM
Funds Transfer from Trading Member Account to Client Account sureshhari Financial Services 0 18th October 2010 10:59 PM
Difference Between Current Account And Savings Account rookie_gau Other Personal Finance Issues 4 7th October 2008 12:58 PM
Transfer of money from PPF account RAMBO65 Other Personal Finance Issues 0 3rd March 2008 03:27 PM


All times are GMT +5.5. The time now is 03:13 AM.


Powered by vBulletin® Version 3.6.8
Copyright ©2000 - 2018, Jelsoft Enterprises Ltd.
SEO by vBSEO 3.6.0
Ad Management plugin by RedTyger