Monday, July 1, 2013

PERSONAL SPECIAL .............Taking Advantage of Life's Inflection Points



Taking Advantage of Life's  Inflection Points

A new book about the wit and wisdom of Harvard Business School Professor Howard Stevenson, written by longtime friend Eric C. Sinoway, examines life's "inflection points" and how to use them to best advantage.

One day not long after I first started working at Harvard, Howard and I were walking across the campus toward the Charles River. It was the kind of early April day that, while still chilly, held the promise of frostless mornings and slowly budding trees. The weather seemed to be hanging on a pinpoint, waiting for a nudge that would push it from winter to spring.
I loved these "walking meetings," which we had begun when I was a grad student and continued through our years of working together at the university. While we sometimes had a specific piece of business to discuss, more often we had no agenda. We just talked about whatever was on our minds, from the psychological to the philosophical to the entrepreneurial. It became an escape from the everyday; a bit of intellectual therapy for both of us. Since Howard was then one of the most senior administrators at Harvard, I never had to explain to colleagues or bosses why I regularly took time to meet with him.
On this particular morning I was telling Howard about my friend Michelle, whose boss had unexpectedly announced her retirement. Michelle is an extraordinarily creative and hardworking woman who was a few years behind me at college. Her boss, the head of their department, had been a mentor and champion throughout Michelle's time at the company. Michelle had worked for this boss for almost ten years and credited the woman's support and wise counsel for her own continuous career progress.
Despite Michelle's success, she felt that her future was uncertain now that her professional champion was departing. It was unclear whether her boss had retired of her own volition or had been forced out—or something in between. All Michelle knew was that on an otherwise unremarkable Friday morning, she had been told that her boss was leaving in a few weeks and that the company was "reconsidering the entire department's role and structure."
Normally decisive and confident, Michelle was caught off guard. She felt frozen, with no idea how long the organization's review process would take, how extensive it might be, or what it might lead to for her. For the first time in her career, she didn't know what to do.
As I shared the story with Howard, a bewildered look crept over his face.
Michelle's plan, I explained to him, was to keep her head down and wait to see how the department might be reshaped. After she learned what opportunities would be presented to her as part of the potential reorganization, she would decide what to do next. After all, at this point she didn't know if she'd be "downsized," "realigned" into a job with less authority, "morphed" into a different professional path at the company—or even "supersized" with a promotion. What she did know was that the economy was weak and she had invested ten years at the company, so she was hoping for the best.
When I finished the story, Howard shook his head, kicked a pinecone out of his path, and grumbled, "Wasting a good opportunity."
"Her problem is that no one has clarified what her options might be," I explained.
Howard stopped and gently poked me in the chest, "No. Her problem is that she doesn't recognize the opportunity staring her in the face."
It was classic Howard, looking at the world from a unique perspective: where almost everyone else would see a problem, he sensed an opportunity; where most people might have endorsed Michelle's "sit tight" approach, he saw reason for thoughtful action.
"She's waiting for someone to decide her fate for her," Howard remarked. "She doesn't realize that she's being given a gift."
"What kind of gift?"
"An inflection point," he said. "In Michelle's case, it's coming at a moment in time when the structures are removed and the rules are suspended. A moment in which she can reflect inwardly about what she wants, and then act to redefine the situation in such a way as to help her accomplish it."
Howard motioned for me to sit on a bench with him under a huge oak tree.
"Inflection points change the way we think about things. They present an opportunity that only occurs periodically. And they possess a kind of latent motivational energy, which, when recognized and harnessed, can unleash potential that one wouldn't seize otherwise."
"'Latent motivational energy'?" I'd teased Howard for years that he had a language all his own—"Howard-speak"—that people didn't always understand. "Latent motivational energy" was quintessential Howard-speak, and when I called him on it, he laughed.
"All right, all right," he said. "How's this? Latent motivational energy is another way of describing a situation's potential to spur you into action, when you wouldn't have acted before."
"In even plainer English," I suggested, "it's a much-needed kick in the ass."
Howard chuckled and said, "A kick that can provide a boost of career momentum."
He paused, then gave me a wink as he thought of just the right way to illustrate his point. "You're too young to remember this," he began, "but in the early 1970s the Apollo 13 spacecraft was midway between Earth and the moon when an air tank exploded and almost wrecked the command module. There wasn't enough fuel to stop its momentum and turn back for Earth. So the crew decided to let the moon's gravity do the work for them. Moving faster and faster, they orbited the moon once, used a single powerful burst of the engine to add to the momentum gravity provided, and, like a stone in a slingshot, zoomed back to Earth. They got home because they used the lunar orbit as an inflection point to change their trajectory and add the energy boost they needed."
"I remember that scene in the movie Apollo 13," I said. "It was riveting because you knew the slightest mistake would send them out into deep space."
Howard smiled. "Here on Earth, the opportunity provided by an inflection point is a lot easier to overlook or ignore—until the window for action passes. As a result, most people are like Michelle: they won't realize they're at an inflection point until it has passed. And if they do realize it, they'll often just react to it without constructive thought. They see inflection points as something that happens to them, something they can only respond to defensively. Like passive observers in their own lives.
"Very few people see inflection points as the opportunities they often are: catalysts for changing their lives; moments when a person can modify the trajectory he or she is on and redirect it in a more desirable direction," he continued. "Whether it's a new job, a change in a relationship, or something else, an inflection point is one of those periodic windows of opportunity when a person can pause, reflect, and ask: 'Self, do I want to continue on this path or is now the moment to change direction?'"
from Howard's Gift: Uncommon Wisdom to Inspire Your Life's Work. Copyright 2012 by Eric Sinoway.
http://hbswk.hbs.edu/item/7041.html?wknews=09052012

FINANCE / TAX SPECIAL ....New rules of filing tax returns



New rules of filing tax returns
 
The tax authorities have introduced several new guidelines for filing returns this year. What are the changes and how they are likely to impact you?


    First they made it compulsory for businesses to e-file their tax returns. Then they made it mandatory for taxpayers with incomes of over `10 lakh to take the online route. This year, the income tax authorities have cast a wider net and made e-filing compulsory if your taxable income is above `5 lakh a year.
    The lowered threshold represents one of the key changes in the tax filing rules this year. Some of these are mere tweaks, such as mentioning your bank’s IFSC number, instead of the MICR code, in the return. However, some of these variations are tectonic, such as the mandatory e-filing for incomes above `5 lakh a year. In the following pages, ET Wealth explains the new rules and how they will affect the way you file your tax return this year.
E-filing tax returns
E-filing of tax returns has grown ten-fold since its introduction in 2006. Less than 8% of the 3.37 crore taxpayers e-filed their returns in 2007-8. Last year, 45% of the 5 crore taxpayers took the online route. That’s a big jump and the figure is expected to go up significantly this year.
    The change has spawned a massive opportunity for tax e-filing portals. These websites charge individual taxpayers between `200 and 4,000 for uploading their tax returns. You can also do it for free on the official website of the Income Tax Department. However, private tax filing portals hand-hold the taxpayer through the process. They guide you while filling the form and even correct you if you make a mistake.
    Filing tax returns online is easy. The average taxpayer won’t take more than 30-40 minutes to enter all the details and upload the return. However, the average taxpayer also harbours several misconceptions about e-filing. Meet Mumbaibased finance professional Harshad Doshi (see picture), who has fallen in and out of love with online filing during the past 3-4 years. Doshi started e-filing in 2008, but when he got a scrutiny notice in 2010, he was advised by a relative to desist from the online route. The next year, he reverted to physical returns, but still got a notice. This year, Doshi has no choice but to e-file his returns because his annual income is above 5 lakh. “I have realised that one can get a tax notice, irrespective of whether one files his return online or offline,” he says wryly.
    He’s right. Tax returns are picked up for scrutiny through a computer-assisted selection procedure that has no human intervention. If the computer detects certain discrepancies in the return, it raises the red flag and the individual gets a notice. In fact, there is a greater probability that a return filed offline will get picked up for scrutiny. The information in your physical return is ultimately fed to the computer by operators. A typing error at this stage can introduce a discrepancy in the return, leading to a notice being sent to you.
    This is also why a lot of taxpayers prefer to file their returns offline. You would think Ankit Mehta (see picture), who works as a business analyst in a private bank in Mumbai, would take the tech route. However, he files the traditional paper returns.
    This problem can be avoided when you file online because the chances of going wrong are lesser. The e-filing portals further reduce the risk of errors by calculating the tax as you fill in the form. Some e-filing companies, such as Taxspanner, even verify your return for a small fee. If you are ready to shell out `200, the portal will check if you have entered correct information and alert you when you are going wrong. Tax professionals go through your return form, tallying the numbers and cross-checking the information before it is uploaded.
Choose the right form
The online filing data reveals that more than 32% of the 2 crore individual taxpayers used the basic ITR 1, also known as Sahaj, to file their returns last year. Only 11% used the more complicated ITR 2. These statistics indicate that a lot of taxpayers who should have used ITR 2 filed their returns using the simpler Sahaj form. The income level does not matter; what is important is the source of income. For instance, if one had made capital gains or earned rent from more than one house, he should have used ITR 2.
    Whether the popularity of ITR 1 was out of ignorance or a deliberate attempt to conceal income is not clear. However, the government has now changed the rules to capture a better picture of the income of taxpayers. If you received more than `5,000 tax-exempt income during 2012-13, you will have to use the ITR 2 for filing your return this year. Exempt income includes tax-free sources of income, such as the interest on PPF, tax-free bonds and dividends (see table). Also, a taxpayer is not supposed to use ITR 1 if he has foreign assets or has claimed tax relief under any double taxation avoidance treaty. Experts are divided over the interpretation of exempt income in this regard. “This change will have a big impact on the salaried taxpayers because HRA, LTA or conveyance allowance are commonly availed of by most of them,” warns Kuldip Kumar, executive director of PriceWaterhouse Coopers. This effectively means that a vast majority of salaried taxpayers will have to use ITR 2 this year. Even if they don’t claim HRA exemption, they get LTA, or at least 800 conveyance allowance per month, which is exempt.
    Vineet Agrawal, director, KPMG, believes that the 5,000 limit for exempt income does not include HRA, LTA and other allowances that a taxpayer receives from an employer as part of the salary package. More clarity is needed on this.
    The stress on disclosure demonstrates the tax department’s resolve to plug the leakages in tax collection. The direct tax collection of `5.58 lakh crore in 2012-13 fell short of the revised target by `7,000 crore. Addressing a meeting of tax officials in May, Finance Minister P Chidambaram exhorted them to “target non-filers and stop-filers to widen the tax base”. Almost 12.5 lakh such “non-compliant” taxpayers have been identified by the Central Board of Direct Taxes, and almost 2 lakh notices are already on their way. The taxpayers who have not filed or stopped filing would do well to take heed of the warning. If you have not filed your return for last year as well, you can do so now (see box). A return filed after the due date is a delayed return. If you file your delayed return before you get a notice, you have a better chance of getting away lightly. The taxman will not take you to task for not filing your returns, just a mild rap for waking up late.
Automatic choice for e-filers
For some online tax filers, choosing the right form is not an issue. “A taxpayer has to just enter what he has earned under different heads of income and the portal automatically chooses the applicable form,” says Sudhir Kaushik, co-founder and CFO of Taxspanner. com. For instance, if the person has only income from salary and no exempt income, his return will be filed using ITR 1, but if he made some capital gains, has rental income from more than one house or his exempt income exceeds `5,000, ITR 2 will be used.
    However, taxpayers who upload their returns through the official Income Tax Department website will have to be more careful about the form they use. Delhi-based Kuldip Kaushik (see picture) used the ITR 1 last year, but since he had dividend income of over `5,000 for the year 2012-13, he will have to use ITR 2 this year.
    If a taxpayer uses the wrong form and the mistake is discovered by the tax authorities, the return may be rejected. Every year, thousands of defective returns are sent back to taxpayers. A defective return is not an earth shattering matter. If you get a notice, you will have to file a revised return within 15 days. If you meet the deadline, the return is treated as valid. Get delayed and your return will become invalid and you will have to file afresh.
    “If you discover on your own that you have made a mistake in the return or used the incorrect form, you can file a revised return to rectify the mistake,” says Agrawal. Your new return will overule the previous one if the assessment has not been completed.
Check your TDS details
Before you sit down to file your returns this year, spend a few minutes to check whether the tax you paid for last year has been correctly credited to your name. The Form 26AS has details of the tax deducted on behalf of the taxpayer and can be easily checked online. Noida-based Brijendra Singh wishes he had done so last year. The former army officer got a tax notice because of a clerical error by his bank. The TDS paid on his income from fixed deposits was credited to another PAN by mistake. Though he was eventually given credit for his TDS, Singh is not taking any chances this year. He has diligently matched all his TDS details with the entries in the Form 26AS online.
    Checking your tax credit details online is child’s play if you have a Net banking account with any of the 35 banks that offer this facility. Otherwise you can go to the official website of the Income Tax Department and click on ‘View Your Tax Credit’. First-time users will have to register but it takes less than five minutes before you can log on and view your details. “It is necessary that taxpayers check their TDS when they file their returns,” says Kuldip Kumar of PwC.
Forms seek more information
If salaried people are feeling jittery about using the more detailed ITR 2, imagine what partners in firms and businessmen are going though. In an attempt to dig deeper for undisclosed income, the government has made it mandatory for partners, professionals and businessmen with an income of over `25 lakh to furnish details of their assets and liabilities. There is a new ‘Schedule AL’ in the ITR 3 and ITR 4. If the taxpayer’s income exceeds `25 lakh during the year, he will have to declare his assets and liabilities.
Don’t forget the ITR V
The most important form in the whole process is the ITR V. This is the acknowledgement of your return. If you file offline, this form has to be submitted along with the ITR. If you file online without digital signature, this form has to be sent to the CPC in Bangalore by snail mail within 120 days of uploading the return. This also means that for a vast majority of e-filing taxpayers, the process is not fully online. The CBDT is considering a proposal that will do away with the physical posting of the ITR V. However, till then you will have to send it by ordinary post.
    Others feel that the cost of digital signature should be brought down and its usage expanded to cover other areas as well. “If e-filing has been made mandatory, the government should also make the use of digital signatures mandatory,” says Delhi-based chartered accountant Minal Agrawal Jain.
Didn’t file your tax return last year?
The due date for filing returns for 2012-13 is 31 July, but some taxpayers may not have filed for the previous year as well. Here’s what they should do.

IF YOU have not filed your tax return for 2011-12, you can file a belated return. If all taxes have been paid, there is no penalty for filing late. You have till 31 March 2014 to file your return. However, if some tax remains to be paid, you will have to pay an interest of 1% per month of delay on the amount. Even so, there is a possibility of a penalty of `5,000 for not filing your return by the due date.
Can you just ignore the past and file tax returns from this year onwards. It’s a tempting thought, but can be a costly mistake. Not declaring your income or failure to pay tax by the due date is tantamount to tax evasion. A penalty of up to 300% of the amount can be slapped on you. The minimum penalty is 100% of the outstanding tax. Even if all taxes are paid, you are supposed to file your tax return. This is especially important if you have been filing your tax returns regularly in the past. If the Income Tax Department discovers a gap in continuity, a notice can be sent to the taxpayer.
 (With Smriti Kumar)

MARKETING SPECIAL........Marketers drive into hinterland for growth



Marketers drive into hinterland for growth 

From Cheaper LED TVs To Luxury Cars, Cos Target Demand In Towns, Rural Belt 

Chennai: India’s aspiration curve is taking a detour. After years of cherry-picking focus on metro cities, marketers are now looking at tier 2 and 3 cities, the so-called ‘hinterland’ demand, to stay afloat through the downturn. From cars to time-share holidays, durables to home loans, just about every product and service is suddenly wooing the ‘other India’ as agri income and insulation from stock market variables makes this segment less pinched by the slowdown. From the earlier tunnel vision of Delhi-Mumbai-Bangalore-Chennai, marketers are now looking at cities like Kochi, Jaipur, Lucknow, Raipur and Pune. Some of these are established markets, others are just beginning to pick up speed. But Indian marketers now realize, the demand at the bottom of the geographical pyramid cannot be ignored.
    Last week, consumer electronics giant Sony India announced that it will launch small-screen Bravia brand TV sets with prices starting as low as Rs 15,000 to tap demand in smaller towns and cities. Sony isn’t the only durables company to eye non-metro nirvana. Earlier this year, arch rival LG announced a range of less-than-Rs 10,000 LED TV sets while Godrej has a sub-Rs 3000 refrigerator model for tier 2 and 3 cities. Even retail chains like Croma and ezone are looking at more affordable products for these markets.
    Car companies, in search of markets less driven by economic sentiment, have been focussing attention on rural/semi urban India for a while now. As a result, rural India is now a ‘strategy market’ for Motown. Says Rakesh Srivastava, head of sales & marketing, Hyundai Motor India, “Hyundai is focusing on rural markets (beyond top 110 cities) by increasing the number of sales outlets. Rural markets are growing on account of growing income and change in lifestyle. In 2011, around 15% of sales came from rural and semi-urban markets. In 2012, it grew to 16.9% and we expect it will increase to over 20% by 2014. Hyundai has 270 rural sales outlets (RSO) and we plan to take it to 350 outlets by end of 2013.”
    Forget mass market cars, even luxury brands like Lamborghini are looking at these markets for the next phase of growth. Says Pavan Shetty, head of Indian operations, Lamborghini India: “Even in the super car segment where prices hover above the Rs 3 crore mark, we are seeing growing demand from places like Cochin, Pune, Jaipur and Hyderabad.” Lamborghini is using a hub-and-spoke model to reach out to these customers through their specialized activities. “For instance, an event in Chandigarh attracts customers from Jallandhar and Ludhiana who otherwise would have had to come to Delhi. There are a lot of enquiries from these places,” adds Shetty.
    Understandably, the nonmetro share of the market – across product and service categories – isn’t very large, as yet. In durables, the rural market comprises less than 15% of the sales. In cars, the share is around 17-20%. But what marketers are interested in is the aspiration curve which is now headed towards lifestyle choices as well.
    Says Rajiv Sawhney, CEO of leading time-share firm Mahindra Holidays & Resorts India: “We are widening our distribution network to tier 2 and 3
ities like Madurai, Pondicherry, Trichy. We would like to increase our presence there alongside places like Surat and Nagpur where the new aspiration, new money, new willingness to spend now exists. So that’s where we are headed.”
    Even services like home loans are now firmly focused on the ‘other India’ in their search for growth. Mortgage major, HDFC, for instance, has seen 16% growth in home loan disbursals to Rs 82,452 crore in FY 13 as against Rs 71,113 crore in FY 12. “The demand is largely coming from Tier II and Tier III towns and the periphery of major metros as properties are still quite affordable in these areas,” Renu Sud Karnad, MD, HDFC had said earlier.
DOWN ASPIRATION ROAD
Sony India plans to launch LCD-LED TVs starting as low as Rs 15,000 while LG will launch sub- 10,000 LED TVs
Godrej has a sub- 3,000 refrigerator
Lamborghini has seen demand grow from cities like Kochi, Pune, Jaipur and Hyderabad
HDFC has seen home loan demand grow from tier II & III towns
Nandini Sen Gupta TNN TOI130624

ON THE JOB SPECIAL.............. 3 Types of Employees Who Always Resist Change



3 Types of Employees Who Always Resist Change

Got innovation-phobic team members? Use this handy guide to classify and overcome their objections.

In business, just about everybody claims to be for creativity and finding new and better ways to do business. Not only does innovation sound exciting, it also sounds profitable. But studies have revealed that while lots of folks claim to love change, when they’re faced with the reality of actually altering their usual way of doing business, they’re skeptical if not downright hostile.
Creativity may be cool but it’s also scary, so how can you get your team to actually embrace fresh ways of doing business? The first step, according to Dana Brownlee, the founder of productivity consultancy Professionalism Matters, is to take a careful look at your team’s foot draggers. Not every innovation-phobic employee is the same. Once you know what sort of change resister you have on your hands, you’re better placed to overcome his or her objections.
Intuit Fast Track columnist Alexandra Levit recently rounded up Brownlee’s insights into a handy field guide to change resisters, laying out six types of innovation-unfriendly employees, as well as ideas on how to prod them to adopt new ideas, including:
The “Positive” Change Resister
“In group settings they seem positive, but often make passive aggressive comments that are really thinly veiled jabs (I’m sure the new shipping process makes complete sense and I’m fully onboard, but I’m just wondering what we should say if customers complain about longer wait times?)” explains Levit.
The solution: Try to ensure they air their grievances in public so you can deal with rather than allow them to curdle the office environment with barbed comments and whispered insinuations. How can you accomplish this? “During a group session, ask each person to write their top concern about the change on an index card and ask everyone to pass them to the front of the room for review and discussion.”
The “Unique” Change Resister
“This is the person who feels that their situation is different.  For some reason, they’re special and shouldn’t change along with everyone else,” Levit writes.
The solution: The fix here is straightforward. Simply stress that that the change will benefit everyone but that this positive impact requires 100 percent compliance.
The “We Need More Time to Study” Change Resister
This type is the victim of analysis paralysis, Levit says: “They don’t want to make a change until they’ve analyzed every possible scenario and option.”
The solution: Puncture their perfectionism by explicitly saying that “the goal is ‘directionally correct’ but not ‘perfect.’” Then get moving by setting out a limited time to study the issue. Once that time has elapsed signal that you meant what you said by taking decision action.
Jessica Stillman http://www.inc.com/jessica-stillman/3-types-of-people-who-always-resist-change.html?cid=em01020week25d&nav=su