Re: Community feedback and clarifications on Mifos X 16.03 features (savings charge & interest rate chart)

[Pramod Nuthakki <pr...@confluxtechnologies.com>]

HI Dayana/Ed,



  For C-3 ​ Percentage on Interest ​ Charge Type for Savings Accounts



As communicated earlier, we will be implementing tax component and tax
groups for applying specific taxes on incomes. At later point we can extend
tax group to charges also.



As this requirement is for withholding tax on interest posting, we don’t
think applying tax withholding as a charge type is right.

We are planning to add a tax group that can be defined for withholding tax
at savings product level.

And at Savings account level will introduce a new button to enable or
disable withhold tax which affects as follows.



1.      If enabled, for the current period will add a new withdrawal
transaction (specific type) for tax deduction.

2.      If disabled, for the current period system won’t collect any tax.



In both scenarios    system won’t affect the previous posting periods.



Earlier we mentioned we will create a new charge type on interest posting.
But we felt this would be the better approach to handle.



please let me know if there are any concerns?



On Mon, Jan 11, 2016 at 8:31 PM, Ed Cable <ed...@mifos.org> wrote:

> Pramod,
>
> Let me follow up with Robert, one of the colleagues of the original
> requestor for this feature to get additional clarifying details but please
> see some replies from me inline.
>
> I will also send these through to the user's list to gather feedback
> there.
>
> Have you coordinated with Binny on these too - his wealth of knowledge was
> critical in the development of the original specs for term deposits.
>
>
>
> On Mon, Jan 11, 2016 at 3:27 AM, pramod conflux <
> pramod@confluxtechnologies.com
> <https://web.chilipiper.com/link/mifos.org/5693c3a9e4b0d82011bff16c?link=bWFpbHRvJTNBcHJhbW9kJTQwY29uZmx1eHRlY2hub2xvZ2llcy5jb20=>
> > wrote:
>
>> Hi Dayna/Ed,
>>
>>
>>
>> Can you please clarify following open points?
>>
>>
>>
>>
>>
>> *​ C-3 Percentage on Interest ​ Charge Type for savings:*
>>
>
> Please also see this issue for more background:
> https://mifosforge.jira.com/browse/MIFOSX-1886
> <https://web.chilipiper.com/link/mifos.org/5693c3a9e4b0d82011bff16c?link=aHR0cHMlM0ElMkYlMkZtaWZvc2ZvcmdlLmppcmEuY29tJTJGYnJvd3NlJTJGTUlGT1NYLTE4ODY=>
>
>
>> 1.      Is this type of charge should have flat amount also?
>>
> Since this charge is being implemented for withholding tax purposes it
> only needs to be a percentage-based amount. Dayna, correct a flat amount
> isn't needed here.
>
>
>> 2.      What should happen at accounting level on collecting this
>> charge. Is this an income or liability? Need exact behavior
>>
> Dayna - this would be a liability account correct. Likely as Withholding
> Tax Payable that get's credited when assessed and then becomes an expense
> when the tax actually gets paid?
>
>
>> 3.      What should happen for overdraft interest?
>>
>> Pramod - could you point me to where we have support for overdraft
> interest? I thought we weren't yet supporting it as it's been requested
> multiple times (although we do collect overdraft interest on the GL side)
>
>>
>>
>>
>>
>> *  C-4 Interest Rate Charts based on Amount*
>>
>> 1.      Should amount and period based variations coexist together?
>>
> My initial take is yes to support both amount and period-based interest
> rate charts on the same product.
>
>> 2.      If these values coexist then can system should allow either
>> period or amount alone to create an entry in chart?
>>
>  Yes - because I think there will be the need for products that are
> typical FDs but want to have ability to charge higher interest and then
> there will be the need for standard savings products that have sliding
> interest rate bands based on amount without the requirement for a certain
> period.
>
>> 3.      if 2 entries in chart satisfies the condition to apply interest,
>> then which one should have priority?
>>
> I would think that in practice in most cases, if two scenarios were being
> applied, the amount-based one would have priority in that the interest rate
> chart for amount would be higher than the period-based one, i.e. you would
> have customers who have fixed deposit accounts but have the option to earn
> higher interest if they have a higher balance.
>
>> 4.      Do we need to add a type to make these interest chats either
>> period based or amount based or Hybrid of both?
>>
> I'm not sure on this one if they should be separate interest rate charts
> or combined as a hybrid.
>
> Ultimately though at the product level, to echo what I said in Point 2,
> there should be support for savings product (not tied to a period so not FD
> or RD) that you can have an amount-based interest rate chart (sliding
> interest rate band) and then for the existing FD/RD deposits, there should
> be the ability to add amount-based interest rate chart (i.e. sliding int
> think we might need a new type that is just amount-based, we already have
>
>> 5.      Right now throughout the account life cycle system is applying
>> single interest based on total number of periods (not applying different
>> interest rates for different periods). should this be same for amount based
>> interest rates also?
>>
> Pramod, are you saying that for any one account, you could only have one
> active period-based interest rate chart, i.e. if you set up a new interest
> rate chart, that it wouldn't affect the existing accounts with the current
> interest rate chart implementation?
>
> Perhaps we can discuss this further as I might be getting confused as to
> how this applies to savings products vs FD/RD?
>
>> 6.       What is the meaning of average balance in case of RD and FD (as
>> I know we will have a total deposit amount at submission time only)?
>>
> Dayna, in the correct FD and RD, couldn't the average balance go up if
> people are adding additional deposits throughout the life of the FD (that
> is usually permitted, correct?)
>
> The question of average balance vs. daily balance over the period would
> only be applicable for general savings products and not FD/RD (this was
> discussed in comments on: https://mifosforge.jira.com/browse/MIFOSX-668
> <https://web.chilipiper.com/link/mifos.org/5693c3a9e4b0d82011bff16c?link=aHR0cHMlM0ElMkYlMkZtaWZvc2ZvcmdlLmppcmEuY29tJTJGYnJvd3NlJTJGTUlGT1NYLTY2OA==>
>
>>
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>
>
>
> --
> *Ed Cable*
> Director of Community Programs, Mifos Initiative
> edcable@mifos.org
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-- 
Regards,
Pramod