Benefits of Cloud Technology for Businesses

What is Cloud Technology?

It is an internet based off-site data storage and retrieval facility with add on facilities of providing data computing services and resources, generally for multiple clients. This type of a Cloud is called a Public Cloud. There are Clouds serving only a single organisation (Enterprise Clouds), called a Private Cloud. However, generally the Clouds are owned and operated by third party Cloud services providers for multiple clients. A modern man uses the Cloud Technology everyday but remains unaware of its use. If you are using Emails, Social Media, Video streaming services, IoTs, Weather App, Web Searches, etc, you are using cloud technology. The Clouds not only provides services for storage of data but it also provides other computing facilities like Software as a Service (SaaS), Platform as a Service (PaaS), etc.

Benefits of the Cloud Technology:

[1] Cost Reduction

To store the data safely, businesses need a Server Room. Setting up a Server Room is costly as it needs space, servers, air conditioning, fire safety equipments, CCTV Cameras, physical access control measures, etc. Disaster Recovery arrangement is also required. The businesses can obviate all these cost and also hassles if the services of Cloud Technology are availed.

[2] Sharing of the Data across the Enterprise

The data can be shared seamlessly on realtime basis by all the users irrespective of the location of the users, time of the access and the device used to access the data. What a great boon in the era of “Work Form Home”.

[3] Sharing of the Data with the Users outside the Enterprise

The data can also be shared in a secured and staggered manner with the users outside the enterprise e.g. customers, suppliers, buyers, investors, etc. This saves lots of time to provide services to customers and plugs the leakages in communication. Online shopping is a good example of availing benefits by this functionality.

[4] Automated Multi-tasking

Local hard-disk or on-site server are fast but when facing multi-tasking by a user or multiple users, they fall short of expectations of users regarding the speed. Given the high capacity of the Cloud for handling automated data flow coupled with speed of the internet, speed satisfies the expectations of multiple users at a time.

[5] User Friendly User Interface

Setting up and maintaining the Cloud services as such are ticklish jobs, even for an IT expert. However, for the user, it is very easy to upload or download the files as the interface is user friendly.

[6] Device Agnostic System

The Cloud works seamlessly with multiple types of devices (PC, laptop, tablet, mobile, etc) at the user end.

[7] Easy Scalability of Volume Load

As the Clouds have massive capacity to handle voluminous data, the CSPs can satisfy the storage need of the client on demand. This convenience cannot be expected if a business has its own data storage facility. As the CSPs have multiple clients, the increase and decrees in the demand stands counter-balanced so their capacity remains optimally utilised benefiting the clients in terms of pricing.

[8] Pricing Options

The CSPs offer various pricing options based on Time Used, Per User, Data Volume and permutations based on these factors (Hybrid Option). These options help the clients to choose the right pricing model and save the cost.

[9] Security of the Data

When connected via internet, safety of data remains the top most concern for the clients and it is more so when the data is uploaded in the servers owned by the third party at a faraway location, mostly unknown to the clients. This concern is well addressed by various physical and digital measures (firewall, encryption, back-ups at other location, etc) by the CSPs. The level of security is higher than what is available at in-house data centre/ server room. As the CSPs are big corporates like Google Cloud, IBM, Amazon, Microsoft Azure, Alibaba etc they can afford large sum for the purpose which individual could not afford. Further, it is not all about money but it is also about having talented manpower in the team.

[10] Business Continuity

Data could be lost due to various reasons like technical failure of the hardware, virus, sabotage, piracy, natural hazards, fire, short-circuit, etc. Business can face tough time to run the shop in a normal way. The chances of such untoward incident will be practically nil in view of the multi-layer security measure deployed by the CSPs. If the businesses avail the Cloud services, it is also a sound alternative to Disaster Recovery measure.

[11] Synchronization of Data

Cloud vendors provide the synchronization functionality. With this feature, user can sync the cloud storage data with other devices, seamlessly.

[12] Standardisation

Though every user of a computer follows standard procedure and dots the  I’s and cuts the T’s, the output/ deliverables are not so standard for variety of reasons. The use of Cloud helps to standardise the input and generate more standardised output/ deliverables.

Disadvantages of the Cloud Technology:

[1] Dependency on Internet

Internet is the mainstay of Cloud Technology. In data technology, the internet has made the geography irrelevant but if the same internet is not available or slow, the user is hamstrung.

[2] Data Security and Privacy

Though the Cloud Services are well equipped to maintain the data security, there are incidents of hacking. Depending upon the law of the land, an authority of a Sovereign Government can compel to divulge the data under given circumstances.

[3] Downtime

If the Cloud service is facing a power outage, a DoS (Denial of Services) attack buy a digital rogue, a technical glitch, a shutdown for maintenance, your own data will not be available till the problem is fixed.

Origin of the name Cloud:

The cloud symbol was used to represent networks of computing equipment in the ARPANET (Advanced Research Project Agency Network, USA) as early as 1977. As such it is a metaphor, having nothing to do with clouds in the sky.

How it works:

Before advent of the Cloud Technology, organisations used to store their data in removable hard-disk or Servers. Servers could be on-site or off-site. The Cloud Service Providers (CSPs) setup the server facility with massive capacity to store the data for the clients. This facility could be at one location or distributed across the globe, close to demand centres.

Future of the Cloud Technology:

The volume at which the data is generated every day is so massive that the adjectives like exponential and astronomical are poor to give the correct picture of the situation. The digital yardstick of Byte (Kilobyte to Yottabyte) is also small to measure the volume. The need and greed for data of businesses are increasing. Data has become a precious commodity in the modern world. Managing and manipulating data for commerce, communication, eGovernance, and entertainment are at the forefront of computing. Under such circumstances a question arises in the mind: What is the future of the Cloud Technology in the world of computing. The answer is: The Cloud Technology is the future of computing. 

If needed any consultation, please do not hesitate to contact us at 8448444245 or info@gujaratinfotech.com for any kind of requirement related  to Cloud Services from Amazon and Microsoft Azure" or Visit - www.gujaratinfotech.com

 =0=0=0=

(The comments of the readers are welcome at gnpatel@gujaratinfotech.com)

Save Income Tax @ End of Financial Year 2020-21 by Investing in NPS (National Pension System)

 

Here comes the Financial Year End and tax payers are alarmed at how fast the year passed and start worrying about the payment of income tax, to be specific, more about the investments to be made to save on income tax. Those who have no financial planning, become nervous in spite of handsome income every month. They curse the Govt for having introduced the harsh Income Tax Act. The solution lies in financial planning and not in cursing the authority. There are many schemes / avenues to invest for availing deduction from taxable income to curtail the liability for income tax. The present blog discusses the path less travelled – National Pension System.  

         The Govt of India has launched the NPS in 2004 for Govt employees which has, in 2009, been extended to All Citizens. The NPS has overcome the inertia and progressing steadily. 72.58 lakh subscribers from Govt Employees category and 25.21 lakhs subscribers from All Citizens Category have joined the NPS till Dec 2020.

The present blog seeks to highlight the deductions/  relief / rebates in Income Tax available to the NPS subscribers as the details of the NPS as such has already been discussed in the earlier blog (13^th June, 2017) on this blogpost.

Following are the deductions/ reliefs / rebates in Income Tax (under Old Regime) available to the NPS subscribers for the subscription / investment made into Tier I a/c:

1. Under Section  80CCD(1), Investment made  up to Rs. 150000/- or 10% of salary whichever is less in NPS  is eligible for deduction from taxable income. This limit for self-employed person is 20% of gross income subject to a similar maximum amount of Rs. 150000/-. Further, it is to be noted that this investment is covered under the overall limit of Rs. 150000/- under Section 80C. The readers will be aware that investments like Life Insurance Premium, PPF, Employees PF, NSC, Unit Linked Insurance Plan (ULIP) of UTI, the repayment of principal portion of housing loan, specific Term Deposits for a fixed period with a Post Office / Scheduled Bank, Contribution by an employee to an approved superannuation/pension fund, SSY (Sukanya Samriddhi Yojana) and such other investments are also covered under 80C. 

2. In addition to above, under Section  80CCD(1B), Investment made into NPS  up to Rs. 50000 is also eligible for deduction from taxable income. This is an exclusive deduction which the NPS subscribers could avail and thereby increase their deduction up to Rs. 2 lakhs. 

3. Under Section 80CCD(2), the contribution made by the Employer in employee’s NPS Tier I account up to 10% of Basic and DA is tax free income in the hands of employees.  For the employer, such contributions are eligible expenses chargeable to Profit and Loss Account. It is to be noted that employer's contribution to EPF and NPS/Superannuation Fund above Rs 7.5 lakh is taxable income for the employee.

4. After completion of 3 years from joining the NPS, subscribers can withdraw as a partial withdrawal up to 25% of their OWN CONTRIBUTION for specific purposes. The partial withdrawal does not attract any Income Tax. The contribution, if any, made by the employer is not considered for partial withdrawal. Maximum 3 partial withdrawals can be made with a minimum gap of 5 years between two withdrawals.

5. On reaching the maturity age (vesting age) of 60 years, subscribers can withdraw up to 60% from the corpus  as a lump sum withdrawal which does not attract any Income Tax. The remaining amount is to be invested for purchasing an Annuity Plan from Annuity Service Provider who will pay the monthly pension. This remaining amount of corpus also does not attract any Income Tax.

6. THE GOVT EMPLOYEES can invest up to Rs. 1.50 lakh in the NPS TIER-II account and can claim Income Tax deduction under Section 80C. However, a Lock-in Period of 3 year is applicable to such investment made.

7. On EPF/PPF pattern, the investment made under NPS is EEE (Investment is Exempted, Accrued income/interest is Exempted, and Withdrawal on Maturity is also exempted). However, the monthly pension received from the Annuity Plan is taxable.

8. Opening of Tier II a/c is not mandatory for availing benefits of deductions of amount invested in NPS under Income Tax. Income Tax deduction is available for the investment made in Tier I a/c only. However, for rules applicable to  Govt employees, see Item No. 6 above. 

9. Norms for Tier I A/c and Tier II a/c are given hereunder for ready reference:

Parameter	A/c Tier I	A/c Tier II
Eligibility	Any Indian citizen between 18 & 65 years of age	Members of Tier I only
Lock-in period	Till the age of 60 years	Nil
Mini number of contributions in year	1	Not mandatory
Mini contribution for account opening	Rs 500	Rs 1,000
Mini amount for subsequent contribution	Rs 500	Rs 250
Mini  number of annual contributions	1	Not mandatory
Fund management charges	Charges are same for both Tier I and Tier II accounts
Requirement of Bank A/c	Not mandatory	Mandatory
Transfer of Fund between these two a/cs	Fund cannot be transferred from this a/c to Tier II a/c.	Funds can be transferred from this a/c to  Tier I a/c without any restriction.
Basic purpose of the A/c	To accumulate the corpus for buying an Annuity Plan for pension.	To manage surplus liquidity with the  subscribers.
When is the a/c  opened?	In the beginning  when the application is submitted for joining the NPS.	In the beginning along with Tier I a/c or at any time later.

 

How to join NPS?

PFRDA (Pension Fund Regulatory and Development Authority) has appointed intermediaries knowns POPs (Point of Presence) who can open the NPS account. 

Gujarat Infotech Ltd is a one such Authorised POP where you can open NPS account.

Should you have any query, call at : 8448444245 

You can also open NPS account online & contribute online, get PRAN online. 

Disclaimer: The information given in the blog is only for general awareness and must not be construed as a professional advice. Readers are advised to consult the professionals in any subject matter of the blog before acting on the information discussed in the blog. The readers who are acting otherwise are doing so at their own risk.

(The comments from the readers are welcome at gnpatel@gujaratinfotech.com)

0=0=0=0