Category: Personal Finance

Do not miss including these five incomes while filing your income tax returns

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

In a hurry to file income tax returns, many a time individuals forget to disclose all income. This not only shows incorrect picture of your income but also changes the tax liability.

To avoid such a situation you should write down all your income under various heads. Here are a few incomes individuals tend to forget while filing their income tax returns.

Saving bank account and fixed deposit interest:

While filing the ITR, the salaried people generally disclose their salary income only or provide copy of Form No 16 to their chartered accountant presuming that interest on saving account is fully exempt and as TDS has already been deducted on their fixed deposits interest, there is no need to include them in their ITR again.

Though interest on saving account is eligible for tax deduction under Section 80TTA up to Rs 10,000 and even if the amount of interest on saving bank account is less than Rs 10,000 you are still required to first include it in your income and then claim deduction u/s 80 TTA.

Similarly though the banks deduct tax on fixed deposit interest but the TDS rate and the tax rate applicable in your case may be different, you need to include it in your income and discharge the balance tax liability or claim refund as the case may be.

Though the tax is deducted at 10 percent but the rate applicable to you may be 5, 20 or 30 percent. It is your liability to discharge the differential tax liability. Even in case you are entitled to a refund, you are still required to include the fixed deposit interest in your income.

Even for fixed deposits which have been renewed on maturity during the year and thus are not reflected in your bank account, you may omit to show the interest on such renewed FD, which is not correct. You should also include the accrued income on NSC purchased in the earlier years as well as accrued interest on fixed deposits of longer tenure.

Capital gains in respect of units of mutual funds switched during the year:

Any switching of units from one scheme to another scheme of the same fund house does not get reflected in your bank statement and thus any profit or loss made on such switching may get unreported.

The switching may happen due to poor performance of a scheme or due to Systematic Transfer Plan (STP) mandate given to the fund house. The profit/loss on switching of units may be short-term or long-term entailing different tax treatment. Even tax treatment for debt fund is different from equity oriented funds.

Ensure to disclose profits/loss on such switching transaction to your chartered accountant for proper and correct treatment.

Notional rental for deemed to have been let out property:

For a self-occupied house the taxable income is taken at nil. However this option is available for one house property only so where you own and occupy more than one house for your self-occupation or your family members, you have to treat any one of such houses as self-occupied and the other/s are then treated as deemed to have been let out.

Such a situation may also arise where you have a house property in your native place reserved for your occupation as and when you visit your native place and thus is deemed to be self-occupied by you in addition to the property owned and used for your residence at your work place. In respect of such deemed to have been let out house, you need to offer the notional rental income for tax.

Please note notional rent is not the same as nominal rent. The income to be offered for tax is the rent which is normally expected to be received for such property if let out in the open market.

Income of minor child:

Income earned by a minor child is to be clubbed with the income of the parent whose income is higher. Parents normally invest money belonging to their minor child received as gift on several occasions. The income or interest earned by the minor on these investments is required to be included in the income of the parent.

As income up to Rs 1,500 per child is exempt per year, the amount in excess of Rs 1,500 for each of the minor child is to be clubbed in the income of parents. The income received by minor due to his own skills or efforts is not required to be included.

Gifts or other benefits received by you in case you are carrying on business:

This is the age of promotion of business by discounts and gifts not only to the customer but also to the businessman. So a few of you might have been benefited by tangible and valuable gifts from the business associates. Some of you must have enjoyed foreign tours as incentives. Since such items are not reflected in your bank accounts and books of accounts and thus go unreported. Please disclose this to your chartered accountant to be fully compliant.

Disclaimer: The views and investment tips expressed by investment experts are their own and not that of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

Source: Moneycontrol.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Amid midcap carnage, these three companies posted stellar earnings in Q1

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

In the last couple of weeks, amid weakness in the midcap space, stellar earnings from some relatively unheard names may have missed investors’ attention. The Nifty Midcap and Smallcap indices plunged 15 percent and 23 percent, respectively, this year as against a 4 percent rise in the Nifty.

It is our endeavour to spot companies that should be on the radar of investors. However, investors need to be mindful of volatility in the midcap space and should capitalise on the weakness.

GM Breweries, which manufactures and markets alcoholic beverages such as country liquor and Indian made foreign liquor, reported a 10 percent year-on-year growth in topline for Q1 FY19. It reported revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) of Rs 404 crore and Rs 34 crore in Q1, respectively. EBITDA jumped 119 percent as margin expanded on account of soft raw material prices. Prices of extra neutral alcohol/rectified spirit, the key raw material for GM Breweries which constitutes around 10-11 percent of total revenue, declined more than 50 percent YoY.

Profit after tax also came in higher at Rs 22 crore compared to Rs 10 crore in the corresponding quarter of last year. At the current market price of Rs 709 per share, the stock trades at trailing 12-months price-to-earnings multiple of 15 which implies a steep discount to other listed companies in this space.

CCL Products (CCL), India’s largest manufacturer and exporter of instant coffee, reported a consolidated revenue of Rs 294 crore, a growth of 20 percent YoY. Net profit rose 46 percent to Rs 39 crore. Growth in topline was mainly driven by higher volumes but was partially offset by weakness in green coffee prices that declined 15-20 percent. Growth was driven by strong performance from Vietnam operations. Sales from its Vietnam plant jumped 10-12 percent in the quarter gone by, while consolidated operating profit growth was aided by richer product mix.

As India capacity is working at nearly full utilisation, CCL is looking to grow its customer base in Vietnam after commissioning of agglomeration capacity in the region. Vietnam’s capacity of 10,000 MT was running at 70 percent utilisation in FY18 and provides significant scope for revenue and profitability growth. Back home, CCL’s new 5,000 MT freeze-dried coffee plant is being set-up at Chittoor and is expected to commence operations by H2 FY19.

Agricultural Trade Office in Sao Paulo forecasts Brazil’s coffee production for FY19 at 60.2 million 60-kg bags, an increase of 9.3 million bags YoY. The prices of green coffee are expected to remain under pressure as Brazil accounts for 35-40 percent of global coffee supply. Accordingly, the management has given a conservative revenue growth guidance of 0-10 percent for the current fiscal. It expects to garner around Rs 100 crore revenue (versus Rs 46 crore in FY18, around 5 percent of total revenue) from business-to-consumer (B2C) segment in the current fiscal. The company also expects a slight margin improvement over the previous year as CCL works with its customers on a cost plus basis. The management has indicated net profit growth guidance of 10-20 percent in the current financial year, excluding the new plant capacity. The new Chittoor plant is a high margin business and will further aid profitability as volumes pick up.

Amal is engaged in manufacturing and marketing of bulk chemicals such as sulphuric acid and oleum and downstream products such as sulphur dioxide and sulphur trioxide. These bulk chemicals find applications in multiple industries such as dyes, fertilisers, personal care, petrochemical, pharmaceutical and textile. This Gujarat-based chemical company is promoted by the NSE-listed chemical conglomerate Atul and has a manufacturing plant located at Ankleshwar with an installed capacity of 140 MT per day.

The company reported a healthy jump in topline to Rs 9.3 crore. Operating profit more than doubled to Rs 4.6 crore as compared to Rs 2 crore during the first quarter of last year. Expansion in operating margin aided growth in bottomline, which moved higher to Rs 3 crore. Growth in topline and bottomline has been aided by a sharp jump in realisations. Prices of sulphuric acid has increased to Rs 10,000 per tonne from Rs 4,000 per tonne after the shutdown of Vedanta’s copper smelter – Sterlite Copper – in Thoothukudi. Sterlite had a 15 percent share of the sulphuric acid market in India.

Disclaimer: The views and investment tips expressed by investment experts are their own and not that of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

Source: Moneycontrol.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

FY18 annual report analyses: Brokers expect these 11 stocks to give 14-100% return

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Indian markets, represented by the Sensex and Nifty, have scaled fresh record highs even as the broader market, comprising of mid and small caps, are witnessing a correction.

The mid and small cap indices have plunged nearly 15 percent and 18 percent this year, after rising 48 percent and 60 percent respectively last year.

The carnage in midcap and smallcap stocks is a buying opportunity in select stocks where earnings growth is fair and the outlook is strong, Mahesh Patil, co-chief investment officer and fund manager, Aditya Birla Sun Life AMC told CNBC-TV18.

Rajeev Srivastava, head-retail broking, Reliance Securities, said that the ongoing Q1 earnings season is unlikely to disappoint but said valuations aren’t cheap. “Therefore, one needs to be careful while treading in the current market. Getting carried away becomes easy when one sees stocks especially in the mid and small cap space.”

It would be advisable to stick to fundamentals and invest in stocks of quality companies which are generating positive cash flows rather than getting trapped in penny stocks, he added.

Siddharth Sedani of Anand Rathi Shares and Stock Brokers said results will be closely watched – for support in mid & small cap stocks. “Along with this, good monsoon (widespread and adequate rainfall) will be crucial in containing inflation, boosting earnings growth and shoring up rural demand.”

Here is the list of 11 stocks that can give 14 to 100 percent returns:

Brokerage: Dolat Capital

NCC: Buy | Target: 164 | Return: 100%

NCC standalone received historic high order inflow of Rs 24,700 crore in FY18 which is more than 3x received in FY16 (Rs 7,400 crore) / FY17 (Rs 7,700 crore). This lead to highest ever standalone order book of Rs 29,990 crore providing robust 4x FY18 revenue visibility. around 92 percent of FY18 order inflow is in its core segments (‘buildings & roads’ and ‘water’) and compression of execution timeline to 12-24 months will drive growth.

NCC plans to shut down its unviable international operations in the next 6-12 months which will strengthen the balance sheet and any monetization of real estate will aid deleveraging.

We expect NCC to witness robust revenue growth supported by highest ever order inflow and order book having shorter execution timeline, decent EBITDA margin, healthy profit growth, improvement in working capital limiting debt and interest cost, declining leverage over FY18-20E. It continues to focus on core construction business and deleveraging balance sheet, particularly through the sale of land.

Thus, we maintain Buy on the stock with SOTP (sum-of-the-part) based target price of Rs 164.

Balkrishna Industries: Buy | Target: Rs 1,356 | Return: 18%

Balkrishna Industries has rapidly progressed as a global player in the off-highway tyres (OHT) segment and with lot of headroom available on distribution front, we expect BKT to grow at more than double the industry growth rate.

Margins will further improve due to backward integration and with no major capex in coming 2-3 years, return ratios will expand.

Despite the outperformance in the stock price, we believe that BKT is a structural bet and should be accumulated at all dips. Recommend Accumulate with a target price of Rs 1,356.

Persistent Systems: Buy | Target: Rs 1,200 | Return: 44%

We expect Persistent Systems to report revenue growth of 13 percent USD terms in FY19 as compared to 9.7 percent in FY18 which is higher than peers and industry averages helped better revenue growth in the Enterprise vertical.

Persistent expects double digit growth in IBM Watson which will drive better growth in Alliance segment. We expect margin improvement led by lower R&D and better growth in enterprise.

The company is already trading at inexpensive valuation of 14x/11.7x based on FY19E/FY20E earnings estimate.

We believe consistent revenue growth coupled with improvement in margin may trigger upgrades in the near term. We maintain Buy rating with target price of Rs 1,200 based on 15.5x one year forward PER.

Dixon Technologies: Buy | Target: Rs 3,430 | Return: 20%

Company added new customers in last year in all its verticals, with big brands like Samsung, Flipkart, Crompton, Lloyds etc. as its customer.

Dixon is confident about expanding margins. It will also be helped by more backward integration. It continues to talk to many big brands in TVs and mobile and expects to add more clients in FY19.

Company increased its cash to Rs 44.1 crore from Rs 15.4 crore following its IPO. Cash flow from operations was higher at Rs 117.3 crore compared to Rs 82.7 crore in last year. Company did major capex of Rs 71.2 crore for setting up its plant at Tirupati. Capex in FY17 was Rs 26.1 crore. Further capex of Rs 40 crore is expected to be incurred in FY19 for Tirupati facility expansion. Company repaid debt of Rs 22 crore during the year.

We expect TV and washing machine volumes to drive growth for Dixon in FY19. We have an Accumulate rating for the stock with a target price of Rs 3,430, valuing stock at 33x for FY20 EPS.

KEC International: Buy | Target: Rs 390 | Return: 19%

FY18 was a strong year despite facing challenges regarding GST implementation in first half of FY18 with revenue at Rs 10,090 crore grew by 15.3 percent YoY as EBIDTA grew by 23 percent to around Rs 1,000 crore and PAT grew by 1.5x to Rs 460 crore. Overall order book was up 37 percent given the strong capex environment in power transmission and rail electrification projects.

Management has guided for a 15 percent revenue growth in FY19, which we believe is doable.

The management expects to double its revenues from railway segment with margins moving closer to T&D. There is focus on reducing interest cost and debt along with better working capital management.

We see 16 percent revenue CAGR over FY18-20E. We maintain Accumulate rating with target price Rs 390 based on target multiple of 15xFY20E.

ITC: Buy | Target: Rs 310 | Return: 16%

Despite a sharp slowdown in the economy, steep increase in tax incidence on cigarettes, subdued demand conditions in the FMCG industry, shortage of tobacco crop in Andhra Pradesh and lack of trading opportunities in the Agri Business, ITC witnessed satisfactory performance in FY18.

While net sales grew by just over 1 percent, bottomline grew by 6 percent during the year.

Cigarette volume growth is expected to amplify on the favourable base of past one year (around 18 percent volume decline in past three years).

Packaged food business, which accounts for 76 percent of ITC’s non-cigarette FMCG business is expected to drive growth.

Moreover, normal monsoon forecast and increasing disposable income, we anticipate consumer shift from bidi to cigarette as well as to branded FMCG products which is likely to improve company’s profitability. Maintain Accumulate.

Havells India: Buy | Target: Rs 640 | Return: 14%

In the Annual Report, Havells has discussed at length the impact of automation and software solutions across its entire value chain. It has also outlined some of the future initiatives it has planned to use IoT, Big data etc.

We are very enthused about the way the company has utilised and continues to use IT as a major business enabler.

From a commercial angle, this has helped Havells in saving significant manpower cost incurred previously to manage the loyalty programmes and reduce retail last mile workforce by 50 percent.

FY18 saw business stabilizing post GST and improved after rates for most of the durables came down to 18 percent from 28 percent in November 2017.Havells is seeing a shift of unorganised to organised.

Channel expansion is the Havells key strategic initiative involves greater engagement with the retailers, exclusive brand store online platform with continuity of relationships with its distributor and direct dealers.

We continue to like Havells in the consumer electricals space. Structural growth story should continue, and we maintain Buy rating.

Brokerage: Stewart & Mackertich Wealth Management

Everest Industries: Buy | Target: Rs 566 | Return: 45%

Everest Industries (EIL) is the pioneer of fiber cement products in India. In the pre-engineered steel buildings (PEB) segment, the company is seating with the order book of 32,000 tonnes in value term which is Rs 300 crore.

Positive cash flows due to improved receivable and working capital management have resulted in the ability to minimise borrowings. Debt Equity ratio improved from 0.27 as at FY17 to 0.13 as at FY18 while the interest coverage ratio improved from 1.3 to 6.9 during the year.

We reduced target price to Rs 566 from Rs 669 by using DCF methods, keeping in mind the robust demand for building products, and their strong participation in ‘Bharatmala Project’, & ‘Housing for all by 2022’, however, subdued PEB segment due to volatile steel price could erode the blended margin.

We believe in the coming year they could ramp up their steel building segment margin which will push their bottom line.

Thermax: Buy | Target: Rs 1,420 | Return: 38%

Thermax Limited provides a range of engineering solutions to the energy, cement, oil & gas, chemical, metal and environment sectors.

Company’s key strategy has been to protect its business from cyclicality of the India’s capital goods sector. Through selective internationalisation of the product businesses and strategic expansion of its product manufacturing footprint, the company has progressed well in this direction.

With the help of its new capacities, company is well positioned to benefit from domestic and global demand recovery and expected to generate positive cash flow in future.

Its presence in areas like clean and green technology gives traction for the long term outlook. With the significant capex coming over, the company is looking at significant growth in its businesses along with improving profitability.

Thermax Group posted a significantly higher order booking for FY2017-18 at Rs 6,380 crore, a 45.2 percent growth over the previous fiscal. It won the highest ever export contract of $157 million from a leading African conglomerate for its refinery project coming up in Nigeria.

Brokerage: Motilal Oswal

Emami: Buy | Target: Rs 690 | Return: 25%

Emami (HMN) HMN is transforming itself to stay ahead of industry with a continuing high focus on innovation and advertisements. Increased emphasis on data analytics – an area where it had lagged peers previously – is a welcome move. ‘Naya Emami’ seems to be the rallying cry.

The stock has been an underperformer over the past two years, which is not surprising, as absolute PAT declined by 4 percent over this period compared to 18 percent CAGR over the preceding five years. Earnings recovery will also be gradual, as HMN is likely to witness the impact of weak summer sales on its talcum powder and cooling oils businesses in 1QFY19.

Nevertheless, we remain convinced about HMN’s strong medium- to long-term revenue and earnings growth prospects as ongoing distribution expansion, continued high pace of innovation, problem-solving nature of its products, high advertisements, and importantly a normalised environment (unlike FY17 and FY18) lead to resumption of strong revenue growth both in the core portfolio and new launches.

At 29.5x FY20E EPS, HMN is inexpensive relative to peers, particularly given its healthy long-term earnings growth opportunity and mid-30s return ratios. Our target price is Rs 690. Maintain Buy.

Brokerage: Reliance Securities

Shree Cement: Buy | Target: Rs 21,500 | Return: 33%

While there has been an increase in debt balance led by new capacities, Debt/Equity at 0.1x and healthy operating cash flow (OCF) generation (Rs 1,880 crore) continue to remain impressive.

Further, low contingent liabilities and continued thrust on growth bode well. We expect its premium multiple to sustain, which can be supported by thin liquidity and meagre non-institutional holdings.

We have a Buy rating on the stock with a target price of Rs 21,500.

Disclaimer: The views and investment tips expressed by investment experts are their own and not that of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

Source: Moneycontrol.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Sebi to soon frame guidelines to allow mutual funds in commodity derivatives

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

To increase the institutional participation in the commodity segment, Securities and Exchange Board of India (Sebi) on Thursday said, it will soon finalise the guidelines to allow mutual funds (MFs) to invest in commodity derivatives segment.

The markets regulator said it will also frame warehousing norms for non-agriculture commodities and will consider allowing ‘indices’ once its robustness is established by the bourses.

Addressing an Assocham event here, head of Commodity Derivatives Market Regulation Department (CDMRD) in Sebi, P K Bindlish said the commodity derivatives market is still faced with challenges even though the trading volumes have risen up to Rs 100 lakh crore.

To increase participation, Sebi is now moving towards allowing mutual funds. “We are working on finalising the guidelines at the earliest,” he said.

On allowing more products, he said ‘indices’ will be considered after knowing its robustness.

The ‘option’ trading in commodity derivatives market has already been allowed with MCX launching it in five commodities and NCDEX in one commodity. “More commodities will be considered after seeing their success,” he said.

To strengthen warehousing, the regulator will soon come out with warehousing norms for non-agri commodities also, he said. “Warehousing Development and Regulatory Authority (WDRA) has done a good job for agri commodities. But for non-agri, there is no regulation and guidelines from WDRA. We will come out with norms soon,” he added.

Emphasising on the need to have a strong settlement mechanism, the Sebi official further said the exchanges have been asked to put in place their trading corporation for settlement purpose from October.

“At present, the settlement is done by exchanges themselves. World over, it is done by trading corporation. I am happy to share that already one of the exchanges has made a proposal for a trading corporation and I think they will be getting soon. The other exchanges are in the process,” he said. On integration of commodity and equity markets, Shashank Saksena, adviser (financial markets) in the finance ministry, said: “We have integrated at the level of regulator and market institutions. We are still far away at the level of participants.” There is a need to work together to increase the number of participants. That’s how the depth of the market and liquidity will improve, he said.

The exchanges have been allowed to integrate commodity and equity derivatives by October 1 in order to boost participation, hedging and better price realisation.

Since the basic function of the commodity derivatives market is to provide price signal and hedging efficiency, the official said there is an empirical evidence that as far as price signal is concerned, markets do provide signal to spot market. There is no hedging effectiveness due to lack of integration between spot and futures market, he said, adding that a committee has submitted a report in this regard. “The report of the committee is out. Now, we have to work towards creating policy framework to remove impediments and complete the integration of the two markets,” he added.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

How to be smart about stock market investments

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Often these days I am asked by a lot of people as to why are portfolio returns not happening, why is our portfolio not moving up, why is it that we are being so conservative, why are we not investing and so on and so forth.

The other day I was in a friendly debate with Vikram Mehra (name changed) and his family and we were talking about why we have barely invested about 30-40 percent in stock market in the current situation and why we have not invested the balance money and when are we intending to actually invest it. This actually happens many a times every few years.

So I explained that we have little bit of process or a system by which we control how much money goes into stock market at a point in time and how much remains outside stock market so that money which is outside stock market earns a mediocre and safe rate of return versus the money which is in stock market is obviously subject to volatility which may be able to bring in higher returns in some months, perhaps no returns in other months and perhaps make a little bit of loss as well in some months. So we are just trying to balance both the balls in the air so that in some sense portfolio is taking care of itself, it is insulated and is protected against adversities or any other damage. That brought a smile on Vikram’s face. However, I could see it was not from his heart.

So I continued, that I am going to be a little technical now … I said, “Now you see there is an indicator, a ratio which tells us that whether the stock market is expensive or cheap. This indicator has been it has been in the high zone for very long time”. I added… “From a practical standpoint the market have been expensive for a long time. The knowledge of last 30 years says do not be too greedy and history will repeat itself, however, it seems for the moment history is at frustrating us. It is not repeating itself. Something is not correct. We do not know what is going to come and rock over world at what point of time.” He nodded in agreement this time! I was glad.

Now I will tell you why there is a problem. A lot of people do not know this and therefore fail with the stock markets. When market is moving upwards everyone is interested as there is easy & quick money, no bad news so people keep pumping in & that is normally the end of that phase. Then people lose money. People like us have seen this too many time and sometimes know too much. We share this with you and with your consent protect your money. He smiled. Truly from the bottom of his heart this time.

In conclusion I said, sometimes markets do not respond scientifically, because somebody is trying to sell (thinking markets may be expensive) and somebody but on the other side feel no news is a good news and therefore keep investing so things get netted off. Then there is SIP money that keeps coming in and same time hot money (short term trader’s money) is moving out so again a netting off effect. I am not by anyway saying SIP is a bad idea. It is a fantastic idea and I keep saying that SIP is a 8-15 year or more type of investment. So keep going with it. Never stop it. Just explaining how things get netted off. For lumpsum money we use the same principle and use the STP facility.

So as readers you can see how markets tend to move, sometimes they are expensive and we should avoid being aggressive and sometimes there will come a time you should put in every little penny you have in the stock market. It is a sweet problem to have sometimes and a rather frustrating one at other times. Never go over the top, never go away completely and in general invest and cherish.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a certified financial planner, wealth manager and financial freedom coach.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Spot gold near 6-month low, should one buy now?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The yellow metal is under pressure, tumbling more than 10 percent from its recent peak of $1366 an ounce in the overseas market. Gold prices have been witnessing wide swings since the start of this year due to dollar volatility and uncertain global geopolitical conditions.

Gold had showcased an unprecedented run-up from 2004 to 2011, where prices of gold went up from $400 to $1,900 an ounce. Since peaking in 2011-12, gold is now trading down by 34 percent.

Gold’s appeal as a safe haven has dimmed recently with the ongoing global geopolitical tensions having little impact on prices. The yellow metal stayed weak even after reports of US sanctions on Iran, which is expected to hit oil supply and raise inflation. Moreover, gold responded cautiously towards escalating worries over trade stand-off between the US and its allies where most global financial markets and commodities tumbled down.

The rise in interest rates is alarming for non-interest yielding assets like gold as well. The US Fed raised the borrowing rate twice this year and is on course to hike it further, backed by the strong labour market and rising inflation. It is expected that US Central bank would lift the rates twice this year.

In the meantime, US dollar is now attracting haven flows. A strong dollar is prompting traders to stay away from taking big bets on gold. A firm dollar makes gold expensive for holders of other currencies as gold is priced in dollar. After the US administration imposing a tariff on imports to the US, the dollar index strengthened and recently went up to its highest level since June 2017.

The bearish stance in gold was also accentuated by demand concerns from consumers like China and India, which form a huge market for the commodity. Gold imports by India have been declining for the last several months. In June, Indian gold imports waned to 44 tonnes, a straight sixth-month decline. Gold purchases have dropped about 25 percent year on year due to weak physical demand.

Though weakness sustained in the overseas market, domestic gold rates are at peak levels owing to weak local currency and premium charged by local traders. In the domestic market, prices held well above Rs 30,000 a gram due to weak INR. Indian prices have been on an upside trajectory since the start of the year. Prices recovered from a low of Rs 28,055 to Rs 31,650 per ten gram during the initial six months of the year.

Looking ahead, the weak sentiments in prices is likely to continue unless there are any changes in key fundamentals. Nevertheless, prices are likely to display a mid-term turnaround. Policies taken by the US. Federal Reserve and its repercussion on US currency, geopolitical factors like US China trade spat, global oil prices, performances of the stock market and physical demand from China and India may sway the trend.

On the domestic front, the government’s policy decisions, monsoon, rural income and currency fluctuations would be the trend-setter.

With the current market fundamentals being unconducive for gold, a wait and watch approach may make sense for larger investments. Still, buying small quantities at periodic intervals with a view of holding for a longer period would be a better strategy.

Disclaimer: The views and investment tips expressed by investment experts are their own and not that of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

Source: Moneycontrol.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Sensex hits fresh record high but here’s why your portfolio is still bleeding

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Bulls have firmly taken over Dalal Street, with the Sensex hitting a fresh record high today. But a thought may have crossed many investors’ mind: why is my portfolio still in red?

Let’s break that down. A large part of what is happening in the benchmark indices is led by few largecaps, which have a dominant position in terms of weightage. On the other hand, small & midcaps stocks are still under pressure, and are down in double digits so far in the year 2018.

To put things into perspective, the S&P BSE Sensex has risen nearly 8 percent in 2018. This compares to a 14 percent fall in the S&P BSE Midcap index and a 17 percent drop in the S&P BSE Smallcap index during the same period.

“Currently, quality is getting too high a premium due to recent episodes like Vakrangee, Manpasand Beverages etc. It is for this reason that some largecap companies are getting costlier and driving frontline indices higher. This large divergence will not remain and markets will soon start converging as memories of market participants fade,” Jimeet Modi, founder & chief executive officer at Samco Securities & StockNote told Moneycontrol.

The small and midcap space, which dominated the market in the previous calendar year came under intense selling pressure in 2018. This was thanks to the reclassification of MF schemes, SEBI’s ASM initiative or additional surveillance measures, and the resignation of auditors.

The performance across mid and small cap stocks for 2-3 years prior to the correction that started in January 2018 was stunning, primarily on account of improvement in earnings and expansion of P/E multiples. But the momentum soon fizzled out after the Budget.

Given the fact that mid & smallcap were top performers during the previous two-three years, the percentage of stocks (mid & smallcaps) in investors’ portfolio also increased over time, which is one of the primary factors why portfolios are suffering.

“The Sensex touched record highs but investors’ portfolios are still in red for the year 2018 as BSE Mid Cap stocks have faced a correction in the last few months though largecaps stocks are almost recovered from their lower levels. Investors having midcap stocks in their portfolio are still suffering,” Astha Jain of Hem Securities Ltd told Moneycontrol.

“We expect the upward rally in the market will continue for some time but factors like increase in crude oil prices, poor monsoon, rising global interest rates and further depreciation in rupee from current levels can prove to be likely headwinds for Indian stock markets,” she said.

In the year 2018, the Indian market has proved to be a mixed bag for Indian investors. While benchmark indices are trading at fresh peak, broader market is trading near a yearly trough. The divergent trend has left many investors and traders clueless about taking positions in this bipolar environment.

“Mid and smallcaps had risen significantly over the past 2 years without even a 15-20% correction, which is the usual trend in equities every year barring CY2017. This had resulted in mid/small cap valuations rising to an almost 28% premium versus largecaps,” Prabhudas Lilladher said in a note.

“Some course correction was due, which is happening currently. This makes markets healthy from a long-term perspective. The funnel of performing stocks has got narrower over the past 2-3 months resulting in severe erosion in most portfolios,” it said.

Historically, market capitalization has an inverse relationship with both risk and return. Companies with larger market caps tend to offer lower returns, on average, than mid/small-cap stocks.

The note from Prabhudas points out that largecaps tend to be less volatile during rough markets as investors fly to quality and become more risk-averse.

This is precisely the opportunity for buying into mid/small-cap space as a result of attractive valuations vs their long-term historical valuation multiples.

Disclaimer: The views and investment tips expressed by investment experts are their own and not that of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

Source: Moneycontrol.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Common mistakes to avoid while filing your Income Tax Returns

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

As tax filing deadline inches closer, you may be rushing to collate all your documents to file your returns. But sometimes despite being very careful, we can commit mistakes that can land us in trouble with the tax department.

Amarpal Chadha, tax partner & India Mobility leader, EY India said that it is essential to re-check your ITR form before submission to avoid any incorrect reporting or making your return defective. “One could do a quick check on a few points like – Have you used the right ITR form, Have you captured all sources of income, for example – did you make a profit on bitcoins, have you done a comparison with your last year return, have you looked at your Form 26AS or have you made necessary disclosure of assets, as applicable,” he added further.

It is thus, important to keep in mind the points mentioned to avoid committing mistakes while filing ITR.  Adhil Shetty, chief executive officer, Bankbazaar told Moneycontrol that assesse should avoid these seven mistakes while filing their income tax returns.

• With the CBDT notifying seven new forms for the assessment year 2018-19, it is important to identify which form is the right one for you and choose it to file your returns. In case you commit the mistake of filing the wrong form, your ITR will be considered defective.
• Do not commit the mistake of ignoring the rules of taxation. For example, if you have multiple properties, only one will be considered self-occupied, while the rest of the properties will be considered as let out or rented and will be tax accordingly.
• Do not commit the mistakes of missing income from any source while filing your ITR. You should include salary, interest earned from Savings Bank Account, Fixed Deposit, etc. In case you miss any detail, you may get a notice from the tax department seeking an explanation.
• Not updating personal details is another mistake that should be avoided. A change in address and mobile number during a financial year should be mentioned while filing returns.
• Any mismatch in details of Form 16 and Form 26AS can also land you in trouble. Do check if the tax deduction as mentioned in both the forms are same and there are no incorrect figures.
• Not being careful about mentioning correct deductions is also a mistake that should be avoided. Do check if you have mentioned each deduction under correct heads.
• Delaying the process of tax filing should be avoided any cost. From this assessment year, you will have to pay a penalty of Rs.5000 if you file your returns after the due date and by December 31. If you file it after December 31, a fine of Rs 10000 will be levied.

By keeping these points in mind, you can ensure a hassle-free tax filing for yourself.

Disclaimer: The views and investment tips expressed by investment experts are their own and not that of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

Source: Moneycontrol.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Five mistakes to avoid while rebalancing your portfolio

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Rebalancing your portfolio is necessitated by a variety of factors. Your goals may have been achieved and may call for rebalancing. You may need to maintain more by way of liquidity ahead of milestones and hence rebalancing may be required. There may be a major shift in the macros calling for a rebalancing in your portfolio.

A change in your own financial situation may also call for rebalancing your portfolio. But more often than not, rebalancing is entirely rule based. You start off with certain allocations for various asset classes. Either your equity component or debt component may go beyond the defined level. That will call for rebalancing.

When you rebalance your portfolio there are a lot of implications in terms of costs, taxes, impact on goals etc.

Here are five key mistakes you must avoid when you rebalance your portfolio:

1. When you rebalance, focus on the current winners and potential losers

When we rebalance the portfolio, the focus tends to be more on the losers or the potential winners. That is a mistake. Your focus in rebalancing should be actually on current winners and potential losers. Why is that so? Your current winners are the assets that may actually require rebalancing. Also when you look at the future, the focus must be on potential losers. That is where the risk comes from. Rebalancing is an outcome of risk. Your risk stems from current winners and from potential losers. When you rebalance your portfolio that is what you need to focus on.

2. Don’t drive your rebalancing by personal likes and dislikes

Rebalancing is a scientific exercise and must be dealt with as such. When you rebalance your portfolio, a rule based approach always works best. A discretionary approach to rebalancing not only becomes too open ended but it also leaves too much to the discretion of an individual. For example, you may have a view that rates are going down and hence may want to shift your debt portfolio more in favour of long dated funds. Alternatively, you may have a view that equities are overpriced and hence may want to move more into low beta equities. Both these are views are subject to certain assumptions. Rebalancing is too delicate and important to be left to assumptions. It is best to make rebalancing rule-driven.

3. It is always better to seek expert support for rebalancing

Self driven planning and robo driven planning is good but it is always better to seek expert advice when it comes to rebalancing. It is after all about your long term goals. What is the value-add that the advisor can provide. He can provide you a holistic picture and fine tune your decision. You can share further data with the advisor and he can add a personal touch to the entire rebalancing process. Experts can also caution you on what to do and what not to do when you rebalance your portfolio.

4. There is a tax angle to rebalancing and you must factor that in

Every rebalancing has transaction implications and entails transaction costs. But above all it has tax implications. For example if you are exiting equity funds within a year it is STCG and if you are exiting beyond one year then it is LTCG. Effective the latest Union Budget, even equity funds have to pay LTCG tax at 10 percent on profits in excess of Rs.1 lakh each year. You need to factor in these costs when you rebalance your portfolio. The tax costs can be higher in case you are moving out of debt funds. If you are selling out before 3 years then it is STCG and is taxed at your peak rate of tax. Even if you have held debt funds for more than 3 years, you still have to pay tax at 20 percent after considering the benefit of indexation. These costs can add up to quite a bit and change the economics of your portfolio rebalancing decision.

5. Don’t rebalance without your eventual financial goal in mind

This is one of the most likely mistakes when you rebalance. Your rebalancing should be driven by your eventual financial goals and also by your milestones. For example when your milestones are approaching it is better to stay in liquid funds. Don’t rebalance these funds as liquidity is paramount when milestones are approaching. Also when you are looking to grow your money over the long term, remember that any shift out of equities can seriously impair your long term wealth creation.

Rebalancing is a necessary decision pertaining to our portfolios. You just need to ensure that it is in sync with your long term goals and the costs do not outweigh the benefits. That is the key!

Disclaimer: The views and investment tips expressed by investment experts are their own and not that of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

Source: Moneycontrol.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow