Tag: Income Tax

Looking for safe havens in volatile markets? 10 stocks with high dividend yield

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

Listen to the Article (6 Minutes)

If you are looking to play safe in equity markets and want to avoid taking risks, don’t miss out on stocks that offer dividend on a regular basis. They might turn out to be multibaggers but investors will be able to generate a steady flow of risk free income from such stocks.

Dividends are distributed by companies out of their profit after tax. A dividend payout ratio indicates how much a company pays out in terms of dividends compared to its share price.

History suggests that dividend paying stocks are less volatile in times of uncertainty or steep corrections. While selecting such stocks investors should look for stability in the underlying business of the company, along with its ability to generate cash flows to pay dividend.

According to a report by IDBI Capital, top 10 stocks with high dividend yield and double-digit return on equity (RoE) include: Rural Electrification Corporation, Coal India, Accelya Kale Solutions, Castrol India, Procter & Gamble Hygiene & Health Care, Infosys, InterGlobe Aviation, Bajaj Corp, Hindustan Zinc and Hero MotoCorp etc. among others.

“At a fundamental level, the return of capital to shareholders by way of dividends generally tends to be sticky and less volatile compared to fluctuation in earnings. The idea is to declare dividends, which can be maintained even in a downcycle,” Harish Krishnan, fund manager-equity, Kotak Mutual Fund, said.

“Ultimate wealth creation comes from tracking the fundamentals of companies, of which dividend track record is an important parameter. One needs to see whether the management rewards shareholder with near term dividends or deploys capital in more value creating opportunities for the future,” he said.

Should investors buy stocks that only offers dividends?

Experts feel investors should invest in growth stocks and not put too much emphasis on dividend payout. Depending on the risk profile of investors, they suggest that dividend paying stocks could constitute 20-60% of one’s portfolio. However, they were quick to add that investors should avoid depending too much on dividend paying stocks for long term value creation. “Despite helping in curbing volatility, it might not come in handy when it comes to value creation.”

Atish Matlawala of SSJ Finance cautions that not all stocks with a high dividend yield are attractive. “Investors should evaluate the company’s future prospects before investing. If the fall in prices is due to challenging future prospects, then a high dividend payout may not necessarily sustain going forward.”

He advises investors to check if the company has a generous payout policy or if it is a one-time event. “If future prospects of the company are bright and it has generous payout policy, then investing in such companies will protect the downside and generate superior returns when market sentiments improve.”

According to Matlawala, if the only criteria for acquiring a stock is its dividend yield, then one should buy only if the yield is more than 3 percent or half of the prevailing fixed deposit rates.

Dividend and stock prices

When a company increases its dividend yield, the company’s price-to-earnings reacts negatively. This is because higher dividends are seen as a signal that there are not too many growth opportunities in the company.

“Dividends are cash payouts and to that extent they reduce the value of a company. When we talk of value, we refer to the networth of the company and its market value. Since shareholders pay for growth, a higher dividend payout does not help valuations. That explains why oil marketing companies quote at low valuations despite generous dividend payouts,” Jaikishan Parmar, Senior Research Analyst at Angel Broking, said.

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

Filing income tax returns? You need to disclose these assets to the taxman

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

Listen to the Article (6 Minutes)

In order to detect cases of disproportionate assets owned by a taxpayer as compared to his known sources of income, the Income Tax Department wants taxpayer with income over Rs 50 lakh to report various assets and liabilities in income tax return (ITR). The requirement was implemented in 2016 and has since been modified from time to time. Let us discuss the latest requirements in detail.

To whom this requirement is applicable:

It is not that each and every tax payer has to report details of his assets and liabilities. The requirement to report the assets and liabilities is only applicable in case your taxable income exceeds Rs 50 lakh for the year. So, people who are eligible to file ITR 1 (Sahaj) do not have to furnish these details. In case you are engaged in a business and thus furnishing your balance sheet in the ITR, you are required to furnish only details of assets which are not already disclosed in the balance sheet.

What assets are required to be reported:

The format for disclosure of assets and liabilities is the same for all ITRs, except form ITR 3 and 4 wherein you are required to submit details of interest in the firm in which you are a partner. You are required to furnish details of your assets and liabilities as on March 31 under the AL schedule. So, any asset disposed of during the year will not form part of the schedule.

Disclosure for immovable properties:

You have to disclose details of immovable properties i.e. land and building owned by you in schedule AL. While submitting the details of immovable properties, you have to mention the description, cost and address of the property. Please note that besides disclosing assets purchased by you, you also have to disclose details of any immovable asset received as gift or inherited by you. In case you inherit a house in your ancestral village, you have to furnish the details here. Even if you are a joint owner of a property, you still have to furnish the details in cases where you have inherited a house jointly with your relatives or bought any property jointly.

While disclosing the cost in such cases you may face some problems as you may not have the details at which the person, from whom you had inherited or received the same as gift, had purchased it for. In order to comply with the requirement and as a safe measure you can indicate the market value as on April 1 as this is acceptable as cost for capital gains calculation purposes. In case any money is borrowed for immovable property or is borrowed on security of the asset, the same also needs to be disclosed in the schedule.

Disclosure of movable assets:

Under movable properties, the assets to be disclosed include financial assets like cash in hand, bank balances, shares and securities, loans and advances, and other movable asset like jewellery, bullion, vehicles, yachts, boats and aircraft, work of art etc as on March 31. Under jewellery, you are required to disclose details of jewellery but also bullion held in raw form. In case you own any gold bar or coins, the cost of the same needs to be disclosed in the schedule.

In case of assets inherited, the same principle as discussed above should be used. While disclosing the details of bank balances, one will have to disclose details of your loan account in case the same has a positive balance. In case of shares and securities, in cases where you have received these by way of gift or as inheritance and you do not know the cost, the market price as on April 1, 2001 may be furnished as a safeguard.

Traditional insurance policies may be treated as investments, but term plans, where you do not get any money back if you survive the policy term, cannot be treated as investment. Since no distinction is made between traditional policies and term plans, I would advise you to include premiums paid till date on term plans as well under the head insurance policies. You are also required to disclose the details of your vehicles, yatch, boats, aircraft etc. Vehicles which are not used and yet to be discarded or are being maintained as antique piece also needs to be disclosed.

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

Personal income tax deposits rose by 44% in the first quarter of the financial year, says Arun Jaitley

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

Listen to the Article (6 Minutes)

The advance tax deposits for the first quarter of the financial year 2018-19 rose significantly on the back of higher spending and consumption, effect of the Goods and Services Tax and demonetisation, finance minister Arun Jaitley said in a statement on Friday.

“The advance tax deposit during the first quarter of this year has seen a gross increase of 44% in the personal income tax category and 17% in the corporate tax category,” Jaitley said.

The implementation of GST, inclusion of technology in the income tax department and demonetisation has put a combined effect on the direct taxation base, where in India’s tax to GDP (Gross Domestic Product) ratio in four years has increased by almost 1.5%.

The finance minister said, in four years, the number of assesses has increased by 64.6%, adding that a total of 68.6 million income tax returns were filled in the financial year 2017-18. 10.6 million new assesses filed returns in FY 2017-18.

The finance minister said that the total income tax collection for the financial year 2018-19 is at Rs 10,02,000 crore, or a growth of 57% in four years. In the financial year 2017-18, despite economic challenges the income tax collection rose by 18%.

“Higher tax collection would enable us to continue with the developmental programmes in the country, not to impose any extra burden on the taxpayers and yet maintain the targeted fiscal deficit,” Jaitley added.

The Swiss Twist

After reports said Indian deposits in the Swiss National Bank has increased to Rs 7,000 crore, Jaitley said that names of illegal depositors will be made public starting January 2019 and that the offenders  would be punished under the penal provisions of the Black Money law in India.

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

Filing Income-Tax Returns: 5 tax implications of mutual fund investments

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

Listen to the Article (6 Minutes)

If you are a  mutual fund investor, one of the important things to understand is the tax implications on your investments. Investment in mutual funds comes with various tax provisions. Thus, while investing in equity funds can carry tax saving benefits under Section 80C of the Income Tax Act along with the Long Term Capital Gains (LTCG) taxation, investing in debt funds come with indexation benefit.

However, there is often confusion on mutual fund taxation. For example, many of us think that investments in all equity mutual fund are eligible for tax deductions under Income Tax Act. While filing your ITR, it is important to know that every investment made through mutual funds do not qualify for a tax deduction. Hence, one needs to select the right scheme to invest if one is looking for tax savings.

Ajit Narasimhan, chief marketing officer, Sundaram Mutual said that the practice of many employees claiming a deduction on investments outside the Equity-Linked Savings Schemes (ELSS) category has been happening for a while now. The tax provisions under Section 80C says deduction is available under only the ELSS category of mutual funds. This category of mutual funds has a 3-year lock in which incidentally is the shortest lock-in within the available 80C options. “It is important that investors take time to understand where they are investing and its impact. Most AMCs have at least one ELSS product as part of their product offering,” he said.

While you can claim up to Rs 1,50,000 deduction for investment in ELSS scheme during the financial year, there are other tax implications on mutual funds which one should be aware of while filing their ITR.

Narasimhan said that one needs to consider these points while filing this year’s ITR:

=> Be conscious of declaring any dividend income if received from mutual fund dividend schemes.

=> Any long-term capital gains booked in equity MF will be exempt from income tax only till March 31, 2018.

=> Benefit of indexation: Benefit of indexation on their original debt fund investment means that the original investment is adjusted for the price of inflation and taxed accordingly.

=> Capital Gains of debt mutual fund arising out of sale before three years, the short-term gains are taxed according to your tax slab.

=> Remember to declare any short or long-term gains out of your liquid fund investments – especially due to rapid growth in instant redemption liquid fund products, there may be a significant number of retail investors who need to be cognizant of this point.

It is important to give a final check on your investment details while filing income tax returns online. If you face any issues related to the investment you made in FY18, you should always concern a Chartered Accountant or a financial adviser to get acknowledged about the error you are making while filing ITR.

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

IT department among top three revenue earners, says official

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

Listen to the Article (6 Minutes)

The Income Tax Department now ranks among the top three “revenue-earners” of the central government and there is still a huge potential for growth, a top IT official has said.

Principal Chief Commissioner of Income Tax, (PR-CCIT) Pune, Vinodanand Jha said in a statement released on Saturday that there was a huge possibility of tax revenue growth from the Panvel region.

Jha had inaugurated a new Aaykar Bhavan building in Panvel on Friday, which will significantly reduce the load on Thane, Mumbai and surrounding regions of the IT centres here.

Panvel has a large number of big and small industries, besides several mega projects coming up in the near future, of which tax practitioners and stakeholders can take full advantage.

Jha said that with the department accorded its pre-eminence in generating revenues, it underlines the government’s confidence and the IT’s role in nation building.

He said that there are many structural changes in the financial sector and called upon all taxpayers to pay their legitimate taxes, with a gentle warning that “Big Brother” was watching all transactions, including digital, net, or web-based apps.

Besides, various measures have been taken to ensure everybody pays their taxes, including the Benami Act in which the assets created by people abroad have also been taken care of.

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

Taxman to plug gaps in rules to make fleeing millionaires pay up

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

Listen to the Article (6 Minutes)

The finance ministry is preparing to amend the Income Tax Act and plug the loopholes in tax treaties with other countries, as it looks to clamp down on tax evasion by High Net Worth Individuals (HNIs) exiting the country to settle abroad, especially in tax havens.

A five-member working group is likely to submit the first set of recommendations by the end of April, sources in the Central Board of Direct Taxes told CNBC-TV18.

CBDT, the central government’s supreme body for direct taxes, created the group on April 5 to assess the risk on tax collections due to a rush of HNIs leaving the country for good.

The group was tasked to come up with recommendations to ensure that migrating affluent Indians — who it suspects of ducking taxes — pay up.

A Morgan Stanley report in March 2018 revealed that 4,000 millionaires left Indian shores in 2016 and another 7,000 millionaires in 2017. According to Ruchir Sharma, head of Emerging Markets and Global Macro at Morgan Stanley Investment Management, this is a global record. Some 23,000 millionaires have left the country since 2014, he said.

In an internal note, CBDT had acknowledged that the trend of a growing number of HNIs migrating to other countries poses a substantial tax risk. “The working believes that HNIs are abusing various bilateral and multi-lateral tax treaties to hide income,” one of the persons familiar with the matter said, asking not to be named.

The working group will make recommendations for changes in Place of Effective Management (POEM) norms to determine the roots of foreign companies. It will also prepare a list of HNIs who became NRIs in the past five years.

“HNIS on migration declare only their Indian sourced income for tax purposes and do not declare their global income, which helps them evade taxes. Apart from this, upon migrating or becoming NRIs, HNIs do not come under the purview of the draconian Blackmoney Act,” said Amit Maheshwari, partner at Ashok Maheshwary & Associates LLP.

Tax authorities said the superrich Indians departing the country settle for tax havens such as the UAE, Singapore and Mauritius, among others. “CBDT in addition shall speak to tax authorities in which have seen maximum number of migration of HNIs in the past,” said the person quoted above.

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

Angel Tax: DIPP issues notification to ease concerns of startups

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

Listen to the Article (6 Minutes)

There’s finally some relief for start-ups that were facing income tax notices, which demanded a 30% tax on their funding.

The Department of Industrial Policy and Promotion (DIPP) has now issued a notification that aims to ease the concerns of many start-ups.

Issue of angel tax

Angel tax was first introduced in the 2012 Budget.  It aims to weed out black money from startup investments section 56 (ii) of the income tax act. It has caused an “existential threat” for startups and angel investments in the country to the extent that the 50% dip in angel deals & new startup incorporations in 2017 has been attributed to this.

Section 56 essentially gives authorities the power to levy tax on any consideration more than the fair value against issue of shares under this clause and under this scores of startups have received income tax notices and heavy penalties for non-payment of this ‘tax’.

The DIPP and the CBDT in consultation with various industry bodies have been in over drive mode at least in the past few months to work towards rationalising this tax. On Thursday, it seems there is some relief on the cards with the DIPP’s latest notification.

To get an exemption on this — First, the start-ups will have to have an aggregate paid up share capital and share premium of less than Rs 10 crore.

For investors there are two conditions and they have to fulfill at least one of them; first is that the average income of the proposed investor will have to be more than Rs 25 lakh in their previous three years or the net worth of the proposed investor will have to be Rs 2 crore plus as on last date of preceding financial year.

The last condition is that the startup will have to obtain a fair market valuations from a market banker.

The three conditions will be vetted by an inter-ministerial board which is notified in the gazette notification that DIPP issued this morning. It’s an 8 member body headed DIPP additional secretary and will have members from RBI, from Sebi and only after this board vets the application, the startup will be eligible for an exemption of Section 56.

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

Taxman names and shames 24 defaulters owing Rs 490 crore

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

Listen to the Article (6 Minutes)

The Income-Tax Department on Thursday released a pan-India list of 24 defaulting individuals and companies who owe about Rs 490 crore in taxes to the exchequer but have either gone untraceable or have reported inadequate assets for payment of dues.

The department issued an advertisement as part of its name and shame defaulters policy in leading national dailies titled ‘List of defaulters of Income Tax and Corporate Tax’.

The notice, issued by a nodal office of the Principal Director General of Income Tax in Delhi, “advised” the named defaulters to pay their tax arrears immediately.

The public announcement carries the identity of the firm or the individual, the name of their directors and partners, the date of incorporation of the company (date of birth in case of individuals), their Permanent Account Number (PAN) or the Tax Deduction Account Number (TAN), their last known address and business profile, the amount of tax-defaulted, assessment year and the respective jurisdictional I-T authority.

These defaulting firms were in the business sectors like food processing, bullion trading, software, real estate, breweries and manufacture of ingots among others.

The maximum tax dues of over Rs 862.7 million is against a Delhi-based company named Ms Stock Guru, India and its partner Lokeshwar Dev and the notice said the assessee has gone untraceable and also has inadequate assets to pay the income tax.

The dues for this firm are for the assessment years (AYs) 2009-10 and 2010-11. Some of the defaulters on the list have not paid their taxes for the assessment year 1989-90.

A Kolkata-based individual Arjun Sonkar, as per the notice, has an I-T default of over Rs 51.37 crore and is “not traceable” now. He is followed by Kishan Sharma, another individual from the West Bengal capital, who the department said is in default of Rs 47.52 crore of income tax.

The total tax default amount by 24 entities, from cities like Ahmedabad, Guwahati, Vijaywada, Nashik, Surat, Delhi, Vadodara, Kolkata and others, is about Rs 4.90 billion (490 crore).

A senior I-T Department official said the public list is aimed to make people aware so that they can help the department in nabbing these defaulters, if they have any information about them.

The notice also carried a disclaimer that the “entries in the list are specific to the tax arrear/assessment year mentioned and the tax defaulter’s address, business, shareholding and management may have changed” now.

It added that the amount of default “shall further increase” after due interest is levied on it.

The department has carried out this exercise over the last few years and had named 96 such entities which have huge tax liabilities on them but they have either gone non-traceable or have shown no assets for recovery.

The Central Board of Direct Taxes (CBDT), the policy-making body of the I-T department, had few years back adopted the strategy of bringing out the names of chronic defaulters in public domain and had also begun posting these names on its official website.

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