Companies Bill is a priority for Govt: Pilot
Crucial Bill: Sachin Pilot, Corporate Affairs Minister, has a word with Praful Patel, Minister for Heavy Industries and Public Enterprises, as Rajkumar Dhoot, Assocham President, looks on after a conference on 'Companies Bill – 2012: Highlights and Insights' in the Capital on Thursday. — Kamal Narang
Hopeful of passage in Monsoon session
New Delhi, July 18:
The Government is hopeful that the much awaited Companies Bill will be taken up for discussion and passage in the upcoming Monsoon session of Parliament, Corporate Affairs Minister, Sachin Pilot, has said.
The Companies Bill in the present form is very comprehensive and would go a long way in securing the interests of investors, Pilot said at an Assocham event in the Capital on Thursday.
Pilot said that the Bill had several provisions for improving corporate governance in the country.
"Corporate governance has to start from the top (board level). It has to be good board level practices that will usher in era of good corporate governance," he added.
Praful Patel, Heavy Industries Minister, stressed the need for re-building confidence of retail investors in Indian companies and markets.
"Big companies can't be built only with institutional investors. Retail investors are also important. The current situation of retail investors being away is not a good sign," he said.
Later, Patel told reporters that he would take up the issue of fiscal problems faced by the automobile industry with Union Finance Minister P. Chidambaram.
(This article was published on July 18, 2013)
Where to go to e-file returns
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Returns can be prepared for free. You need to pay only when filing it electronically.
As each tax filing season springs, more and more of us are being brought into the e-filing net. This year, the Income Tax department has made it mandatory for individuals whose total income exceeds Rs 5 lakh, to file their returns online. The limit was Rs 10 lakh last year.
Besides, those holding assets abroad or having signing authority in any account located outside India and those claiming tax relief under certain circumstances also need to file returns online.
If you too need to do it online, take the help of the several websites offering e-filing services.
Basic services
Services provided on these websites range from the 'do-it-yourself step by step' way, to interacting with experts face-to-face, to mailing them a copy of your Form 16 and forgetting about the rest.
If you choose the do-it-yourself mode, taxsmile.com, for instance, has an interactive platform wherein the interface asks you questions about your income, investments, tax deductions and payments and prepares your return. Don't have the patience to sit through the process? Email your Form 16 and other details to taxassist@taxsmile.com.
For those who prefer one-on-one interactions, taxspanner.com sets up 'Tax spanning stations' across the country wherein you can interact with tax professionals in person and get your returns e-filed right in front of your eyes.
In most cases, the return preparation is free. You need to pay only when the return is ready for e-filing. Websites such as myitreturn.com makes even the return filing free for some simplistic cases. The more the heads of income, the more the charges.
Cleartax.in also allows you to file your returns for free if you adopt the 'self e-filing' approach. Discounts for group or bulk filing are offered by many websites too. Sometimes, brokerage houses through which you buy and sell shares may tie up with these websites and offer e-filing for free or at a discount to its customers. Ditto with banks. For instance, SBI has joined hands with Taxspanner to help its staff and customers e-file returns at preferential rates. So, do your homework on charges before you zero in on one.
Value-added services
While free filing is indeed enticing, the paid services come with their own value additions. Typically, the higher the charges, the more the value-add. For example, Taxsmile Gold (Rs 400 ) offers a digital signature for your returns which is not available under its Silver plan (Rs 250). What's the advantage of a digital signature, you ask? Well, if you do, you can skip signing and sending your ITR V to the processing centre in Bangalore.
Taxsmile Premium (Rs 2,000) is even better, with year-round support from tax professionals for your tax related queries and advice on tax planning. Some websites also help NRIs and those who have foreign earnings file their returns. Charges on such foreign income related packages are generally higher.
Some others offer additional services on an individual basis too. You can use most websites to obtain a PAN card or change PAN details for a small fee. Outside of the package chosen, Myitreturn.com charges an additional Rs 99 if you want them to submit your ITR V, check its receipt at the processing centre or track your refund status. If you want to get your return reviewed by an expert, their charges range from Rs 399 to Rs 799.
Besides providing e-filing, digital signature and PAN card services, e-Lagaan also helps customers with the legal formalities involved in setting up businesses – be it in the form of a company, sole proprietorship, partnership or a trust.
Holds an edge
E-filing is not only convenient but also more advantageous than manual filing. It helps many employees who go on short stints abroad to file their returns on time, irrespective of their presence here.
Secondly, e-filing intermediaries such as the many portals that provide this service, serve as a digital storehouse for your tax records. They maintain digital copies of your returns each year, the ITR Form V, and other related documents, freeing you of the burden.
A third advantage is that the processing of refunds is faster for electronically filed returns. And finally, unlike manual filing, where confidentiality tends to take a back seat, e-filing is absolutely safe.
(This article was published on July 13, 2013)
Avoid saving through tax funds for retirement
I am 27 years old and I want to invest a lumpsum — the bonus component of my salary — which amounts to nearly Rs 2 lakh in mutual funds. My financial goals are: near-term investment in real estate and marriage in 2-3 years' time. I make regular investments in the form of SIPs (systematic investment plans) for other financial goals. These include a total of Rs 20,000 in HDFC Balanced, DSP BR Balanced Fund and HDFC Prudence Fund. Another Rs 5,000 for retirement corpus is parked in DSP BR Tax Saver, DSP BR Top 100 and HDFC Top 200. Kindly suggest funds where I can make a one-time investment with my bonus amount. Please tell me whether there is any need to change my mutual fund portfolio.
Sachet Parida
You have made the process of achieving your goals easier by adopting a systematic approach to investing quite early into your career. With defined goals and timeframes, you are well set to achieve all your goals.
But your choice of schemes with regard to the SIPs that you are running needs an overhaul as there are many flaws in the way you have gone about building your portfolio. Also, your risk appetite appears unclear.
You have chosen too many funds from the same fund houses, which will deprive you of diversification across asset management companies and their varied investing styles.
Also, choosing tax funds for retirement goals will not serve the purpose. You can always invest in a diversified equity fund to achieve all your goals, provided an appropriate timeline is factored in for meaningful capital appreciation.
Coming to your question on lumpsum investment, since both your goals — real-estate investment and marriage — are just 2-3 years away, it may be advisable to adopt a safe approach.
You can put Rs 2 lakh in a bank fixed deposit, so that you can get back your investments whenever you want. You can consider a debt fund such as Birla Sun Life Dynamic Bond or a monthly income plan such as HDFC MIP Long Term as well. Investing in liquid funds is another option. But in general, investing in MFs through the SIP route is advisable.
Coming to your SIP portfolio, you have not stated the goal to direct the Rs 20,000 investment. But you have put money in as many as three balanced funds, suggesting that either the goal is medium term (less than 5 years) or that you are quite conservative. Split Rs 20,000 as follows: Invest Rs 7,000 in HDFC Balanced. Exit HDFC Prudence, a steady performer, as you already have a balanced fund from the same house. Invest Rs 7,000 in Birla Sun Life '95, a balanced fund with a proven long-term track record. You can exit DSPBR Balanced and move to a stronger fund in ICICI Pru Balanced and park Rs 6,000 there. If you have a penchant for greater risk, you may also consider some large-cap equity funds.
For your retirement purpose, you do not need a tax plan. For Rs 5,000, you will be better off investing in not more than two funds. Retain HDFC Top 200. Exit DSPBR Tax Saver and DSPBR Top 100. Instead invest in Quantum Long Term Equity.
Alternately, for retirement, you can invest in the national pension system (NPS), which is a simple, low-cost product.
Review your funds periodically and take corrective action, if necessary. Also note that over the long-term building a balanced portfolio is necessary. So do make investments in debt (PPF, FDs and RDs etc) and gold as well.
***I am 28, married, and my net salary is Rs 43,000. At present, I invest Rs 10,000 in PPF and Rs 5,000 in ETF every month. I have an LIC policy which entails a premium outgo of Rs 72,000 a year. I have paid premiums for two years and minimum returns will be generated after 10 years.
I am planning to invest in mutual funds. In Quantum Long Term Equity and Birla Sun Life Frontline Equity, I wish to invest Rs 3,000 each. In IDFC Premier Equity and HDFC Balanced, I wish to park Rs 2,000 each.
Also, I am considering investing Rs 500 a month in NPS. I have a good surplus as my wife would also start earning Rs 30,000/month. Please go through my portfolio and suggest suitable alternatives if needed.
Ajit Singh
Endowment plans are generally expensive and may not be suitable for achieving long-term goals. Insurance and investment must not be confused. The former must be for just protecting risks, while the latter is the process for reaching financial goals. Pay the premiums for the minimum period and stay invested till the threshold lock-in timeframe and exit the policy later.
All the four funds that you have chosen have proven track record in delivering excellent returns over the long-term of 5-7 years. Investing in the NPS is also a good idea. Step up investments there once your surplus increases.
You have stated that you are investing Rs 10,000 every month in PPF. Please note that the maximum amount that can be invested in a financial year is Rs 1 lakh. With reference to your other investment of Rs 5,000, you have just started ETF. If it is a gold ETF, the amount invested is far too high. Gold must not account for more than 10 per cent of your overall portfolio. When your surplus increases, invest in real-estate as well. Take a term cover for yourself and a medical insurance policy for your family.
(This article was published on July 13, 2013)
How to file tax returns electronically
The department website allows users to rectify returns, view old returns and check status of refunds.
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July 18, 2013:
Come July, what is on top of our minds is tax return filing.
Most of us might have experienced hardships in manual preparation and verification of returns, visiting the tax office, identifying the jurisdiction and spending time in long queues when filing the returns in paper form. On the contrary, e-filing is really a boon, as the benefits range from avoiding long queues to file returns to quick processing of the tax returns to speedy refunds. But the catch is that you need to focus on a few things while filing the tax return electronically. Otherwise, you will end up wasting time with added woe to set things right later on. Here is a guide to e-filing returns through the Income-Tax Department's Web site.
What you should do
Ensure that appropriate ITR Form is used, which is available for download in the Income-tax e-Filing website. For example, ITR 1 is to be used in case an individual has income from salary, house property and other sources whereas ITR 2 is applicable for those having income from all other sources except income from business or profession.
Also, fill in your correct contact details (address, email and telephone number) in the income-tax return, to ensure appropriate communication from the Tax Department. Make sure that the bank account number and MICR code (the 9 digit number found at the bottom of the cheque leaves) is entered correctly, in order to facilitate refund credits.
Verify the tax credits as reflected in the Form 26AS (available for download in the same website). Form 26AS is a consolidated tax statement which includes details of tax deducted at source, advance tax, self assessment tax etc deposited by the taxpayer. You must identify any mismatch in the tax credits against the Form 16 / Form 16A (TDS certificates) issued, to take up the matter with the deductor (employer / banker) on time.
Steps to Filing return
As a prerequisite, you should get registered at www.incometaxindiaefiling.gov.in using PAN and other personal and contact details. On receipt of activation link and by successfully activating it, you are ready for e-filing of the tax return.
In this context, it is also beneficial to understand 'XML files' and 'Digital signature' . XML file is a file format which is generated for uploading a tax return, which can be understood both by the taxpayer and the computer. Whereas, digital signature is a method by which authentication is done electronically instead of physical signature.
The following steps should be taken for e-filing of the tax return. First, select the appropriate ITR Form and download the same. Fill the ITR Form offline and save the XML file generated by the Form.
Then, register your PAN in the income-tax website by getting a username (the PAN itself ) and a password (of your choice). Log in and click the relevant form on the left panel and select "Submit Return". After this, upload the XML file and print the acknowledgement/ ITR-V Form. If you wish to use a digital signature to sign the return, then the process is over. If not, you need to sign and file the acknowledgement with the Central Processing Centre (CPC) of the Income-tax Department within 120 days of uploading the return. Once the CPC receives the physical copy of the signed ITR-V form, an acknowledgement will be sent by email.
The income tax department has upgraded its e-filing website with additional features. With a user-friendly interface and enhanced features, the website allows taxpayers to submit tax returns, request for rectification of returns, view old tax returns and their acknowledgements as well as demand and check the status of tax refunds. Though the process of e-filing may appear to be little complicated, by paying a little attention to above, one can reap the benefits of e-filing!
What you should not do
Do not miss to file your returns on time. Delay in filing the tax return has certain unfavourable consequences as you would lose your entitlement to carry forward losses to subsequent years (except loss from house property). Also, you lose the benefit of being able to revise the return in case of an error or omission discovered later. Lastly, it could also be a costly affair as there is an interest charge at the rate of 1 per cent of outstanding taxes, per month of delay in filing the returns.
Do not forget to send the signed ITR V, after uploading your tax return on the website of the Income-tax department (without digital signature), within 120 days to CPC, else the tax return becomes invalid as and is as good as not filed.
(The writer is a senior tax professional, EY.)
(This article was published on July 18, 2013)
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