Prajna Capital |
- What to do When you get a tax notice…
- Monthly Income Plans and Systematic withdrawal plan
- How to use Mid-cap & small-cap mutual funds and get good returns?
| What to do When you get a tax notice… Posted: 10 Apr 2013 02:54 AM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
With the Income- Tax department on a drive to increase compliance, notices are being sent to individuals for old dues, which will now be adjusted against pending refunds.
Of course, anyone who gets a notice starts panicking. But for all you know, your returns may have been picked for random scrutiny.
Importantly, don't ignore the notice. Non- compliance with the notice could lead to a penalty of ₹ 10,000, apart from the tax and interest penalty. Provide all the documents to the assessing officer ( AO) and things might get resolved.
Before you meet the AO, check for details like the permanent account number ( PAN) in the notice. Sometimes, the name or address might be incorrect but the incometax department identifies you through the PAN.
Identify the reason for being served a notice.
Typically, under section 143( 1D), individuals get demand notices for discrepancy in the returns. At other times, it could be for mismatch in tax deducted at source (TDS) or income amount.
If there is a refund claim and the case is selected for scrutiny under section 143( 2), then the return may not be granted. Section 143( 2) enables the AO to make a regular assessment after a detailed enquiry. Otherwise, an intimation under section 143 ( 1) is the proof of return processed as submitted.
Then, check the validity of the notice. Under section 143( 3), a scrutiny notice has to be served in six months from the end of the financial year in which the return was filed. But, a notice under section 148 can also reopen five six year old cases if the AO has enough reasons for it. After collating all the information/ documents, prepare a cover letter ( make two copies) listing all the documents provided.
Ask for an acknowledgement on the copy of the letter.
Preserve this as evidence of the documents given. In case of a notice under Section 143( 2), where the details required are not specified, collate basic information, like bank statements, major expenses, income and loan details, say chartered accountants.
Such notices have the officer in- charge's details like name, designation, signature, office address and, most importantly, income tax ward/ circle number. Now that such notices come electronically, it must have the Document Identification Number, available on each communication by the tax authorities.
Do remember to make copies of the demand notice, in case you lose it. Or, scan and store the document. The envelope that carries the notice is an important evidence and should be preserved. It has the Speed Post number and establishes when the notice was posted and served to you. This helps when you receive the notice late and can't respond within the validity period.
Chartered accountants suggest seeking professional help to better understand the demand in the notice and supporting it with proper documents. In case you have to appear before the AO, a professional can help you better prepare your responses.
Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
------------------ Best Performing Mutual Funds
|
| Monthly Income Plans and Systematic withdrawal plan Posted: 09 Apr 2013 08:23 PM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
Monthly Income Plans (MIPs) are meant to provide monthly income to the investor through regular dividends but you can also create a stream of income through Systematic withdrawal plan (SWPs). Dividends results in reduction of NAV and are subjected to Dividend distribution tax on the other side SWP leads to reduction of unit capital of investment as withdrawal happens from the existing units only. Now the question is which works better in Monthly Income Plans – Dividend payout or SWP. Some back testing results that Systematic withdrawals give better results than dividend payout.
Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
------------------ Best Performing Mutual Funds
|
| How to use Mid-cap & small-cap mutual funds and get good returns? Posted: 09 Apr 2013 09:10 AM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
Mid-cap fund and small-cap fund holdings should not form part of the core portfolio
THERE is always a question in the minds of investors about the role of mid and small-cap funds in their portfolio. For understanding this, it is important to look at the behaviour of these funds, as it will enable you to take a position on how they should actually be treated in the portfolio and the role that they can play in the future. It will also help in determining how these funds need to be included in the portfolio.
Return expectation:
Mid and small-cap funds are considered as an attractive investment option due to the returns that they can generate. Largecap funds might seem to have a limited potential on the upside because of the nature of stocks in the portfolio and, hence, the attraction towards the mid and small-cap funds rises. There are chances that some stocks in the portfolio could turn out to be multi baggers, which can increase the overall returns for the fund. This is the hope that attracts investors towards these funds, but this is just the starting point for the entire investment consideration.
Since the risk element is also high, this aspect also needs some attention from investors before they make the investment.
Very volatile:
There are times when the mid and small-cap space bears the brunt of market movement on the downside as they go out of favour with the investor community.
This is the time when individuals witness that there is a sharp fall in the value of these stocks, which can be for quite high in a short period of time. Thus, a 30 per cent or a 40 per cent fall in the value of several stocks in a few weeks is something that is not very uncommon, and can lead to a situation, wherein, the net asset value of the funds also swing in dramatic fashion. Thus, sharp rises and falls could lead to the entire outlook for the investment changing quite rapidly and, so, this is something that investors have to be ready to face. In case, there is some action required, then waiting might prove to be too late. So, it is better to be quick to respond to the situation.
Portfolio part:
It is important that the mid and small-cap holdings covers a small part of the portfolio with a specific role assigned to it. There has to be a percentage in the overall portfolio that should be allotted for such funds to ensure that there is a specific way in which the investment is constructed. Also, the mid and small-cap holdings should not form a part of the core portfolio of investors so that there is not much reliance placed on it to generate steady returns.
There will be times when nothing is happening to this part of the portfolio or a situation where the returns could jump significantly in just a short period of time.
Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
------------------ Best Performing Mutual Funds
|
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