IDBI Short Term Bond Fund

 

 

Sundaram Select Mid Cap and Sundaram S.M.I.L.E - Among the Top 7 Funds

 

A monthly SIP of ₹ 10, 000 in

• Sundaram Select Mid Cap delivered a return of 21.26% and an accumulated sum of ₹ 36.82 Lakhs.
• Sundaram S.M.I.L.E delivered a return of 20.23% and an accumulated sum of ₹ 34.81 Lakhs

 Retirement fund body EPFO will start investing in stock markets from next month as part of its plan to put in as much as Rs 5,000 crore in exchange traded funds (ETFs) by the end of this fiscal.

"We will start investing in the exchange trade funds from next month. We have planned to invest 5 percent of our incremental deposits in ETFs during this fiscal," Employees' Provident Fund Organisation's Central Provident Fund Commissioner K K Jalan told PTI.

"EPFO is expected to get about Rs 1 lakh crore as incremental deposit during the current financial year.

Thus, we would be able to invest Rs 5,000 crore in ETFs during this fiscal," he added. A decision regarding investment in stock markets was taken at the meeting of Central Board of Trustees (CBT), the apex decision-making body of EPFO on March 31.

The Labour Ministry had given EPFO a direction through a notification on April 23 for investment of five percent of its corpus into ETFs. Earlier, the EPFO, which has over 6 crore subscribers, has been investing primarily in state and central government securities.

Unionists had opposed any investment in equity or equity-related instruments during the meeting of the CBT on March 31.

The new investment pattern notified on April 23 by the Labour Ministry states that EPFO will invest a minimum of 5 percent and up to 15 percent of incremental deposits in equity or equity-related schemes. However, the EPFO has decided to park 5 percent of its incremental deposits in the ETFs to start with during this fiscal.

The new investment pattern for EPFO provides that the body will invest in "shares of body corporates listed on Bombay Stock Exchange (BSE) or National Stock Exchange (NSE) which have market capitalisation of not less than Rs 5,000 crore as on the date of investment".

According to investment norms, the retirement fund body can also invest in units of mutual funds regulated by the Securities Exchange Board of India and which have minimum 65 percent of their investment in shares of body corporates listed on BSE or NSE.

 The new income tax forms have been notified by the government. This came after the forms notified earlier in April were withdrawn due to huge protest by the tax payers. Let us now understand the latest requirements as to the forms which you are required to file. I also intend to discuss other relevant matters relating to additional disclosure on bank accounts and foreign travels as originally proposed and modified as per these modified ITR forms.

The government has notified four forms for filing of your income tax returns which are applicable to individual and/or HUF.

 

Let us discuss as to which form you need to file?

Form No ITR 1: This is also known as Sahaj meaning easy. This form can only be filed by an Individual and no other assessee can use this form for filing of their return of income. It is not that every individual can use this form. This form can only be used by a person whose source of income is salary and not business. Even pensioners can use this form. Moreover you can also use this form in case you have any income under the head income from other sources which generally includes interest from various investment products like saving bank account, recurring bank account, fixed deposits with bank and post offices. This form can be used by you even if you have any exempt income in addition to the taxable income from two of the sources discussed above. You cannot use this form in case your agricultural income exceeds Rs. 5,000 in the previous year as the same need to be added to your regular income for the purpose of determining the average rate of tax on which your other income shall be taxed. So you can use this form even if your other exempt income exceeds the threshold of Rs. 5,000. Earlier there was a cap of Rs. 5,000 of exempt income for using this form.

Please note that if you have won any lottery or have any income from horse race in the last year, you cannot use this form. Moreover you can use this form only if you own one house property, so in case you own more than one house, you cannot use this form. This can also not be used in case you have any asset outside India or any income from a source outside India.

In my opinion this is the forms which would be applicable to majority of the tax payers as most of the tax payers are salaried and do not own more than one house property and have only income taxable under the head "Income from other sources" in addition to receiving either salaries or pension.

Form No. ITR 2A : This is a new form introduced from this year. This form can be used by Individual as well as an HUF unlike the form ITR 1 which can only be used by an Individual and who does not have any taxable income under the head "profits and Gains or business or Profession" or "capital Gains". Moreover in case you have any foreign asset outside India or have income from any foreign source you still cannot use this form for filing of your income tax return. It may be noted that you can use this form in case you have more than one house property or have agricultural income exceeding Rs. 5,000. This form is extended version of form No. ITR1 and can be used only if you either do not have business income or capital gains as well as do not own any foreign asset or have foreign income.

Form No ITR 2: This form can be used by Individual as well as an HUF. This form can be used in case you have income taxable under the head Capital Gains in addition to the income taxable under the head "Salaries" and "Income from other Sources". This form can be used by you even in case you have income from lotteries and horse races. This form can also be used by you in case you have agricultural income exceeding Rs. 5,000 or you own more than one house property. However this form cannot be used by you if you have any income taxable under the head "Profits and gains of business or profession" howsoever small the amount taxable under this head.

This form can even be used by the resident tax payers who have any foreign asset or any income from foreign source.

Form No. ITR 4S: This is commonly called Sugam. This form can be filed by any individual or an HUF who has business income which is taxable at certain predefined basis either as certain percentage of your gross receipt/sales or your income is presumed at fixed amount per income yielding asset owned by you like truck etc. So this form can be used, only and only if, your business income is taxable on some presumptive basis. Broadly speaking this form can be filed by a person who is otherwise entitled to file his return of income in ITR 1 but cannot file as he has certain business income taxable at predetermined way. So in case you have capital gains income or agricultural income exceeding Rs. 5,000 or own any foreign asset or have income from any foreign source you cannot use this return to file your return of income. You cannot use this form even if you have income from lottery or horse race.

Requirement of disclosure in respect of passport and bank accounts

The forms notified earlier had provisions for disclosure of foreign travels undertaken with details of expenses incurred by you. However the revised forms have done away with this requirement and you are only required to give details of your passport number.

As regards the other requirements of furnishing details of your bank account the earlier forms had requirement to furnish details of all the bank accounts held during the previous year including the particulars of joint holders and closing balances in those bank account. The revised forms have the requirements to furnish the details of only active bank account and in case there are no transactions in the bank account during the last three year, you do not have to furnish the details of such dormant bank accounts. Moreover you are not required to furnish the details of balances at the year end and the details of the joint holder of the accounts.

However, you are still required to furnish the details of the bank name, IFSC code and account number of all your bank accounts whether saving or current account. It seems you are not required to furnish details of your recurring account or fixed deposits with banks held by you during the year.

The forms to be used by the person who has taxable income under the head profits and gains of business or profession other than on presumptive basis are not yet notified for the current filing.

 

Benefits of long term investing in equities

 

 

One of the most consistent funds in the category, ICICI Pru Dynamic Plan has enjoyed a 4-5-star rating over most of the last eight years. It currently has a 4-star rating. The fund has a flexi-cap mandate and has been an excellent fund to own in volatile markets.

Strategy: The USP of this fund is its ability to time the market on the behalf of investors. The fund uses a top-down strategy to identify investment-worthy sectors and also takes a view on the large-cap versus mid-cap allocations. Equity levels can range between 65-100 per cent. In practice, the fund has retained a sizeable cash/debt position over the last one year in the range of 18-25 per cent. It has also reduced mid- and small-cap allocations and overweighted large caps. This has led to lower returns compared to the category. The fund is a contrarian investor. It also looks for companies with temporary difficulties but having growth potential.

Performance: The fund has an impressive record of staying ahead of its benchmark in ten of the last 11 years. While the 1-year returns are below category, 5- and 10-year returns beat both the benchmark and category convincingly. The fund's record is unique in its ability to contain downside in every bear market in the last decade, yet outpacing indices in every bull run.

What we don't like: The fund is currently under-invested in equities and can lose out on upside in the case of a secular bull run.

Why invest: It puts your equity investments completely on autopilot, buying low and selling high, without any intervention on your part.