Understanding Capital Gain Tax

Many people make capital gains from stock and mutual fund investments. An individual who has sold shares or mutual fund units in the previous financial year must mention the gains, if any, in the return. 
Long-term capital gains on stocks and equity mutual funds are not taxed. But short-term gains are taxed at 15%.
In case of debt mutual funds, both short-term and long-term capital gains are taxed. Short-term capital gains are added to the income and taxed as per the individual's income tax slab. Long-term capital gains from debt mutual funds are taxed at 20% with indexation and 10% without indexation. Indexation is adjusting the purchase price for inflation. This increases the purchase cost and, thus, lowers the gain. 
Calculating capital gains is not easy. Imagine you invested in an equity fund through a systematic investment plan, or SIP, till December 2013 and redeemed the investment in March 2014. You might have made decent profits on your total investment, but a part of it could be short-term gains (each SIP instalment must complete one year if it is to be considered a long-term investment for tax purpose), which are taxable at 15%.

Will you be able to calculate the short-term gains on your own? You can, if you are financially savvy, get the net asset value, or NAV, of the fund on each SIP date and calculate the profit/loss on each SIP to arrive at the net gain. Most retail investors will find the process tedious. Even if they are able to do the calculation, they would rather not take any chance lest they make a wrong disclosure in the return.

It's better to get the figure from a trusted source. Mutual fund investors can get the capital account statement on demand from the fund house. However, it is not easy for investors in direct equity, as not all brokerage houses give the statement.

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Advance Tax

As the name suggests, it refers to paying a part of your yearly taxes in advance. Advance tax is the income tax payable if your tax liability exceeds Rs 10,000 in a financial year. Advance tax should be paid in the year in which the income is received.
Advance tax is applicable when an individual has sources of income other than his/her salary. For instance, if one is earning through capital gains, interest on investments, lottery, house property or business, the concept becomes relevant.
Any rebate due fetches you an interest of 0.5 per cent every month, or, six per cent annually, as in the case of an income tax refund. However, if you don’t pay the advance tax on time, you’ll be charged one per cent every month, or, 12 per cent a year.

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PAN must to buy jewellery worth Rs5 lakh and more or paying an insurance premium of Rs 50,000

Any person planning to buy jewellery worth Rs5 lakh and more or paying a life insurance premium of Rs50,000 or above, has to quote PAN (Permanent Account Number) from July 1. As per the amendments in the income tax (I-T) rules, coming into effect from July 1, quoting PAN will be mandatory for any payment of Rs5 lakh and above for purchase of jewellery or insurance premium of Rs50,000 or abov.
The customer would need to submit copy of his PAN and quote it as well with the jeweller, while buying jewellery.
High-value purchase of jewellery, among valuables, have often been feared to be a much favoured route for circulation of black money and quoting of PAN would help the tax authorities in tracking such transactions.
From July 1, if a bank wants to issue a debit card to its customer, the latter has to quote PAN.
Till date it is applicable in the case of issuance of credit card.
The PAN will also become mandatory in the case of paying a life insurance premium of Rs50,000 and above.
Transactions that already require PAN include sale or purchase of any immovable property valued at Rs5 lakh or more, sale or purchase of vehicles other than two-wheelers and bank deposits exceeding Rs50,000.

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Post Office savings schemes to be taxed

The government has decided to levy tax on the interest obtained on Post Office savings schemes from the current financial year.
The Central Board of Direct Taxes (CBDT) has brought out a notification in this regard recently, which stipulates that any interest earned beyond Rs 3,500 (in case of individual accounts) and Rs 7,000 (in case of joint accounts) will be taxable from the running fiscal.
The CBDT– which is the administrative authority of the Income Tax Department– has issued the notification to all the tax collection ranges across the country for implementation.
Taxpayers will have to reflect this investment on their income tax returns.
“Taxpayers who now invest in the post office saving accounts schemes will now have to show the interest earned on this scheme while filing their income tax returns. Interest upto Rs 3,500, in case of single accounts and and Rs 7,000 in case of joint accounts, is exempted,” a senior I-T official said.
The Assessing Officer (AO) will compute the tax on the interest earned, beyond the exemption limit, accordingly, he said.

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E-filing of Income Tax Return

E-filing of income tax return is an easy, 15-minute job. And it is definitely smoother than finding a tax consultant, haggling for the right price and then waiting endlessly for him to do the job at his whims.
So, how do you do it?
STEP 1
Go to the website of directorate of income tax, India, and register yourself, that is if you are not registered already. As you register, you need to fill in your PAN number and other details in order to set your login and password.
STEP 2
Once you are done with registration, log out and log in again with your PAN number as user ID and the new password you have set earlier. Click on e-filing A.Y. 2010-11 on the left side and download the e-filing form for INDIVIDUAL, HUF (HUF stands for Hindu undivided family)
STEP 3
The form comes in a ZIP file. Save it to your desktop and extract the Excel file from it to a new folder. Open the excel file and enable macros. Mind you, you have to enable macros in order to complete the process.
STEP 4
Fill in details like Name, Address, City, State, Pin Code in the sheet for INCOME DETAILS; fill in your PAN number wherever required and then fill in details of your income, investments and tax paid as provided to you in the Form 16 as per the instructions on the sheet. Then click on the VALIDATE button to check. If the details are correct. It will show the sheet is ok. (That is if no errors are found).
STEP 5
The next sheet of the file is TDS. Fill in the details for No 23 only if you have income only from salary. If you have income other than salary, fill in details for No 24 also. Fill in details of TAN number, name of company, address, city, state, pin code as given in form 16.
STEP 6
Fill in details of income charged under salaries, deductions from Chapter VI-A, tax payable and tax deducted. All these information is found on your Form 16. Click on VALIDATE button to check for correctness.
STEP 7
Next sheet is taxes paid and verification. Fill in details of name, father’s name, place, date and PAN number under the VERIFICATION section shown in RED. Click validate once again. If all the three sheets are shown OK on validation, you are ready to generate an XML file of the details.
STEP 8
Click on Generate XML and it will ask you to save the file. Once saved, go back to the website and log in (if you are logged out) with your user name and password. On the left side, click on submit return with 2010-11 as assessment year. Upload your generated XML to the site. Your e-filing is done.
STEP 9
It sends you a copy of acknowledgement to your email ID and also allows you to download the acknowledgement by clicking on blue link. The acknowledgement again comes in a ZIP file. Extract the file, take a printout of the PDF file and sign it manually.
STEP 10
Send a signed Acknowledgement to Income Tax Department address shown at the bottom of the PDF file by ORDINARY POST only. You will get a confirmation from IT department within one week.

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How To Save Income Tax In India?

As per the government law, it is mandatory for every citizen to pay the income tax. Tax assessment takes place every year in the month of March. Government has given so many benefits to the taxpayers. Tax payment is applicable for a person who is generating profit by any mode either by the business or from the job. In any of the public or private limited company, there are shareholders then the tax will not be exempted on the individual basis. The calculation is based on the annual profit generated by the organization.
In India, there are various tax slabs for the male and female and as per the annual salary, the tax deduction takes place. If a male individual earns (in Rs) 160,001 to 500,000, the tax would be 10% if it exceeds from 500,000 to 800,000 the tax would be 20% if it exceeds from 800,000 the tax would be 30%. Tax slabs for the female individual is different from the male individual, the tax limit for the female start from 190,001. For 190,001 the tax is 10%, from 500,000 to 800,000 tax is 20% whereas for above 800,000 tax would be 30%.

To get the tax benefit,  it is important to show the investment proof. Tax waiver is applicable if the investment has done in the following:

Insurance Policy- Government has given tax benefit on different type of insurance policies such as life insurance policy and health Care. This should be noted that no tax benefit is given for the General insurance like motor insurance etc.
Mutual funds – There are several government and private mutual funds available in the market such as State Bank of India mutual funds, Franklin Templeton, Kotak Mahindra and ICICI. Investor has to take care that tax waiver is available only on those mutual funds that have a locking period; a fund without a locking period is not eligible for the income tax benefit.
Home Loan – If an individual has purchased any property on loan, a tax waiver is applicable on it.
House Rent – House rent is another mode to save the income tax. While filing for income tax, tax receipt should be attached.


While filing for the income tax it is useful to attach the receipt of the documents as per the above list.

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Stock Market in Simple Terms

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New Fund Offers

Schemes Regular

Name		Open Date	Close Date
Axis Gold Fund (D)		30-09-11	14-10-11
Axis Gold Fund (G)		30-09-11	14-10-11
DSP BR World World Agriculture (D)		30-09-11	14-10-11
DSP BR World World Agriculture (G)		30-09-11	14-10-11
ICICI Pru CPO Fund - Sr-IV 36M (D)		22-09-11	05-10-11
ICICI Pru CPO Fund - Sr-IV 36M (G)		22-09-11	05-10-11
L&T MIP - Wealth Builder Fund (G)		27-09-11	11-10-11
L&T MIP - Wealth Builder Fund (MD)		27-09-11	11-10-11
L&T MIP - Wealth Builder Fund (QD)		27-09-11	11-10-11

previous fund offers

Schemes FMP

Name		Open Date	Close Date
Axis FTP - Sr 16 (370D) (D)		22-09-11	05-10-11
Axis FTP - Sr 16 (370D) (G)		22-09-11	05-10-11
Axis FTP - Sr 16 (370D) (QD)		22-09-11	05-10-11
Birla SL FTP Sr-DQ (370D) (D)		03-10-11	11-10-11
Birla SL FTP Sr-DQ (370D) (G)		03-10-11	11-10-11
BNP Paribas FTP Sr-22 E (369D) (AD)		29-09-11	13-10-11
BNP Paribas FTP Sr-22 E (369D) (DM)		29-09-11	13-10-11
BNP Paribas FTP Sr-22 E (369D) (G)		29-09-11	13-10-11
BNP Paribas FTP Sr-22 E (369D) (QD)		29-09-11	13-10-11
DSP-BR FMP 12M - Sr-14 (D)		03-10-11	10-10-11
DSP-BR FMP 12M - Sr-14 (G)		03-10-11	10-10-11
DWS FTF-Sr 91 (3 years) (D)		04-10-11	18-10-11
DWS FTF-Sr 91 (3 years) (G)		04-10-11	18-10-11
HDFC FMP 24M Sep 11 Sr19 (1) (D)		30-09-11	10-10-11
HDFC FMP 24M Sep 11 Sr19 (1) (G)		30-09-11	10-10-11
HDFC FMP 370D Oct 11 Sr19 (1) (D)		03-10-11	05-10-11
HDFC FMP 370D Oct 11 Sr19 (1) (G)		03-10-11	05-10-11
ICICI Pru FMP Sr-57-3Yr- Plan B (D)		07-10-11	17-10-11
ICICI Pru FMP Sr-57-3Yr- Plan B (G)		07-10-11	17-10-11
Reliance FHF - XX Series 32 (D)		03-10-11	11-10-11
Reliance FHF - XX Series 32 (G)		03-10-11	11-10-11
SBI DFS 18 Months (7) (D)		29-09-11	07-10-11
SBI DFS 18 Months (7) (G)		29-09-11	07-10-11
SBI DFS 90 Days (50) Oct 2011 (D)		03-10-11	05-10-11
SBI DFS 90 Days (50) Oct 2011 (G)		03-10-11	05-10-11

 

Mutual Fund New Fund Listings

Scheme	Fundclass	NAV	Returns(%)
Peerless Equity Fund (G)	Equity Diversified	10.00	0.01
SBI Gold Fund (G)	Gold	9.54	-4.65
Union KBC Liquid Fund (G)	Money Market	1026.08	10160.77
Union KBC Equity Fund (G)	Equity Diversified	8.74	-12.60
Pramerica Treasury Advantage (G)	Debt - Short Term	1031.39	3.14

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Upcoming Mutual Fund Offers

Date of filing with SEBI	Draft offer documents on SEBI
16-09-2011	DSP BlackRock Dual Advantage Fund - Series 1 to 10
16-09-2011	Escort Fixed Maturity Plan - Series III
13-09-2011	SBI Capital Protection Oriented Fund Series VI
13-09-2011	SBI Capital Protection Oriented Fund - Series V
13-09-2011	SBI Capital Protection Oriented Fund Series VI

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