Due date of filing Income tax return is 31st July'08

Last day Tips from IncomeTax website

Income tax department has posted few tips that would be beneficial for return filers and would avoid jamming of website due to heavy rush. The department's website https://incometaxindiaefiling.gov.in is working fine as of now.

  • For a smooth E-filing experience please observe the following. 1>Completely prepare your return and generate xml and keep ready.

  • Login only when you are ready to upload your return.

  • At the time of login, do not, repeatedly click on the 'Login' button. Please wait till your first login request is accepted.

  • After login please click on submit your return and upload the xml file.

  • Please download your ITR-V from My Account-> My Return link or wait for ITR-V to be received via email.

  • Please immediately logout and close your browser. This will enable other users to login and submit their returns.

  • E-filing for AY 2008-09 is now available for all ITRs. Please download the free Return Preparation Software for these ITRs from the downloads page in the website.

  • Income Tax Department has launched Web service facility for E-Return Intermediaries. Please download the latest Web Services Manual and follow instructions to avail this facility.

  • Please efile early to avoid last minute rush! The due date for filing returns for individuals and non-corporates not required to get their accounts audited u/s 44AB is July 31st. E-filers will get a automatic 15 day grace period from date of E-return upload to submit their signed and verified ITR-V to the Income Tax Department.

  • To enable taxpayers to file returns in the electronic mode, Income Tax Returns (except ITR-7) have been made annexureless. The CBDT has issued clarifications on annexureless returns. Click here to download Circular 6 of 2008 and related Press Release.

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IPO Update: Nu Tek India

Sustaining growth a challenge – Avoid it

Nu Tek India has entered the capital markets with an offer of 44 Lac shares at a price band of Rs. 179-192. Investment Guru is of the view that Investors should avoid the IPO on account of following reasons:

  • Nu tek is operating in a very competitive segment and has limitation of scale of operations.

  • In view of above, it would not be possible for the company to sustain its growth rate of over 47%. The growing trend of Infrastructure sharing by telecom companies would also act as a restraint.

  • The issue is priced at a PE of 15.6 which looks aggressive considering the current market scenario. Since the issue is small it may sail through, but it may not provide listing gains to the investors unless there is change of sentiment at the time of listing. The listing trend of recent IPO’s is sufficient to deter investors from applying blindly to the IPO’s. See my post on Initial profit-less option

  • The business model is skewed towards limited customers.

  • Large players have significant advantage in securing large scale orders and hence Nu tek faces serious challenge with regards to competitors like GTL who enjoy better presence and have better financial and technical competencies.

Issue opens : 29-Jul-2008
Issue Closes : 01-Aug-2008
Registrar : Aarthi consultants
Related Information
About the company
Company Fact Sheet
Company's Strength
Check IPO Allotment Status of NuTek

Read More!

File your Income Tax Return before 31st July

Don't worry if you couldn't file return in time

I am sure most of you must be spending a lot of time arranging your documents related to computation of Income Tax and trying to meet the Deadline of 31st July,2008 for filing of return of Income. Here are some tips which would be beneficial for you in filing the return without having unreasonable worries of implications.

Deadline of 31st July for whom ?

All individuals and business entities , other than companies, who are not liable to get their accounts audited are required to submit their return of Income by 31st July. For companies, the due date is 31st October. So all individuals, who have income from salaries, interest, house properties, capital gain tax or business income where the books of accounts are not required to be audited , are covered under this.

Benefits of Submitting Return in time

Well, the biggest benefit is that you get peace of mind and get rid of botheration of the implications. So Ideally I would recommend that one should submit one's return in time. The other benefit of submitting the return in time are

  • You would be allowed to file a Revised return of Income in case such need arises. Returns filed after due date are not allowed to be Revised.
  • You would be entitled to carry forward the losses under Capital gains. Later return filers lose this benefit.
  • You will save on interest charges on late payment of taxes. This applies if you have some tax payable in addition to what has already been deducted at source. In that case you need to pay interest @1% per month.

Delay in submission of Return, Don't worry !

Yes, 31st July is the due date for filing the return of Income, but it is not the last date of filing the return. You can file your return by 31st of March 2009 for assessment year 2008-09 without paying any penalty. Another good thing is that if you do not have any liability of paying tax in addition to what had already been deducted, you will not incur even the interest charges. So if your return does not show self assessment tax to be paid, you can safely deposit your return by 31st March, provided you don't get the need to revise your return.

File your tax online and get 15 days more to submit ITRV

Yes, this is a bonus for those who are filing the return online. What you need to do is file your return online and then you will get 15 days to get the acknowledgement submitted to your nearest IT office irrespective of the deadline of 31st July. So if I submit my online return on 31st July, I can deposit the acknowledgement form till 15th August and will still qualify for in-time submission. But remember to upload your return online before 31st July. It's a very easy and user friendly procedure. You can log on to Income tax department website to get step by step procedure of filing online return.
Related post

Guidelines for filing Income Tax Returns

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UPA win may help in changing Market Mood

UPA wins trust, Can market win Investors ?
It was a nail biting finish to the Vote of confidence moved by the UPA government. The 45 minutes of delay in counting in 50 votes nearly stopped the breath of both the ruling and opposition parties and finally UPA managed to emerged as a stronger combination.

Expectation from the New UPA

Now with the change in composition of UPA and as the anti-reform brigade of the Left is out of the scene, the Prime minster is expected to move faster on the various initiatives to put the country on the fast growth track. This includes signing the Nuclear deal, moving faster on Infrastructure growth, bringing Insurance and banking reforms. Now this is a good news of market. Will the government gear itself to get rid of the inflationary pressure on the economy and put the country back on growth radar ? The road may not be so smooth but in short term the UPA win of course would be a moral booster for the sensex.

Impact on Stock markets
Today's rally indicated that markets were confident of the UPA win and the outcome is going to give a short term relief to the markets in terms of positive sentiments. But all depends on how the government presents itself to the investor community post its rebirth.

The bigger evils like inflation and lower IIP are not going to die down soon and government doesn't have magic stick to ward them off. Hence, the sober mood in market may not last long. Also the new partners in UPA may pose new set of challenges to the party, hence , politically also things cannot be termed to have settled till May'09 when the elections are due.

In summary, the coming week would be interesting to watch as sensex find some reason to celebrate on one hand and gets reminded of the lingering issues on the other.
Read More!

Global & Domestic cues continue to haunt

Markets still in Red Zone

For those who are getting a comfort factor with this week’s dramatic rise of sensex, I do not have a good news to share. The sentiments still remain shaky for the markets and the macro environment is still having a negative bias.

Yesterday, I was thinking about the way Indian markets are behaving and a question that came to my mind was “Are Indian markets too emotional”? or in other words “Are Indian markets too irrational “? Irrational markets typically display bouts of extreme volatility both on positive and negative side and we have witnessed similar pattern in last one year or so. Initially the market was swamped with positive “bias” and went on rocketing to 21K levels as if there was no tomorrow and this year what we have witnessed is the other face of it i.e., Negative “bias” followed by global concerns, Inflation and political instability.

What went wrong ?
What are markets? We say markets have negative /positive bias. But what is market made up of? Aren’t they made up of Investors who put in their money for a better return? So If I say markets are displaying irrationality, doesn’t it mean that the Investors in Indian markets are showing immaturity or lack of understanding about the macro environment. The market statistics are nothing but sum total of Investor behavior as depicted in their buying and selling patterns. A major factor that drives Indian and other emerging markets is that FII’s are a major force in driven the market behavior. So do we say that FII’s have realized that these emerging economies may not satisfy their hunger for quick bucks and are fleeing the scene? Were they caught on wrong footing? Did they overestimated the potential of these economies?

If one see the pattern of Indian markets vs. US markets (In the above chart Nasdaq trend is depicted in Blue, Sensex in Red and Dow in Green), it is visible that even though the global factors are weighing heavily on the markets, most of the bad news is emerging out of the US, the US markets have shown more maturity in terms of movement of their indices. While US markets are down only 14%, Indian markets have tanked by more than 30% during the same period.

FII’s are still selling, MF’s do some shopping

If we looks ate the current pattern of Investments of FII’s and mutual funds, FII’s are still selling heavily. They have already sold 6 Billion worth of stocks on a net basis in this year. The month of June saw second highest selling after January’08. Mutual funds came out to do some shopping in June and are net buyers even in July so far, but the volumes is much low as compared to FII’s. Moreover, Mutual funds has also not being major buyers in the stocks and hence are not able to provide major support to the indices. HNI' had been reported to already cut down their exposue in equity markets significantly. One thing is very clear, If markets have to go up strongly Institutional interest is a must. In the current circumstances this doesn’t seem to be the case and hence any short covering (or say technical correction) should not be read as resumption of buying interest in the markets.

Crude is down but not out

The crude oil surge showed some signs of cooling (currently trading at $128.5) after hitting highs of $145 in July. Experts are of the view that this might be a temporary correction. I have been reading various articles on crude oil and the common consensus is that the crude at settle at $100 levels by the end of this year. Any increase in crude prices from here would act as negative news for the markets. I have explained in one of my earlier post as how rise in crude oil aids in increasing the inflation and hence Inflation which is another big dragger of the markets would also get help if crude cools off faster.

Domestic cues are Negative
Morgan Stanley has revised its GDP growth estimates for India down from 7.4% to 7.1% for FY09 and from 7.8% to 7.6% for F2010. Rating Agency Fitch has revised its local currency grade outlook for India to negative citing deteriorating public finances, mainly due to subsidies (Read the article in Reuters )

As expected, Inflation rose marginally to 11.91 as compared to 11.89% last week. Analyst are of view that Inflation might touch 12% before settling down at the end of the year or early next year.

However, there is good news on the Corporate tax and direct tax fronts. Belying fears of slowdown in economic growth affecting government revenue, direct tax collections have grown 38.6% to Rs57,373 crore in the first quarter this fiscal. Corporate tax collections rose 32.65% to Rs34,566 crore for April-June period this fiscal, against Rs26,058 crore during the corresponding period last fiscal.

Political drama continues and the coming week is very crucial in deciding the fate of the UPA government. The confidence motion on Tuesday would decide the short term trend in the market. The fall of UPA government may add to the woes of market as it may lead to further pull out by FII’s. However, the general opinion is that the UPA would manage to save its face.

Investment Guru’s Outlook
My opinion remains same as I gave in my previous post on market outlook. The sentiments are still negative and one should not expect markets to zoom. However, at the same time, long term investor should cherry pick fundamentally strong companies for investing with at least 1 year horizon.

Read More!

IPO's make a dent in Investor's Coffers

IPO: Initial Profit-less Option

The Year 2008 has so far been a nightmare for investors who have put in their money in the IPO’s. Out of the 22 IPO’s which have been listed during this year, 18 are currently trading at a loss ranging from 2% to 69%. Only 4 IPO’s have managed to swim against the current and trade above their Issue price. Companies like Emaar and Wockhardt had to withdraw their IPO’s.

As a general rule , IPO’s do not do well in the bearish markets. But there were a huge queue of companies who have planned to line up their IPO’s during the dream run on the bourses, but most of them have shelved their plans given the massacre post January. However, few needy ones have shown courage to roll it despite the ongoing state of markets. And to their advantage, they found investor who subscribed to their offerings. Most of these companies have priced their IPO’s on the higher side of the price band even after knowing very well that the investor may not fetch good price post listing.

Investment Guru is of the view that it’s still not the right time to subscribe to IPO’s since the secondary markets sentiments are extremely negative and hence one should forget the hefty premium that these IPO’s used to give till 6 month back. When the best of listed companies are not doing well on the stock market, how can we expect the IPO’s to do well and that too at a premium.

Read More!

Fear factor continues, Markets to remain Weak

Bear to retain grip of the markets

  • Crude prices surged to a new high of US$ 146 per barrel.

  • For the week ended June 21, inflation has risen to 11.63% (a 13-year high), marginally higher than the previous week's annual rise of 11.42%

  • Sustained selling of Indian stocks by foreign institutional investors (FIIs) . FII outflow in calendar year 2008 totaled Rs 26571 crore (till 3 July 2008). They are expected to remain sellers in equity in the short term.

  • From a record high of 21,207 hit on 10 January 2008, Sensex has lost 7753 points or 36.55%. It has shed 6834 points or 33.68% from the begin of this year.

  • Global factors continue to be negative as they fight evils of sub-prime, Crude and falling housing prices.

  • India faces additional threat of Political Instability. Though the short term crisis look over with SP coming to the support of UPA government, its credentials are not trustworthy. (see my post on latest political developments)

    No points for guessing that the macro indicator have turned from bad to worse and there is no short term solution to these. To me, inflation and Crude oil are bigger evils as they have wide implications on a variety of factors and in turn create a vicious cycle of downturn in the economy. On one hand it results in rising cost of inputs for the industry as a whole, it also slows down the consumption story.

    Well, let me take to you to some of the positives now. India's monsoon has been 21% above average so far this season. A normal monsoon may result in higher agricultural output and in turn may result in cooling off the inflation to some extent.

    Experts are of opinion that the crude oil surge is a short term phenomenon and the same will cool down by December. An article on DNA money reports
    "With the crude predicted to touch 175 dollars a barrel and the Indian currency depreciation, FIIs will turn their focus to the commodity market which has emerged as an alternate asset class. They would prefer to stay invested in the commodity market and hedge against inflation," Crisil's Joshi said. The analysts feel that a bounce back could be seen around December with the soaring oil prices likely to cool down by that
Cooling down of crude will also result in positive impact on inflation and hence the overall sentiments. Well, I am of the view that the current market crisis will remain over the short term and things are not going to change dramatically. I am not building castles in air, but I am still of the view that if an investor takes a long term view (say 1 year), he should do well by picking quality stocks during the ongoing bearish phase. Read More!