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Investment Advisory

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What is a Systematic Investment Plan? How does it work?

Feb 5, 2015, 12.28 PM IST

What is a Systematic Investment Plan?

A Systematic Investment Plan or SIP is a smart and hassle free mode for investing money in mutual funds. SIP allows you to invest a certain pre-determined amount at a regular interval (weekly, monthly, quarterly, etc.). A SIP is a planned approach towards investments and helps you inculcate the habit of saving and building wealth for the future.

How does it work?

A SIP is a flexible and easy investment plan. Your money is auto-debited from your bank account and invested into a specific mutual fund scheme.You are allocated certain number of units based on the ongoing market rate (called NAV or net asset value) for the day.
Every time you invest money, additional units of the scheme are purchased at the market rate and added to your account. Hence, units are bought at different rates and investors benefit from Rupee-Cost Averaging and the Power of Compounding.

Rupee-Cost Averaging

With volatile markets, most investors remain skeptical about the best time to invest and try to ‘time’ their entry into the market. Rupee-cost averaging allows you to opt out of the guessing game. Since you are a regular investor,your money fetches more units when the price is low and lesser when the price is high. During volatile period, it may allow you to achieve a lower average cost per unit.

Power of Compounding

Albert Einstein once said, "Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t… pays it." The rule for compounding is simple – the sooner you start investing, the more time your money has to grow.

Example
If you started investing Rs. 10000 a month on your 40 th birthday, in 20 years time you would have put aside Rs. 24 lakhs. If that investment grew by an average of 7% a year, it would be worth Rs. 52.4 lakhs when you reach 60.

However, if you started investing 10 years earlier, your Rs. 10000 each month would add up to Rs. 36 lakh over 30 years. Assuming the same average annual growth of 7%, you would have Rs. 1.22 Cr on your 60 th birthday – more than double the amount you would have received if you had started ten years later!

Other Benefits of Systematic Investment Plans

· Disciplined Saving – Discipline is the key to successful investments. When you invest through SIP, you commit yourself to save regularly. Every investment is a step towards attaining your financial objectives.

· Flexibility – While it is advisable to continue SIP investments with a long-term perspective, there is no compulsion. Investors can discontinue the plan at any time. One can also increase/ decrease the amount being invested.

· Long-Term Gains – Due to rupee-cost averaging and the power of compounding SIPs have the potential to deliver attractive returns over a long investment horizon.

· Convenience – SIP is a hassle-free mode of investment. You can issue a standing instruction to your bank to facilitate auto-debits from your bank account.

SIPs have proved to be an ideal mode of investment for retail investors who do not have the resources to pursue active investments.

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Uncategorized

TDS Information

Budget 2016: Under the scheme of deduction of tax at source as provided in the Act, every person responsible for payment of any specified sum to any person is required to deduct tax at source at the prescribed rate and deposit it with the Central Government within specified time. However, no deduction is required to be made if the payments do not exceed prescribed threshold limit.

In order to rationalise the rates and base for TDS provisions, the existing threshold limit for deduction of tax at source and the rates of deduction of tax at source are proposed to be revised as mentioned in table 3 and table 4 respectively.

– See more at: http://taxguru.in/income-tax/rationalization-tax-deduction-source-tds-provisions.html#sthash.uh9CS5U9.dpuf

Reminder from tax department to pay tax on interest income, revise returns if required

by Cleartax-Team on March 25, 2016 in Form 26AS, Income from Other Sources, Income Tax, Income Tax Penalty, Section 80 Deductions, TDS

In last year’s tax returns arnsdisclosurewas added for bankinaccountstax retuheld by a tax payer.

It seems the income tax department has done its work related to this information. It has recently asked tax payers to include entire interest income in their tax return and pay tax on

it. The release also said that you must revise your revise your tax return if you did not include interest income.

Important points regarding tax on interest income

Include all interest incomes in your tax return: All types of interest income should be included in your tax return.

All of these interest incomes are taxable –

Interest income from a savings account with banks, co-operative banks, post offices

Interest income from a fixed deposit

Interest income a recurring deposit

Interest income from corporate bonds

Interest income from government bonds (unless specifically notified by the government)

Interest income from capital gains bonds

Interest income from post office savings deposit schemes

Interest income from post office monthly schemes

Interest income on NSCs

Interest income from Kisan Vikas Patras.

Form 26AS includes only that interest income on which TDS is deducted: A lot of tax payers include interest income which appears in their Form 26AS. This is the interest income on which TDS has been deducted. Since no TDS is deducted from a savings bank account, such interest income is not included. However, interest from a savings account is taxable and must be included in your tax return.

Deduction under section 80TTA: Are you unsure about how to claim this deduction – readhere in detail. A lot of taxpayers make the mistake of assuming this deduction is available on all types of interest. And sometimes they completely miss out on including interest in their tax returns. (More helpful reading here).

Government has information of interest paid by payer without TDS deduction: The circular from the income tax department mentions that the government has details from payers of interest paid by them without deducting TDS. So make no mistakes and remember to include these in your income tax returns.

Where a Form 15G and Form 15H is filed but total income of tax payer exceeds Rs 2,50,000: Sometimes you may have filed a Form 15G and Form 15H but at the end of the year realised that your total income is more than the minimum exempt income of Rs 2,50,000. In such a case, you must include interest for which you gave Form 15G/Form15H. Even though no TDS is deducted, such income is fully taxable.

(Find out if you are eligible to fill Form 15G/Form 15H here. Instructions to fill Form 15G arehere).

What should you do to comply with the circular

File your income tax return of income for Assessment Year 2014-15 (if not filed already) by 31stMarch 2016. Assessment year 2014-15 relates to financial year 2013-14. Minimum income exempt from tax for this year is Rs 2,00,000.

Revise your income tax return of income for assessment year 2014-15/2015-16 if the return already filed does not include taxable interest income. Minimum income exempt from tax for these years is Rs 2,50,000.

File income tax return of income for assessment year 2015-16, if not filed so far and include taxable interest income if any. This return must be filed by 31st March 2016 to avoid penalty of Rs 5,000 under section 271F.

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Indirect Tax

New Information about TDS

Budget 2016: Under the scheme of deduction of tax at source ahttp://www.charteredclub.com/wp-content/uploads/2012/02/tds-rent.pngs provided in the Act, every person responsible for payment of any specified sum to any person is required to deduct tax at source at the prescribed rate and deposit it with the Central Government within specified time. However, no deduction is required to be made if the payments do not exceed prescribed threshold limit.
In order to rationalise the rates and base for TDS provisions, the existing threshold limit for deduction of tax at source and the rates of deduction of tax at source are proposed to be revised as mentioned in table 3 and table 4 respectively.
– See more at: http://taxguru.in/income-tax/rationalization-tax-deduction-source-tds-provisions.html#sthash.uh9CS5U9.dpuf Reminder from tax department to pay tax on interest income, revise returns if required
by Cleartax-Team on March 25, 2016 in Form 26AS, Income from Other Sources, Income Tax, Income Tax Penalty, Section 80 Deductions, TDS
In last year’s tax returns a disclosure in tax returns was added for bank accounts held by a tax payer.
It seems the income tax department has done its work related to this information. It has recently asked tax payers to include entire interest income in their tax return and pay tax on it. The release also said that you must revise your revise your tax return if you did not include interest income.
Important points regarding tax on interest income –
• Include all interest incomes in your tax return: All types of interest income should be included in your tax return.
All of these interest incomes are taxable –
• Interest income from a savings account with banks, co-operative banks, post offices
• Interest income from a fixed deposit
• Interest income a recurring deposit
• Interest income from corporate bonds
• Interest income from government bonds (unless specifically notified by the government)
• Interest income from capital gains bonds
• Interest income from post office savings deposit schemes
• Interest income from post office monthly schemes
• Interest income on NSCs
• Interest income from Kisan Vikas Patras.

• Form 26AS includes only that interest income on which TDS is deducted: A lot of tax payers include interest income which appears in their Form 26AS. This is the interest income on which TDS has been deducted. Since no TDS is deducted from a savings bank account, such interest income is not included. However, interest from a savings account is taxable and must be included in your tax return.

• Deduction under section 80TTA: Are you unsure about how to claim this deduction – readhere in detail. A lot of taxpayers make the mistake of assuming this deduction is available on all types of interest. And sometimes they completely miss out on including interest in their tax returns. (More helpful reading here).

• Government has information of interest paid by payer without TDS deduction: The circular from the income tax department mentions that the government has details from payers of interest paid by them without deducting TDS. So make no mistakes and remember to include these in your income tax returns.

• Where a Form 15G and Form 15H is filed but total income of tax payer exceeds Rs 2,50,000: Sometimes you may have filed a Form 15G and Form 15H but at the end of the year realised that your total income is more than the minimum exempt income of Rs 2,50,000. In such a case, you must include interest for which you gave Form 15G/Form15H. Even though no TDS is deducted, such income is fully taxable.

(Find out if you are eligible to fill Form 15G/Form 15H here. Instructions to fill Form 15G arehere).

What should you do to comply with the circular
• File your income tax return of income for Assessment Year 2014-15 (if not filed already) by 31st March 2016. Assessment year 2014-15 relates to financial year 2013-14. Minimum income exempt from tax for this year is Rs 2,00,000.
• Revise your income tax return of income for assessment year 2014-15/2015-16 if the return already filed does not include taxable interest income. Minimum income exempt from tax for these years is Rs 2,50,000.
• File income tax return of income for assessment year 2015-16, if not filed so far and include taxable interest income if any. This return must be filed by 31st March 2016 to avoid penalty of Rs 5,000 under section 271F.

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Investment Advisory

Investment Advisory

Vision Consultancy for specified investment goals for the benefit of the investors & proper guidance about investment financial plan is a comprehensive evaluation of an individual’s current pay and future financial state by using current known variables to predict future income, asset values and withdrawal plans.[1] This often includes a budget which organizes an individual’s finances and sometimes includes a series of steps or specific goals for spending and saving in the future. This plan allocates future income to various types of expenses, such as rent or utilities, and also reserves some income for short-term and long-term savings. A financial plan is sometimes referred to as an investment plan, but in personal finance a financial plan can focus on other specific areas such as risk management, estates, college, or retirement.

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Uncategorized

SBI Housing Loan Consultation

Vision Consultancy Also Provide SBI Housing loan consultation

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Business

GST, Service Tax, Excise consultation, LBT & VAT consultation

Vision Consultancy firm having offices at Kolhapur, Pune and Mumbai. Presently we are providing wide range of services covering direct and indirect tax consultation and many other non-conventional services in a wide geographical area covering almost entire Maharashtra and part of other states like Karnataka, Kerala etc.
a) GST, LBT & VAT consultation – We are also providing LBT & GST consultation in various cities on Maharashtra such as Pune, PCMC, Kolhapur, Thane, Ulhasnagar, Navi Mumbai etc.

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Others

Shop Act License Registration

Vision Consultancy is one of the reliable consultancy firm engaged in the business of providing a wide range of services such as Shop Act License Registration to various clients.

Shop and Establishment Act is one of the most important State Government regulations which governs the functioning of businesses engaged within its Jurisdiction. The Shop and Establishment license is a primary proof of existence of business in a specified jurisdiction.

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Others

Wrong Assessee code does not invalidate payment: HC

In the case of Devang Paper Mills Pvt Ltd Vs UOI, it was held that merely mentioning wrong code in the process cannot result into such harsh consequence of the entire payment not being recognized as valid, incurring further liability of repayment of the basic duty with interest and penalties.

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Indirect Tax

MVAT

With reference to Notification No VAT 1515/CR-169/Taxation -1 Section 9 of MVAT, the Government of Maharashtra hereby, with effect from 2nd January 2016, amends schedule ‘A’, after entry 12A the following entry inserted with NIL %. Drugs and medical equipments used in dialysis for the treatment of patients suffering from kidney disease as may be notified from time to time by State Government, in the official Gazette.

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Direct Tax

Tax Deducted At Source

Whether Employer is legally bound to deduct tax at source from income / receipts which are prima – facie exempt from tax:

S.10 deals with certain receipts which enjoy exemption from income-tax. In other words, the receipts falling u/s 10, do not form part of “total income“.

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