Tax authority (CBDT) extends deadline for filing Income Tax returns by 31 August

Tax authority (CBDT) extends deadline for filing Income Tax returns by 31 August

The Central Board of Direct Taxes (CBDT) has extended the due date for filing of Income Tax Returns from July 31, 2018, to August 31, 2018, for certain categories of taxpayers.

The Central Board of Direct Taxes (CBDT) has extended the due date for filing of Income Tax Returns to August 31, 2018, for categories of taxpayers who were to file their returns by July 31.

 
The decision comes days ahead of the July 31 deadline, which several groups had requested the government to push to later.

CBDT had notified the new income tax return forms for assessment year 2018-19 on April 5. Experts said the introduction of new forms was leading to delays in filing of returns.

Further, the CBDT had said non-filing of ITR Before The Due Date from this assessment year would lead to a penalty of Rs 1,000, 5,000 and Rs 10,000, depending on when the returns were filed after the deadline. The fine for taxpayers having income under Rs 5 lakh remained at Rs 1,000.

If you are still unclear in choosing the appropriate ITR for disclosing your income earned during the previous year, here's a quick guide on the various ITR forms.

ITR 1 Sahaj:

Applicable to individuals that are an ordinary resident in India deriving income from salaries, one house property, other sources and having total income upto Rs 50 Lacs.

ITR 2:

It is applicable to any individual having total income exceeding Rs. 50 Lacs or having foreign asset/income or having more than one residential house property or income from capital gain or HUF.

ITR-3:

It is applicable to individuals and HUFs deriving income from profits and gains from business or profession along-with any income from salaries or house property or capital gains or other sources.

ITR-4 SUGAM:

It is for resident taxpayers (Individual, HUF, Firm other than LLP), who have opted for presumptive income scheme as laid down under section 44AD, 44ADA and 44AE of the Income Tax Act, 1961.

ITR-5:

This form can be used by a person being a Firm, Limited Liability Partnerships (LLP), AOP/BOI, Private discretionary trust, an Artificial juridical person referred to in section 2(31)(vii), Cooperative Society and Local authority.

ITR-6:

This form is being used by Company, other than a company claiming exemption under section 11 of the Income Tax Act. The ITR also introduces a new Schedule for Ind AS Compliant companies wherein they are required to disclose the balance sheet and P/L account in the same format as prescribed under the Companies Act, 2013

ITR-7:

Required to be filed when individuals including companies fall under section 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F). This ITR form is basically meant for trusts claiming exemptions u/s 11 of the Act, Political party, Mutual funds, Securitization trust, and other specified assesses.

For Tax Planning
Damodaran K
Financial Counselor
9940857995

.... enlighten yourself and enlighten others.

Read this, understand the value of insurance , enlighten yourself and enlighten others.

1. We buy gold for our children's education and marriage, but we don't buy a child plan.

2. We get fear on seeing an insurance agent, rather than getting a feeling of protection.

3. Only "20 crore" Indians have got insurance policy out of "130 crores" population.

4. We buy a screen guard to protect our mobile worth 10k, but we don't insure our life which is worth more than 10 Crores.

5. We get our daughter married to an unknown person. But we think a lot when a known person advices us about taking an insurance policy.

6. We fight among ourselves on Bhagavath Githa and Khuran, but we don't realise death is "FATE"

7. We place our chappal very carefully  in a stand paying Rs.5/-.  But we don't feel like paying Rs. 50/- a day to insure our life.

8. We believe Babas who do "magic" but we don't believe insurance agent who guides us with "Logic".

9. We envy Govt employees for their pension facility. But  we don't like saving some amount every month in a Pension policy and get pension for life time.

10. As per world census, more than 10k people everyday , do not wake up from sleep on their alarm set previous night.
Please remember only " FIRE ENGINE" comes with alarm, but "DEATH ENGINE" does not ...

11. We buy invertor to have light in our home during power off.
But you are the light to your family. Insurance policy is the invertor for your family to have light even when are not there.

12. When we die, it's LAST DAY only for us. But for family, it's just another day. They continue to live next day too.. Protect THEIR life with insuring YOUR life.

13. You know the balance in your mobile card, you know the balance in your Debit card ....  Do you know ... what is the balace in your life card?

RECHARGE" your life card with insurance..,,,

Dhamodharan.K
Financial Counselor
9940857995

Why It Is Important To Invest In Health Insurance plans In 2018?

Why It Is Important To Invest In Health Insurance plans In?

In India health care expens is increased day by day, health care is actually becoming a pain for a lot of Indians. The pain is further aggravated by the fact that we still don’t efficient public health care services which should have been providing services at a discounted rate which has lead to more dependence on private facilities and which is quite unbearable for lot of households and makes it tough for them to manage financial turmoil in a state of health emergency. The most effective way the to take this  problem can be by building effective financial reserve for handle the emergency .The cost effective option to build that reserve is to buy a health insurance plan. In fact if you don’t have a health insurance plan in place then it should be the most important commitment that you should make for 2018...This supposedly should be the most effective investment which you should plan for the year 2018.

So if you are planning to fulfill your Health Insurance this year, below is the list of thing that you should look into in your health insurer’s plans so that you make the most effective decision:

Hospitalization benefits: In the earlier days the only way you can raise a claim with your health insurer is when you have gone through a 24 hour hospitalization. Though the concept has changed drastically but still a lot of policies do have certain limitations which defines what would be covered and what is the amount that would be covered so while buying a health insurance do look at the various clauses governing which this part of the  benefit.

Day to Day care related benefits:  With recent advancements in medical science today a lot medical treatment doesn’t even require somebody to get a hospital admission. All a lot of ailments can be handled by OPD services provided by various hospital. While planning for your health insurance in 2020 you should look at guidelines regarding day care health procedure and check is there any limitation governing the same.

Cashless facility: Today all health insurance plans offer cashless facility but the challenge lies in understanding are there any hospitals under your insurer's network present in current city of residence. Though cashless is an efficient way  to settling claims and you don’t have panic for financial aid when you are faced with a medical emergency but the factor regarding presence of hospitals through which you can access this facility is also very important.

Room rent: This is actually bit tricky benefits. A lot of health insurer limits the type of services that you can opt under a specific plan and hospital room facilities in one of them. A  better of this very important because it's misinterpretation can put you in a state where your others claims can also be denied.

Ancillary benefits : You should understand the during the state of a medical emergency other than the major cost like hospitalization , doctor advise and medicine cost there are a lots of ancillary cost involved which we often ignore. One of the most common of them is Ambulance services which can be at times can become very costly. While investing in a health insurance plan do check at things relating how claims would be settled by your insurer against all these costs.

Other than these important things which are defining factors to identify which policy to buy and which not , you can always take tax benefits on Sec 80D on the premium that you would pay this year and in the future years subject to the conditions the regulation don’t change. Another thing is that important is that you always do an online comparison of all Health Insurance Plans before investing so that the decision that you take this year should have long term benefits.

Invest little today for tomorrow huge expence

Call me for more

DHAMODHARAN K

Financial Planner

+91 7358210672

GOOD INVESTMENT MADE BY LIC

GOOD INVESTMENT MADE BY LIC

LIC could still make some money from it if IDBI Bank turns around in the next two or three years.

The consensus about Life Insurance Corporation of India’s proposed investment in beleaguered IDBI BANK is that it is a bad, very bad idea.

Stock market pundits, banking and insurance experts, economists and the media have uniformly dubbed it a retrograde move, one that is bound to fail given the insurmountable problems at IDBI and LIC’s lack of expertise in turning around failing banks.

IDBI shares have bounced back somewhat immediately after the deal’s announcement at the end of June, though they are still far away from the March levels.

The fall could be a reflection of the tough road ahead for B Sriram, the newly-appointed managing director of IDBI Bank, and his team who have to grapple with shrinking market share, rising bad loans and the absence of a credible retail strategy to take on the might of the NBFCs and smarter private sector bank rivals.

IDBI Bank is now under the prompt and corrective action (PCA) mode of Reserve Bank of India which bars it from lending though it can still collect deposits so the first step will be to convince RBI that IDBI is ready to do normal business again.

The primary argument against the LIC-IDBI deal is that it is a gross misallocation of resources. Policyholders’ money should not be used to bail out ailing banks especially when there is no clear turnaround strategy.

Returns to policyholders will suffer as these investments lag the broader market or worse, collapse sparking a government bail-out.

While the argument about government’s over reliance on the LIC may be on the mark, the fears about LIC’s financial performance suffering due to the IDBI deal are grossly exaggerated. Let’s examine the argument one by one.

The IDBI investment of just over Rs 10,000 crore (including investments before 2018) is less than 2 per cent of LIC’s equity assets under management (AUM) of over Rs 5 lakh crore. Equity is only 20 per cent of the total assets. The percentage of its holdings in PSU banks may be higher but one should note not all these investments are struggling. State Bank of India, Bank of Baroda, for instance, are neither under PCA, nor is their financial position as bad as IDBI or some of the PCA banks.

Secondly, there is the question of LIC’s products and its status as a government-backed insurance company. A small, negligible portion of its policies are unit-linked insurance plans or ULIPs. The majority of its products are traditional protection plans.

A sovereign guarantee on all LIC products ensures that the policyholders get sum assured and vested bonus as most of the plans are participating plans, where 95 per cent of the surplus is allocated to policyholders. This guarantee ensures that policyholders don’t lose out in the unlikely event LIC fails to discharge its obligations.
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LIC attempts to generate surpluses which can be used to make payouts for claims or endowment policies have to be closed. A small portion of its massive equity portfolio underperforming for some periods is unlikely to have a significant impact on such payouts especially when there also exists the Corporation’s debt portfolio which is several times larger than the equity portfolio.

Of course, an insurance company’s investment portfolio can go wrong and clobber its financials but LIC seems an unlikely candidate at this point given the size of its overall investment in PSU banks as a percentage of its equity AUM.

This, however, does not mean that the government has done something fantastic by persuading LIC to buy into IDBI. The problem with the transaction is less about LIC’s ability and financial clout and more about the government’s own readiness in dealing with bank recapitalisation and disinvestment.

IDBI Bank was among the earliest candidates for disinvestment. It was supposed to be privatised a few years back as selling down the govt stake did not involve amending the Bank Nationalisation Act. Despite the best efforts of the PMO and the finance minister, Arun Jaitley, it did not happen.

You can blame the usual ills for this — red tape bureaucratic inertia and an unwillingness to take risks but the problem is that the first failure has now come back to haunt the government.

A private investor would have been far more nimble-footed in recognising the problem of NPAs and taken steps to tackle it if it had been sold two years ago. The management would have got sufficient breathing room, if early and timely recognition had happened, to tackle issues relating to the bankruptcy court and the RBI’s February 12 circular.

Today, IDBI Bank is in a far worse shape and private investors are unwilling to even come close. With elections looming and the bad loan problem only becoming bigger, the government, in desperation, has palmed it off to LIC.

Now, LIC could still make some money from it if IDBI Bank turns around in the next two or three years. It is difficult but not an impossible task, but the whole saga shifts the limelight onto the government’s approach to disinvestment which has been tentative, wary and devoid of strategic intent. It is almost as if the government is unsure of what to do.

Why Health Insurance is Important?

.It is your duty to be responsible to your health and start saving and investing early in a suitable health insurance, says Financial Planner

At the dusk of life, when a person has worked for a good 20-30 years, s/he wants rest and lead a relaxed life -- without the constant worry of taking care of others. This phase of retirement however comes with a concern: the absence of fixed earnings.

Any prudent individual plans ahead before s/he can settle down. S/he saves during her/his lifetime and invests in well-paying schemes, so that they don’t have to be conservative in their spending post retirement. However, with retirement comes old age too, which brings with it health issues. Hence, it becomes imperative for people to undertake healthcare planning as well.

Advantages of beginning early

It is always advised to plan for healthcare early because you never really know when an emergency situation will strike. On a more technical side, your savings get time to multiply and grow.

For example, if you save Rs 5,000 per month at the age of 20 and it pays 12.5 per cent per annum compound interest then by the end of your 60th year (when you retire) you would have saved Rs 5.94 crore.

But if you begin at the age of 30, you would only have saved Rs 1.76 crore. So, if you give 10 less years to your savings, you miss out on the benefits of compounding by more than four crore.

Availing adequate medicare without the worry of insufficiency

It is inevitable to contract diseases in one’s old age.

Without investing in a sound healthcare plan, it will also be very difficult to avail the services of a good hospital or a doctor.

One will be easily able to concentrate on best healthcare rather than ‘how am I going to pay the medical bill?’

The most important aspect of health insurance is that one is not limited to government hospitals but can actually avail good facilities at private hospitals as well.

Financial security

The price of medical service is very steep and rising rapidly. Once, a person is admitted to a hospital, there are various costs, which a person has to pay. They involve not only doctor’s fee but also charges for various diagnostic tests, medically prescribed expensive drugs and sometimes even a re-examination fee.

The list does not include other exorbitant bills that one has to pay off when a surgery -- major or minor is involved. Paying off these expenses will naturally drain one’s savings. And where such expenses are contingent in nature and have not been prudently accounted for, they hurt more.

There are many who would argue that going to government hospital is cheaper as there is less cost involved.

It is important to note, private hospitals are well equipped with modern facilities in comparison to government hospitals. Also, keeping in mind the kind of low doctor-patient ratio India has, one has to fend on their own -- looking for good medical services instead of relying on the state.

If you have a health insurance policy, you can take the benefit of modern facilities as your health insurance will pay for the hospitalisation as long as it is within the permissible limits of the policy.

Covering pre-existing diseases

First of all, let us understand what pre-existing disease actually is.

Pre-existing ailments or diseases are symptoms, diagnosed ailments or any existing or past health condition which exist at the time of applying for mediclaim Policy.

When one applies for a healthcare insurance, please ensure that the detailed medical background of the family is provided.

The IRDA has mandated a maximum of four years after which one’s pre-existing diseases need to be covered by the policy but generally, health insurance companies cover it much earlier as well.

  Deduction for the premium paid for Medical Insurance

Deduction under this section is available to an individual or a HUF. A deduction of Rs. 25,000 can be claimed for insurance of self, spouse and dependent children. An additional deduction for insurance of parents is available to the extent of Rs 25,000 if they are less than 60 years of age or Rs 50,000 (has been increased in Budget 2018 from Rs 30,000)  if parents are more than 60 years old. In case, a taxpayers age and parents age is 60 years or above, the maximum deduction available under this section is to the extent of Rs. 100,000.
   Example: Rohan’s age is 65 and his father’s age is 90. In this case, the maximum deduction Rohan can claim under section 80D is Rs. 100,000. From FY 2015-16 a cumulative additional deduction of Rs. 5,000 is allowed for the preventive health check up to individuals.

If want to know more please contact 

Dhamodharan.K

Financial Planner

9940857995

licdhamu@gmail.com

  

Don't delay filing your income tax returns

    Don't delay filing your income tax returns 
The tax returns season is underway. You must take all steps to ensure your return filing is error-free. For this it is important to file your returns punctually by the July 31 deadline and to keep yourself updated about any changes in the tax filing norms.

If you wait till the last minute to file your returns, you may commit mistakes in a hurry and will have to file a revised return by March 31, 2019. From assessment year 2018-19, if you file your income tax return (ITR) after the due date, you may have to pay a penalty up to Rs 5,000 if you file by December 31 and Rs 10,000 thereafter. For those whose income is under Rs 5 lakh, the penalty is Rs 1,000.

   There are several such developments in recent times. To be on the right side of the norms, it is important to file your returns on time. Take a look at some important changes to ensure an error-free filing well within the July 31 deadline.

Change in tax-related rules Income tax slab rates have changed for AY19. For individuals whose taxable income is between Rs 2.5 lakh and Rs 5 lakh, a rate of 5 percent would be applied. The tax slab of 20 percent remains the same for individuals earning Rs. 5 lakh to Rs 10 lakh, and 30 percent for income above Rs 10 lakh.

If you own more than one home, then till AY18 the entire interest paid on the home loan was allowed as deduction under Section 24B, but now it has been restricted to Rs 2 lakh in a financial year. Earlier, the complete loss from house property was allowed to be set-off without a ceiling, but it is now restricted to Rs 2 lakh in a financial year and the remaining loss can get carried forward for the next 8 years.

Earlier, the holding period to claim long-term capital gain tax on immovable property was 3 years, but from AY19 the holding period has been reduced to 2 years.

The base year to calculate the indexation for ascertaining LTCG was 1981 earlier, It is 2001 from this assessment year.

Earlier, there was no surcharge on an individual’s income, but from this year a 10 percent surcharge will be applicable if the total income exceeds Rs 50 lakh up to Rs 1 crore. If the income exceeds Rs 1 crore, a surcharge of 15 percent will be applicable.

Section 87A earlier provided a rebate up to Rs 5,000, but the same has been slashed to Rs 2,500.

Changes in ITR form Sahaj or ITR-1 form will now require additional details related to salary break-up. It would need details of perquisites, allowances, et al. It would also require detail of income from the property including rental income, tax given to local authority, etc.

In the new ITR form, you have to mention the details of exemption from capital gain separately. For each section such as Sec 54, 54 B, 54 EC, 54 GB, etc you have to mention the details in the relevant column.

ITR 4 has also changed, as it would now need additional details such as secured/unsecured loan details, fixed assets, capital account, etc.

GST details required while filing ITRStarting this year, you have to specify the exact turnover details mentioned while filing Goods & Services Tax. This can be cross-checked by the Income Tax Department. You also need to mention the GST detail in ITR.

To make your tax filing process an error-free exercise, it is important you keep your documents handy, do your calculations beforehand and file before the July 31 deadline.

Depending on your mode of filing returns - either through a private tax filing portal or through the government one, you should be aware of the form you need to fill. In case it is done through a private portal, the correct form will be chosen for you. If you file via the government website, you will have to manually choose it.

Since the I-T Department has introduced 7 new forms this year, it is wise to have some time in hand to pick the correct form and avoid mistakes.

While filing your returns, you would also require time to verify your tax deducted at source details in Form 26AS. Any mismatch should be brought to the notice of your employer. Again you need time to make rectifications, therefore plan ahead to avoid last-minute rush which can cause errors.

Things to keep in mind - Keep all important documents handy while filing returns to save time and to keep errors away 
- Claim all tax benefits and deductions properly -even the ones you forgot to mention in your tax declaration 
- Take note of important details like interest earned from recurring deposits and fixed deposits, which are fully taxable at the applicable slab rates. Interest earned up to Rs 10,000 from savings bank account is exempt under Section 80TTA.

By being aware about the changes and updates in the tax filing norms discussed above, you can avoid the last minute hassles and have an error-free filing process.

For Tax Planning
Dhamodharan.K
Financial Planner
licdhamu@gmail.com
9940857995

Lifetime-high! Sensex Stocks Down

Lifetime-high! Sensex up, stocks down

With 72% of Nifty mid-cap stocks falling this year — and 28% by more than a fourth — the market is mostly in a bear grip

The Sensex may have hit a new high at 36,548.41 points on Thursday but more than 75% of stocks in the broader market are down between January and now. That’s because only a handful of stocks are driving up the indices; the rest are underperformers. An FE study showed more than 75% of all stocks with a market capitalisation of Rs 1,000 crore and above are in the red so this year. As Bank of America Merrill Lynch put it, India’s version of a “Fin-Tech” re-rating is supporting the index amid a correction. The stocks that have done spectacularly are Tata Consultancy Services (TCS), Kotak Mahindra Bank, HDFC, HDFC Bank, Infosys and Reliance Industries (RIL).

Of the Nifty 50 companies, 31 are trading in the red with just 10 companies driving up the benchmark. At 11,023.20 points, the Nifty is now is just around 100 points away from its all-time high closing level of 11,130.40. But the Nifty mid-cap index, at 18473.9, is down 12% since January.

At Thursday’s new high, the Sensex in 2018 so far has been flat in dollar terms while the Dow is up marginally by 0.7%. India is a very expensive market. At 36,548.41, the benchmark Sensex trades at a price-earnings(PE) multiple of 18.01 times to the estimated one-year forward earnings, a premium of 12.4% to the long-term average PE of 16.03 times. This compares with 8.6 times for South Korea’s Kospi and 14.2 for the Jakarta Composite. Brazil’s Bovespa and the Shanghai Composite are trading at a price-earnings multiple of 10.4 and 10.6, respectively, data from Bloomberg show.

Thursday also saw RIL — the most valued company after TCS — re-entering the $100-billion club after more than a decade. The two together boast over 22% of the combined market capitalisation of Sensex.  The poor breadth of the market has probably kept foreign portfolio investors (FPIs) away; since April, FPIs have sold stocks worth $2.9 billion, the bulk of it in May. However, domestic institutions have been buyers to the tune of $6.1 billion. Local buying since January has hit nearly $10 billion whereas foreign funds have sold shares worth $790 million.

For Safe Investment Call now

K Damodaran M.Com.,LL.B.,HDCM.
Financial Counsellor
licdhamu@gmail.com
9940857995