Prajna Capital - An Investment Guide

Book Losses before 31 March And Set Off Against Cap Gains For Next 8 Yrs, Advise Tax Experts ARE you sitting on unrealized losses from the recent downturn in the stock market? If the investments are less than a year old, you could put it to good use and lower your tax liabilities for the current financial year. Tax experts are advising investors to book their losses on or before March 31 this year and buy back those positions in the next financial year. By doing so, the tax on short-term capital gains (if any) can be set off to the extent of the short-term capital losses. Market watchers are expecting some sharp swings in many small and medium cap stocks over the next few weeks as investors try to balance their account books. Short-term capital losses for the year can be set off against any capital gains, short or long term, reported under the head, income from capital gains. In case the gains are lower than the losses, the excess short-term capital losses can be carried forward and s...

One can give the benefit of doubt to products that have started losing their value only recently The contrast is striking. Especially, since the market has started falling. The return from some of the mutual fund scheme has been offering for sometime now is disturbing. Some fund manager is severely underperforming his peers. For example, take a look at the gainers and losers, the top performing fund in the diversified equity scheme category has returned around 66% in the past one year, whereas the worst performer in the category has given a negative return. Index scheme category has given an average return of around 25% in the last one year. Worse, even debt schemes have performed better than these losers. Shot-term debt funds, for example, has offered around 8.4% returns to the investors in the last one year. One really don’t understand how these schemes can lag so far behind the best in the category. How can any fund manager justify his fee, when he is underperforming even debt schem...

A professor of mechanical engineering has been a regular investor in traditional investment products for the last 30 years. His investment portfolio includes instruments like LIC, public provident fund ( PPF ), national savings certificates ( NSC ), fixed deposits ( FDs ) and infrastructure bonds. For him, investment in equities was never a priority. He thought they were risky. More recently, he ran into a wealth m a n a g e r who told him that investments in traditional products are important but it shouldn’t occupy a major chunk of his portfolio. Now he is beginning to invest a little in mutual funds and equities. Everyone hates losing money. But by playing too safe, you could also lose money by earning negative real returns (after taxes and inflation). Traditional investments were hugely popular 20 years ago. They were safe, gave decent returns and were easy to invest in. However, they have not borne the onslaught of private investment options very well. Today, most of Sunder’s c...

What's special about March? Lots of things, actually. But from a tax point of view, it will be that time of the year when a lot of you will actually start figuring what your tax saving avenues should be. Little wonder that mutual funds report the highest inflows into equity linked savings schemes ( ELSS ) and life insurance companies record their highest sales in the first three months of the calendar year. Guilty as charged? Well, here's some help. Here's the first part of our special section dedicated to tax saving. We start right now with the absolute basics. You would have noticed that the tax department is more partial to women and specially, senior citizens. But those rates are the maximum you would have to pay if you did absolutely no tax planning. The very first step that you have to follow is to figure out what Section 80C (of the I ncome Tax Act ) is and how you can use it for your benefit. Any individual, irrespective of how much s/he earns, can reduce his taxab...

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We are at the end of this financial year. Some tips in case your tax planning isn’t complete The financial year 2007-08 is coming to an end in the next couple of weeks. This is the last chance for investors who have not planned their tax savings this year to invest and save taxes. There are certain investments and expenses that are exempt from income tax under the Income Tax Act. Investors can review their tax planning and see if they missed out on something good. This can lead to a 33 percent savings on the amount invested through the reduction in their tax liability. Here are some ways for an individual to reduce tax: Tax rebate under Section 80C Section 80C of the Indian Income Tax Act allows income tax exemptions to individuals on certain investments and expenditures. The maximum exemption allowed under this section is Rs 1 lakh. Investors can invest Rs 1 lakh in one or more of these instruments to avail tax rebates under Section 80C: Provident fund or public provident fund ( PPF ...

In this section an attempt is made to analyze and highlight the implications of Budget on common man under various heading. Home is where many tax saving options still dwell Buy a home, go for joint ownership if you are two salaried persons, buy a second property, or even sell the existing one...if you plan well, there are various options to save tax on hard-earned money THE Indian economy has been witnessing a boom in the recent past. However, rising property prices and growing interest burden on home loans are worrying buyers. The Budget has not offered any relief, but you can still make ample use of the existing provisions to save substantially on property investments. Here’s how…. BUYING A HOUSE Owning a house is not just a dream but a necessity, and there are several tax benefits as well. However, when buying a house, you would do well to consider the following. (a) It’s always advisable to go in for a housing loan. Interest paid on home loans can be deducted from your taxable in...

Here are seven simple ways to survive a stock market correction as an investor: 1. Stop Listening To Analysts Most analysts in the media instead of providing you with a solution will just confuse you. Somebody will say everything is doomed while others will say things are great in the long term. Forget listening to analysts- most of them won’t be of any help. The reason people listen to analysts is because they are looking for peace and hope. In reality, you will get none of that by listening to somebody else. Peace and hope are all within you. 2. Stop Staring At Your Portfolio Every Thirty Minutes Another mistake people make is that they get up every morning and wait for the markets to open. Once markets open they start staring at their stock prices. A fall makes you feel worse and small rise makes you feel a little better. This won’t help either. Instead keep track of the fundamentals of your company every time the results are out. If your company is profitable and growing - be happ...