Income Tax Return Filing - Check Out These Changes

Final countdown to income tax return filing for AY 2018-19 has begun. Here are few of the critical changes introduced this year that you should take care before filing your returns. 

1) Aadhar-Pan link - It is now mandatory to link your Pan No with Aadhaar for filing income tax returns. You can visit the income tax website to check or link your Aadhaar with Pan no. If you have applied for Aadhaar then the 28 long Aadhaar Enrolment number needs to be input while linking the Pan. 

2) Benefit for investing LTCG in Startups - Tax exemption under section 54GB has been handed out to those who have invested their Long Term Capital Gains (LTCG) arising from the sale of land or property into the equity shares of a start-up venture. Investment should be made before the filing of income tax return on the due date as per the condition set for this exemption. 

Also, the startup company is required to use the received investment towards purchasing plant and machinery within one year from the date of investment. Apart from this,         taxpayers will also have to obtain proofs from the startup company to establish that their investment has been used for the said purpose. Bank payment, purchase invoice or agreement will qualify as valid proofs in this regard. 

3) Rebate u/s 87A - Now individuals whose taxable income is below Rs 5,00,000 are allowed a rebate of up to Rs 5,000 under section Section 87A. The rebate will be restricted to the tax liability if the same is less than Rs 5,000. 

4) Cash deposits during demonetization - Aggregate cash deposits exceeding Rs 2,00,000 (new and old currency notes) between 9th November 2016 to 30th December 2016 needs to be reported during income tax return filing. 

5) Mandatory filing if LTCG exists - The income tax return filing is mandatory even if your taxable income is below the exempted limit of Rs 2,50,000 but has surpassed the limit after considering the LTCG. For example - If your taxable income is Rs 2,00,000 and the LTCG is 1,50,000 then the total amount is Rs 3,50,000, which is above the exemption limit, hence making the necessity of filing returns mandatory. 

Lastly, make sure to cross check TDS certificate with the Form 26AS available on the income tax website to ensure that no mismatch arises later. 

About The Author: Reenika Avasthi is associated with Inverika Investment Solutions LLP as a Content Writer and Financial Planner. She is a Certified Financial Planner and a freelance content writer in the field of personal finance. Her interest in writing and spreading investor awareness motivated her to start blogging.

5 Ways To Make Market Highs Investment Friendly

Stock markets are making new highs each day, leaving investors in a tight spot about their next investment move. Investors are dawned by mixed emotions of euphoria as well as utter confusion - what if market tanks down again. In the wake of this uncertainty, here’s some help for you to make the market highs investment friendly.

Photo by David Ohmer

1) Go dynamic with lump sum - Break down your lump sum investments into smaller chunks and invest it at different time periods. In this way, you will be able to buy at lower levels. Else you can wait to buy during market dips that are likely to happen around corporate results or change in interest rate cycle. However, it is a tough call to predict or identify low buying levels for a common investor, who should opt for dynamic asset allocation funds. These funds cut down their equity allocation during high market valuations and increase it when the valuations drop. 

2) No stopping of SIPs - Steer away from the urge to stop or pause your Systematic Investment Plans (SIPs) during market highs. You can potentially miss on accumulating more units during volatile market conditions if you stop your SIPs in an effort to prevent buying at higher NAVs. Let’s take a look at what can happen if you discontinue your SIPs even for a while. 

	Scenario 1	Scenario II	Scenario III
	Regular SIPs	SIP Stopped During Market Highs	SIP Stopped During Market Lows
SIP Per Month	5000	5000	5000
Investment Tenure	10 Yrs	8 Yrs	7 Yrs
Returns	12%	14%	11%
Investment Value	₹ 11,21,070.25	₹ 8,53,982.78	₹ 6,20,401.41
Takeaway	Highest corpus accumulated for all due to regular and disciplined investing	Lower corpus despite higher returns as the amount invested is lower than Scenario I	Lowest corpus accumulated at lowest returns as the benefit of low valuations not availed.

3) Don’t chase lucrative strategies - There is no quick money in the market so there is no point in falling for fancy strategies that keep pouring from all around. The only way to be a successful investor is to stay focused and disciplined and ignore the market chatters completely. You do not need to respond to market movements by doing something, rather treat it as another normal market phase. 

4) Stick to asset allocation - Downsizing equity exposure or even upsizing it is uncalled for. Your financial plan need not be fine tuned to market swings. A financial plan is made keeping in mind market movements, be it ups or downs that leave no room for altering it every now and then.

5) Monitoring is a must - Surely market highs might have helped almost all investments to deliver robust returns. But, it does not relieve you from the task of monitoring them periodically. In fact, it becomes imperative to understand if equity funds in your portfolio delivered better returns than the benchmark or not. You should continue to replace and take timely decisions about funds or investments that are not performing up to the mark. 

Knowing your way to wisely deal with market highs can go a long way in maximising your wealth.

About The Author: Reenika Avasthi is associated with Inverika Investment Solutions LLP as a Content Writer and Financial Planner. She is a Certified Financial Planner and a freelance content writer in the field of personal finance. Her interest in writing and spreading investor awareness motivated her to start blogging.