SMALL INVESTORS FORUM

Tax Audit – Limit, Due Date & Section 44AB Tax audit is the verification of the books of accounts of an assessee to validate the income tax computation and compliance with the laws of Income Tax. Auditing of books of accounts must be carried out by a certified Chartered Accountant. In this article, we look at tax audit limit, section 44AB of the Income Tax Act and appointment of tax auditor. Tax Audit Limit The provisions relating to tax audit are provided under Section 44AD of the Income Tax Act. According to Section 44AB, tax audit is required for the following persons: Business In case of a business, tax audit would be required if the total sales turnover or gross receipts in the business exceeds Rs.1 crore in any previous year. Under the Income Tax Act, “Business” simply means any economic activity carried on for earning profits. Section 2(3) has defined the business as “any trade, commerce, manufacturing activity or any adventure or concern in the nature of trade,

CBDT extends due date for filing of Income Tax Returns & audit reports from 30th Sept, 2018 to 15th Oct, 2018 for all assessees liable to file ITRs for AY 2018-19 by 30.09.2018, after considering representations  from stakeholders. Liability to pay interest u/s. 234A of IT Act will remain.

Brilliant Definition of a *Bank* _A bank is a broker between the middle class and the rich. The only place where the two meet is in a bank. The middle class brings the money, through saving, and the rich takes it, through borrowing. A middle class person saves the money because they have more money than their thinking capacity. So they keep the money in the bank so they can go and think what to do with the money they saved._ *On the other side, the rich people come to pick th at money, through borrowing, because they have more ideas than the money they have. On a practical side, please show me one billionaire who got rich through saving and I will show you a million Indians who have money saved in the banks and are still renting the houses that the Millionaires and billionaires build through the middle class people savings which the rich borrowed from a bank.* ```This one  👆 got me thinking.```

*What happened in the financial debt market leading to a huge sell-off and panic in the Stock Market on September 21?* A debt fund of DSP Mutual Fund named DSP CREDIT RISK FUND was holding IL&FS commercial Paper (CP). This paper were rated AAA. But last week IL&FS made an interest default hence its rating went down to D. Redemption pressure came to this fund. Hence DSP MF sold AAA rated 9.1% paper of DHFL as they needed big fund and hence this quality paper was sold at a steep discount to meet the redemptions. Fine...this was debt market operations but its repercussion were seen in DHFL stock... thinking its paper was sold at steep discount... hence company must be in some trouble. This led to fear of all NBFCs specially HFC's will have big problem and it triggered sell off in all the NBFCs. Then followed by banks and YES Bank was already in bad news. Leading to overall sell-off and volatility. *Now Post this NBFC Sell Off What is expected ahead ?* (1) D

Highly Susceptible Market Spooked by Fears - Week ending September 23rd Markets during the week had a very volatile period shaking even the strongest bulls on the street. The panic selling based on some news or eventsare, historically speaking, good buying opportunities. No fundamentals had changed either for Yes Bank or for housing finance companies such as DHFL for such 50% moves which occurred just on the basis of street expectations which are often irrational in the short-term because they are based on herd mentality. But such irrationality offers good buying opportunity of quality companies as the so-called fear is hypothetical and hence won't last for long. And once the fear subsides the stocks will rebound. As Warren Buffett had quoted “The best thing that happens to us is when a great company gets into temporary trouble. We want to buy them when they're on the operating table." Another such incident occurred this week! The regulator's mandate to cut AMC fee

*Why are NBFCs selling off?*:  (1) There is news that DHFL bond has sold for a high implied yield to maturity of ~11%.  (2) This has made stock investors of DHFL worried about DHFL's liqudity and sold off the stock.  (3) Other HFCs have sold off in sympathy with DHFL. Other non-HFC NBFCs have joined in the sell off.  (4) DHFL management has confirmed on air that they have not faulted and there is no liquidity crisis at DHFL.  (5) It is possible that the entity which sold DHFL paper did so because it was not satisfied with this exposure and wanted to sell anything of slightly questionable creditworthiness. *This is an example of risk aversion after the unfolding of the IL&FS saga even though entities being sold off have no direct exposure to IL&FS.* (6) DHFL and IBHF have both confirmed on air they do not have any exposure to IL&FS.

What is market ? A young just out of college graduate, asked me books about technical analysis and I gave him all, the books, e-books, PDF, printout all what I had collected during my journey. 3 months on, the Guy is back, I want more books more information. I said that's what I have, however there is Google for more information. Again after about 2 months, he was back full of excitement and energy, telling me I know all, it's was easy, why do people spend on such simple things. I am now ready for trading now. I just smiled at him and wished him Good luck. 3 months on, the Guy came back all frowned up, angry and upset. I asked him what happened. He said its all cheating in market. I asked how. He said initially I started making money which was so easy to make, then all of sudden, the market just turned against me for no reason and I lost out. I again tried, but it kept on taking away my money, this is so not fair. He went on and on telling me what he did, and how

How to identify value stocks. Four most powerful tools that Warren Buffett uses to identify value stocks. If you understand them all then you can easily pick value stocks for wealth creation. Suppose you are sitting in a beer bar with some of your friends. While drinking the beer you got idea to start your business. The business of printing T-shirts. It requires ₹1,000 to open and start that business but you have only ₹250. You convinced one of your friends sitting with you and he is agree to pay you remaining ₹750. Now you have ₹250 as equity ( Investor’s original money invested) and ₹750 is your debt that you have to pay back. You started your business and in very first year your company has generated Revenue = ₹200 Expenses = ₹80 Operating Profit or EBIT = ₹200- ₹80 = ₹120 Net Profit (After deduction of TAX and Interest say 20rs. )=  ₹100 Now some of the important terms are as follows: Equity or Shareholder’s equity : ₹250 Debt or Total liability : ₹750 Total Asset = A

*3 Important Financial Instruments* There are 3 important financial instruments every investor must have in their portfolio. *1) Term Plan:* The first and foremost step towards Financial Planning is having a term plan upto 20 times one's Annual Income. Recently, the term plan awareness has picked up but still it is awailed by less than 4% people in India. *2) Health Insurance:* The cost of Medical treatment has sky rocketed with the advancement of medical science. Accordingly, investors having medical insurance have not increased their medical insurance and many have not taken health insurance at all. One must have Health insurance upto 2 years annual income, or Rs.10 lacs whichever is higher. *3) SIP:* SIPs should be done for one's long term financial goals. ● *SIP for Retirement:* Retirement corpus should be adequate enough to take care of your financial needs for 30 years. SIP works the best for retirement planning. One should start SIP for Retirement as one s

Good Investment Consultants do not offer tips or advice on stock market over the phone. Beware of receiving fraudulent communications, unauthenticated trading tips and unsolicited calls on trading in stocks from unverified sources. What should you do if you receive a trading tip over phone or SMS? Please verify the authenticity of the caller, at the slightest doubt, desist from acting on such calls or tips Ensure you are registered on the TRAI DND.  Report any unsolicited stock tip or marketing call to TRAI and your service provider Android phone users can also download the DND (2.0) App offered by TRAI to register number under DND and report unsolicited commercial communications. Stay alert! Warm regards, Team Investor Education