CAPITAL LETTER

Volume 3
G re e ti ngs fro m FundsIndi a!

June 7, 2011 June 7, 2011

Issue 6 Issue 6

FREE online tax-filing!

My name is Srikanth; Im a director at FundsIndia. Thanks for taking the time out to read this June 2011 issue of our monthly newsletter. The romantic poet Shelley wrote, If winter is here, can spring be far behind?. Doing a brutal re-writing of this line, one can say If tax saving season is here, can tax filing season be far behind?. As unromantic as the paraphrased line is, the truth is that we are upon the tax filing season now as we begin the new financial year. It is time to gather up the form 16s, capital gains documents, loan documents etc. and get started with the IT filing exercise. At FundsIndia, we are doing something exciting and interesting this year with tax filing. If you were a customer with us last year, you would remember that we offered a tax-filing solution in the FundsIndia platform in partnership with TaxYogi. We plan to do so again this year. This year, TaxYogi is fully enabled to file your taxes completely online all the tax details will be sent to the IT department electronically! Also, our tax filing offering this year has an added twist you could get it done for FREE! Yes, tax filing which costs between Rs. 150 Rs. 500 elsewhere on online filing sites could be yours completely for free at FundsIndia. How do you get your online tax filing done for free? Simple: If you are an existing account holder at FundsIndia, all you need to do is refer one person to open a new account in FundsIndia to get your free online tax filing what more, the person you refer will also get free online tax filing! If you are a registered user who has not yet opened an account in FundsIndia, all you need to do is complete the formalities and get your account activated to get your free online tax filing! So, in effect this is a three-in-one free offer Open a free account to get free online tax filing and free mutual fund investment services from Indias best mutual fund investment platform! However, like all good things in life, this is available for a limited time only. So, better hurry! Also, please remember to read the article on common e-filing myths written by TaxYogi in this newsletter issue.

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Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.

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Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.

BUY TODAY SELL TOMORROW under the BTST segment Now available at FundsIndia.com With Buy Today Sell Tomorrow (BTST ) you can get the incredible advantage of selling the stocks that you have bought on the previous day. Thats right, you no longer need to wait for the receipt of your shares into your demat account.
FundsIndia BTST - Recommendations May 2011 DATE SYMBOL
Recommendation

BOOK ROFIT

PROFIT

PROFIT %

5/25/11 5/26/11 5/27/11 5/30/11 5/30/11 5/31/11 5/31/11 6/1/11 6/2/11 6/3/11 6/4/11

TATAMOTORS BANKBARODA GODREJ INDUSTRIES Reliance Cap HDFC DENA BANK SBIN ANDHRA BANK Reliance DLF RANBAXY

1133 818 181 500 661 92 2285 144 950 237 536

1160 837 185.5 535 680 95 2320 148 967 242 542

27 19 4.5 35 19 3 35 4 17 5 6

2.38% 2.32% 2.49% 7.00% 2.87% 3.26% 1.53% 2.78% 1.79% 2.11% 1.12%

Why you should take advantage of BTST: Get an average profit of nearly 3% on every recommendation (based on last months recommended stocks) With BTSC you wont have to miss booking profits just because the shares have not yet been credited into our account. Cash based transactions for intra-day trading can be more profitable as it lets you realize maximum profit. Gives you access to an intermediate option between cash and margin trades where you can make profits within one or two days from the date you buy your stock without a compulsory square off.

www.fundsindia.com/taxfiling
Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.

Myths about E-filing of Income Tax returns

BY SRIDAR NAG

E-filing of income tax return was introduced by Income tax department couple of years ago. Using e-filing is a simple and very easy way of filing the return for everyone. However, if you look at stats only 16% of tax payers file their return through e-filing while the rest of the tax payers take the conventional physical route. There are several reasons for that, one being the penetration of computers and accessibility of internet is very low in certain parts of India. However, even in large metros where the accessibility of Internet is very much, only 30-35 percent of the tax payers opt for filing their taxes online. Thus the real problem is not the poor internet access or non availability of computer. It is the mindset and misconception of the people which they have about filing their tax returns online. Some of the common myths regarding e-filing income tax returns are as follows: Myth: Need Digital signature for e-filing the income tax return. Reality: You need digital signature only when you file your return completely online. You dont need one if you e-file your return and then post a signed ITR V form to the income-tax office in Bangalore. The new rule, which requires a taxpayer to send the ITR V by post within 120 days, has made the submission process very simple and convenient. Myth: More chances of scrutiny for the electronically filed returns. Reality: This is purely a fictitious assumption. Every year income tax department pull out random list of people to scrutinize. Whether the person has filed income tax returns electronically or through traditional paper filing method have no bearing on this list. In fact, digital filing can help in automatically tallying Returns Particulars filed by you and that filed by your Employer, Banks and other Financial Institutions. Myth: E-filing cost while physical return doesnt cost anything. Reality: E-filing through the government site is free but its difficult to use in terms of usability. Some private portals also offer free filing. Others offer various packages. Alternately a lot of people utilise the service of tax professionals and chartered accountants which may be much more expensive. Also, consider the cost of your time and the environmental cost that mother earth pays for every return that is filed physically. E-filing is also an environment friendly way. Myth: Cannot revise the return if filed electronically. Reality: E-filed returns can be revised in the same way as those filed in any other manner. All e-filing portals allow you to file revised tax returns. Myth: E-filing is unsafe. Reality: All registered e-filing portals send the tax returns uploaded by assesses to the Income Tax Department. The government website uses the latest software to make it fully secure.
Conclusion: E-filing has made filing the return so simple and easy that any individual can file his return any time anywhere by just few clicks. You just need to fill a simple form and submit. Once you try it out, there is no going back to the old ways!

- Syndicated from Tax Yogi

Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.

A Sage of Hype and Losses

BY DHIRENDRA KUMAR

For almost a decade now, infrastructure has been an enigma to investors. On the one hand, the basic economic rationale of the sector is such that it should be a great investment. On the other hand, the actual experience that investors have had has been terrible. On paper, the logic is simple. There can be no two opinions about the huge gap between the scale of infrastructure that India needs and what it has. When the demand is there, and customers can pay for the product, then the suppliers should be making money and generating wealth for their shareholders.

Unfortunately, this hasnt happened. What has happened is a terrible cycle of hype and losses. In the couple of years leading up to the crash of 2008, infrastructure stocks were boosted up to stratospheric heights and when the markets crashed, investors made huge losses. That much was normal and expected and indeed happened to many companies across many other sectors as well. But what happened after the markets recovered didnt feel normal. The recovery seemed biased against infrastructure stocks. Those who had invested at any point of time in 2007 or earlier never recovered anything close to their earlier investments. Its easy to assume that this is a normal cycle of a sunrise sector, similar to what happened to IT services companies during the 90s and then through the crash of 2000. Among tech companies too, there were many stocks that never recovered. However, I think there is a qualitative difference between the tech boom-bust and the current cycle in infrastructure. During the tech boom, there were a handful of exceptional companies, and there were also the IPO artists who were pretending to be tech companies to ride the boom. The genuine companies tended to be the big ones like Infosys, TCS, Wipro, HCL, (at the time) Satyam, etc. The IPO artists were the small ones. In the infrastructure industry, the situation is different. Some of biggest ones have the most suspect antecedents. Take Reliance Power, perhaps the poster child for the sectors problems. No investor now believes anything that the company says about how the huge quantity of IPO money has been deployed and what the prospects of its projects are. Unfortunately, Reliance Power is not the only such case. Practically the entire real estate development and housing sub-sector is filled with companies that are just as bad. Thus the sector poses a special challenge to investors. On the one hand, there is the prospect of an expanding industry where there must definitely be money to be made. On the other hand, there are all these variables that are external to the operations of the businesses which can sour the deal for investors. I think we should be reconciled to the fact that on these issues, we may not see much improvement. As the joke goes, they are like this only. And the driver for why they are like this only is political corruption. For large parts of this sector, getting government clearances and contracts is a major determinant of success. And a sector where success (or even mere existence) depends on politicians decisions is going to have ethical problems. Thats a millstone that infrastructure investors will have to carry around their necks. The challenge is to identify companies where this effect is minimal and to derive value from them. Syndicated from Value Research Online

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