How stock markets work :)

This is how stock markets function 😀 .@Mldigital .@mobis_philipose .@invest_mutual .@menakadoshi .@investor_first pic.twitter.com/y7plEOEfDD

— pd (@iGalactus) July 15, 2015

Services available at the eFiling website of the IT Department

The following online services are available at the e-filing website of the Income Tax Department for returns filed electronically (Logon to www.incometaxindiaefiling.gov.in with your user id and password)

NEW: The IT Departhment has introduced OTP verfication for returns that have been e-filed and there is no need for  tax payers/filers to send their ITR V to Bangalore for validating and verifying the returns.  Read the process here. 

If one is reporting a taxable income of less than Rs. 5 lakhs, one can easily generate the Electronic Verfication Code at the mobile number registered in your account at the E Filing website

If your income is > Rs. 5 Lakhs or there is a refund, the best way would be to link your Aadhaar to your PAN through the EFiling website and request for the Electronic Verfication Code which will be sent to the mobile number registered with Aadhaar authorities.

 Read the details here 

The other services offered at the efiling website are given below. These were received as a mailer and it is very simple to use this site to do your own filing.

History of e-filed returns You can view all your e-filed returns by Acknowledgement number, along with all status details like receipt of ITRV, processing status, etc. To view E-Filing history, log on to e-filing –> My Account –> My Returns ⁄ Form.

View Status of Demand ⁄ Refund The status ⁄ outcome of the processing of your return as refund ⁄ demand along with reasons of refund failure, if any can be viewed at My Account–> Refund ⁄ Demand Status. The refund issued can also be tracked athttps://tin.tin.nsdl.com/oltas/refundstatuslogin.html

Details of Outstanding Tax Demand Details of outstanding tax demand is available at 'E-file' tab –> Response to outstanding demand. A response can be submitted for Agreeing ⁄ Disagreeing to each of the demands along with details at 'E-file' tab –> Response to outstanding demand.

View Form 26 AS Statement The annual consolidated credit statement, which is provided to the assessee having details of Tax Deducted at Source (TDS), Tax Collected at Source (TCS), Advance Tax ⁄ Self-Assessment Tax ⁄ Refund paid during that year. You can also view your tax payment details in Form 26AS at My Account –> View Form 26AS ( Tax Credit)

Request for Re-issue of Order u/s 143(1) and 154 If the Income Tax Return has been processed at CPC, then an online Request for resend of the Orders u/s 143(1) and 154, can be raised on the e-filing website at My Account –> Request for intimation u/s 143(1) and 154.

Refund Re-issue request If the Income Tax Return has been processed and refund determined has failed to reach the taxpayer, then an online Request for refund re-issue along with the required information can be raised at My Account –> Refund Reissue request.

File Rectification You can file a rectification application u/s 154 for e-filed Income Tax Return processed at CPC. To file a rectification go to My account –> Rectification request.

Submit Grievances and Know Status of Grievance You can register your grievances related to CPC at Helpdesk –> Submit Grievance with respect to ITRV, Processing, Rectification, Refund or Communication, and check the status and view the resolution online.

FAQ The FAQ document related to services is available for easy reference . Go to Help tab –> FAQs.

Contact Us For queries and further information on e-filing and CPC, please contact:  E-filing Call Centre : 1800-4250-0025 (Toll Free) CPC Call Centre: 1800-425-2229 / 1800-103-4455 (Toll free) or 080-22546500

ULIPs versus Mutual Funds

@b50 No data for different periods. Here is 5 year data of best ULIPs Vs MFs for you :) @DharmeshASampat pic.twitter.com/KAiz2ErVWI

— Debashis Basu (@Moneylifers) July 7, 2015

How many stocks should one have in his portfolio - a great twitter conversation

Do see this great twitter conversation on how many stocks should be there in a portfolio

A discussion on whether a Direct MF investor should check scheme portfolios

 I received a link to an online conversation  discussing whether investors should check scheme portfolios - and am sharing some excerpts the same. Provides good insights into investor thinking. 

A question was asked - Many DIY investors just see performance of the last 1,2,7,10 years and the star ratings and invest. They do not see portfolios.  I want to know – Do you need to see portfolios especially of large and multi cap schemes or just follow the ratings and performance. For mid caps – what is your opinion? Many just see performance and ratings. That may not be good? Some say that one must check holdings in your portfolio for overlap.

Gist of the answers - against checking portfolios

1. If I knew how to analyse, I would invest directly in stocks - I don't think it is necessary.

2. Overlap is important. BUT you don’t need to check for that if you only use funds with a narrow mandate. Like one blue chip fund and one mid/small cap fund. (In other words, limit the number of funds and keep the mandate narrow so that one need not check for overlap)

3.  Stop worrying too much about fund portfolios - because of the below mentioned reasons:

There are some practical difficulties in studying the portfolio of mutual fund scheme. They are

We always get information about their holding at the end of month, which IMO is very late. We do not know either the rationale behind buying those stocks. Nor do we know either their purchase price, time of purchase or holding period or exit price. Again we do not know whether the exit is partial or full and at what price and for what reasons.

The very purpose of approaching the stock market through MF is to

a. Compensate our ignorance or lack of time or both with regard to stock investing

b. To get reasonable returns (I mean superior returns) for the fees and commissions we pay to MF and also for taking the risk of investing in stocks.

c. If we know how to do the aforesaid things, we can do it by ourselves and save the fees and commission paid to MFs

Portfolio overlap? You can hardly avoid that. All large cap funds have almost the same stocks albeit in slightly different proportion. It is mid and small cap funds whose portfolios vary by vast extent. But they move up and down too much and too fast. By the time you get the information about them, it is too late.

So stop worrying too much about fund portfolios and stick with the funds that you are comfortable with.

Answers for checking fund portfolios

1. I strongly believe that you should check the portfolio of the MFs you are investing in! A few reasons being, you are entrusting your money to the fund manager, don’t you want to know what’s being done with it? (Imagine you gave someone the money as a loan, would you not check?)

Secondly, you want to ensure that the fund walks the talk. If it’s chasing glamour by taking high risk, then you will know from the portfolio.

Finally, by knowing the portfolio you will start learning what decisions are going wrong and whether the fund manager is learning from them, acting quickly, etc. this helps you in increasing your confidence and remain invested when the market tanks (trust me, if you are a long term investor, you’ll see a few crashes.) if you don’t have complete faith in the fund manager, you’ll exit at the worst possible time.

2. You can see the ability of the fund manager if stocks overlap: If you see all large cap funds have invested in more are less same companies but the return is not always same, I think it’s mainly due to fund manager ability to manage the fund well and get best return so probably just one fund in each category may be bit restricting yourself.

3. Is the fund manager backing duds and putting your investment at risk? I check I think this is a good way to shortlist a fund, along with metrics like churn rate, returns % etc. While this helps in finding out actual portfolio overlaps, this also gives a hint whether the fund manager is backing duds ( say for example – is the fund invested in a Sahara Group or equivalent); and could help investors take a more informed call.

4. Checking portfolios helps you learn what fund managers do: I am currently invested only in one fund, and am predominantly into direct stocks. When I wanted to finalize this fund, I did check portfolios of the funds i had shortlisted (VR/Moneycontrol/Morningstar provide these snapshots). Surprisingly, what i found was that a lot of mid cap/value funds also had large caps; probably to act as a cushion. There were many which had exposure to dominant stocks in the index itself – again probably as a way to protect downside in case of a drop in mid cap stocks.

Here is the  link to the complete conversation  .