It’s raining IPOs
Those who are familiar with stock markets may be wondering why are so many companies lining up for the initial public offerings (IPOs). Well, the reason is the bull run that we are witnessing in the stock market right now.
It is a dream for most companies to get listed on the stock exchange as it gives wings to their funding and expansion plans. A strong market means a good company can attract a lot of investors and ultimately it will help to get a good valuation for its shares. Recently, we have seen many stocks getting listed way ahead of their issue prices – few got listed above 50% or even 80% of their issue price.
Looking at such returns, it is natural to get attracted. But before you take a leap, don’t forget to evaluate your portfolio, risk appetite and other aspects. Also, it is not guaranteed that all IPOs will get listed at a premium; even in the current markets there are many that got listed below their issue price and drifted further down from there.
Avoid unnecessary TDS, submit form 15G or 15H as applicable
While we don’t recommend investment in fixed deposits (FDs) to most of our clients, as returns are low,that too taxable and hence generating returns well below inflation, which should be an investor’s big concern. However, those who have investment in FDs should submit form 15G or 15H to banks, if their income is below the taxable limit.
Ideally, this should be done at the start of the financial year because banks are required to deduct TDS in case your interest income is more than Rs 40,000 in a year. For this purpose, the banks add deposits held in all its branches for an investor (linking through PAN or Aadhar) to calculate this limit.
Form 15G and Form 15H are self-declaration forms for an individual below 60 years of age and those above the age of 60 years, respectively. Some banks also allow you to submit the forms online. However, please do not make such a declaration through Forms 15G/15H if your income is above the non-taxable limit. Otherwise, you are likely to receive a notice from Income Tax Dept which has all this data well-linked now.
Just for your information, No-tax limit is Rs 2.5 Lakhs for those below 60 years of age, 3 Lakhs for 60+ till 80 years and 5 Lakhs above 80 years of age under the old tax regime where deductions and exemptions are applicable. For those opting for new tax regime, there is no difference.
Four important financial changes to happen from 1st April 2021
TDS rate on bank FDs: Income tax rule for TDS (Tax Deducted at Source) will get changed. If a person doesn’t file income tax return (ITR), then TDS rate on bank deposits would double. That means, even if an earning individual doesn’t fall in the income tax slab, the TDS rate levied on them will be doubled if such individual does not file ITR.
Taxability of interest earned on contributions beyond 2.5 Lakhs on EPF and 5 Lakhs on DSOPF. This aspect has been given out in great detail in two of our communications in the past.
Merger of Seven PSU banks: Dena Bank and Vijaya Bank have been merged with Bank of Baroda, Oriental Bank of Commerce and United Bank of India merged with Punjab National Bank (PNB), and Corporation Bank and Andhra Bank merged with Union Bank of India.If you have bank account in any of these seven public sector banks — Dena Bank, Vijaya Bank, Corporation Bank, Andhra Bank, Oriental Bank of Commerce, United Bank of India and Allahabad Bank — then your passbook and cheque book will become non-functional from 1st April 2021.
Rise in NPS Fund Manager Charges: The Pension Fund Regulatory and Development Authority (PFRDA) has allowed pension fund managers (PFMs) to charge their customers higher fees from 1st April 2021, doing away with the old cap of 0.01% of assets under management (AUM) on fees.