When Do You Need to File an ITR?
You generally don’t need to file an ITR if you have no income sourced from India. However, it becomes mandatory if your total Indian income in a financial year exceeds:

• ₹2.5 lakhs under the old tax regime.

• ₹3 lakhs if you opt for the new tax regime.

Even if your income is below these thresholds, filing might still be necessary if you have specific types of income, such as:

• Rental income from Indian property.
• Pension received in India.
• Capital gains from selling Indian assets.

Benefits of Voluntary Filing: Even if your income falls below the threshold, consider filing an ITR voluntarily. This can be beneficial for:

• Claiming tax refunds on deducted TDS (Tax Deducted at Source).
• Claiming DTAA benefits in India.
• Carrying forward capital losses to offset future gains.
• Securing bank loans or visas where ITRs are required.

Choosing the Right ITR Form: You shall select ITR-2 for returns filing, and for business income, ITR 3 is required. NRIs can no longer file ITR-1. Consulting a tax advisor can ensure you choose the correct form. The deadline for ITR filing is usually July 31^st of each year. Missing this deadline can attract penalties.

Remember:
By staying informed and proactive about your tax obligations, you can enjoy peace of mind and focus on your financial goals. If you have any questions or need assistance, we’re here to guide you every step of the way!

(Contributed by Yogesh Gola, Relationship Manager, Advisory Desk, Hum Fauji Initiatives)

The Rise of Social Media Investment Scams.
How to Avoid them?

Planning for a Second Career Post-Retirement

Retirement can be a thrilling yet uncertain time as you transition from a long-standing career to a new phase of life. While some retirees enjoy their newfound free time, others seek opportunities to start a second career. Leveraging your skills and experience can provide financial benefits and a renewed sense of purpose and fulfilment.

Here are some key considerations to help you navigate this exciting phase of life.
Assess Your Financial Needs

1. Review Savings: Check your EPF, PPF, pension, and other investments.
2. Estimate Expenses: Include essentials like housing, healthcare, and daily costs.
3. Identify Income Gaps: Determine if you need extra income to cover your expenses.

Explore Career Options

1. Leverage Experience: Use your professional background. Consider consulting, part-time, or freelance work in your previous field.
2. Pursue Passions: Turn hobbies or interests into work. Think about teaching, writing, or working with NGOs.
3. Seek Flexibility: Look for part-time, remote, or freelance opportunities to maintain work-life balance.

Consult Advisors

1. Financial Advisors: Seek advice on managing retirement funds, tax planning, and investment strategies.
2. Career Counsellors: Get guidance on suitable career paths, skill development, and job search strategies.

Balance Work and Personal Fulfilment

1. Set Goals: Define what success means to you—financial stability, personal growth, or community impact.
2. Prioritize Well-being: Ensure your new career leaves time for family, self-care, and leisure.
3. Stay Adaptable: Be flexible and ready to adjust your plans as needed.

Planning a second career post-retirement involves assessing financial needs, exploring career options, consulting advisors, and balancing work with personal fulfilment. With careful planning, you can achieve both financial stability and personal satisfaction in this new chapter.

(Contributed by Neeraj Kumar, Financial Planner, Team Arjun, Hum Fauji Initiatives)

Question: How do I correct discrepancies in my Annual Information Statement (AIS)?

Our Reply: The Annual Information Statement (AIS) includes current data from the Income Tax Department. There may be other transactions relating to the taxpayer which are not presently displayed in Annual Information Statement (AIS). Taxpayer should verify all details and report accurate information in the Income Tax Return to avoid complications.
Here’s how to correct any discrepancies before filing your ITR:

1. Review the AIS: Carefully go through the AIS to identify any discrepancies or incorrect entries.
2. Gather Supporting Documents: Collect all relevant documents such as bank statements, transaction receipts, and any other evidence that supports the correct information.
3. Access the Income Tax Portal:
   • Log in to the Income Tax e-filing portal: Income Tax Portal
   • Navigate to the ‘AIS’ section under the ‘Services’ tab.
4. Submit a Correction Request:
   • Select the specific entry that needs correction.
   • Provide the correct details along with supporting documents.
   • Submit your correction request through the portal.
5. Follow Up: Keep track of the status of your correction request through the portal. If needed, follow up with the Income Tax Department.
6. Respond to Any Notices: If the Income Tax Department issues any notices regarding the discrepancies, respond promptly with the necessary information and documents.

By following these steps, you can ensure your AIS is accurate, avoiding complications during your tax filing process. Happy filing!

(Contributed by Team Arjun, Hum Fauji Initiatives)

Question: How do I correct discrepancies in my Annual Information Statement (AIS)?

Our Reply: The Annual Information Statement (AIS) includes current data from the Income Tax Department. There may be other transactions relating to the taxpayer which are not presently displayed in Annual Information Statement (AIS). Taxpayer should verify all details and report accurate information in the Income Tax Return to avoid complications.
Here’s how to correct any discrepancies before filing your ITR:

1. Review the AIS: Carefully go through the AIS to identify any discrepancies or incorrect entries.
2. Gather Supporting Documents: Collect all relevant documents such as bank statements, transaction receipts, and any other evidence that supports the correct information.
3. Access the Income Tax Portal:
   • Log in to the Income Tax e-filing portal: Income Tax Portal
   • Navigate to the ‘AIS’ section under the ‘Services’ tab.
4. Submit a Correction Request:
   • Select the specific entry that needs correction.
   • Provide the correct details along with supporting documents.
   • Submit your correction request through the portal.
5. Follow Up: Keep track of the status of your correction request through the portal. If needed, follow up with the Income Tax Department.
6. Respond to Any Notices: If the Income Tax Department issues any notices regarding the discrepancies, respond promptly with the necessary information and documents.

By following these steps, you can ensure your AIS is accurate, avoiding complications during your tax filing process. Happy filing!

(Contributed by Team Arjun, Hum Fauji Initiatives)

The Sensex reaching 80,000 is big news! It shows the Indian economy is booming, with companies doing well and investor confidence high. However, for investors, this milestone brings both opportunities and potential concerns. Let’s break it down.

Reasons to Celebrate

• Economic Growth: A high Index – Nifty or Sensex – means companies are thriving, earnings are up and investor sentiment is positive.
• Wealth Creation: Long-term investments grow faster in a rising market.
• Market Confidence: Both local and foreign investors are pouring money into the market, boosting stability.

Reasons for Caution

• Valuation Concerns: As the Sensex rises, so do the valuations of the companies that constitute it. High valuations can sometimes indicate an overheated market, where stocks are priced beyond their intrinsic value. This can lead to corrections, which might affect stock prices and mutual fund NAVs.
• Market Volatility: Sudden corrections can lead to short-term losses for mutual fund investors.
• Sectoral Imbalance: Sometimes, a rising Sensex might be driven by a few sectors, like technology or finance, while others lag behind.

What Should Investors Do?

• Stay Diversified: Spread your investments across various sectors to manage risk so as not to put all eggs in one basket. This helps mitigate risks and capture growth from various parts of the economy. For retail investors, Mutual Funds are the best way to invest in the stock markets since even an investment as low as Rs 1000 gets diversified into 20-60 stocks chosen by experts.
• Regular Review: Periodically review your portfolio to ensure it aligns with your investment goals and risk tolerance. Rebalance if necessary to maintain your desired asset allocation.
• Focus on Long-Term Goals: Avoid making impulsive decisions based on short-term market movements. Focus on your long-term financial goals and stay disciplined with your investment strategy.
• Seek Professional Advice: If unsure, seek advice from financial advisors to navigate the complexities of the market and make informed decisions.

The Sensex reaching 80,000 is indeed a milestone worth celebrating, highlighting the growth and potential of the Indian economy. However, investors should remain vigilant and consider both the opportunities and risks. It’s crucial to stay invested and not panic during such times.

Stay informed, keep a balanced portfolio, and focus on your long-term financial goals to make the most of this milestone.

(Contributed by Abhilash Rana, Relationship Manager, HNI Desk, Hum Fauji Initiatives)

Tax Twists and Turns: The Impact of Marriage, Divorce, and Inheritance

Game Changer for Indian Government Bonds

Big news for the Indian economy!

Starting in June 2024, Indian government bonds are being included in the widely tracked JP Morgan Government Bond Index – Emerging Markets (GBI-EM). This is a huge step forward for the Indian bond market.

What’s Happening?

The inclusion process is happening gradually over a ten-month period, from June 2024 to March 2025. Initially, Indian bonds will have a small weight of 1% in the index, increasing by 1% each month to reach 10% by March 2025.

Why Is This Important?
This inclusion signals growing confidence in the Indian economy. By adding Indian bonds, JP Morgan is recognizing the stability and attractiveness of our bond market for global investors. This move is expected to attract billions of dollars in foreign investment.

Potential Benefits

• Increased Liquidity: More foreign investors will make it easier to buy and sell Indian bonds.
• Reduced Borrowing Costs: Higher demand for bonds may allow the Indian government to borrow at lower interest rates.
• Improved Market Perception: Being part of the JP Morgan index shows the world that the Indian bond market is mature and growing.

Investor Considerations
While this inclusion is great news, investors should think carefully about their strategy. Increased demand might push bond prices up, which could lead to lower yields (returns) in the short term. It’s important to balance potential benefits with your investment goals and risk tolerance.

A Milestone for India
The inclusion of Indian bonds in the JP Morgan index is a significant milestone. It highlights India’s growing role in the global financial landscape and paves the way for further integration with international markets.

Keep an eye on this development – it’s an exciting time for the Indian economy!

(Contributed by Ankit Singh, Financial Planner, Team Prithvi, Hum Fauji Initiatives)

Ques: How can my legal heirs claim my NPS money if I pass away?

Reply: When an investor in the National Pension System (NPS) passes away, his/her legal heirs must navigate specific procedures to claim the accumulated funds. Here’s a simplified guide to help:

Overview of NPS Inheritance Rules

The NPS has clear rules governing the transfer of funds to legal heirs upon the death of a subscriber. These rules vary based on the subscriber’s age at joining and their employment sector.

Subscriber Joined NPS between 18 – 60 years

1. For Government Employees:
   • Corpus ≤ Rs 5 lakh: Entire amount is tax-free.
   • Corpus > Rs 5 lakh: 80% must buy a taxable annuity, 20% is tax-free.
2. For Other Citizens:
   • Entire corpus is tax-free or can purchase a taxable annuity.

Subscribers Joined NPS after 60 years
Nominees or legal heirs receive the entire accumulated corpus tax-free, irrespective of its size.

Documents Needed:

1. With Nominee:
   • Death certificate
   • Claim form
   • KYC documents
   • Proof of relationship
   • Bank details
2. Without Nominee:
   • Legal heir or succession certificate

Steps to Claim:

1. Submit death certificate and claim form.
2. Provide KYC and proof of relationship.
3. For no nominee, submit legal heir certificate.

Understanding these steps and requirements ensures legal heirs can efficiently navigate the process of claiming NPS funds, thereby securing the financial legacy left by the investor.

Source – Valueresearchonline
(Contributed by Team Vikrant, Hum Fauji Initiatives)

Filing your Income Tax Return (ITR) can seem daunting with all the new terms and abbreviations. Let’s try and break it down to a simpler understandable language.

Key Terms to Know

1. Assessment Year (AY): This is the year when your income from the previous year is reviewed for taxes. For instance, income from FY 2022-23 is assessed in AY 2023-24.
2. Gross Total Income (GTI): All your income from different sources before any deductions or exemptions.
3. Taxable Income: The income left after deducting eligible expenses and exemptions from your GTI, which is then used to calculate your tax.
4. Tax Deducted at Source (TDS): Tax deducted from your income at the source of payment of that income by entities like employers or banks, deposited with the government on your behalf. TDS is a part of your overall tax due from you.
5. Tax Payable: The total tax you owe after accounting for TDS and eligible tax credits.

Income Sources

Salary Income: Earnings from your job, including basic salary, allowances, and perks.
House Property Income: Rental income from properties you own.
Business or Professional Income: Income from your own business or self-employment, after expenses.
Capital Gains: Profits from selling assets like stocks, mutual funds, or property.
Other Sources: Includes interest from savings, dividends, and agricultural income.

Deductions and Exemptions

Deductions: Expenses or investments that reduce your taxable income, like contributions to PPF, EPF, insurance premiums, and charitable donations.

Exemptions: It refers to types of income that are not subject to taxation. Examples include agricultural income up to a specified limit, long-term capital gains from property reinvested in another property, and scholarship income for students.

Tips for Filing

• Begin early to avoid last-minute stress and errors. Filing accurately and on time helps contribute to the country’s development.
• If you have complex income sources or deductions, consider consulting a tax professional for guidance.

Filing your ITR doesn’t have to be stressful. With this guide, you’re well on your way to a smooth and confident tax season!

(Contributed by Abhinandan Singh, Relationship Manager, Team Vikrant, Hum Fauji Initiatives)

How Your Feelings Can Hijack Your Portfolio?

Investing can be exciting, but scary too. The market can go way up, then way down, making you feel like you’re on a crazy rollercoaster. If you let your emotions take the wheel, your investments will almost surely suffer. Let’s see how emotions can hijack your portfolio and what you can do to stay grounded.

Common Emotional Traps

Fear of Falling: Say the market takes a big dive. You might panic and sell everything to avoid losing more. But remember, short-term dips are normal. In fact at least one 10% every year is a normal phenomenon. Selling in a panic just converts notional losses into actual losses.

Greed for Green: The market’s on fire! You might be tempted to buy anything that’s hot, hoping to get rich quickly. But risky bets can backfire badly. Slow and steady wins the investment race. Buying stocks or mutual funds at elevated levels will come back to haunt you when reversion to mean happens.

Feeling Stuck: The market’s all over the place, and you’re frozen, not sure what to do. This indecisiveness can stop you from making any progress.

Strategies of Emotional Control

Pick a Path: Decide what you’re saving for (retirement, dream house, children’s education, car, traveling, wealth creation, etc) and how much risk you’re comfortable with. This plan will be your compass.

Spread the Wealth: Don’t put all your eggs in one basket! Invest in different things to avoid major losses. Eg, Mutual Funds are natural diversifiers. A small Rs 1000 investment even in a single fund could be spreading your money across 40-60 stocks or 30-40 debt instruments like govt bonds, bank FDs, and corporate FDs.

Stay Informed, But Chill: Keep an eye on things, but don’t check your investments all the time. It can make you anxious and lead to bad decisions a la ‘itchy fingers syndrome’.

Get Help if Needed: A financial advisor can be your investment buddy and stabilizing compass, giving you personalized advice based on your goals.

Remember, serious investing is a long-duration game. By controlling your emotions and following a plan, you can ride out the ups and downs and reach your financial goals in an easy and grand manner!

(Contributed by Anjali, Financial Planner, Team Prithvi, Hum Fauji Initiatives)

Key Takeaways from the Quant AMC Front-Running Incident

You must have heard about the recent saga of the Quant AMC (Asset Management Company, or the mutual fund company) front- running case. In the evening of 23^rd June 2024, a news broke out in the media that ‘Securities and Exchange Board of India, SEBI’, has initiated an investigation into a ‘front running’ case involving Quant Mutual Fund.

Let’s first understand what is front running
Mutual fund houses buy and sell stocks through brokers, known as dealers. If a dealer knows that a fund house is about to place a purchase or sell order for a particular stock in a large quantum which can influence the stock price, he can profit unfairly from this information by buying or selling that stock beforehand. This incident serves as a stark reminder of the importance of transparency and robust compliance in the financial sector. This is what SEBI suspects might have happened in case of Quantum AMC in some cases with some insiders involved.

Here are some key takeaways:

• Importance of Compliance: Quant’s case, and similar two cases in the recent past in four years in Axis and HDFC AMCs, highlight the need for continued robust compliance frameworks within the AMCs. Regular audits, segregation of duties, and stringent data protection protocols can help prevent insider information leaks.
• Surveillance and Enforcement: SEBI’s swift action in investigating the Quant case demonstrates its commitment to safeguarding investor interests. Effective market surveillance and strong enforcement mechanisms are crucial for deterring malpractices.
• Focus on Accountability: The incident raises questions about accountability within AMCs. It’s essential to have clear lines of responsibility for ensuring ethical conduct and adherence to regulations.

SEBI’s swift action in the Quant case sends a strong message – protecting investors is paramount for it as the regulator. We need continued vigilance and effective enforcement to deter future wrongdoing.

(Contributed by Mausam Gupta, Relationship Manager, Team Prithvi, Hum Fauji Initiatives)

Query: What is the ideal duration for a term insurance? My wife is a homemaker and dependent on me. Till what age should I buy a term insurance plan.

Our Reply: When selecting time frame for life cover, the choice essentially depends on many factors – some of them are enlisted below-

Key Points

• Planned Retirement Age: Most individuals retire around their 60s. A term plan until 60 is often sufficient since, by then, you should have accumulated enough savings and investments to support your spouse without needing additional life insurance coverage. If that is not likely to be the case, take the insurance accordingly.
• Dependents’ Needs: If your spouse is a homemaker and entirely dependent on your income, it’s crucial to ensure her financial security. If you plan to work beyond 60 or have financial responsibilities extending into your later years, you might consider a longer policy.
• Premium Costs: Longer-term plans, such as those extending to 85 years, come with higher premiums. It’s essential to balance these costs with your financial capability and the value of extended coverage.
• Asset Transfer: Make sure to designate your spouse as the nominee for your investments. This ensures a smooth transfer of assets, providing financial stability if you pass away after the term insurance expires.

Expert Advice
We typically recommend a term plan until 60-65, aligning with the usual retirement age. By this point, most people have sufficient savings to support themselves and their spouses. If you opt for coverage beyond this, be prepared for higher premiums but ensure it aligns with your financial strategy and needs.

Choose the term insurance duration based on your retirement plans, financial situation, and the needs of your dependents. While a plan until 60 is generally adequate, extended coverage might be necessary for long-term financial security, if you have some different family situation.

Of course, this needs no reiteration that a Term Insurance Plan is the ONLY insurance plan anybody needs. Anything else is the worst of both worlds – poor insurance cover and a poor investment product.

(Contributed by Team Prithvi, Hum Fauji Initiatives)