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Sunday, 22 September 2019

Corporate Tax Cut : More fireworks Expected




On Friday (20Sep2019) our finance minister cut the Corporate taxes from 35%  to 25.2%(Effective). It was a long pending demand form industry. After that we witnessed a huge up move in stock prices and indices. Because this cut in tax will impact positively on earning of a company. The approximate change in EPS would be 15%. If the PE of remains same then the valuation is also expected to apricate by 15%.

Suppose if a share with PE multiple 20 has Earnings Per Share (Before Tax): 100Rs.
Case 1: Before Tax cut
Corporate tax : 35%
Earnings Per Share (After Tax): 65 Rs.
Expect valuation in this case: 65*20=1300 Rs.

Case 2: After Tax cut
Corporate tax: 25.2%
Earnings Per Share (After Tax): 74.8 Rs.
Expect valuation in this case: 74.8*20=1496 Rs.



Above calculation explains the reason behind the movement in prices across the board. Historically we can say that is EPS increases then PE also gets improved. So more upside expected. Indices calculation is not so simple but it will have positive impact on EPS and Valuation. Hold tight your equity portfolio. Let them re-rate …..



Hope this will help....

SEBI Circular dated 20th September'19 on Liquid Funds

SEBI Circular dated 20th September'19 on Liquid Funds

1. Liquid  funds  shall  hold  at  least  20%  of  its  net  assets  in  liquid  assets.  For  this purpose,  ‘liquid  assets’  shall  include  Cash,  Government  Securities,  T-bills  and Repo  on  Government  Securities.   - Effective date 1st April 2020

2. Liquid and Overnight  Funds  shall  not  park  funds  pending  deployment  in short term  deposits  of  scheduled  commercial  banks, shall  not  invest  in  debt  securities  having structured  obligations and/  or  credit  enhancements  - Immediate effect for fresh Invts

3. Exit load period of 7 days for liquid funds - applicable for investments made 30 days from date of circular and not for investments already done before that date. Awaiting clarity on graded exit load.

4. The  cut-off  timings  for  applicability  of  Net  Asset  Value  (NAV)  in  respect  of purchase  of  units  in  liquid  and  overnight  funds  shall  be  1:30  p.m.  instead  of 2:00  p.m. - effective 30 days from now.

Sunday, 1 September 2019

How to Open NPS Account Online


National Pension Scheme India is a voluntary and long-term investment plan for retirement under the purview of the Pension Fund Regulatory and Development Authority (PFRDA) and Central Government. This pension program is open to employees from the public, private and even the unorganized sectors with the exception of those from the armed forces. You can claim any additional up to Rs 50,000 under section 80CCD(1B) as NPS tax benefit. The scheme, therefore, allows a tax deduction of up to Rs 2 lakh in total. You cannot withdraw the entire corpus of the NPS scheme after your retirement. You are required to keep aside at least 40% of the corpus to receive a regular pension from a PFRDA-registered insurance firm.  The remaining 60% is tax-free.

How to Open NPS Account Online

1. Go to the eNPS website . Click on “Click Here” to begin registration.



2. In the window below select New Registration. Choose individual subscriber, Tier 1
only. Enter PAN number and select a Point of Presence that you want to open an
NPS Account with (preferably your banking partner). If your bank is not showing as
an option in the drop down menu you may have to choose another bank or go
through offline mode. Press continue.



3. Enter all the details as mentioned in the different tabs and click on save and
continue. Under nomination details you will be asked to choose a pension fund
manager and select from a mix of different asset classes and specify the proportion
of investment you want in a certain asset class.


4. Under document upload you have to upload a scanned copy of cancelled cheque of
the bank that you chose as POP. Also upload a scanned copy of PAN card.
5. Under photo & Signature you have to upload a scanned photo and also upload your
scanned signature.
6. Under payment details you have to make the payment (minimum payment of Rs.
500/-) to activate your NPS account. Payment has to be via net-banking of the POP
you selected.
7. Once the payment is done you have the option to “Esign” the form. The
authentication is done via Aadhar based OTP. If this process is successful the
subscriber need not send a hard copy of their forms to NSDL.
8. If “Esign” feature is not working for any reason, you may have to take a print and
sign the form and sent it to the address mentioned on the website.
9. PRAN is allotted immediately after payment is done. PRAN card is sent after
verification of documents.

Hope this will help....

How Pump and dump works in market

A friend just shared with me this stock market story A lot of monkeys lives near a village. One day a merchant came to the village t...