Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARDS :: due date for vat payment :: form 3cd :: articles on VAT and GST in India :: VAT RATES :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARD :: list of goods taxed at 4% :: empanelment :: Central Excise rule to resale the machines to a new company :: VAT Audit :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes
 
 
« Direct Tax »
 Income tax returns: How to calculate income from house property
 CBDT proposes new accounting standards for real estate firms
 1 lakh entities face I-T action as ‘clean money’ drive gains pace
 Here are 4 things to know about how CBDT improves ease of doing business by issuing PAN and TAN within 1 day
 Online platforms make tax filing easy, help fill details automatically
 Delhi HC refuses to stay tax case against Young Indian
 CBDT issues draft ICDS on real estate
 CBDT chairman Sushil Chandra gets one-year extensiona
 Income-tax (9th Amendment) Rules, 2017? - Amendment of Income-tax Rules, 1962 - Prescribing form & manner of exercise of option by the domestic company for the purposes of section 115BA of the Income-tax Act, 1961-reg
 CBDT issues draft rules for valuation of unquoted shares
 Central Board of Direct Taxes releases rules to compute fair market valuation of unlisted shares

Tax-saving equity schemes fail to take off
January, 03rd 2012

Uncertainty over Direct Taxes Code and poor equity markets play spoilsport.

A worsening equity market scenario and confusion over the Direct Taxes Code (DTC) have impacted inflows in equity-linked-saving-schemes (ELSS) in the current financial year.

Fund managers say declining sales and net inflows in the ELSS category, which is in line with what's happening with the pure equity funds, may deepen in the last quarter of FY12. They have kept their fingers crossed to see how the fourth and final quarter pans out.
 

TAXING TIMES
Implementation of Direct Taxes Code (DTC) keeps investors away from tax saving equity schemes
Weakening inflows and sales in equity linked savings schemes (ELSS) till November
Year Sales Net Inflows
FY10 1,290 195
FY11 1,427 -993
FY12 1,331 -468
All figures in Rscrore till November
Net inflows in ELSS over last five financial years
Year

Net Inflows 

2006-07 4,453
2007-08 6,151
2008-09 2,968
2009-10 1,554
2010-11 266
All figures in Rscrore
Source : Association of Mutual Funds in India

ELSS are mutual fund schemes covered under Section 80C, which means the money investor puts into these funds is reduced from the taxable income (up to a limit of Rs 1 lakh). Therefore, it helps reduce taxes. However, once DTC kicks in, tax benefits on ELSS will cease to exist.

Normally, the second half of every financial year witnesses rise of inflows in equity tax saving schemes. However, this year, investors have confusion over DTC, which will take away the tax exemption once it is implemented, says the chief marketing officer (CMO) of a bank-sponsored asset management company, who did not wish to be named.

Till November, not a single month could see sales of more than Rs 200 crore and net inflows failed to cross a mere Rs 50 crore mark. We had anticipated that post-October flows would rise. But, November disappointed with net outflows and in December there was no visible rise in interest for ELSS, the CMO explains.

Most of the tax saving equity schemes are in the red, with a negative return of as high as 17 per cent over the last one year. Only four schemes from fund houses, including Axis, ICICI Prudential, Canara Robeco and Franklin have been able to give returns between two and five per cent during the year.

The overall sentiments, adds chief executive officer of a medium-sized fund house, in the equities are worsening. ELSS, too, could not keep themselves aloof. Forget taxes, investors sensed that in such markets they cannot even make any reasonable returns, he says.

However, investors can still buy ELSS this year as DTC will only be enforced from April. One would get the Section 80C benefits in any ELSS investment made till March 2012. Post that, there is no clear strategy about how fund managers would deal with their existing tax planning funds.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Portfolio

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions