Saturday, July 19, 2008
Golden Quotes
JAB WE MET CA GROUP
some members of JAB WE MET CA GROUP celebratingcompletion of their GMCS JUNE 2008 batch at chandigarh.
ALL THE MEMBERS OF THE GROUP(JAB WE MET CA) ARE WORKING VERY HARD TO PROVIDE UPTO DATE INFORMATON TO ALL OF US FREE OF COST.
I SALUTE THEM !!!!
Friday, July 18, 2008
4 investing gems from Warren Buffett
4 investing gems from Warren Buffett
Warren Buffett, probably the greatest investor of his generation, rarely communicates his investment ideas in writing to the general public. And why should he? If someone has that extra edge when it comes to making money from the stock markets, he would rather use it for himself rather than go around sharing it. But once a year, he makes an exception to the rule and does give out his way of thinking through the annual letter he writes to the shareholders of Berkshire Hathaway. Other than this he has given many speeches over the years, which have given the general public some idea of the way he thinks. Here are a few of these gems which he has shared with his shareholders over the years through his letters and speeches.
1. Buy the business and not the stock The speech titled, 'The Superinvestors of Graham and Doddsville,' delivered to the students of Columbia Business School in 1984, remains the most famous speech that Buffett ever made. This speech was delivered at a seminar held to celebrate the 50 years of the publication of Benjamin Graham and David Dodd's book Security Analysis. Benjamin Graham was Warren Buffett's Guru at Columbia School and all the years that Graham taught there Buffett was his only student to have got an A+ grade. And Buffett, as we all know, has surely lived up to that grade. This speech elucidated his firm belief in the principle of value investing. Value investors, he said, "search for discrepancies between the value of a business and the price of small pieces of that business in the market." Hence, the only thing they are bothered about is "how much is the business worth?" As Buffet said in the speech, "He's not looking at quarterly earnings projections, he's not looking at next year's earnings, he's not thinking about what day of the week it is, he doesn't care what investment research from any place says, he's not interested in price momentum, volume or anything. He's simply asking: What is the business worth?" And hence, as Buffett points out in the speech about value investors. "While they differ greatly in style, these investors are, mentally, always buying the business, not buying the stock." As we all know, the question 'how much is a business worth?' is not easy to answer and depends on how closely the investor follows the business of the company he is investing in and the understanding he has of that particular line of business. Buffett himself follows this and does not invest in businesses he does not understand. Information technology is one sector he has consciously stayed away from even at the height of the technology boom.
2. Buy when the stock prices are low One of the peculiar things about stock markets is the fact that investors like to buy when the markets are doing well and the stock prices are on their way up. This is not the best way to invest given the fact that in everyday life we like to buy more of something only when the prices are low. Buffett explains this point in his letter to the shareholders for the year 1997. "A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices?" "These questions," he goes on, "of course, answer themselves. But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the 'hamburgers' they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices."
3. For investors as a whole, returns decrease as motion increases Getting into stock because everyone around you is and hoping to make money from it money successfully is not everyone's cup of tea. As more and more investors get into the same stock, and price rises, the chances of making money from the stock go down. In his 2005 letter Buffett wrote, "Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac's talents didn't extend to investing: he lost a bundle in the South Sea Bubble, explaining later, 'I can calculate the movement of the stars, but not the madness of men.' If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: 'For investors as a whole, returns decrease as motion increases.'"
4. There is a thin line separating investment and speculation Buffett explains this beautifully in his letter to the shareholders in the year 2000. "The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money." "After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities -- that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future -- will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There's a problem, though: They are dancing in a room in which the clocks have no hands."
RTI ACT AND INCOME TAX REFUNDS
RIGHT TO INFORMATION AND INCOME TAX REFUNDS
If in the income-tax administration there is one area
which has remained perennially incurable, it is Incometax
Refunds.
In a Press Release dated 19th April, 2007, Central Board of
Direct Taxes stated: “It has been reported in some
sections of the media that a large number of taxpayers
are awaiting refunds from the income-tax department for
up to three years. These reports are factually incorrect
and based on incomplete appraisal of facts”.
As per the statement made by Minister of State for
Finance there have been instructions to issue refunds
within four months from the date of receipt of return and
dispatched within 30 days from the date of signing the
refund order.
I am sure most readers of this article would doubt the
correctness of above Press Release and the Statement.
Many readers may not have received income-tax refunds
for one or more earlier years inspite of many reminders,
personal visits, and grievance-cell applications. There
was no hope. It was a helpless and hopeless situation.
Right to information Act
• The Right to Information Act came into effective
being from 12.10.2005. Now nearly two years are
getting over.
• The Act is being used by many citizens to obtain
information, which earlier was not available, from
various Government Departments and other
organisations like PSUs, Indian Railways, Reserve
bank of India and so on.
• Information can be accessed by making an
application under the RTI Act. It is very simple, leasttime
consuming, most inexpensive.
• Few organisations (22 in all) like CBI, RAW are
basically exempted.
• Further, certain informations are exempted for all
organisations covered under the RTI Act referred to
as “Public Authority”. Such exempt items include
information on commercial confidence, trade secrets
or intellectual properly, information which would
impede the process of investigation or apprehension
or prosecution of offenders, information which
relates to personal information the disclosure of
which has no relationship to any public activity or
interest or which would cause unwarranted invasion
of the privacy of the individual etc.
Example of application under RTI for refund
Suppose your income-tax refunds for A.Y. 2002-03 of Rs.
1,057 and for A.Y. 2004-05 of Rs.7,230 are not received
inspite of many reminders. You make the application in
Annexure A OF RTI ACT . You take it to one of the designated post
offices, handling RTI applications. There are
designated post offices, list available on
www.bcasonline.org. For ALL cities, visit
http://www.indiapost.gov.in/rtimanual16a.html to get
details of designated post offices.
Submitting application under RTI
• Filing fee for RTI application to the Central
Government authority is Rs. 10. Same can be
paid at post-office in the form of Postal Order for
Rs.10.
• To make the system operate easier, the decision was
taken by the Prime Minister of India that the
Department of Posts should provide its services to all
the Central Government Departments as a collection
point for information under the RTI Act by
designating its Central Assistant Public Information
Officers (CAPIOs) as CAPIOs for the entire Central
Government.
• The postal department now not only receives cash of
Rs. 10 on behalf of Public Authorities of all Central
Government Departments or / and issues postal
order for it, but also takes the responsibility of
delivering the RTI application free of charge to the
concerned CPIO anywhere in India. We need to
appreciate the service of postal department.
• Post office normally dispatches the RTI application to
the concerned Central Government Department on
the same day.
• The service of Post offices for delivery is at the option
of the applicant. If you desire to deliver application
to the concerned department yourself personally or
yourself posting it by registered post A.D. to get the
acknowledgement yourself you may do so.
Public information Officer
• RTI application is to be addressed to Public
Information Officer (PIO).
• Each establishment (i.e. Public Authority) covered
under the RTI Act has to appoint one or more PIO, in
fact one for each of the department's different offices.
• Until 09.08.2007, all Commissioners of Income-tax
were PIOs. Ministry of Finance, Department of
Revenue, Directorate of Income-tax vide
communication dated 09.08.2007 have modified RTI
mechanism in respect of PIOs / Appellate Authorities
and other related RTI issues. Now your assessing
officer himself is the PIO for you.
Is laptop usage damaging your health ?
Laptops are replacing the desktops at most of the offices.
Due to increase of travel and loads of work.
Laptops were designed with portability in mind. Many of
the design features create problems when it comes to
ergonomics. Long periods of working and inappropriate
laptop use can increase the chance of muscle and joint
pain, overuse injuries of the upper limbs and eyestrain.
The problem is that the monitor and keyboard of a laptop
are very close together.
The risks can be reduced or eliminated with proper work
space design, improved posture and good working habits.
Posture-related injuries
Back and neck pain, headaches, and shoulder and arm
pain are common laptop-related injuries. Such muscle
and joint problems can be caused or made worse by poor
workstation design, bad posture and sitting for long
hours.
Although sitting requires less muscular effort, it still
causes fatigue and requires parts of the body to be held
steady for long periods of time. This reduces circulation
to the muscles, bones, tendons and ligaments and can
result in stiffness and pain. If a workstation is not set up
properly, these steady positions can put even greater
stress on muscles and joints.
Prevention tips muscle and joint injuries
Suggestions to reduce the risk of muscle and joint
problems include:
• Position your keyboard at a height that allows your
elbows to rest comfortably at your side. Forearms
should be roughly parallel with the floor and level with
your keyboard.
• Adjust your chair so that your feet rest flat on the floor.
• Use a footstool (if your feet do not rest on the floor
when the chair is adjusted for good arm position).
• Switch to an ergonomic chair, which helps your spine
to naturally hold its curve while sitting.
• Use an ergonomic keyboard to offer your hands and
wrists a more natural holding position.
• Take frequent short breaks and go for a walk or
perform stretching exercises at your desk. Stand often.
• Use external devices. Attach an external keyboard
and pointing device to your laptop. Position them at a
height that allows your upper arms to hang loosely
from the shoulder and your forearms to extend
horizontally towards the keyboard.
• Raise the laptop. Place the laptop on a stand, book or
other surface so that you can see the screen without
having to bend or rotate your neck.
Ideally screen should be 51 cm away and 20 cm below
eye level.
Overuse injuries of the upper limbs
Muscles and tendons can become painful with repetitive
movements and awkward postures. This is known as
'overuse injury' and these typically occur in the elbow,
wrist or hand of computer users. Symptoms of overuse
injuries in the upper limbs include pain, swelling, stiffness
of the joints, weakness and numbness.
Prevention tips overuse injuries
Suggestions to reduce the risk of overuse injuries
include:
• Keep your mouse at the same height as your correctly
positioned keyboard.
• Position the mouse as close as possible to the side of
the keyboard.
• Use your whole arm, not just your wrist, when using
the mouse.
• Type lightly and gently.
• Mix your tasks to avoid long, uninterrupted stretches
of typing.
• Remove the hands from the keyboard when not
actively typing, to allow the arms to relax.
• Make sure the laptop is stable and will not wobble or
slide as you work, rest your eyes frequently and blink
more to prevent them feeling dry, it adds.
Eyestrain
Focusing your eyes at the same distance point for
extended periods of time would cause fatigue. The
human eye structurally prefers to look at objects further
than six meters away, so any work performed close-up
puts extra demands on the eye muscles.
The illuminated computer screen can also contribute to
eye fatigue, blurred vision, temporary inability to focus
on faraway objects and headaches.
Prevention tips eyestrain
• Make sure your primary light source (such as a
window) is not shining into your face or directly onto
the monitor.
• Tilt the monitor slightly to eliminate reflections or glare.
• Maintain a gap of nearly 51 cm between screen & eyes.
• Position the screen at or 20 cm below eye level.
• Reduce the contrast and brightness of your screen
• Frequently look away from the screen and focus on
faraway objects.
• Have regular eye examinations if any symptoms appear.
Precautions while carrying laptop during travel
Frequent travelers carrying laptop can put strain on backs,
hands and shoulders. To minimize these precautionary
measures are :
• Carry only the essential laptop accessories.
• Use a sturdy bag, backpack, or rolling luggage.
• Pack an external mouse.
So you see, there can be many disorders by use of
technology. But, still the technology is to be used with
the changes in the business needs, space shortage
etc… Therefore, as they say 'Precaution is better then
cure'; one should understand the risk, take it seriously
and to try to minimize the injuries.
ITAT makes it tougher for taxmen to impose penalty
ITAT makes it tougher for taxmen to impose penalty
Imposing some checks on arbitrary actions of taxmen, the Income Tax Appellate Tribunal has made it tougher for the Assessing Officers (AO) to impose penalty on common taxpayers.
Setting aside the orders of the AO and Commissioner of Income Tax (Appeals) in case of Delhi-based Genesis Overseas case, Income Tax Appellate Tribunal (ITAT) in a recent ruling said that tax sleuths cannot impose penalty without clearly mentioning the grounds for such action.
"The required satisfaction for initiation of penalty proceedings as required in law was not at all discernible from the assessment order...Penalty proceedings initiated by the AO were bad in law and the penalty imposed u/s 271(1)(c)in pursuance of such invalid initiation is not sustainable", the ITAT said in case of the city-based company.
The company, was charged by the Tax department for concealment of income by furnishing inaccurate particulars for about Rs 10.68 lakh.
The department had alleged that the traveling expenses of Rs 2.37 lakh to Hong Kong, Bangkok and Kathmandu by the Directors of the company were not related to the business of the company but still shown as a business expense in an attempt to evade tax.
Also, another amount of Rs 8.3 lakh was shown as commission expenses by the company while it had only shown in the accounts to be given to the company's sister concern in order to reduce income and evade tax, the department said.
However, the company in submissions before the Income tax Appellate Tribunal said that requisite satisfaction concerning the concealment of income was not recorded by the Assessing Officer and there was no clarity on penalty to be imposed. Considering the arguments of both the parties, the tribunal ruled that in absence of a discernible satisfaction about the concealment being recorded by the tax officer, the penalty proceedings had no meaning.
INEREST RATE JITTERS
“Spreads will narrow further if RBI hikes key interest rates in the coming days. Banks will have to raise sub-PLR rates to protect their margins,” said G Narayanan, executive director of Indian Overseas Bank. Most bankers have indicated that they may fail to meet the targets on margin this fiscal year if RBI continues to use the CRR as a tool to curtail rising inflation. Recently, banks have pleaded to the central bank not to raise CRR to manage inflation. However, a number of analyst have projected a hike repo rate and CRR. “Banks have began the exercise of raising sub-PLR rates, but it requires a lot of negotiation with corporates. Due to long-term relationship, corporates do not easily accept higher rates. But slowly, they are coming around to accept that fact that high interest rates are here to stay,” said RS Reddy, executive director of Union Bank of India.
E-Payment of Taxes
The Central Board of Direct Taxes (CBDT) have vide notification S.O.No.493(E) dated 13.3.2008 notified the categories of taxpayers who are mandatorily required to electronically pay taxes on or after the 1st day of April, 2008. A company and such other taxpayers (other than a company), to whom provisions of section 44AB of the Income-tax Act, 1961 are applicable have been brought within the ambit of the new provision.
With a view to clarifying and facilitating such electronic payment of taxes by different categories of taxpayers, the CBDT has issued Circular No. 5 of 2008. The Circular clarifies that a taxpayer can make electronic payment of taxes from the account of any other person. However, the challan for making such payment must clearly indicate the Permanent Account Number (PAN) of the taxpayer on whose behalf the payment is to be made. It will not be necessary for the assessee to make payment of taxes from his own account in an authorized bank.
Further, it has also been clarified that for the purpose of the newly inserted rule 125 of the Income-tax Rules, 1962, the meaning of 'tax' will include payment of tax deducted at source (TDS) or tax collected at source (TCS). Therefore, a company and such other taxpayers (other than a company), to whom provisions of section 44AB of the Income-tax Act, 1961 are applicable, are also required to mandatorily make such payment electronically.
ARE YOU A SPAM VICTIM ?
Technologies are advancing, so as the problems with the
advanced technology. In the scenario of e-Mails when
the communication goes through within seconds, the
junk and spam mails are the unfortunate fact of
technology.
If you struggle to find important emails hiding in the
jungle of junk in your inbox, you are not alone. In 2007,
72% of all email traffic was spam.
What is a SPAM email?
A SPAM Email is an unsolicited commercial email, in other
words, an email trying to sell you something which you
haven't requested. E-mail spam, also known as bulk email
or junk e-mail is a subset of spam that involves
sending nearly identical messages to numerous
recipients by e-mail.
Spam is more than just a menace it makes your inbox a
gateway for viruses, phishing attacks and identity theft.
Where do spammers get addresses from?
Some of them are
• Dictionary attacks Some spammers use software to
randomly generate email addresses for popular email
providers, commonly called dictionary attacks the
software will guess the first part of an email address:
guessed@emailprovider.com
• Purchasing third party lists Buying email
addresses from third parties.
• Email Harvesters Some spammers use special
software called email harvesters which scan web
pages for email addresses. Common targets for email
harvesters are message boards and chat rooms.
• Some email appear from trusted sites This is
called email spoofing, in these cases the spammer's
apparent email address will be a trusted domain name,
the only way to really see where the email has come
from is by viewing the full header information of the
SPAM email.
Junk Mail trends
The various spam mails are
• Image Spam Includes Newsletter spams
• Attachment Spam Includes PDFs, zip files, etc…
Shows no sign of decline in near future
• Pump and Dump Stock Scam Spam One of the top
scam catergories, which continues to evolve even
after reporting
• New Social Engineering Includes spam related to
big events like Beijing Olympics, Saddam Hussein's
execution
Simple Tips to avoid excess junk mail
Some of them are
1. Don't advertise your email address or circulate it on
the World Wide Web, i.e. give email address to trusted
sites.
2. Have separate personal and business email addresses.
3. Choose an email address that is difficult to guess. This
would avoid dictionary attacks. Have special
characters such as underscores or numbers in email
address.
4. To avoid your email being picked up by email harvesters
software when including your email address on a
webpage (for example when you use a message board)
t r y t o o b s c u r e i t , for example, use
johnATyourprovider.com instead of using the @ symbol.
5. Check privacy policy and marketing opt-outs carefully
before giving out your mail address
6. Use junk mail filters with your email account
New Year Treat
This year introduced internet users to new dangers, like
'Peacomm Trojan' (kind of virus), where opening a
particular email had your computer download a mailware.
Your computer then becomes part of a bot network. A
bot-herder (spammer) can control these PC's remotely
and command them to send more spam.
Next on the list of spammers are social engineering sites.
It is therefore, strongly advised to the internet users; be
against giving out their email addresses on websites.
Once you are on a spam mailing list, there is nothing you
can do, except change your email address to avoid more
spam.
E-PAYMENT
E-PAYMENT OF TAXES MADARORY FROM 01.04.2008
CBDT has issued press release dated 23rd January , 2008
regarding mandatory e-payment of taxed from 1st April,
2008
e-Payments
• The scheme of electronic payment of taxes for
income-tax payers was introduced in 2004 and it was
optional
• With a view to expand the scope of electronic payment
of taxes, it is proposed to make the scheme
mandatory for the following categories of tax-payers:
o All corporate assesses;
o All other assesses covered under mandatory tax
audit
• The scheme of mandatory electronic payment of taxes
for income-tax payers is proposed to be made
applicable from 1st April, 2008.
• Tax-payers can make electronic payment of taxes
through
o the internet banking facility offered by the
authorized banks.
o internet by way of credit or debit cards.
What is e-Payment
• e-Payment a facility provided to the taxpayers to
make income tax payments through internet using
net-banking facility.
• You must have a bank account with net-banking
facility, and Your bank is amongst the banks that
provide the e-tax payment facility.
Procedure for e-payment
• Log on to the NSDL-TIN website. Click on the icon 'Pay
tax online'
• To pay taxes online the taxpayer will select the
relevant challan :
- ITNS 280: Income Tax
- ITNS 281: TDS / TCS
- ITNS 282: STT / Wealth Tax
- ITNS 283: FBT / BCTT
• Enter the following details
o PAN for non-TDS payments and TAN for TDS
payments
o Name and address of the taxpayer
o Assessment Year
o Major Head Code
o Minor Head Code
o Type of Payment
• If PAN/ TAN is valid the taxpayer will be allowed to fill
up other challan details
• On submission of data entered a confirmation screen
will be displayed. If the taxpayer confirms the data
entered in the challan, it will be directed to the netbanking
site of the bank.
• TIN system will direct you to the net-banking facility of
your bank. You will have to log on to the net banking
site of your bank using the login ID and password/PIN
provided by the bank. The particulars entered by you
at the TIN website will be displayed again. You will
now be required to enter the amount of tax you intend
to pay and also select your bank account number from
where you intend to pay the tax. After verifying the
correctness, you can proceed with confirming the
payment.
• On successful payment a challan counterfoil will be
displayed containing CIN, payment details and bank
name through which e-payment has been made. This
counterfoil is proof of payment being made.
• You can verify the status of the challan in the "Challan
Status Inquiry" at NSDL-TIN website using CIN after a
week after making the payment.
Benefit of e-Payment
• You are not required to personally visit the bank to
make the payments. Payment can be made
electronically at your convenience from any place
where an internet facility is available e.g. your office,
residence, etc.
• You get the Challan Identification Number (CIN)
online, which is required by you when you file your tax
return / eTDS Statement
Banks offering e-Payment Facility
Axis Bank State Bank of India
Punjab National Bank Indian Overseas Bank
Canara Bank Indian Bank
Bank of India Corporation Bank
SBBJ State Bank of Travancore
State Bank of Indore Vijaya Bank
HDFC Bank Oriental Bank of Commerce
State Bank of Patiala Bank of Baroda
IDBI Bank. Union Bank of India
More banks may be added in future