CICASA E-Newsletter February 2017

Bilaspur Branch of Central India Regional Council The Institute of Chartered Accountants of India

1) CICASA Bilaspur

CONTENTS :::

Managing Committee

2) CICASA Bilaspur Chairman’s Message And Vice Chairman’s Message

3) CPSE ETF

4) BUDGET 2017 – Changes in ITR Filing

5) Industrial Visit

6) Creative Column

7) Editor’s Message

“If you set your goals ridiculously high and it's a failure, you will fail above everyone else's success.”

Chairman's Communication

Dear Students,

Greeting for the New Year and Mahashivratri!

It is a pleasure to interact with you all. First of all, I would like to congratulate the students, who passed their exams in November, 2016 attempt. The students who have not cleared their exams need not be worried and depressed about this. This is the time to learn from your mistakes in previous attempts and focus on correcting those mistakes. There isn’t any substitute for hard work. Now is the time, you need to come over again through your determination and hard work. As Swami Vivekananda Said –

“Arise! Awake! And stop not until the goal is reached.”

So, focus on your goal and forget all the other things. Take new resolutions in this New Year and tread the path of success. May God Shiva bless you all and give you success in your carrier and your life.

Good Luck

Regards

CA Manglesh Kumar Pandey

(Chairman, CICASA Bilaspur Branch of ICAI)

“Tough Times Never Last, But Tough People Do.” Vice Chairman's Communication

Hello friends,

I am glad to be a part of the Managing Committee of the Bilaspur Branch of CICASA of ICAI 2017-18. First of all, I am thankful to my co-committee members for giving me an opportunity to serve as the Vice Chairman of Bilaspur CICASA. Thanks to all the members of Bilaspur CICASA for your blessings & support.

I am very fortunate to have a very dynamic Bilaspur CICASA Chairman, CA MangleshPandey Sir, CA Sachendra Jain Sir, CA Kamal Bajaj Sir and other Managing Committee Members of Bilaspur CIRC & all the active & participative members of Bilaspur CICASA.

Our Committee is determined to conduct various Regional and National Level events during our tenure. We are looking forward for your support throughout the year. Your suggestions & contributions are always welcomed. Let's get together and do wonders again...!

Yours’

Ankur Sahu

(Vice-Chairman, CICASA Bilaspur Branch of ICAI)

“Opportunities don't happen, you create them.”

CPSE ETF by Bhumika Kedia CRO0521823 Every Budget, the Government sets itself an ambitious target for raising cash from selling its equity stakes in PSUs. This target is more often missed than met. Two years ago, the Modi government hit upon the bright idea of selling these stakes through a specially constructed fund — CPSE Exchange Traded Fund or ETF. While the first CPSE ETF was floated in March 2014, a second tranche is set to open this week. The fund is managed by Reliance Nippon Life AMC.

What is Mutual Fund?

A mutual fund is a professionally-managed investment scheme, usually run by an Asset Management Company (AMC) that brings together a group of people and invests their money in stocks, bonds and other securities.

A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, as well as their funds counterparts, including mutual, exchange-traded and closed funds. Portfolios are held directly by investors and/or managed by financial professionals.

What is CPSE ETF?

An ETF is a mutual fund whose portfolio exactly duplicates an existing index (Stock Market Index is a measure of change in a securities market). So, the CPSE ETF holds the same basket of stocks, in the same proportion as the Nifty CPSE Index. You can expect its returns to very closely mirror the performance of this index.

Ten central PSUs make up the portfolio of the Nifty CPSE ETF. Of these, ONGC (24.3 per cent weight), Coal India (20.5 per cent), IOC (17.9 per cent) and GAIL (11.1 per cent) take up the lion’s share, while Power Finance Corp, Rural Electrification Corp, Container Corp chip in with about 5 per cent each and Bharat Electronics, Oil India and Engineers India account for 2-4 per cent. These have been shortlisted for their high dividend pay-outs. The subscriptions will be used by Reliance MF to buy equity stakes from the Centre, in the same proportion. During the offer, the CPSE ETF is available at a 5 per cent discount to prevailing market prices. But if you miss this window, the ETF is listed on the stock exchanges and you can buy or sell units in the secondary market, at the latest quoted price.

“Great minds discuss ideas; average minds discuss events; small minds discuss people”

Why is it important?

When the Centre floats its disinvestment offers one at a time, the investor response is often dependent on market conditions. So if markets are soaring and the sector to which the PSU belongs is favored, the offer gets lapped up. But if markets are downbeat the offer bombs, prompting LIC or another state institution to do the rescue act.

When the Centre disinvests through the ETF route, a bunch of PSUs can be disinvested at one shot. The offer can be timed to good market conditions with a high decibel marketing campaign. While one-off disinvestment offers so far this year have raised Rs. 400 crore to Rs. 3000 crore, the CPSE ETF expects to mop up between Rs. 5000 and Rs. 6000 crore. This canhelp the government inch closer to its disinvestment target of Rs. 56,500 crore for the year. A healthy mop up from disinvestment will mean lower burden on tax payers.

Why should I care?

If you’re a big fan of state-run firms, the CPSE ETF offer is a good opportunity to buy a basket of them. With a price earnings ratio of about 11 times, compared to the Nifty index’s 22 times, the CPSE basket is inexpensive too. Investors who bought into the first tranche of the CPSE ETF have made a 54 per cent return on their buy price. They also received bonus units.

But then, past performance is no guarantee of future returns. PSUs do suffer from constant government intervention in their business and pricing decisions. With nearly 74 per cent of its portfolio dedicated to energy stocks, the CPSE basket is heavily reliant on the commodity and economic cycle. With the top three stocks chipping in with over 15 per cent each, it’s a concentrated portfolio to own.

The bottom-line

An investment can work out splendidly for either the seller or the buyer. So if the Government wins, you lose and vice-versa.

“ Unexplored paths lead to undiscovered treasures ”

By: Shri Anand Saraf, CRO - 0517926 Changes relating to filing of Income Tax Return in Finance Bill’2017

Do you know these changes in income tax return filing process? The Government is focusing on early reporting of the income by the tax payers for facilitating the decision making. And with this aim in mind has been proposing changes in the income tax law with respect to various aspects of filing of the income tax return. In good old days one was allowed to file income tax returns for previous two years. The previous year’s budget has reduced this to one year. So beginning from 1st April 2017 you will be able to file your income tax return for one year. For the previous year ended 31st March, 2017 you should be filing your income tax return by 31st March 2018. This year’s budget has proposed various changes keeping this aim of early reporting of income by the tax payers in mind. Let us discuss the provisions which are applicable to the Individual tax payers.

Mandatory payment of fee for delay in filing of your income tax return

Hitherto the Income Tax Act provided that in case you were required to file your income tax return under Section 139(1) and failed to file the same before end of the assessment year, the income tax officer could levy a penalty of Rs. 5,000 for such failure after giving you adequate notice to explain your case. With amendment of law from the last year’s budget you cannot file your income tax return beyond the end of the assessment year, the penalty provisions became redundant. Moreover the levying of penalty was not automatic and the experience holders are of opinion that levying of penalty is extremely rare.

So in order to ensure that the tax payers file their income tax returns by the due date which is generally 31st July for the average tax payers, this year’s budget has proposed to levy a mandatory fee for such delay in filing of your income tax returns beyond the due dates. The finance minister has proposed to levy a mandatory fee in case you are required to file your income tax return under Section 139(1) due to the income being more than the taxable limit before allowing deductions under Chapter VIA and capital gains exemption under Section 10(38) of the income tax act.

The amount of fee would depend on the quantum of delay and quantum of your income. In case your income exceeds Rs. 5 lakh in a year you will have to pay a fee of Rs. 5000 if you file your income tax return beyond 31st July but by 31st December of the assessment year. For filing the return of income beyond 31st December but by 31st March you will have to pay a fee of Rs. 10,000. The amount of fee, however,

would be restricted to Rs. 1,000 in case your taxable income did not exceed Rs. 5 lakh for the year.

This mandatory fee has to be paid as self assessment before filing of the income tax return without having to wait for any communication from the assessing officer.

It may be interesting to note that the fee is not payable in case your income does not exceed the basic exemption limit before giving the effect of deduction and exemption as explained above as you are not required to file the return of income but are allowed to file the same. This will result into additional revenue for the government in the form of fee instead of penalty which did not bring any substantial revenue for the government.

Time limit for revisions of the income tax return filed by you

Prior to the amendment of Section 139 by the Finance Act 2016, you were not allowed to revise your income tax return in case any mistake or error is noticed later on unless the same was filed before the due date applicable in your case. So you could revise income tax return even if you had filed your original return by the due date, within a period of one year from the end of the assessment year or completion of the assessment whichever is earlier. The finance minister has proposed to curtail the time limit available with you for revising the income tax return by one year and now you are allowed to file your revised return by the end of the year only. So practically the time limit for filing and revising your original return remains the same. This will apply for the income tax returns to be filed for the assessment year 2018-2019. So for example you file your original return for the assessment year 2018-2019 on 31st March 2019 so you cannot revise the same beyond 31st March 2019 itself.

These changes proposed will bring the reporting of the income closer to the end of the year than what was happening earlier and will also result into better and timely compliance by the taxpayers.

Industrial visit at MaaBhawani Rice Mill,

Students Corner Feedback of students on Industrial Visit of Rice Mill

It was very nice experience throughout the day. It was very well organized. Keep it up CICASA Team. Hope to join you for further nice programmes and events.

- Shashwat

This is my first industrial visit and it really helped me to get to know about the process of conversion of paddy into rice, various by products in the process, accounting of Rice Mill and Stock Audit. Thank you all of the members of CICASA for there presence and making this trip possible. Really enjoyed a lot!!

- JagritBhunjia

I know you’re busy but I am tired of waiting around,

You are lost in your books and our statements are really messed up now;

You can’t make any rectification entries for this,

Any post-dated cheques won’t help either;

We gotta keep it real,

A little time is all I need from you,

Time when it’s only me and you;

Let’s catch up someday on the old pranks or create new ones,

We’ve got our whole lives to talk about how much everybody earns;

I am missing you a lot..

I have classes and office too,

But I can fix my schedule to meet you;

I know you have other friends and you hang out with them,

But they notice your goofy smile when you hear my name;

Stop being busy and making excuses,

In the journey of life, few friends is what everybody loses;

Don’t be that guy,

Who’s always shy;

Because it’s been a long time since I have heard your voice..

Bhumika Kedia

CRO0521823

Hi Friends,

It gives me immense pleasure to launch the first newsletter of CICASA Bilaspur. As the Editor of Newsletter and Joint Secretary of CICASA Bilaspur Committee, I have a few words to say.

We are CA students and we have very busy lives but we should sometimes peek out of our office and classes so that we can explore ourselves beyond our identity as CA students and articles. Through this newsletter, we want to encourage the Students to express themselves, bring out their creativity, and bring to the forefront their hidden potential.

We’ll take every possible initiative to provide a platform to latent talents. Be a part of the amazing CICASA group through your active participation and we’ll celebrate our achievements together. Work hard, party harder and have fun in the hardest of circumstances because-

Life’s a beach, if you want to enjoy the waves and play in the sand; you have to burn a little in the sun.

I hope we’ll have a rocking year and we’ll make lots of wonderful memories.

We would like to include articles, poems, and other relevant content contributed by you all in the upcoming issues of CICASA newsletter. You can send your content along with your Full name, CRO and a Photograph to Cicasabsp@gmail.com.

All the best for your exams!

Regards,

BhumikaKedia

(Editor)

(Joint Secretary, CICASA Bilaspur Branch of ICAI)

ANNOUNCEMENT Time flies but memories last forever... It's now time to handover CICASA to the new committee... CICASA bilaspur is organising a charge handover ceremony on 28th February 2017 (Tuesday). Time: 3 P.M. Sharp Venue: Bilaspur Branch We, the whole CICASA committee, request your presence for the celebration. Please come in maximum numbers and motivate the upcoming CICASA body! For and on behalf of CICASA bilaspur Shruti Agrawal Ex- Secretary CICASA Bilaspur

Disclaimer: The views and opinions expressed or implied in this Newsletter are those of authors and do not necessarily reflect those of Bilaspur Branch of CIRC of ICAI.