Quarterly results may affect direction of markets in coming days

Blog meant for 13 July 2017 Thursday

Dear friends,

Nifty closed higher by 30 points to touch another new life time high level of 9816. Tonight, even the global cues are very positive as European and US markets are trading 1-2 % as of now.

The Government has announced that retail inflation in India is 1.54% which is the lowest level since 1999. However, the factory output for the month of May was only 1.7% as compared to 3.1% in April.

The quarterly results of many companies are going to be announced in the coming days and we have to see how the businesses have performed in the first quarter of the year.

Nifty is in Hold zone and at record high. The indications for individual stocks as per technical analysis are –

THE HOLDS ARE – DIVISLAB,  ITC, Maruti, Yes Bank, Reliance, HDFC Bank, Infosys, ACC, LUPIN

Wait to Buy – Asian Paint

Wait to Sell – HDFC, Titan

Sell –  TCS (results of TCS are going to be announced tomorrow. This is the reason investors why investors might have sold today due to uncertainty over how good the results will be.)

Buy – SBI

Don’t Buy – Axis Bank, L&T, M&M

All investors who have been investing for long term must be feeling very happy that markets are going higher and higher and their portfolio value is increasing. However, also understand that we should not get into the temptation of selling our long term holdings just because of the high prices. As long term investors, we are looking for compounding of our investments over many years and not simple profits of a few percent.

For example, your portfolio may be up by 20% currently. It is a good profit. However, if we hold good stocks for many more years, we can make 20% p.a. returns on our investment which will result in our portfolio value being very high due to compounding.

Continue long term investments with your goals in mind so that you get motivation to invest regularly.

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Question of the Day

Question from Mr.Rahul Kumar from Bangalore –

I have received Rs.1 lakh as gift from my father in this year. Do I need to pay tax on this amount? How much tax should I pay?

Answer –

Any gifts received from a ‘blood’ relative is tax exempt in the hands of the receiver. In this case, Mr.Rahul need not pay tax on the Rs.1 lakh received from his father since he has received it from a blood relative.

As per the Income Tax rules, the term blood relative has been defined specifically. Blood relatives are –

• Parents

• Spouse

• Your and your spouse’s brothers and sisters

• Brothers and sisters of your parents

• Your lineal descendants (including spouses)

• Lineal descendants (including spouses) of your spouse

Any time a blood relative gives you any amount as a gift, make sure you take it writing that they have given you the amount out of love and affection.

Please note that the person gifting you the money must have paid tax on it as per law.

Any gift received from non-blood relatives upto Rs.50,000 is not taxable. Any gift of value above Rs.50,000 is taxable in the hands of the receiver. These gifts may be in any form – cash, jewellery, movable and immovable property, shares etc. Any gift received above the value of Rs.50,000 is taxable for the full amount received.

Suppose, you receive Rs.60,000 from a non-blood relative, then you have to add Rs.60,000 to your total income and pay taxes accordingly and not only Rs.10,000 (which is the amount above the basic gift limit).

Hence, you cannot claim anything as gift and state that it is not taxable unless you satisfy the conditions.

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All the best!

Dr.Bharath Chandra & Rohan