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Tensions in Middle-East are rapidly inching closer to their zenith, with Iran firing about 200 ballistic missiles at Israel late yesterday night. In response today, the Indian markets witnessed their worst decline in two months, with Sensex dipping around 1,769 points, or 2.1% to close at 82,497.10. <keyword id="19896381" type="General" weightage="20" keywordseo="Nifty" source="keywords">Nifty</keyword> followed suit and was also down by 2.1% to close the day at 25,250.10. As a result, about Rs 11 lakh crore were wiped off the market today. The decline was broad-based, with sectors like realty (dipped by over 4%) auto, and energy suffering the most. Broader indices also fell, losing nearly 2% each. The Hang Seng index, which had rallied over 14% during the last week, largely on the back of various stimulus measures announced by the central bank to stir consumption in the Chinese economy, also slumped around 1.47%. With the possibility of an all-out war between Iran and Israel looming on the horizon, threatening to happen sooner than later, markets are expected to remain volatile in near future. Even the India VIX, seen as a gauge of uncertainty and investor fear in the market, jumped over 9% during the day. The war could throw a huge spanner on India's crude oil import plans. As of August 2024, about 44.6% of India's crude oil imports came from <keyword id="19904316" type="General" weightage="20" keywordseo="middle-east" source="keywords">Middle East</keyword>. Israel has already promised significant retaliation, in response to Iran's attack in the days to come. And the strong possibility of a full-blown Israeli attack in Middle East, particularly major oil fields in Iran has sent the crude oil prices surging. Closer home, ONGC (Oil and Natural Gas Corporation) was amongst the biggest gainers on NSE today. <h2>Should Indian investors worry? </h2>But is the impending action in Middle-East the only reason behind today's drastic fall? Vishnu Kant Upadhyay, AVP, Research &amp; Advisory at Master Capital Services notes that while it plays a significant role, other factors are also at play. "Recent regulatory changes in the F&amp;O segment by SEBI is expected to impact trading volumes, as retail participation may decline due to the increased contract size and limits on weekly expiries. Meanwhile, strength in the Chinese market, following the People’s Bank of China (PBoC) stimulus package, has also diverted foreign investment to China, where valuations remain more attractive compared to India", he noted. But Upadhyay believes that the extension of losses in Indian markets wont last long. "From a technical perspective, as long as prices hold above the 25,250–25,100 zone, any decline could present an opportunity to build fresh long positions. A stock-specific approach is advisable, with sectors such as Oil, IT, PSU Banks, Metals, and Chemicals likely to outperform in the coming days", he adds. Shrikant Chouhan, Head Equity Research, Kotak Securities observes that as long as market is trading below 25,365/82,800, the weak sentiment is likely to continue. On the down side, it could slip till 25,150-25,025/82,200-82,000 as well. On the other side, one quick technical pullback is likely if the market succeeds to trade above 25,365/82,800. Above the same, it could bounce back till 25,475-25,500/83,100-83,300. The current market texture is volatile hence; level based trading would be the ideal strategy for the day traders. <h2><keyword id="20760178" type="General" weightage="20" keywordseo="mutual-fund-investors" source="keywords">Mutual fund investors</keyword>, stay put</h2>In the aftermath of a <keyword id="19968045" type="General" weightage="20" keywordseo="market-correction" source="keywords">market correction</keyword>, most mutual fund investors often face a critical decision- should they stop their SIPs (<keyword id="21047553" type="General" weightage="20" keywordseo="Systematic-Investment-Plans" source="keywords">Systematic Investment Plans</keyword>) or to view the downturn as a valuable opportunity to acquire more mutual fund units? By continuing SIPs during such downturns, investors can take advantage of 'rupee-cost averaging,' i.e. accumulating more units when prices are down. This approach not only lowers the average cost per unit, but also positions the portfolio for greater returns when the market eventually recovers, and softens the impact of short-term volatility. Swapnil Aggarwal, Director, VSRK Capital explains that alongside maintaining regular investments, revisiting your asset allocation is also essential in these turbulent times. A well-diversified portfolio, that balances equities with safer assets like bonds can withstand market fluctuations more effectively. You can consider shifting some investments into bond funds or other stable instruments, which can provide a cushion against further declines. <h2>What happens next? </h2>While the immediate impact of a market correction may lead to declines in the NAV (Net Asset Value) of mutual funds, disciplined investors can view this as a moment to reassess their strategies. Focusing on your <keyword id="20908416" type="General" weightage="20" keywordseo="long-term-financial-goals" source="keywords">long-term financial goals</keyword> will let you turn market volatility into opportunity! The market will remain keenly focused on the evolving situation in the Middle East. What will also be equally important are the US monthly jobs data due tomorrow, which could determine the size of Fed's next interest rate move in November.

Nifty, Sensex in freefall today as Iran mounts attack on Israel. Here's what experts think you should do

<ul><li>LTCG of up to Rs 1,20,000 in a single financial year is tax-free. </li><li>Effective July 23rd, 2024, <keyword id="21006654" type="General" weightage="100" keywordseo="indexation-benefits" source="keywords">indexation benefits</keyword> will no longer be available for real estate, gold</li><li>Effective July 23rd, LTCG will be charges at 12.5%, sans indexation benefit</li></ul> After FM <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> proposed to remove indexation benefits on <keyword id="20584761" type="General" weightage="20" keywordseo="long-term-capital-gains" source="keywords">long-term capital gains</keyword> (LTCG) on real estate, gold, and other unlisted assets, discussions were abuzz on the internet as to how this would lead to significantly higher <keyword id="20118944" type="General" weightage="20" keywordseo="taxation" source="keywords">taxation</keyword> on gains from <keyword id="20008581" type="General" weightage="20" keywordseo="property-sales" source="keywords">property sales</keyword>. Previously, LTCG on long-term capital gains was marked at 20%, but it came with indexation benefits, which eventually lowered the individual's overall <keyword id="19974193" type="General" weightage="20" keywordseo="tax-liability" source="keywords">tax liability</keyword>. Now, it has been lowered to 12.5%, but minus any indexation benefit. So, with indexation gone, how will gains from property sales be taxed going ahead? Is this applicable to all properties? What is set to change? Does it help that the <keyword id="22480102" type="General" weightage="20" keywordseo="LTCG-tax" source="keywords">LTCG tax</keyword> has been brought down from 20% to 12.5%? Lets take a deep-dive First, explain this long term short-term conundrum to me So, how much capital gains tax you're supposed to pay depends on how long you hold a particular asset before selling it. Prior to yesterday's announcement, there were 3 holding periods which determined whether an asset was held for long-term or short-term: The situation before- <ul><li>Shares, units of mutual funds would qualify for LTCG tax, if they are held for more than 12 months. If the holding period is less than 1 year, you'd have to pay short-term capital gains (STCG).</li><li>Real estate and immovable property would qualify for LTCG tax, if held for more than 24 months (2 years), along with indexation benefit. </li><li>Bonds, debentures and gold were to be considered long-term capital assets, if they were held for more than 36 months (3 years), with indexation benefit. </li></ul>But going ahead, there will only be two waiting periods which will determine whether an asset would be classified as long-term or short-term The situation now- <ul><li>For all listed securities (stocks, mutual fund units), the holding period for LTCG tax purposes would be more than 1 year (sans indexation benefits) All other assets (real estate, gold, bond, debentures) will qualify for LTCG tax, if they are held for more than 24 months (minus indexation benefits). </li></ul>What was the taxation situation earlier on long-term capital gains? What has changed? So, lets say Tara purchased a property in FY 2004-05 for Rs 20,00,000. In FY 2024-25, she decided to sell it for Rs 60,00,000. You'd think she'll have to pay a flat 20% on Rs 40,00,000, which was her total profit earned from selling her property (Rs 60,00,000-20,00,000). But this is where indexation swooped in and helped cushion the overall tax liability. Prior to July 23rd, 2024, the government considered something known as "indexed cost of acquisition" for determining an individuals' total LTCG tax liability, which was calculated using the following formula: [Cost Inflation Index (CII)value for transfer/sale year/CII for purchase year, or 2001-02 (whichever is later) X cost of acquisition]. Thankfully, you don't have to go about calculating this CII value, since the government does this for you, and notifies the same officially. What CII essentially does is that it compares the current prices of basket A(which contains a bunch of products and services) to the price of the same basket A in the year of comparison, to reflect the change in prices caused by inflation. So, for Tara, her indexed cost of acquisition would come down to Rs 64,24,778 [363(CII for 2024-25) /113(CII for 2004-05)X 20,00,000]. This would mean she incurred a capital loss of Rs 4,24,778, since her indexed cost of acquisition is more than her sales receipts. So, she does not need to pay any LTCG tax. She can set off this loss, but only against her other long term gains with a limit of Rs 2 lakh in one financial year, and can carry forward the same for a maximum of 8 years. However, this changed when the budget memorandum noted yesterday, "indexation available under the second proviso to section 48 is proposed to be removed for calculation of any long-term capital gains which is presently available for property, gold, and other unlisted assets. This will ease the computation of capital gains for the taxpayer and the tax administration". This means that indexation benefits on LTCG will be applicable starting July 23rd, 2024. To understand its impact, assume that this rule is in effect from April 1, 2024. In that case, Tara's LTCG will be a flat 12.5% of her total gains of Rs 38,75,000 (remember, Rs 1,25,000 per year on LTCG are tax-exempt). This would bring Tara's taxability to Rs 4,84,375 Long story, short, minus the indexation benefit, Tara will have to pay Rs 4,84,375 as long-term capital gains tax. However, there has been a slight increase in the basic tax exemption limit for LTCG. Previously, LTCG of up to Rs 1,00,000 in a single financial year was tax-free. But now, this threshold has been raised to Rs 1,25,000. Small wins! <div type="Article" hostid="261" msid="111956035" title="Decoding capital gains taxes: What FM Nirmala took from your pocket, what she gave you in Budget 2024" mstype="2" mssubtype="0"></div> Okay, is there something that continues to be the same for long-term capital gains? Yes, roll-over benefits continue without change. This means you can re-invest the proceeds from sale of your old property into buying a new, residential one, in order to avoid capital gains tax. But that too, is not without its share of catches: You can reinvest these funds in either 54EC bonds, which have a maximum annual investment limit of Rs 50,00,000. Or, you can avail this exemption for a maximum of 2 residential houses, provided your capital gains are limited to Rs 2 crore. Also, if you've it purchased a property, or held from before 2001, you can continue to avail indexation benefits, thanks to something called a grandfathering clause. Does indexation or lower tax rates work better? There's no general rule here. But a cursory look indicates that high capital gains would be favorably taxed under these reduced tax rates, while lower returns and holding periods would find indexation to be a better option. Says Pankaj Kumar, VP – Fundamental Research, Kotak Securities, "the Union Budget-FY25 has rationalized long-term capital gains tax on real estate transaction. It proposed to remove indexation benefits and reduce the long term capital gains tax rate from 20% to 12.5% with immediate effect (grandfathering for properties held before 2001). We find that the new capital gains tax structure for real estate favours investors, who have generated high IRRs, while investors with poor IRRs would be worse off in the new regime". "On the other hand, it is expected to have limited impact on end users who purchase homes for personal consumption. The budget has also talked about encouraging states to lower the stamp duty and consider lower duties for women buyers. Lowering of stamp duties would reduce the overall acquisition cost in high stamp duty states/markets like Gurgaon, Chennai, Mumbai and Kolkata", continued Kumar.

Budget 2024: How will long-term capital tax change your real-estate investments post-budget?

<ul><li><keyword id="859162" type="General" weightage="100" keywordseo="Kotak-Investment-Advisors" source="Orion">Kotak Investment Advisors</keyword> secured an anchor commitment of $500 million from the Abu Dhabi Investment Authority (<keyword id="6482676" type="General" weightage="80" keywordseo="adia" source="Orion">ADIA</keyword>).</li><li>Domiciled in Gujarat’s GIFT City, Kotak Investment Advisors’ new fund will target residential <keyword id="6354553" type="General" weightage="20" keywordseo="real-estate" source="Orion">real estate</keyword> investments.</li><li>The alternate assets arm of the Kotak Mahindra Group had earlier raised $590 million from an ADIA unit this June towards the office space market.</li></ul>Kotak Investment Advisors secured an anchor commitment of $500 million from the Abu Dhabi Investment Authority (ADIA) for its $1 billion <keyword id="172775" type="General" weightage="20" keywordseo="real-estate-fund" source="Orion">real estate fund</keyword>, the company said on Tuesday. Kotak Investment Advisors is an alternate assets arm of the Kotak Mahindra Group. With the anchor commitment from ADIA, Kotak Investment Advisors has raised, managed or advised more than $3.3 billion across its 13 real estate funds, the company said. Kotak Investment Advisor’s 13th real estate fund will primarily target the residential sector. “The new platform is primarily targeted at the significant demand for housing in India, which is driven by sustained economic growth and a shortage of urban housing clusters,” said Mohamed AlQubaisi, executive director of ADIA's real estate department. It is domiciled in Gujarat’s GIFT City, and will focus on markets like Mumbai, Bengaluru, Delhi-NCR, Pune, Hyderabad and Chennai. “This is an opportunistic fund which can invest across various real estate asset classes and capital stack, that is, both debt and equity. With the first close of this Fund, KIAL has raised around $1.5 billion in real estate across multiple strategies in around one and a half years,” said Vikas Chimakurthy, CEO, Kotak Realty Fund. Earlier in June, the company had entered into an agreement with an ADIA unit to set up a $590 million real estate platform, aimed at meeting the long-term demand for office spaces across the country. <cmsannotation type="cmsannotation" annotationid="Home sales rise 119% year-on-year in H1 FY23 in top seven cities" comment="subhead" text="Home sales rise 119% year-on-year in H1 FY23 in top seven cities">Home sales rise 119% year-on-year in H1 FY23 in top seven cities</cmsannotation> Home sales rose 119% year-on-year in H1 FY23 across the top seven cities of the country. According to an<a href="https://www.businessinsider.in/business/news/early-diwali-for-developers-homes-worth-1-5-lakh-cr-sold-in-top-7-cities-in-h1fy23/articleshow/95405843.cms"> Anarock report</a>, homes worth ₹1,55,833 crore were sold between April and September this year, up from ₹71,295 crore in the same period last year. In terms of units, 1,73,155 units were sold in H1 FY23, up from 87,375 units in H1 FY22. Mumbai alone accounted for 48% of the total value of homes sold in this period, with Delhi-NCR and Hyderabad in second and third places, respectively, maintaining their positions from the previous year. “The data vouchsafes that the first half of FY23 was a highly upbeat period for the residential market in the top 7 cities, allaying fears that housing sales could be impacted by rising property prices and interest rates,” said Anuj Puri, chairman, Anarock Group. SEE ALSO: <a href="https://www.businessinsider.in/business/corporates/article/tatas-mega-aviation-merger-is-poised-for-flight-but-the-skies-are-not-clear-yet/articleshow/95526116.cms">Tata's mega aviation merger is poised for flight, but the skies are not clear yet</a> <a href="https://www.businessinsider.in/business/news/95-indian-companies-experiencing-new-types-of-fraud-after-covid/articleshow/95530428.cms">95% Indian companies experiencing new types of fraud after Covid</a> <a href="https://www.businessinsider.in/stock-market/news/fusion-micro-finance-lists-at-a-2-discount-amid-volatile-market-conditions/articleshow/95523776.cms">Fusion Micro Finance lists at a 2% discount amid volatile market conditions</a>

ADIA commits $500 mn to Kotak Investment Advisors’ $1 bn real estate fund

<ul><li><keyword id="859162" type="General" weightage="20" keywordseo="kotak-investment-advisors" source="Orion">Kotak Investment Advisors</keyword> announced the launch of <keyword id="14619266" type="General" weightage="20" keywordseo="kotak-india-alternative-allocation-fund" source="Orion">Kotak India Alternative Allocation Fund</keyword>.</li><li>It is a <keyword id="647801" type="General" weightage="20" keywordseo="fund-of-funds" source="Orion">fund of funds</keyword> to invest in other <keyword id="34499" type="General" weightage="20" keywordseo="private-equity" source="Orion">private equity</keyword> and <keyword id="6357097" type="General" weightage="20" keywordseo="venture-capital" source="Orion">venture capital</keyword> funds besides direct investments in companies.</li><li>The company aims to diversify its investment across different investment avenues in multiple sectors.</li></ul>Kotak Investment Advisors Ltd (KIAL) on Tuesday announced the launch of Kotak India Alternate Allocation Fund, a fund of funds (FoF) to invest in other private equity (PE) and venture capital (VC) funds, besides directly investing in companies. The fund targets to raise ₹1,500 crore, including a greenshoe option of ₹750 crore. The objective of the new fund of funds is to diversify across different investment avenues in multiple sectors, including consumer, technology, healthcare, financials and more. It also intends to invest some portion into co-investment opportunities available from such investee funds. “Indian alternate ecosystem has become vibrant with PE/VC fund managers delivering consistent returns and outperformance over public benchmarks. But many of the marquee fund managers have been inaccessible to domestic investors as they raised only offshore capital or had high minimum ticket investment requirements,” said Srini Sriniwasan, managing director of Kotak Investment Advisors. He added that Kotak Investment Advisors intended to enable access to such funds and increase domestic overall participation in the Indian alternates industry. “Lack of knowledge and information availability in this asset class makes it difficult to make an informed choice. Diversification of risk across managers is tough due to high minimum investment requirements. Through Kotak’s fund of funds we intend to provide investors access to multiple funds as well as leverage our institutional diligence,” Nidhi Chawla, fund manager at Kotak India Alternate Allocation Fund added. SEE ALSO <a href="https://www.businessinsider.in/finance/news/the-worst-of-the-rupees-decline-might-be-over-as-market-expects-us-fed-to-dial-down-pace-of-hikes/articleshow/93290895.cms">The worst of the rupee's decline might be over as market expects US Fed to dial down pace of hikes</a> <a class="tout-title-link" href="https://www.businessinsider.in/stock-market/news/markets-on-a-wait-and-watch-mode-as-they-await-cues-from-rbi/articleshow/93290015.cms">Markets on a wait and watch mode as they await cues from RBI</a> <a href="https://www.businessinsider.in/business/auto/news/as-new-cars-get-pricier-pre-owned-bmws-audis-and-porsches-get-more-attractive/articleshow/93275786.cms">As new cars get pricier, pre-owned BMWs, Audis and Porsches get more attractive</a>

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Nifty, Sensex in freefall today as Iran mounts attack on Israel. Here's what experts think you should do

Ira Alok Puranik

Budget 2024: How will long-term capital tax change your real-estate investments post-budget?

Ira Alok Puranik

ADIA commits $500 mn to Kotak Investment Advisors’ $1 bn real estate fund

Rounak Jain

Kotak Investment Advisors intends to raise ₹1,500 crore to increase its investments in consumer, technology company

Kritti Bhalla

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