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<a href="http://www.businessinsider.in/searchresult.cms?query=Indian+stock+market&amp;sortorder=effectivedate">Indian stock market</a> was quite upbeat since December about <a href="http://www.businessinsider.in/searchresult.cms?query=Budget+2017+&amp;sortorder=effectivedate">Budget 2017 </a>but the happiness may be shortlived as few analysts are predicting possibilities of the government changing the <a href="http://www.businessinsider.in/searchresult.cms?query=long-term+capital+gains+tax&amp;sortorder=effectivedate">long-term capital gains tax</a> (<keyword id="6357448" type="ORGANIZATION" weightage="100" keywordseo="LTCG">LTCG</keyword>) in the upcoming <keyword id="6360189" type="COMPANY" weightage="20" keywordseo="Union-Budget">Union Budget</keyword> 2017. 
 
If the experts are to be believed, the benchmark equity indices are trading near key resistance levels and a bout of profit booking cannot be ruled out should the government decide to restructure the LTCG structure. 
 
Currently, for a holding period of over 1 year, the long-term capital gains tax on equities is zero and the short-term capital gains tax continues to be at 15%. However, in context of other instruments such as debt mutual funds, the definition of holding period for computation of long-term capital gains tax has changed to three years, while for equities it has remained one year. 
 
However, there has been a try by the <a href="http://www.businessinsider.in/searchresult.cms?query=Finance+Minister&amp;sortorder=effectivedate">Finance Minister</a>, dispel fears regarding LTCG tax, analysts predict more probability that the holding period of equities could be changed from one year to maybe two or three. 
 
According to the analyst who ET talked to, predicted these three scenarios: 
 
Scenario 1: 
 
This is the worst-case scenario as the government could enforce a five percent tax rate on LTCG while aligning the securities transaction tax (STT) and short-term capital gains tax with the income-tax slab. 
 
<a href="http://www.businessinsider.in/searchresult.cms?query=Dalal+Street&amp;sortorder=effectivedate">Dalal Street</a> won’t take it nicely and the benchmark indices could backfire. Some analysts see up to 10 % correction in the index in such a situation. 
 
"This is a more likely to happen in this Budget. Initially, the market may react negatively, but it will ultimately be guided by other macro factors,” Pankaj Pandey, Head of Research, ICICI Securities, told ET. 
 The hope in the <keyword id="6355178" type="UNKNOWN" weightage="20" keywordseo="Dalal-Street">Dalal Street</keyword> has already raised the Nifty50 to 8,600 level from 7,900 in December. The index is now facing resistance at 8,700 and requires fresh triggers to move higher. However, a five percent fall from the current level would bring down the index to about 8,100, which will lend initial support to the Nifty50. Also, a 10 % fall would take it to about 7,700 level, which would be more devastating for investors. 
 
"There are murmurs of the long-term capital gains being altered. The market is not yet apprehensive enough. If the market remains at elevated levels till the Union Budget and there is some change in the long-term capital gains tax (LTCG) structure, we could clearly see a 5-10 per cent correction in the market, which would a sentiment dampener,” Nilesh Shah, MD &amp; CEO, Envision Capital, told ET. 
 
Scenario 2: 
 This is the base case scenario and according to the experts, the lock-in period could change from one year at present to two or three years, the securities transaction tax gets abolished and <keyword id="569463" type="ORGANIZATION" weightage="20" keywordseo="STCG">STCG</keyword> remains unchanged at 15%. 
 
Experts suggest that the STT is majorly killing the depth of capital markets by keeping the high-frequency traders away. The expectation from the government is to completely abolish STT to promote the equity culture in India. 
 
"There is a 65 per cent probability that the lock-in period could change to either two or three years and STT could go away,” Harsha Upadhyaya, CIO - Equity, Kotak Mutual Fund, told ET. 
 
"In that case, we could see some knee-jerk reaction, but volatility should ease soon. It will help inculcate a longer-term investment focus. There is a 35 per cent probability that everything remains status-quo, and in that case we could witness relief rally in the short term,” he told ET. 
 
Scenario 3 
 
This scenario can be the best-case scenario if there won’t be tinkering with LTCG and life will go on. The STT, too, will remain as it is and STCG will remain at 15%. 
 
"If the best-case scenario materialises, expect a breakout, which could take the Nifty50 above the 9,000 level,” experts told ET. 
 "If the government refrains from tinkering with LTCG in this Budget and leaves the other two (STT and STCG) as they are, it will give a big push to the market. The Nifty50 will zoom past the 9,000 level,” Renjith RG, Associate Director at Geojit <keyword id="87153" type="CITY" weightage="20" keywordseo="BNP-Paribas">BNP Paribas</keyword>, told ET.

Markets will plunge if government tinkers with LTCG tax in Budget 2017. Here’s how

Do you invest in mutual funds? If you answer yes, the union budget, presented by <keyword id="20404376" type="General" weightage="20" keywordseo="FM-Nirmala-Sitharaman" source="keywords" meta.keywordsubtype="org" meta.entityname="FM Nirmala Sitharaman" meta.hostid="261" meta.entityid="FM Nirmala Sitharaman">FM Nirmala Sitharaman</keyword> recently threw up some surprises for your equity and <keyword id="21006653" type="General" weightage="20" keywordseo="mutual-fund-investments" source="keywords">mutual fund investments</keyword>. Going ahead, <keyword id="20584760" type="General" weightage="20" keywordseo="short-term-capital-gains" source="keywords">short-term capital gains</keyword> (STCG) will be taxed at the rate of 20%, up from its previous slab of 15%, while <keyword id="20584761" type="General" weightage="20" keywordseo="long-term-capital-gains" source="keywords">long-term capital gains</keyword> (LTCG) will attract a tax of 12.5% instead of the earlier 10%. <h2>What's changed?</h2>The definition of specified mutual funds, which changes a lot. Previously, a specified mutual was one which invested less than 35% of its total assets in equity instruments. This meant an taxation ambiguity for ETFs (exchange traded funds), funds of funds and gold mutual funds, where the primary investment wasn't in debt securities, but another asset class like gold. However, since their investments in equities remained below 35%, they were clubbed with specified mutual funds, and taxed accordingly. Now, the budget has changed the definition of a specified mutual funds. From now on, any fund which invests more than 65% of its total proceeds in debt instruments would be classified as a specified mutual fund, and will be taxed as per the investor's income tax slab. But other categories, like Funds of Funds (FoF), gold mutual funds and ETFs will not be a part of these specified funds, and will be charged LTCG and STCG per the new tax norms. Units of gold mutual funds, FoF and other ETFs will be eligible for LTCG if they are held for a period of more than 24 months, and will be taxed at 12.5% sans indexation benefits. As for STCG on them, the requirement is that you sould have held units of these funds for less than 24 months. In this case, you will be charged 20% short-term <keyword id="20301441" type="General" weightage="100" keywordseo="capital-gains-tax" source="keywords">capital gains tax</keyword> Here's a handy reckoner for you to check which asset class will be charged LTCG and STCG going ahead: <div type="image" title="Source: Valtrust" msid="111992244" hostid="261" sizebytes="47483"></div> How will your SIP investments be impacted on withdrawal? Buckle up, long-term investors! This is where the ride is about to get a little complicated, and tough.Say you start investing Rs 30,000 per month in SIPs from January this year, all of which goes in equity mutual funds. You're a dedicated, patient investor, but you need to fund a medical emergency, so you withdraw all the funds you've invested between January and July (just 6 months0, which is about Rs 2,10,000, which are now valued at Rs 2,60,000. With your capital gains at Rs 50,000, here's how you will be charged STCG tax. <div type="image" title="Calculation of short-term capital gains" msid="111992475" hostid="261" sizebytes="32260"></div> Come next year, and you decide you want to go on a solo trip across Europe. You check your investments, and you have Rs 5,40,000 accumulated till July 2025, which have now grown to Rs 9,00,000. Since over one year has passed, their withdrawal will be subject to long-term capital gains. Per new announcement, here's how your funds will be taxed: <div type="image" title="Long-term capital gains" msid="111992482" hostid="261" sizebytes="41339"></div> In case of debt funds, both long and short term capital gains will be taxed as per the investor's income tax slab. So, irrespective of your capital gains, you will be charged basis the tax regime you choose, and the applicable tax slab.

Budget 2024: Here's how your mutual fund investments are set to change post-budget

The union budget for 2024 introduced a slew of changes that will directly impact your pocket in the days to come. FM Sitharaman brought about significant changes in how your capital gains were taxed. Take a look at how this will impact your pocket. First off, what are capital gains? Simply put, any gains or profits you make when you sell a capital asset like your properties, investments in stock or mutual funds and more is counted as capital gains. What sets capital assets aside is their ability to generate monetary value over a long period. Depending on the time period they are held for before they are sold, <keyword id="20584761" type="General" weightage="20" keywordseo="long-term-capital-gains" source="keywords">long-term capital gains</keyword> (LTCG) or <keyword id="20584760" type="General" weightage="20" keywordseo="short-term-capital-gains" source="keywords">short-term capital gains</keyword> (STCG) is applicable. So, what has changed? In one sharp move, <keyword id="19916618" type="General" weightage="20" keywordseo="Nirmala-Sitharaman" source="keywords">Nirmala Sitharaman</keyword> pushed up the long-term <keyword id="20301441" type="General" weightage="100" keywordseo="capital-gains-tax" source="keywords">capital gains tax</keyword> from 10% previously to 12.5% now. Moreover, <keyword id="22142879" type="General" weightage="20" keywordseo="indexation-benefit" source="keywords">indexation benefit</keyword>, which reduced the total tax outgo from the investor's hands, also went away with these proposed changes. As for short-term capital gains tax, it was decreased to 15% from its previous rate of 20%. However, to ease the pain, the maximum exemption amount for long-term capital gains in a single year was increased from Rs 1,00,000 previously, to Rs 1,25,000 now. All listed securities will be considered long-term capital assets (and hence, LTCG will be levied) if they are held for a period of 12 months. For unlisted securities and other immovable properties, LTCG will be applicable post 24 months of holding them. Bonds, debentures and gold will have also have a holding period of 24 months, from the earlier duration of 36 months, in order to be eligible for long-term capital gains tax. What does indexation mean? Indexation allowed <keyword id="19900618" type="General" weightage="20" keywordseo="investors" source="keywords">investors</keyword> to account for inflation, by adding the same to their initial purchase price. This would result in a higher purchase price, significantly lowering the overall gains. But now, capital gains tax will be calculated at the actual purchase price (ouch!) with no scope to factor for inflation, which would mean a higher tax outflow from the investor's pockets. This benefit has been done away with for real estate and gold. Under indexation benefit, it is not your initial purchase, or acquisition price that is taken into consideration, but rather your indexed cost of acquisition that comes to play. This is calculated using the CII of the sale year and the purchase year. This helps in adjusting the purchase cost of your property for inflation when you are selling it. The government calculates and notifies the public of the CII (cost inflation index) every year. For instance, Aditya's father purchased a property worth Rs 40,00,000 in 2009 (FY2009-10). In 2004 (FY2024-25), he decides to sell this for around a crore. How will his tax liability be calculated? First, lets consider that he had indexation benefit. By that, his indexed cost of acquisition (there's a long formula to this) would be Rs 98,10,810, making his long-term gains at Rs 1,89,189. So, 20% of this would come down to Rs 37,837. But lets also consider if he did not have this indexation benefit. While indexation benefits have been done away with starting July 23rd, 2024, lets assume this rule came into effect at the very start of FY25, or 1st April, 2024. This would mean your total capital gain would be 12.5% of Rs 60,00,000, or a staggering Rs 7,50,000. What are the experts saying? Nilesh Sharma - President &amp; Executive Director, SAMCO Securities sees this as a double whammy which leaves much to be desired on the investors front. "It seems govt wants share in investors’ profit. At a time when the equity indices are at an all-time high, the government has tried to take a share out of the growth and the profits earned by the investors by increasing both the STT rates on derivatives and an increase in STCG and LTCG", he notes "The removal of indexation benefit for LTCG will also impact the real estate industry and will slow down the resale of residential flats /lands. There is a fear that it may also increase the proportion of cash transaction in real estate deals, which will be again be counterproductive. The government has not announced any major changes for the individual tax payers except a slight change in the tax slabs and a minor increase in the standard deduction. This too, is however applicable only in the new tax regime, leaving nothing for the tax payers who have opted for the old tax regime", continued Sharma. Palka Arora Chopra, Director, Master Capital Services Ltd notes that the removal of indexation benefits might negatively impact investor returns, leading to a short-term bearish outlook for the sector. "While the 25% increase in the Long-Term Capital Gains (LTCG) tax is manageable and not likely to deter investors significantly, the increase in short-term capital gains (STCG) tax from 15% to 20% could have a more pronounced negative impact in the medium term", she continued.

Decoding capital gains taxes: What FM Nirmala took from your pocket, what she gave you in Budget 2024

<ul><li>No changes, or announcements for the old tax regime</li><li>FMlowered the tax burden by increasing the standard deductions in the new regime </li><li>Tax slabs also revised under the new regime</li></ul> <keyword id="7706673" type="General" weightage="20" keywordseo="Finance-Minister-Nirmala-Sitharaman" source="Orion">Finance Minister Nirmala Sitharaman</keyword> presented the Union <keyword id="18656923" type="General" weightage="20" keywordseo="budget-2024-25" source="Orion">Budget 2024-25</keyword> in the parliament recently, unveiling the Narendra Modi-led government’s budget for the fiscal year 2024-25. While the government announced some changes to direct taxation, including revised tax slabs for the new tax regime, most experts called the budget lackluster. Nitin Chaudhary, Founder of NC Financial Advisory Services highlights his disappointment, noting that this Budget has actually been not at all impactful as it was expected to be. "It is more of a Budget for Coalition rather than any common man and tax payer. Neither there was any major drastic change in allocation as such and nor there was any major relief and tax benefits that was passed on to the tax payer. There is a slight change in the tax slab rate owing to which there will be a very limited benefit to the tax payer in terms of tax outflow", continued Chaudhary. <h2>Changes in new tax regime</h2>In a bid to make the new tax regime more lucrative, the FM proposed to hike the standard deduction limit to Rs 75,000 from earlier Rs 50,000, exclusively under the new tax regime. Similarly, the deduction available for family pension is also proposed to be increased from Rs 15,000 to Rs 25,000. More than two-thirds of taxpayers have availed of the new <keyword id="6354751" type="General" weightage="20" keywordseo="income-tax" source="Orion">Income Tax</keyword> regime, as per <keyword id="129243" type="General" weightage="20" keywordseo="Nirmala-Sitharaman" source="Orion">Nirmala Sitharaman</keyword>. The FM announced a review of the comprehensive tax regime. Per FM, under the new regime, taxpayers will be able to save up to Rs 17,500 as taxes, annually. The government has revised the tax rate structure for the new regime, which are now as follows - <h2>New income tax slab rates</h2> <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5008695000000001pt;border-bottom:solid #000000 0.5008695000000001pt;border-top:solid #000000 0.5008695000000001pt;vertical-align:top;background-color:#000000;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Income slabs </td><td style="border-right:solid #000000 0.5008695000000001pt;border-bottom:solid #000000 0.5008695000000001pt;border-top:solid #000000 0.5008695000000001pt;vertical-align:top;background-color:#000000;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tax rate </td></tr><tr><td style="border-left:solid #000000 0.5008695000000001pt;border-bottom:solid #000000 0.5008695000000001pt;border-top:solid #000000 0.5008695000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0 to 3L </td><td style="border-right:solid #000000 0.5008695000000001pt;border-bottom:solid #000000 0.5008695000000001pt;border-top:solid #000000 0.5008695000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nil </td></tr><tr><td style="border-left:solid #000000 0.5008695000000001pt;border-bottom:solid #000000 0.5008695000000001pt;border-top:solid #000000 0.5008695000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3 to 7L </td><td style="border-right:solid #000000 0.5008695000000001pt;border-bottom:solid #000000 0.5008695000000001pt;border-top:solid #000000 0.5008695000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5% </td></tr><tr><td style="border-left:solid #000000 0.5008695000000001pt;border-bottom:solid #000000 0.5008695000000001pt;border-top:solid #000000 0.5008695000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7 to 10L </td><td style="border-right:solid #000000 0.5008695000000001pt;border-bottom:solid #000000 0.5008695000000001pt;border-top:solid #000000 0.5008695000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10% </td></tr><tr><td style="border-left:solid #000000 0.5008695000000001pt;border-bottom:solid #000000 0.5008695000000001pt;border-top:solid #000000 0.5008695000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10 to 12L </td><td style="border-right:solid #000000 0.5008695000000001pt;border-bottom:solid #000000 0.5008695000000001pt;border-top:solid #000000 0.5008695000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">15% </td></tr><tr><td style="border-left:solid #000000 0.5008695000000001pt;border-bottom:solid #000000 0.5008695000000001pt;border-top:solid #000000 0.5008695000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">12 to 15L </td><td style="border-right:solid #000000 0.5008695000000001pt;border-bottom:solid #000000 0.5008695000000001pt;border-top:solid #000000 0.5008695000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">20% </td></tr><tr><td style="border-left:solid #000000 0.5008695000000001pt;border-bottom:solid #000000 0.5008695000000001pt;border-top:solid #000000 0.5008695000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Above 15L </td><td style="border-right:solid #000000 0.5008695000000001pt;border-bottom:solid #000000 0.5008695000000001pt;border-top:solid #000000 0.5008695000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">30% </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>Prior to the changes announced today, the new tax regime was structured as follows: <h2><table class="redcator-table-advance" style="border-width: initial; border-style: none; background-color: rgb(255, 255, 255); font-size: 16px; line-height: 1.6em; box-shadow: none; width: 850.594px; font-family: Merriweather; letter-spacing: 0.121826px; padding-bottom: 10px !important; background-image: inherit !important; background-position: inherit !important; background-size: inherit !important; background-repeat: inherit !important; background-attachment: inherit !important; background-origin: inherit !important; background-clip: inherit !important;"><tbody><tr><td style="border-width: 1px; border-style: solid; border-color: rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">Income Slab (In Rs)</td><td style="border-width: 1px; border-style: solid; border-color: rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">Tax Rate</td></tr><tr><td style="border-width: 1px; border-style: solid; border-color: rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">Up to 3,00,000</td><td style="border-width: 1px; border-style: solid; border-color: rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">No Tax</td></tr><tr><td style="border-width: 1px; border-style: solid; border-color: rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">3,00,001 - 6,00,000</td><td style="border-width: 1px; border-style: solid; border-color: rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">5%</td></tr><tr><td style="border-width: 1px; border-style: solid; border-color: rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">6,00,001 - 9,00,000 </td><td style="border-width: 1px; border-style: solid; border-color: rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">10% (Tax Rebate up to Rs 7 lakh)</td></tr><tr><td style="border-width: 1px; border-style: solid; border-color: rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">9,00,001 - 12,00,000</td><td style="border-width: 1px; border-style: solid; border-color: rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">15%</td></tr><tr><td class="se-table-selected-cell" style="border-width: 1px; border-style: solid; border-color: rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">12,00,001 - 15,00,000 </td><td style="border-width: 1px; border-style: solid; border-color: rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">20% </td></tr><tr><td style="border-width: 1px; border-style: solid; border-color: rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">Above 15,00,000 </td><td style="border-width: 1px; border-style: solid; border-color: rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">30%</td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> </h2>Says T Manish, Research Analyst, SAMCO Securities, "FM announces revised tax rate under new tax regime, apart from the above slab revisions, the Standard deduction from 50,000 to 75,000 for individuals opting for new tax regime. This would result in savings of around Rs. 17500 in net taxes in the hands of individual. This would benefit directly to the companies in FMCG segment such as HUL, ITC, Dabur, Nestle and second order beneficiaries would be suppliers to these FMCG giants such as Polyplex, Uflex. Further, increased saving would also boost the inflow to wealth management (AMC’s)in the form of SIP's, and to Stock broking companies through brokerage". <h2>Capital gains simplified</h2>FM also moved to rationalise and simplify short-term capital gain (STCG) tax. Going ahead, STCG on specific financial assets will be charged at 20%, while the remaining financial and other non-financial assets will be charges as per applicable rates. This threshold was set at 15% previously. The long-term capital gains tax on financial and non financial assets was raised from its earlier threshold of 10% to 12.5%. However, the exemption limit under LTCG has been enhanced. This means that now, all long-term capital gains tax earned during the year to the tune of Rs 1,25,000 will be tax exempt. This limit was earlier set at Rs 1,00,000. Specified listed financial assets will be considered long-term provided they have been held for more than 12 months. As Anand Rathi, Co-founder of MIRA Money notes, the FM aims to send a clear message to the investors: avoid short term trading and leveraging. This is reflected in the increased security transaction taxes on futures and options, which is a positive step. However, the increase in short term capital gains tax from 15% to 20% is a notable drawback for many traders. "Previously, if your capital gain was 2 lakh rupees, 1 lakh was exempted, and you had to pay 10% on the remaining 1 lakh, amounting to 10,000 rupees. Now, with the same 2 lakh rupees capital gain, you would pay 12.5% tax on the remaining 75,000 rupees after the exemption, which is beneficial", Rathi explained. <div type="Article" hostid="261" msid="111946291" title="Union Budget 2024-25 key highlights: Angel tax to be scraped" mstype="2" mssubtype="0"></div> <h2>Higher tax on F&amp;O trading</h2>In a bid to stop fund inflows into speculative trading, the securities transaction tax (STT) on trading in futures and options was increased. While STT on options was increased from 0.062% to 0.1%, while the STT on futures was raised from 0.0125% to 0.02%. While this might seem as a major setback to those trading in futures and options, experts opine that this is unlikely to significantly trading volumes in the segment. Note that this change is set to come into effect starting October 1, 2024. Says Deepak Ramaraju, Senior Fund Manager, Shriram AMC, "Hike in short-term capital gains and long-term capital gains have been sentimentally negative for the equity markets. This has resulted in short-term selling pressure. However, this can be the beginning of reforming the capital markets and curbing retail participation in the F&amp;O segment. We can expect more measures in the F&amp;O space in the days to come". <h2>Other tax changes</h2><ul><li>The TDS rate on e-commerce operators has been reduced from 1% to 0.1%</li><li>Angel tax, the tax levied on the capital raised via the issue of shares by unlisted companies has been abolished.</li><li>TDS payable on insurance commission reduced from 5% to 2%, starting 1st October, 2024.</li><li>TDS payable on rent paid over Rs 50,000 to be reduced from 5% to 2%. </li></ul> SEE ALSO: <div type="Article" hostid="261" msid="111953230" title="Union Budget 2024-25: Mobile Phones to get cheaper, as FM Nirmala Sitharaman reduces basic customs duty to 15%" mstype="2" mssubtype="0"><payload><![CDATA[seealso]]></payload></div> <div type="Article" hostid="261" msid="111952160" title="Sitharaman announces cut in customs duty on gold, silver to 6%" mstype="2" mssubtype="0"><payload><![CDATA[seealso]]></payload></div>

Budget 2024-25: New tax regime sweetened by FM, hikes standard deduction to Rs 75,000

The entire country celebrating Raksha Bandhan today. But are you one of those elder siblings still mulling and stuck over the perfect gift to give your younger ones? Well, then it is time for you to move beyond your traditional gift ideas like sweets, gadgets, clothes, and jewelry, and invest in their future prosperity. How? By gifting them <keyword id="19905382" type="General" weightage="20" keywordseo="stocks" source="keywords">stocks</keyword>, or even mutual fund units. Here's a deep dive into how you can lay the foundations of a lasting bond with your siblings, and cement their financial future, one stock and one mutual fund unit at a time. <h2>How can I gift shares ?</h2>You can swiftly transfer shares online, provided both you and your siblings have a <keyword id="19977340" type="General" weightage="20" keywordseo="demat" source="keywords">demat</keyword> account. Many brokerage firms like Zerodha, Groww and others also offer this facility. For this, you will need to input details like your sibling's name (who you wish should receive these shares), particulars of their demat account, the amount of shares you wish to give as gift, and the name and 12-digit ISIN number of the company whose stocks you want to transfer. In addition, you will also have to provide the beneficiary owner ID of your siblings, reason for transferring these shares, and bank account details. In order to kickstart the process, you'll have to initiate what is known as an off-market settlement. This means without the stock exchange coming into the picture, two parties i.e. you and your sibling will mutually settle shares. For this, you will have to submit a delivery instruction slip (DIS) to your DP, or depository participant, which serves as a bridge between you and the depository. When you are transferring shares, you are essentially transferring your ownership of such stocks to them, and thus, you need to inform your DP and depository of the same. At present, there are only 2 depositories present in the country, namely NSDL and CDSL. You can submit this DIS both online and offline. If you have more than one siblings you wish to transfer shares to, remember to use separate DIS for each recipient's account. Once you initiate the transfer, your broker will send an email and SMS to the recipient, who will have 7 days to accept this. But remember, once you've transferred these shares, there is no provision to revoke this transfer. And just like with your clothes, accessories and everything else in life, your siblings will have full freedom and ownership to do whatever they deem fit with these shares! However, what you can certainly do, and make this gift more meaningful, is drive home the value of holding these securities for the long term, so that they are able to make the most of this investments. Ideally, a good start would be to start investing in stocks of large-cap, blue-chip companies, and them eventually complement them with small and midcap stocks, which offer higher legroom for growth. Per brokerage firm Master Capital Services Ltd, "consider choosing stocks from well-established companies with a solid track record and growth potential. It is essential to consider risk tolerance, investment horizon, and financial goals before selecting stocks for your brothers and sisters. The finest present you could give your siblings this year would be long-lasting financial stability". If you're looking for some stock recommendations you can consider for your siblings, we have you covered as well: <h4>Larsen &amp; Toubro Ltd. </h4>Why you should consider this? The company has shown consistent revenue growth and profitability in the past years while maintaining stability with its ROCE &amp; ROE of around 19% and 15%. L&amp;T has a significant global presence, with projects and operations in various international markets. This geographic diversification helps in tapping into global opportunities and reduces dependence on the domestic market. <h4>HCL Technologies Ltd. </h4>Why you should consider this? HCL Technologies is one of the IT giants of India, which is ranked amongst the top five Indian IT services companies in terms of revenues. HCL offers a wide array of IT, business services, engineering, R&amp;D services, and software products with operations in 60 countries. The company has been investing heavily in digital technologies, including cloud computing, artificial intelligence (AI), and automation. This focus aligns with current industry trends and positions the company to capture growth in the high-demand areas. <h4>TATA Motors Ltd.</h4>Tata Motors Limited is a leading manufacturer of automobiles and one of the largest OEM in India offering a wide range of passenger and commercial vehicles. Tata motors owns the flagship brand of Jaguar and Land Rover (JLR) which is a dominant automobile player in the global market. Its early entry in the electric vehicle segment has positioned it well ahead of many competitors and currently, it enjoys the largest market share in the EV segment in India. The focus on innovation and sustainability, along with a robust product lineup, positions Tata Motors well for future growth and market opportunities. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">Tax Implications of gifting shares</h2>The best part about gifting shares is that it is tax-exempt, since you're giving it to your relative. This means your sibling will not be liable to pay any taxes on this gift. However, to be on the safer side, make sure that the market value of the shares that you gift them does not exceed Rs 50,000, or else your siblings, i.e. the recipient will have to incur a tax liability. If your siblings decide to sell these gifted shares, they will have to pay LTCG (long-term capital gains) tax at the rate of 12.5%, or STCG (short-term capital gains) tax at the rate of 20%, depending on how long they hold these securities for. <h2>Gifting mutual fund units? </h2>Unfortunately, you cant transfer your mutual fund units to your siblings. The transfer of mutual fund units is only possible in case the unitholder passes away. But the one thing you can certainly do is start an SIP, or systematic investment plan (SIP) in their name. With as much as Rs 5,000 per month, invested over a period of 10 years, you 'll have invested Rs 6,00,000 for you siblings, which would have earned returns worth Rs 5,61,695, taking their total corpus to Rs 11,61,695. You can even start an SIP with just Rs 500/month in their name. You can nudge them into continuing this, so that you instill the value of financial discipline and long-term investing in them. Remember, at the end of the day, the true value of your gift lies not just in its monetary worth, but in the knowledge, responsibility, and financial acumen that you will pass on to your siblings. So, this <keyword id="22639140" type="General" weightage="100" keywordseo="Rakshabandhan" source="keywords">Rakshabandhan</keyword>, consider tying not just a rakhi, but also a knot of financial empowerment.

Move over regular gifts! Gift your sister stocks, MF units this Rakhi

<ul><li>Integrated platform to be set up under insolvency and bankruptcy board to benefit stakeholders</li><li>IBC has recovered Rs 3.3. lakh crore for creditors, 28 cases worth Rs 10 lakh crore also dismissed </li><li>Additional tribunals will be notified</li></ul><keyword id="19912360" type="General" weightage="20" keywordseo="Finance-Minister-Nirmala-Sitharaman" source="keywords">Finance Minister Nirmala Sitharaman</keyword> is set to present the Union <keyword id="15478236" type="General" weightage="20" keywordseo="budget-2024" source="Orion">Budget 2024</keyword> in the parliament at 11 am today and has arrived at the parliament with the paperless Bahi-Khata, a practice first followed by the minister while presenting the <keyword id="6360189" type="General" weightage="20" keywordseo="union-budget" source="Orion">Union budget</keyword> for 2021-22. This will be the seventh time FM Sitharaman will be presenting the <keyword id="6358021" type="General" weightage="20" keywordseo="budget" source="Orion">budget</keyword>, inching past the record of former <keyword id="19956758" type="General" weightage="20" keywordseo="Finance-Minister" source="keywords" meta.keywordsubtype="org" meta.entityname="Finance Minister" meta.hostid="261" meta.entityid="Finance Minister">finance minister</keyword> Morarji Desai, who had 5 full-fledged and 1 interim budget presentation to his credit. President <keyword id="20109163" type="General" weightage="20" keywordseo="draupadi-murmu" source="keywords">Draupadi Murmu</keyword> had described this budget as historic, in terms of the reforms and announcements it will lay forth. Earlier in the day, the FM had met the president with a copy of the budget. The budget will set forth the tone for Modi's third tenure, and will be an important cornerstone for his vision for India's Amritkal, leading India towards becoming a developed nation, or Viksit Bharat. Sitharaman will begin her budget speech at 11 am in the Lok Sabha. You can watch the presentation live on the official Youtube channels of the government. After her speech, all budget-related documents will be available at indiabudget.gov.in <h2>FM Sitharaman tables <keyword id="20387181" type="General" weightage="20" keywordseo="Union-Budget-2024-25" source="keywords">Union Budget 2024-25</keyword></h2>FM Sitharaman, "India's inflation continues to be low, stable, moving towards 4% target. We need to focus on Gareeb, Mahila, Yuva and Annadata (Poor, Women, Youth and Farmers). Budget to focus on employment, skilling, MSME and middle class. Allocations of Rs 1.48 lakh crore have been made for education and skilling in this budget". Productivity and Resilience in Agriculture <ul><li>Aim to develop climate resilient crop varieties. Over next 2 years, 1 crore farmers will be initiated into natural farming through structural support. 10,000 need based bio-resource centers will be established. </li><li>Financing for shrimp farming, processing and export will be facilitated through NABARD </li><li>Rs 1.25 lakh crore set aside for agriculture and allied activities. </li></ul> Employment and Skilling <ul><li>Scheme A: One month wage to all those entering the formal workforce across all sectors. The scheme is expected to benefit 210 lakh youngsters</li><li>Job creation in manufacturing: Incentives given to both employee and employer in the first 4 years of the employment, basis their EPFO contribution.</li><li>Support to employers: The govt. will reimburse Rs 3,000 per month for 2 years for each additional employee hired by employer. The scheme is expected to benefit 50 lakh people</li><li>Establish working women hostels and creches to facilitate women participation in workforce</li></ul>Infrastructure Development <ul><li>Bihar and Andhra Pradesh to receive additional monetary support in the current financial year. Development of new airports, roadways and sports infrastructure to be undertaken in Bihar.</li><li>Grants for backward regions in Andhra Pradesh will be provided</li><li>3 crore additional houses in rural and urban India have been made under PM Aawas Yojana.</li><li>Women led development schemes have received an allocation of over Rs 3 lakh crore.</li><li>Credit support to MSMEs during stress periods</li><li>SIDBI to open new branches in MSME clusters within 3 years and offer direct credit to them. 24 new branches to be opened this year, covering 168 MSME clusters</li><li>To enable MSMEs and artisans to sell products in international markets, hubs to be set up under public-private partnership model. </li><li>Encourage moderation of stamp duties, also consider lowering duties for properties purchased by women.</li><li>Infra investment in economy to stand at 3.4% of GDP</li></ul>Tourism <ul><li>Development of Vishnu Path, Mahabodhi temple corridor</li><li>Support development of Nalanda as a tourist center</li><li>Development of Orissa as a popular tourist destination.</li></ul>Research, Innovation and New Gen reforms <ul><li>Expanding space economy by 5x in the next 10 years via a venture fund of Rs 1,000 crore</li><li>Land management and urban planning to incentivised for timely completion</li><li>Digitisation of terrestial maps will be undertaken</li><li>Establishing land registry and linking to farmer registry as well </li><li>E-shram portal to be integrated with other relevant portals for seamless services </li><li>Shram Suvidha and Samadhan portal will be revamped to enhance ease of compliance</li></ul>Investments Introduction of NPS Vatsalya: Investments can be made on behalf of child. Once they turn 18, this can be converted into a normal NPS account. Budget Estimates 2024-25 Total receipts (sans borrowings) Rs 32.07 lakh crore Tax receipts; Rs 25.83 lakh crore Fiscal deficit at 4.9% of GDP Solar Energy Increase in list of exempted capital goods used for manufacturing solar products No extension in exemption of custom duty for foreign products used for solar manufacturing Income Tax A comprehensive review of the Income Tax Act, of 1961 is in order Merger of two exemptions for charities of donations TDS rate on e-commerce operations to reduce to 0.1% Provisions for reassessment to be simplified. Also read: <a href="https://www.businessinsider.in/budget/news/budget-2024-25-changes-to-tax-slabs-increased-standard-deduction-and-other-changes-to-direct-taxation/articleshow/111951205.cms" data-type="tilCustomLink" target="_blank">Budget 2024-25: Changes to tax slabs, increased standard deduction and other changes to direct taxation</a> Simplification of capital gains STCG on specified financial assets to be at 20% Other financial and non-financial assets to be taxed at applicable rates Long term capital Gains on financial and non-financial assets to be at 12.5% Annual limit on exemption raised from Rs 1,00,000 Rs 1,25,000 Listed financial assets will be considered long-term if held for more than 12 months. Other taxation highlights Angel Tax to be scraped away Simpler tax regime for foreign shipping companies Security transaction rates on trading in future and options to be increased Standard deduction to increase to Rs 75,000 from Rs 50,000 under new tax regime Deduction for pensioners enhanced from Rs 15,ooo to Rs 25,000 Tax slabs under new regime revised. Employee can save up to Rs 17,500 in income taxes annually. Total revenue foregone is about Rs 8 lakh crore.

Union Budget 2024-25 key highlights: Angel tax to be scraped

<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="6377620" type="General" weightage="20" keywordseo="fixed-deposits" source="Orion">Fixed deposits</keyword> serve as an attractive option for short-term investments too with guaranteed returns. </li><li><keyword id="551306" type="General" weightage="20" keywordseo="arbitrage-funds" source="Orion">Arbitrage funds</keyword> are well-suited for investments with a horizon of one year or less due to their relatively low risk profile.</li><li>Low duration <keyword id="35474" type="General" weightage="20" keywordseo="debt-funds" source="Orion">debt funds</keyword>, which invest in a diversified portfolio of fixed-income securities, are also a viable option.</li></ul>While the purpose of investing is to grow your money, where you invest depends on the time horizon and specific goal. While <keyword id="6391506" type="General" weightage="20" keywordseo="equity" source="Orion">equity</keyword> investments are a great option for long term goals which are at least 5-7 years away, for a shorter duration of one year or less, investing in equity can be risky, as it will be exposed to the vagaries of the market. If you require the amount in a year or less, and do not want to keep your money parked in a savings account, then you need to choose your investments wisely. We take a look. <cmsannotation type="cmsannotation" annotationid="Bank fixed deposits" comment="Subhead" text="Bank fixed deposits">Bank fixed deposits</cmsannotation> Fixed Deposits (FDs) serve as an attractive option for investment of less than one year due to their stability and guaranteed returns. They offer a fixed interest rate, shielding investments from market volatility. With the option of flexible tenures, you can align your FD with your specific financial goals. However, FD returns may be lower than some alternate investment options. While at present, the interest of 211 days to less than one year is 5.75% at State Bank of India (SBI), small finance banks can give an interest of up to 6.50% for a period of less than one year. It is noteworthy that interest earned on FDs is taxed at slab rates. <cmsannotation type="cmsannotation" annotationid="Arbitrage funds" comment="Subhead" text="Arbitrage funds">Arbitrage funds</cmsannotation> Arbitrage funds operate on a unique investment strategy that capitalises on price discrepancies between cash and derivatives markets. They identify opportunities where the underlying securities are bought in the cash market while simultaneously selling equivalent futures or options contracts. The goal is to profit from the convergence of these prices over time. These funds are well-suited for investments with a horizon of less than one year due to their relatively low risk profile. Since they primarily engage in arbitrage opportunities, they are less exposed to market fluctuations and volatility, making them a stable choice for short-term investors. According to Value Research, arbitrage funds have given a category average return of 6.54% in the last one year. Arbitrage funds do not have a credit risk. “They are also tax efficient. For a short period of time the taxation of equities is 15% whereas in debt, individuals have to pay the tax as per their tax bracket where some individuals can pay up to 30% tax,” says Soumya Sarkar, Co-Founder, Wealth Redefine, a mutual fund distribution firm. Arbitrage funds are taxed similarly to equity funds. When held for less than a year, any gains are categorised as short-term capital gains (STCG), subject to a 15% tax rate and thus they are more tax efficient than FDs and debt funds. <cmsannotation type="cmsannotation" annotationid="Debt funds" comment="Subhead" text="Debt funds">Debt funds</cmsannotation> Low duration debt funds are a viable option for investments with a horizon of less than one year. They invest in a diversified portfolio of fixed-income securities such as government bonds, corporate bonds, and money market instruments. These funds maintain a shorter average maturity period, between six months to twelve months (according to SEBI rules), which helps mitigate interest rate risks. They aim to provide investors with stable returns while preserving capital, making them suitable for those with a short investment horizon and a preference for lower risk. “Right now given where the yields are, one could look to get around 6.5% - 7.25% return on low duration funds. Obviously these returns are not guaranteed like a bank FD," says Deepak Gagrani, Founder of MADHUBAN FINVEST, a financial services firm. According to Value Research low duration debt funds have given a return of 6.53% in the last one year. One also needs to understand the tax aspect. “The taxation would be something very similar to a bank FD. It will be based on the tax slab,” says Gagrani. <cmsannotation type="cmsannotation" annotationid="Equity savings fund" comment="subhead" text="Equity savings fund"><keyword id="1554748" type="General" weightage="20" keywordseo="equity-savings" source="Orion">Equity savings</keyword> fund</cmsannotation> <a href="https://www.businessinsider.in/investment/news/benefits-of-equity-savings-fund-offered-returns-and-who-should-opt/articleshow/101210167.cms">Equity savings funds</a>, a hybrid investment option, allocate funds into equity, debt, and arbitrage segments to balance potential returns with risk management. “In equity savings funds the proportion of debt is quite high and equity proportion is low. It has 70-80% in debt and the remaining in equity, so it is a conservative fund,” says Sarkar. With lower volatility compared to pure equity funds, they mitigate market fluctuations, making them a favourable choice for those seeking balanced, relatively stable short-term investments. However, it's crucial to align investments with individual financial goals and risk tolerance for the best results. While the debt portion gives around 6%-7% return, the overall returns go up due to the equity portion. According to Value Research, equity savings funds have given a category average return of 9.14 % in the last one year. In the case of FDs, you can withdraw the funds on the day the FD matures, but in case of the mutual funds mentioned above, it may take one to three business days for the funds to be credited to your account after you submit a redemption request.

Short-term investing: Options to park your money if you have a time horizon of one year or less

Incomes of all kinds are taxable. While a few financially sound people understand the tax calculation on income from salary, rents and businesses, taxes on <keyword id="6357440" type="General" weightage="20" keywordseo="stock-market" source="Orion">stock market</keyword> income calculation is a tad more complicated. Here are a few steps to understand taxes on <keyword id="14528053" type="General" weightage="20" keywordseo="stock-market-earnings" source="Orion">stock market earnings</keyword>: Types of stock market earnings In the first place, you need to know that the income generated through purchasing or selling shares is covered under the category of Capital Gains. The two heads under ‘Capital Gains’ are ‘Long Term Capital Gains’ and ‘Short Term Capital Gains’. Depending on their holding period, shares are classified either as long term or short term. Here the holding period refers to the duration for which the investment is held from the date of acquisition to the date or transfer or sale. The holding periods of shares and securities differ between different types of capital assets. For the purpose of calculating the <keyword id="6354751" type="General" weightage="20" keywordseo="income-tax" source="Orion">income tax</keyword>, the holding period is defined differently for equity mutual funds and debt mutual funds. The taxability also differs in these cases. How equity share gains are taxed Short-Term Capital Gains (STCG) On a given stock exchange, if the equity shares are sold within 12 months from the date of purchase, the seller is said to make either short term capital gains (STCG) or incur short term capital losses (STCL). Short term capital gain results when the selling price of shares is higher than the purchase price. Short term capital gain calculation: Sale price of the share minus (Purchase price of the share + expenses on sale) Short-term capital gains are taxed at 15% irrespective of which tax slab you belong to. Long-Term Capital Gains (LTCG) On a given stock exchange, if the equity shares are sold after 12 months of purchase, the seller is said to make either long term capital gain (LTCG) or incur a long term capital loss (LTCL). Long term capital gain results when the selling price of shares is higher than the purchase price. If a seller makes a long term capital gain of over 1 lakh on selling equity shares or equity oriented mutual fund units, the gains made will be taxed @10% plus whatever cess is applicable. The seller will not have the benefit of indexation. Short-Term Capital Loss (STCL) If there are any short term capital losses from equity share sales, it can be offset against short term capital gains or long term capital gains ensuing from any capital asset. When not set off in entirety, the loss can also be carried forward for eight years and adjusted against short term or long term capital gains made over this eight year period. It is possible to carry forward the losses only IF the taxpayer files the IT returns within the due date. Hence even if the income made in a year is lesser than the taxable income, filing |IT returns are mandatory for availing the provision of carrying forward the losses. Long-Term Capital Loss (LTCL) Any long term capital losses incurred from transfers can be off-set and carried forward. Hence it is possible to off-set the long term capital losses against any other long term capital gains. However, it is not possible to off-set long term capital losses against short term capital gains. If there are any long term capital losses that are unabsorbed, it is possible to carry them forward to the next eight years and can be set off against long term capital gains. To be able to avail of this provision, a person has to file IT returns within the due date. Securities Transaction Tax (STT) STT is applied on the equity shares sold or purchased. These tax implications apply only to the equity shares sold or bought on a stock exchange. All sales and purchases on a stick exchange will invite STT. / Business income Vs Capital Gains Income If you want to treat the income from the sale of shares as business income, the profits you made will be added to the total income generated in a given financial year. Such income is taxed according to your tax slab. If you want to treat income from sale of shares as capital gains, long term capital gains from equity above 1 lakh per year is taxable. On the other hand, short term gains are taxed at 15%. If the taxation rules allow treating the income from sale of shares as a business income is a big question. A lot of uncertainty hovers over this question since taxpayers have received notices from the income tax department seeking explanations on why they chose to treat the income from sale of shares as a business income. Options in front of taxpayers Taxpayers now have the option either to treat the income from sale of shares as a business income or income from capital gains. However, once they make their choice, the same method must continue for subsequent years too unless there is a significant change in the situations of selling shares. This choice is available only to the shares or securities listed. CDBT circular says that the taxpayers can choose to treat the income from selling shares as business income by treating their listed shares as stock-in-trade, irrespective of how long the shares are held. If the taxpayer chooses to treat the income from the sale of shares as capital gains, it is possible to do it in case of shares held for over 12 months. Nevertheless, if the taxpayer makes this choice, the same stand will have to continue for the subsequent years too and changing the stand will not be permitted. In any of the cases discussed above, whether to consider the income from selling shares as business income or capital gains income depends on the concept of significant trading activity and the taxpayers intention to hold the shares either as ‘stock’ or ‘investment’. Sale of Unlisted Shares In case of selling unlisted shares, the sale does not take place in any formal market. Therefore, the Income Tax Department has clarified that the income generated from the sale or transfer of unlisted shares will be taxed as ‘Capital Gains’ irrespective of the holding period. This rule is put in place in order to ensure a uniform approach. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/careers/news/zoho-vivifi-leadsquared-and-many-other-startups-are-looking-new-people-in-different-roles/articleshow/93054022.cms">Zoho, LeadSquared and other startups continue to hire amid industry layoffs</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/apps/niti-aayog-launches-new-app-to-help-with-ev-benefits-savings/articleshow/93054107.cms">Niti Aayog launches new app to help with EV benefits, savings</a>

How to calculate income tax on stock market earnings

<ul><li>You can invest in <keyword id="48211" type="ORGANIZATION" weightage="20" keywordseo="US-stocks">US stocks</keyword> either through domestic brokers like Motilal Oswal, foreign brokers or through investment platforms like Groww, Upstox etc.</li><li>Very soon, NSE will offer investors to trade in 50 US stocks through GIFT city, an international financial services centre (IFSC).</li><li>Taxation on US stocks is simple as taxes are charged only on dividends and capital gains on the stock sale.</li></ul>Investment in US stocks like <keyword id="6354576" type="UNKNOWN" weightage="20" keywordseo="facebook">Facebook</keyword>, <keyword id="18635" type="CITY" weightage="20" keywordseo="Amazon">Amazon</keyword>, <keyword id="6354427" type="ORGANIZATION" weightage="20" keywordseo="apple">Apple</keyword>, Netflix and Google seems an attractive option for retail investors in today’s time. In fact, with the growing number of investment platforms, it has become even more convenient to have an exposure in US stocks. For those who don’t know, there are two ways to invest in US stocks — one option is directly through a domestic broker like Motilal Oswal, HDFC Securities or through a foreign broker. And now you can even invest through apps like Groww. Another way through which one can have exposure to US stocks without putting much effort on stock selection is through mutual funds and exchange traded funds (ETFs). An ETF is a basket of securities, shares of which are sold on an exchange. Very soon, there will be a third option, as this week the NSE announced that it will offer investors to trade in 50 US stocks through GIFT city, an international financial services centre (IFSC). Now the main question is what tax would be imposed on your profits? It is very simple. There are two types of tax implications — tax on dividends and capital gains tax. Tax on dividends Similar to Indian stock market, when you invest in the US stock market you might receive dividends from companies. This is income for an investor, which would be taxed at 25%. So if a company announced a dividend of $100, you will receive $75. The tax rate is comparatively lower for Indians compared to other foreign investors investing in the US as there is a tax treaty between the US and India. However, the dividend received in cash or reinvested again will be taxed in India at your applicable tax slab. However, due to the double tax avoidance agreement (DTAA), the tax withheld in the US can be set off against the tax liability in India. Offsetting means balancing the money that you are owed with money that you owe. For example: You have received a $100 dividend from US stocks in FY21, out of which 25% gets taxed by the US tax department on dividend. This means you have a total $75 income. Now, you have to pay tax on a $100 dividend in India and say you come under a 30% tax slab. Now your tax liability in India is for ₹7,400 assuming dollar rate is ₹74. And remember you have already paid 25% tax in the US which is ₹1,850. So now since you have already paid ₹1,850 as tax in the US you can claim that amount and just pay ₹370. Capital Gains Tax Firstly, capital gain is the profit one earns on stocks. Secondly, there is an additional benefit in investing in the US as they do not charge capital gains tax on Indians. For example: If you had bought shares of $100 and sold them at $400 then you will not be charged tax on capital gains of $300. However, here’s the twist, you will be liable to pay tax on this gain in India. Here there are two types of tax — Long term capital gain and short term capital gain. Long Term Capital Gains (LTCG) LTCG of 20% is charged when you hold the stock for more than 24 months plus applicable fees and surcharges. Short Term Capital Gains (STCG) On the other hand, if you hold the stocks for less than 24 months then you will be charged tax according to your income tax slab. <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/ten-most-awaited-ipos-in-the-coming-months-in-india/slidelist/85241641.cms">Paytm, PolicyBazaar, MobiKwik, Nykaa and more -- Ten most awaited IPOs in the coming months</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/makemytrip-fully-exits-travel-aggregator-ixigo-deep-kalra-to-resign-from-the-board/articleshow/85240387.cms">MakeMyTrip fully exits travel aggregator ixigo, Deep Kalra to resign from the board</a>

Looking to invest in Facebook, Amazon and Apple shares from India -- These are the taxes you may have to pay

Post Budget, Indian investors took a sigh of relief as <keyword id="6355261" type="POSITION" weightage="20" keywordseo="Finance-minister">Finance Minister</keyword> <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> adhered to the path of fiscal prudence and didn’t change the long term tax rate (LTCG) and Short term Tax rate (STCG). 
 Post the announcements, the S&amp;P BSE <keyword id="6484188" type="CITY" weightage="100" keywordseo="Sensex">Sensex</keyword> surged over 300 points, led by gains in ITC, ICICI Bank, HDFC, <keyword id="42747" type="CITY" weightage="20" keywordseo="Tata-Motors">Tata Motors</keyword>, SBI, <keyword id="6355975" type="CITY" weightage="20" keywordseo="Axis-Bank">Axis Bank</keyword>, and L&amp;T. 
 
The Nifty50 got back to 8600 which was led by gains in realty, power, oil &amp; gas, capital goods, banks, and auto stocks. S&amp;P BSE realty index saw an increment of 4 %. 
 The rally in the index was triggered by gains in DLF which increased by 6%, further followed by DB realty which gained 5.1%, and <keyword id="45432" type="COMPANY" weightage="20" keywordseo="Godrej-Properties">Godrej Properties</keyword> rallied 4.4%.

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