With the introduction of 10 per cent tax both on long-term capital gains and on dividend, choose funds based on investment horizon and risk appetite, not on tax advantage, experts tell Sanjay Kumar Singh.
The Rs 84,000 crore domestic fund of funds (FoFs) space, which was in the doldrums over the past 18 months, has now caught the attention of investors due to a change in the tax structure in Budget 2024. The broader category, which includes offerings across equity, debt and commodities, has seen a spike in the inflows over the past two months. FoFs typically deploy the pooled capital in one or multiple MF schemes rather than investing directly into equities, debt or commodities.
After holding discussions with the FM, the Sebi chief said the government thought it was an opportune time to levy the LTCG tax as the "markets are booming."
rediffGURU T S Khurana answers readers' personal income tax queries.
Brokers believe that the higher charges may not completely deter investors from taking bets in F&O but could help cool down some activity, as the threshold to break even rises.
Most investors should have a 5% to 10% allocation to gold for diversification. They should stagger their investments to mitigate timing risk.
Taxpayers seeking to save tax from the sale of gold (including inherited) should reinvest the capital gains in residential property to avail of the benefit provided by Section 54F.
'Expectations are high regarding the change in LTCG with respect to equity investments.'
The finance minister clarified that indexation benefits offered until April 1, 2001 would be protected. This means older properties, including legacy assets, would benefit.
rediffGURU Vivek Lala answers your income tax and personal finance queries.
During a series of hectic talks between Cairn Energy and the Indian government over the $1.2-billion arbitration award in favour of the former last week, a slew of options was proposed by the two sides, including computation of capital gains and participation in the Vivad se Vishwas (VsV) dispute resolution scheme. The government is likely to go ahead and appeal against the arbitration award by a Permanent Court of Arbitration at The Hague before March 21, indicated finance ministry officials. Cairn Energy Plc on Sunday said it was hopeful that an acceptable solution to its tax dispute with the Indian government could be found to avoid prolonging and exacerbating the 'negative issue' for all parties.
The government's step could push investors to choose riskier equity, or to fall back on bank deposits, thereby negatively impacting the debt market which actually needs to grow, points out T N Ninan.
To say capital gains from stocks are effortless shows little understanding of the treacherous investing terrain, says Debashis Basu.
Mahavir Chopra compares mutual funds and Ulips to help investors decide.
There are a number of steps taken that will leave more money in the hands of the taxpayers.
These include the reduction in tax rates under the new tax regime, increase in standard deduction, allowing tax collected at source to be adjusted against tax deducted at source from salaries, notes Harsh Roongta.
rediffGURU Vivek Lala answers your income tax and personal finance queries.
Equity-focused schemes may perform better in a bull market, while debt-oriented ones may offer greater stability during volatile periods.
rediffGURU Samkit Maniar answers readers' personal income tax queries.
The government on Tuesday proposed reducing the long-term capital gains tax on immovable properties to 12.5 per cent from 20 per cent, but removed the indexation benefits to adjust for inflation, a move experts termed as "negative" for sellers.
Since MAAFs invest across multiple asset classes, they offer diversification.
Anil Rego, CEO, Right Horizons, answers your personal income tax queries.
rediffGURU T S Khurana answers readers' personal income tax queries.
rediffGURU Samkit Maniar answers readers' personal income tax queries.
Do you know what tax-loss harvesting is? Does it help you save tax? Financial planning expert P V Subramanyam offers all the answers.
Debt mutual funds are likely to be stripped of the long-term tax benefit if they invest less than 35 per cent of their assets in equities. Such mutual funds will attract short term capital gains tax. The government is likely to make such a proposal in the form of an amendment to the Finance Bill 2023 in the Parliament, sources said.
'For me, if I want to buy a house to stay, I don't care about indexation because I don't want to sell that house.' 'The only thing that matters to me as a buyer is that the home price should be within my reach.' 'Any market, when speculators and investors go out, it will benefit the middle class.'
rediffGURUS Hardik Parikh, Tejas Chokshi, Mihir Tanna and Sanjeev Govila answer your tax related queries.
Anil Rego, CEO, Right Horizons, answers your personal income tax queries.
Anil Rego, CEO, Right Horizons, answers your personal income tax queries.
Anil Rego, CEO, Right Horizons, answers your personal income tax queries.
'We expect the bull-market phase to still persist, but now led by large-caps which offer better valuation and benefit from FII inflows.'
'We expect continued pressure on midcaps, but any sharp correction looks unlikely from here on.'
rediffGURU Samkit Maniar answers readers' personal income tax queries
In the face of tax blow, brokerages remain sanguine about the prospects of asset management companies (AMCs). A sharp correction in the shares of AMCs over the past three months factors in most of the negatives and turned valuations attractive, observe analysts. In its latest report, Kotak Institutional Equities (KIE) has upgraded HDFC AMC to 'add' (from 'reduce') and reprised 'add' and 'buy' ratings on the rest of the listed AMCs - Nippon, UTI, and Aditya Birla Sun Life.
Mihir Tanna, Associate Director, S K Patodia & Associates, answers your tax queries.
If the shares are purchased for investment, then it would be treated as a capital asset and taxed as capital gains.
But if the shares are bought and sold in a short duration repeatedly, then it would be taxed as business income, explains Amit Gupta.
Mihir Tanna, Associate Director, S K Patodia & Associates, answers your tax queries.
'If the NDA comes to power with 320-330 plus seats, then we could see some correction. We could possibly see a level of 19,500 to 20,000.' 'If the NDA comes to power with a majority of 400-plus, we could see the markets going to about 23,500-24,000 levels.' 'And from there we could see some correction because markets are expensive at this point of time and a correction is overdue.'
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
rediffGURU Ramalingam Kalirajan answers your personal finance queries.
Anil Rego, CEO, Right Horizons, answers your personal income tax queries.
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