Tax on debt funds

Debt funds, as a category, include liquid, ultra short-term, short-term, income accrual, dynamic bond, and gilt funds. It also includes all debt-oriented funds as MIPs and other hybrid non-equity funds. International funds and gold funds also follow the same taxation as debt funds. For these funds, short-term is a holding period of less than 36 months. Long-term holding is a period more than 36 months. On short-term capital gains, you are taxed at your slab rate. That is, if you’re in the 20% tax bracket, you pay 20% of your capital gains as tax. If you’re in the 10% tax … Click here to continue…..

Tax on equity funds

Taxation rules on equity and equity-oriented funds are fairly simple. A holding period of more than 12 months qualifies as long-term holding; less than that is short term. Equity-oriented funds have no tax on long-term capital gains; i.e., if you sell your fund after 12 months from the date you bought it, you don’t pay capital gains tax. On short-term holding, the capital gains tax is a flat 15 per cent, no matter which tax bracket you belong to. Securities transaction tax (at 0.001%) will apply on all redemptions of equity schemes. That is about one paisa for every Rs … Click here to continue…..

What is MF capital gain?

Capital gain is simply the profit on your investment when you sell your mutual fund units. It is the difference between the market value of your mutual fund units at the time of sale and the cost of such units. The gains come in from the appreciation in your fund’s NAV. Capital gains can be short term or long term, depending on how long you hold the fund units. Holding period is the number of years between when you first bought a unit and sold it. What is considered short-term and long-term holding varies between equity and debt/gold mutual funds.

Is it better choice to exit from stocks and park that fund in Fixed Deposit right now?

In India, bank fixed deposit rate is hovering around 7.5%-9% per annum. Senior citizen will get 0.5% extra. So,100 rupees will become at max 110 rupees in fixed deposit. Now consider inflation. Officially inflation rate is hovering around 7%-8% in India. But calculate your household expense per month. You will find if it requires Rs-100 to cover your household expense right now then after 1 year that same expense will shoot up to Rs-110-112. Approx 10% to 12% increase annually. You may take help of back calculation. Calculate how much it was cost for your lunch/dinner 1 year back and … Click here to continue…..

What is Growth Investing

Growth investing is the strategy of investing in stocks having current or expected earnings growth rates higher than that of their sector or the market as a whole. Investors here look for companies having high quality management, strong financial performance, and bright future outlook for capital appreciation. The growth companies may look overvalued compared to peers in terms of high price to earnings ratio, high price to book value ratio etc. because of appreciation of price at relatively higher rate. For example, Titan Company Ltd. has been a growth stock most of the time as its earnings growth has been … Click here to continue…..

What is Value Investing

Value investing is the strategy of investing in undervalued stocks. Generally, the current market price of a stock is compared with its intrinsic value to decide whether it is under-valued or overvalued. If the current market price is below the intrinsic value, the stock is considered under-valued. The intrinsic value represents the earning potential of the company. Higher intrinsic value than market price of the stock is considered to be an anomaly. It is expected to be eliminated in long term when the company achieves its earning potential, and consequently when the market price converges to its intrinsic value. The … Click here to continue…..