City Short-Term Financial News

income tax only when you sell your holdings. While you need to pay taxes on your gains, you also get an opportunity to save taxes in case you incur losses. Short-term capital loss on selling equities can be adjusted against any short-term or long-term capital gains on selling equities. When it comes to long-term capital loss it can be adjusted only against long-term capital gain on equities. You are also allowed to carry over the losses for future years. This method, which is called tax harvesting method allows individual taxpayers to not pay capital gains tax on their equity shares and mutual funds. However, this method can only be effectively used only if you have long term capital gains (LTCG) on equities up to Rs 1.25 lakh or have any significant loss from equities. The reason for this is because LTCG up to Rs 1.25 lakh is non-taxable though you need to declare this income in the ITR. However, if you have any significant loss, then you can set off it against any capital gains in future and can even carry it forward for up to eight years. The best part is that the new tax regime does not specifically alter the rules for claiming capital gains losses. Moreover, the new tax regime maintains the same rules as the old tax regime for carrying forward losses.

With only a week remaining until the end of the current financial year, now is the right time for investors to book their unrealised losses to reduce the overall tax bill. Several investors may be sitting on losses this year, given the market correction over the last few months.

Subscribe to enjoy similar stories. The margin trading facility (MTF) is a powerful financial instrument. It enables individuals to purchase stocks by paying only a portion of the total value while the broker funds the remaining amount.

The 2024 Budget has reshaped the investment landscape, making exchange-traded funds (ETFs) significantly more attractive compared to funds of funds (FoFs). With changes in tax treatments for gold, silver, and overseas investments, ETFs now offer a compelling advantage due to their shorter holding periods and trading flexibility.

capital gains tax rates is a welcome and logical change by the government. Under the new tax rules, stock investing will now attract a 12.5% Long-term capital gains tax (previously 10%) and 20% Short-term capital gains tax (previously 15%). Excluding tax havens such as Hong Kong, Singapore and the UAE, India’s capital gains tax remains one of the lowest globally, especially as the amount of capital gains increases. And as Finance Secretary Somnath explains, analysis of the tax base shows that capital gains tax doesn’t really impact the middle class. 88% of the capital gains income is earned by individuals with an income above Rs. 15 Lakh and 62% by those with an income greater than Rs 1 crore. The investing community in India is a minority demographic that benefits from a tax rate much lower than the marginal rate, a standard tax rate for income earned by salaried and other business incomes. Even with the new rates, we’re still much below the marginal tax rate.

NRI) community.

As passive funds, these investments will align their portfolios with an underlying index. Mint explains how this proposal could help investors in building their portfolios. A passive hybrid fund gives more clarity to investors in terms of portfolio structure, according to experts.

Tax season might seem complex! In India, you aren’t required to file a return if your income is below the basic exemption limit, which varies based on your age and chosen tax regime.

Long-term capital gains (LTCG): Profits from the sale of equity shares held for more than 12 months are classified as LTCG. But the same for land or real estate transactions are considered LTCG if the holding period is 24 months. LTCG, from the sale of equity exceeding ₹1 lakh in a fiscal year, is taxed at 10% without indexation benefit.

demat account often comes free of charge these days, it's essential to recognise that maintaining them and actively engaging in transactions, whether it's buying or selling securities, does come at a price. While the allure of zero opening fees might initially seem like a win-win situation, it's crucial to understand the financial responsibilities that come with managing a demat account over time. Just when you thought you were diving into the world of investing to grow your wealth, along comes the taxman, ready to take a slice of your profits.

Debt mutual funds have been an instrument of choice while giving exposure to fixed income assets in investment portfolios. Tax efficiency was one of the major reasons for this. However, from April 1, 2023, there has been a change in income tax laws for mutual fund units bought on or after this date. Capital gains from units of any Mutual Fund (MF) scheme that has invested after this date and has only up to 35% assets in Indian equity would now come under Short-term Capital Gains (STCG) tax regime, irrespective of the duration of the investment. STCG tax is payable at one's applicable income tax slab rates. Capital gains from units of those mutual fund schemes that have invested 35%-65% in Indian equity in the MF scheme would qualify for long-term capital gains (LTCG) after 36 months of holding period. LTCG tax of 20% would be applicable, after indexation, for this category. This means that capital gains from units of pure debt funds would come under Short-term capital gains regime irrespective of the holding period and tax payable will be as per one's income tax slab rates. This is a major disadvantage. However, there are two mutual fund categories that offer returns similar to debt mutual funds in a tax efficient manner.

I am a 30-year-old software engineer working in Kochi and have recently received ₹10 lakh from the sale of a share of agricultural property. Is this amount taxable? Also, if I was to purchase a house with the proceeds, can it be set off for income tax purposes? —Name withheld on request Taxability on the sale of agricultural land will depend on the status/location of the land that has been sold. Agricultural land in a rural area is not considered a capital asset and therefore gain on sale of the same is not subject to income tax.

real estate market has always attracted the investments from its diaspora spread across the globe. NRIs have readily contributed to the Indian real estate market by purchasing residential and commercial properties in the country. In the past few years, numerous investment opportunities are coming forth in the market that is centered to cater to the burgeoning investment needs of NRIs. Out of all, real estate investment in India is viewed as one of the most lucrative opportunities that increases the returns multi-fold and diversifies the portfolio. While purchasing property in India is an attractive proposition and a common investment option among the Indian diaspora, selling these assets isn't always straightforward. It calls for heightened understanding and thorough planning on the part of the NRIs, particularly concerning tax implications. Therefore, NRI sellers need to understand these intricacies to ensure full compliance and maximize profit.

Vested Finance has added cryptocurrency-backed securities offered by Grayscale Investments to their premium offerings. Vested Finance is a platform that enables Indian investors to invest in the US stock market. The premium customers will now get the option to put their money in crypto assets as well. By investing in the securities offered by Grayscale, Indian investors can gain exposure to Bitcoin, Ethereum, and other crypto-assets indirectly without having to buy any cryptocurrency directly.