Taxation is not as crucial as the fact that we are in a high-growth era that will continue to be the real source of investment returns
hypothetical conversation between two investors on the recent Budget. It may not be a real interaction, but is representative of the many exchanges on the social media and in real life.
ET Guide to ITR
Who should switch from old to new tax regime now?
No tax refund if you filed ITR with this refund amt
You can be jailed for not filing ITR and paying tax
A: “The Budget is terrible. The long-term capital gains tax has been increased from 10% of gains to 12.5%.”
B: “But look at the incredible infrastructure buildout that’s happening. Look at the way the government has maintained the fiscal balance despite Covid and so many other challenges. No other large economy around the world has managed to do so. Consider the growth rate!”
A: “What does that have to do with my tax? I made profits in the market and now the tax on these profits will be 25%higher.”
I find it fascinating that a large number of people seem unable to make the connection between what’s happening in the economy at large and the money that they earn from their equity and mutual fund investments.
I’m sorry to put it so bluntly and many people may hate me for it, but the biggest input in the money that you and I make in the markets is not our supposed genius as investors, but what I call the ‘India tailwind’. We have made money not because we are great, or even good, investors, but because the Indian equity markets are up 3-4x in 10 years. As someone said on X, a sure-shot way of avoiding capital gains tax is to buy high and sell low. This is not just a
