Posts

Assessing Tax impact while choosing investments

-
Assessing Tax impact while choosing investment vehicles My client, a media professional, had a desire to own his own stocks and when he received an inheritance , he immediately opened an account a   Portfolio Management Scheme . As luck had it , markets rallied and the PMS delivered spectacular returns . All was well till it was time to file the year’s   ITR. His annual taxable income was 48 lakhs and a long term capital gains of 6   lakhs had been booked in the month of Dec 2022 . At a 10 % long term capital gain tax , with   one lakh exemption , my client was happy that the extra   tax liability was only Rs.50,000 . To his surprise his CA asked him to deposit 1.77 lakhs extra in taxes . How did the tax amount jump up from Rs.50,000 to 2.23 lakhs ?. The tax payable was more than four times the amount anticipated by my client. The culprit was   the capital gain that took his total income above 50 lakhs , a slab that attracts a 10 % surcharge on total taxes. Look at the table below
Post a Comment
Read more

Debt Alternatives

-
  As India moves towards becoming a 5 trillion-dollar economy, investors have much to gain by participating in this big growth decade via equities. But equities are essentially long gestation investments and come with their fair share of volatility. For investors looking at fixed income to park short term funds or wanting higher returns while diversifying from equities, traditional fixed income instruments and mutual funds offer limited options. On one hand there is  demand for products with higher returns in the fixed income space. On the other hand, is a growing requirement of funds by business owners and individuals for purposes that aren’t traditionally covered by banks or NBFCs. For example, Corporates both in traditional and new age business require high quality and different types of capital when they go through special situations like liquidity crunch, bankruptcy, promotor buy backs etc. Similarly on the retail side, our young consuming population needs quick and easy acces
Post a Comment
Read more
-
    Factor Investing: An introduction   Factor investing, is an asset pricing and portfolio construction approach that involves targeting specific drivers of returns. There are five main factors associated with higher returns that are widely used in factor ETF strategies: value, small-caps, momentum, low volatility and quality (which is also known as dividend payers). A sixth factor, yield, is sometimes included in the main factor definition count. For the purpose of our writeup today, we will be focussing exclusively on factor-based ETFs with some compelling statistics that should help you as an investor to: - Critically evaluate performance of large cap investments in managed funds - Usher in ETFs as a cost effective and promising part of your core portfolio We will also restrict this analysis of funds to the large cap space. It is likely that in a few years midcap and small cap indexes will start outperforming their managed peers, but so far data points to a reasonably
Post a Comment
Read more