Rollovers are not sale for the purpose of tax, says CBDT circular. This has eliminated confusion and allowed investors to extend their investments up to 36 months.
One should not expect it to eliminate the entire capital gains. Rather it would be lead to only reduction of the capital gains.
Using risk adjusted returns helps in making balanced decisions, as investors get to know the downside element present.
In some cases the dividend announced on an investment in mutual fund does not comply with the norm of minimum dividend amount, which can be paid out. Hence even if one chooses to invest in dividend payout option, the dividend is reinvested in the same scheme.
Long term capital gains are more tax-friendly - in listed equity there is no tax on it where as in case of bonds and property, one can enjoy indexation benefit.
Commodities such as gold typically have long cycles, unlike equity or debt where there may be quick rallies and correction. One must stay put in gold when there is nothing happening so that he benefits when there is a sudden jump in gold prices.
Pension is added to the other income of the recipient and there is not much that can be done to reduce the tax liability.
Though there is a provision to deduct tax at the source of income, one must assess this tax position. Despite TDS, one may have to pay tax, if his tax rate is higher than the rate of TDS. One may also claim tax refund if TDS rate is higher than his tax slab rate.
Many get confused with the period of holding of shares with the mode of holding. However it is the time period the shares are held is more important.
Mutual funds are planning to launch ETF that offer to track leading equity indices, benchmark government securities and broad based equity themes, which should allow investors to replicate diverse set of indices in their portfolios.
SSY offers to build corpus for a girl child that should come handy to meet her life goals such as funding education and marriage. The scheme offers tax benefits at the investment stage and proceeds are tax free.
There are situations where investments actually do not put any cash in the hands of the investors, however he is expected to income tax on the accrued income.
Balanced funds are showing performance that is actually the envy of many. Investors need to realise the special conditions that have propelled this performance and the outlook ahead so that they have some realistic expectation from these schemes.
Merger of two schemes will not mean a sale of units by the investor in merging scheme. Earlier it was construed as a sale and attracted tax
Many investors do not give adequate importance to the fund manager of the equity fund. However they must judge the fund manager based on the time period the fund manager has spent with the fund house, co-fund manager's role and performance of the scheme.
FY 2014-2015 has seen a good rally in the stock market and investors have made good money in shares. This also means that there may a need to pay some capital gain tax. Depending on the time frame of your investment, you may have to pay some capital gain tax.
There are many new fund offers being launched in the market. Investors will be better off looking at fundamental features offered by the scheme, style of fund management and fund manager of the scheme before investing.
Many companies are declaring bonus to their shareholders. If a shareholder sells bonus shares in less than one year after the allotment date, he is liable to pay short term capital gain tax on them.
Equity linked saving scheme (ELSS), also known as tax saving fund invests in equity. Due to high exposure to equities this entails higher risks.
One principle that is very important for the individual is that the amount that is earned by them would be taxable only once.
Summary: Individuals should know the exact money invested and the associated tax benefit that they may get. Amount of tax saving enjoyed by an individual depends on individual's tax slab.
Taking Section 80C benefit for housing loan will lead to a holding period of five years for a property, whereas to claim long term capital gain, you have to hold your property for at least three years.
Individuals can donate money for scientific research and rural development and claim deduction from taxable income.
One should keep a track of income earned under heads that are tax exempt. One should also be careful of transferring assets to others as it may lead to clubbing of income.
There are investments that do not bring in any respite in the form of deduction from taxable income. In some cases the returns offered by the investments are taxable and some investments make investors pay taxes on accrual, even before investors receive returns.