Best Equities Investment to Grow Your Wealth.
Best Equities Investment to Grow Your Wealth.
Benefits of Equities
Benefits of Equities
Potential for Higher Returns
Indian equity markets offer superior long-term returns due to the growth potential of local companies driven by economic, demographic and technological advancements.
Power of Compounding
Long-term equity investors gain from compounding. Reinvested returns amplify capital growth particularly with prolonged investment horizons enhancing overall returns.
Risk Diversification
Investors spread risk across sectors and companies by diversifying their portfolio with stocks or equity mutual funds, mitigating individual stock impact for consistent long-term returns.
Hedge Against Inflation
Equity investments have the potential to surpass inflation, safeguarding the purchasing power of invested capital and making them an attractive choice for wealth preservation.
Ownership Stake
Investors become partial owners of companies when purchasing stocks. Long-term investors benefit from company growth and profitability reflected in stock appreciation and dividends.
Potential for Higher Returns
Indian equity markets offer superior long-term returns due to the growth potential of local companies driven by economic, demographic and technological advancements.
Power of Compounding
Long-term equity investors gain from compounding. Reinvested returns amplify capital growth particularly with prolonged investment horizons enhancing overall returns.
Risk Diversification
Investors spread risk across sectors and companies by diversifying their portfolio with stocks or equity mutual funds, mitigating individual stock impact for consistent long-term returns.
Hedge Against Inflation
Equity investments have the potential to surpass inflation, safeguarding the purchasing power of invested capital and making them an attractive choice for wealth preservation.
Ownership Stake
Investors become partial owners of companies when purchasing stocks. Long-term investors benefit from company growth and profitability reflected in stock appreciation and dividends.
Investment Success Factors
Risk Tolerance
Monitoring and Rebalancing
Investment Goals
Tax Implications
Time Horizon
Professional Advice
Risk Tolerance
Investment Goals
Time Horizon
Monitoring and Rebalancing
Tax Implications
Professional Advice
Risk Tolerance
Time Horizon
Tax Implications
Investment Goals
Monitoring and Rebalancing
Professional Advice
Tax Guide for Investors
Long-term Capital Gains (LTCG)
- Tax Rate: LTCG exceeding ₹1 lakh in a financial year are taxed at 10%, without indexation. Gains up to ₹1 lakh are tax-exempt.
Exemption under Section 10(38)
- Historical Exemption: Until March 31, 2018, LTCG on equity shares and mutual funds were tax-exempt under Section 10(38) if subject to Securities Transaction Tax (STT).
- Post-Reintroduction: From April 1, 2018, LTCG exceeding ₹1 lakh became taxable at 10%, with gains till January 31, 2018, grandfathered.
Calculation of LTCG
- Indexed Cost of Acquisition: Cost of acquisition can be indexed using the Cost Inflation Index (CII) to adjust for inflation, except for securities acquired before April 1, 2001.
- Exclusions: Certain long-term capital gains, like those from unlisted equity shares, may not qualify for the concessional LTCG tax rate.
Reporting and Compliance
Investors must report LTCG from equity investments in their tax returns, ensuring proper documentation of transactions for tax planning and compliance.
Tax-Saving Equity Investments
Equity Linked Savings Schemes (ELSS) provide tax benefits under Section 80C of the Income Tax Act, allowing deductions up to ₹1.5 lakh annually.
Tax Guide for Investors
Capital Gains Taxation (Effective from July 23, 2024)
Holding Periods
- Listed Securities: Long-term if held >12 months.
- Unlisted Equities: Long-term if held >24 months.
Tax Rates
Short-Term Capital Gains (STCG)
- Listed Securities: 20% (previously 15%)
- Unlisted Securities: Taxed as per the income tax slab rates.
Long-Term Capital Gains (LTCG)
- Listed Securities: 12.5% (previously 10%)
- Unlisted Securities: 12.5% (previously 20%)
Exemption Limit
- LTCG on Listed Securities: Exemption limit increased to ₹1.25 lakh per annum (from ₹1 lakh).
Dividend Income
Taxable at slab rates. (TDS can be deducted at prescribe rate)
Equities Partner
