Check my yesterdays post. What I wrote yesterday is now the truth.
Long Term Capital Gains Tax (LTCG) – investments in equity mutual funds and stocks over 1 year, will now be taxed at 10%. The set date is 31st of January, 2018. The highest price traded on that day of the stock investors had bought will be calculated as base price to check for the final profits.
This is very complicated as many investors may not now the highest price traded on their stocks on 31st of January, 2018 (Wednesday), and may end up paying more taxes which will never be refundable.
BAD news for long term fund investors and equity investors.
Along with a short term trader I am an investor too. Sad news for me as well along with many investors. 🙁
Anyway luckily there is no change in Short Term Capital Gain (STCG) taxes. STCG is taxed at 15% of the profits made in a year.
Now think about this – since in mutual funds investments and equity investments, we do not get leverage we have to invest a lot of money to make a lot of money. Though long term taxes over 1 year till now was ZERO, fact is result is known only after 5 years that a mutual fund or the stocks you bought performed well or not. So most were invested for years.
Rarely anyone invested for one year just to save tax. It was for both – save tax and make more. Now one part is gone for certain and second part is unknown.
This is a LONG WAIT and then even if you make a profit – give back 10% of it to the government.
THIS PROFIT YOU CANNOT HIDE UNDER ANY CIRCUMSTANCES like most Indians do.
Waiting for years not knowing what will happen to your money and then paying 10% tax on profits is painful.
Frankly if you can compound your money with a regular income every month still paying 15% tax is much better than waiting for 5 years and then do not know if you will ever make a profit.
There is another point – we do not invest small money for the long term as we know it will not make sense even if it gives a profit. Every month 10k SIP monthly for 10 years equals investment of 12 lakhs and then if you make let say approx 6 lakhs profit – pay a tax of 60,000 to the government reducing the profit to a large extend.
🙁 🙁 🙁
Anyway I feel 15% tax is much better than 10% tax if you are sure WHATEVER happens you will still make 25-30% a year (I am not even taking an average of 3% a month – I am deliberating reducing it) – year after a year. Instead of waiting for 5 years and not even knowing what will happen to your money. And then profit also gets reduced.
You can do my conservative option course and make at least 25-30% a year – whatever happens in the markets. Say for example Nifty stays at 11k to 13k level for next 3 years which is very much possible, we do not know, or it may go into recession or crash – who knows? But you will still make money every year.
Take small steps every month and move forward. You do not know what will happen in 5 years time. Time will pass anyway but finances should be controlled and it should be IN YOUR HANDS.
Why wait so long?
You can pay here for the course and start making monthly income for life by the side.
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Dilip Shaw, Founder
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