Simplified Equity Investing

In Finance Bill 2018 , Finance Minister Mr. Arun Jaitely introduced long term capital gains tax on sale of listed equity shares or Equity oriented mutual funds . Here's simplified implications of this provision. Highlights of the provision: 10% Tax to be levied on Long Term Capital Gains on sale of listed equity shares or Equity Oriented Mutual Funds of more than ₹ 1,00,000/- w.e.f   F.Y. 18-19 (A.Y. 19-20): This means no tax would be levied if you sold your long term investments on or before 31.03.2018.   Gains till 31.01.2018 are grandfathered: This means any gains till 31.01.2018 will not be consider for calculation of Long Term Capital Gains.   How to calculate Long Term Capital Gains: Sale Consideration – Deemed Cost   Deemed Cost: Higher of [Actual Purchase Cost or Day’s High Price /Closing NAV (In case of Mutual Funds) as on 31.01.2018] - Applicable only for securities purchased before 01.02.2018.   There is no change in calculations o...

In Previous Blog I have explained one side of Equity Investing, here’s another side of Equity Investing. Here’s is the returns of well-known companies (or Products) over a period of last 10 years (01 st Jan 2008 to 31 st Dec 2017), it includes effect of year 2008 crash . Company Name Absolute Returns CAGR over 10 Years 1. Reliance Industries (Petrochemical) 27.88% 2.49% 2. State Bank of India (Banking) 30.54% 2.70% 3. Videocon (Consumer Electronics) -97.62% -31.20% 4. Bharti Airtel (Telecom) 6.46% 0.63% 5. ICICI Bank (Banking) 40.13% 3.43% 6. Reliance Communication (Telecom) -95.15% -26.11% 7. Larsen & Toubro (Construction) 35.58% 3.09% Fixed Deposit 115.89% 8.00%                    ...

What is Equity Investing: Investment in equity shares of companies. Why Equity Investing in India? Equity is the best asset class in the world in terms of return over a period of time .   India is one of fastest growing economy in the world.   Unorganised sectors converting into organised sectors after big moves by Indian Government like: Demonetisation, GST, RERA.   Currently Long Term Capital Gains (More than 1 Year) on Equities are exempt in India. Myth about FD Returns: We all thinks that we are earning interest on FD’s but the real fact is these Interest rates are just Inflation Compensation , so you are earning nothing. Now comes to equity performance over a period of time: We all have fear of year 2008 crash and why not? Even our leading bank (HDFC bank) crashed by 50 odd percentage. But if we see returns over a period of time from equity, it is much better than Fixed Deposits returns. Here’s is the returns of well-known comp...