Weekly News Letters...

Weekly News Letter from Different Broking Houses

 

Mansukh

 

Fairwealth

 

Aditya Birla

 

Panditji

Daily Trading Tips....

• ICICI WEEKLY CALL 11-jan-2010 09:04 Weekly Technical Delivery calls: Buy SOFSOL (PVP Ventures) CMP 29 Target 34.50 and Stoploss 27

 

• 11-jan-2010 09:03 Weekly Technical Delivery calls: Buy HANTOY (HANUNG Toys) CMP 119 Target 127 and Stoploss 114

 

• RIL sells 3.3 crore treasury shares in a block deal, reports CNBC TV18. The stock is currently trading at Rs 1094.20,

 

• Buy HDIL cmp 382 SL 376.50 16 ANNA CALL

courtsey :- ShareGuru

 

How much Tax I pay by Investing in Stocks...?

Making money from Indian stock market was never so simple. Even though markets are in the upswing we can find more and more people losing in stocks. A close study shows non understanding of financial markets as the major reason for this. Fundamental study helps you to identify potential winners which can be multi-baggers. Technical analysis helps to time the markets. But there is one more important factor that affects the profits of your investments that is Tax. In this article we have briefly explained different types of Taxes that influences your Returns.

 

Securities Transaction Tax (STT)

Securities Transaction Tax (STT) is a tax on the value of shares bought and sold on a stock exchange. The Tax has to be paid irrespective of your profit or loss; it is a turnover based tax. STT has been introduced in the in the year 2004-05. It is levied on the purchase or sale of equity shares, derivatives, equity-oriented funds and equity-oriented mutual funds'

 

The current rate of STT is 0.125% of the transaction volume.

 

As mentioned earlier, Securities Transaction Tax (STT) is a tax on the total turnover, irrespective of the profit or loss involved. Even if there is no profit you have to pay STT.

 

Items fall under the category of 'Securities'

'Securities' are defined under Section 2(h) of the Securities Contracts (Regulation) Act, 1956 (SCRA). It includes the following:

• Shares, bonds, debentures, or other marketable securities of same nature of any incorporated company or other body corporate
• Derivatives
• Units or any other instrument issued by any collective investment scheme to the investors in such schemes
• Security receipt as defined in the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
• Such other instruments as declared by the central government; and
• Rights or interest in securities
• Equity-oriented mutual funds

Securities Transaction Tax (STT) is not applicable in case of government securities, bonds, debentures and units ofmutual fund other than equity oriented mutual fund.

 

STT & Traders

For traders, in other words people who buy and sell stocks frequently, STT is a nuisance factor. They have to pay this tax on every single transaction – even if they incur loss. Since these people make profit by selling as soon as the price goes up, they are not too much concerned about long term capital gain, for these people gains are always short term. Traders are the ones who are suffering because of the STT.

 

STT & Investors

In case of a genuine investor the scene it totally different. An investor is a person who doesn't buy and sell shares frequently; normally he is a buy-and-hold person. Investors go by evaluating the strength of the company's operations, and not by its short term stock price Fluctuations.

 

Even though STT needs to be paid on every transaction, an investor wouldn't suffer much because of his low trading volume. Compared to a trader an investor trades less and keeps the possession of the stock for a longer period. Since an investor follows a buy-and-hold strategy, his gains are always long term. Since there is no tax on Long Term Capital Gain an investor benefits immensely.

 

STT & exemption of Long Term Capital Gain (LTCG)

Long Term Capital Gain (LTCG) from the sale of shares on which Securities Transaction Tax has been paid is exempt from income tax. Thus, Long Term Capital Gain (LTCG) exemption and STT are inherently linked.

 

A genuine investor trades less compared to a trader most of his profits as long term capital gain (LTCG). A genuine investor will be always benefitted from the Securities Transaction Tax (STT) and the subsequent continuation of exemption of long term capital gains (LTCG).

 

Capital Gain

A Capital Gain can be any income generated by selling a capital investment. A capital investment can be anything likestocks, business, paintings, houses, family businesses, farmhouses, etc.  

 

How to Calculate Capital Gain

Capital Gain = ( Full value of consideration received or accrued on transfer of capital asset) - ( Cost of acquisition of capital assets + Cost of improvement of capital assets + Expenditure incurred exclusively in connection with the transfer of capital asset such as stamp duty, registration charges, legal fees, brokerage etc.)

 

Asset	Short Term	Long Term
Shares or any other security listed in a stock exchange in India or a unit of a Unit Trust of India or a unit of a mutual fund.	Less than 12 months	More than 12 months
Assets other than mentioned above.	Less than 36 months	More than 36 months

 

In case of stock investment, income generated by holding the securities for more than 12 months is considered as long term Capital Gain.

 

Tax on short term and long term capital gains

 

·         Short-Term capital gains

·         Long-Term capital gains

 

Short-Term capital gains

For sale of equity shares, units of equity oriented mutual fund to mutual fund the gains are taxable at the rate of 15% (+surchage +education cess) under section 111A

 

Long-Term capital gains

For sale of equity shares, units of equity oriented mutual fund the gains are exempt from tax under section 10(38)

 

Capital Gain	Tax Rate
Short-Term	15%
Long-Term	Nil

 

Tax exemption for Dividend earned

As per the Income Tax Act, 1961 there is a provision benefit in Income Tax, if the assessee has an income as a dividend on investment in any of the following:

• Shares
• Mutual Funds
• Unit of UTI

 

                                                                                                                                                                                                                                                                                                    FreeLancer...

Dollar/Rupees

The Fall In USD/INR countinued for the fourth consecutive session as breach of crucial levels lead to triggering of stop losses leading to long liquidations . USDINR Jan Futures opened the day at 45.87 levels and closed at 45.73 levels after making a low of 45.63 levels. Yesterday's weekly inflation data provided some relief with Primary articles WPI falling by more than 1% from previous figures to quote at 14.39% from 15.49%. However bond yields did not cool down as yields on 10 year benchmark bonds rose to touch previous high of 7.66% from 7.64% the day before. Equity markets fell by 18 points to close at 5263 levels. Another key factor that affected the markets was news of monetary tightening in China as Chinese Central Banks poised to roll back its monetary stimulus to reduce danger of asset bubble inflation after a record surge in credit. Dollar index continued to be range bound with benchmark quoting at 78.02 levels. Overall for today 45.91 will act as a key resistance while 45.50 will act as a critical support of currency pair.