Taxation on Stock Investing-Vivek Bajaj

1. VIVEK
BAJAJ
LEARN2INVEST
Know where to start and how to start!
PRESENTS
SESSION 4

2. TAX
IMPLICATIONS
ACROSS
ASSET CLASSES
Key Agenda
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3. HEADS OF INCOME
CAPITAL GAINS
BUSINESS INCOME
HOUSE PROPERTY
SALARY
OTHER SOURCES
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4. ASSET
CLASSES
An Asset class is a collection of
comparable securities having
similar traits and experiencing
similar market fluctuations.
Risk, liquidity, return, taxation,
volatility and investment
tenure differ for every asset
class.
-Cash
-Fixed Income
-Equity
-Real Estate
-Commodities
-Alternate
Investments
CATEGORIES
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5. CASH
EQUIVALENTS
CASH
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Cash,
Coins,
Cheque
Savings
A/C
2.5% - 4%
Commercial
Paper,
Treasury Bills
Certificates
Of Deposit

6. TAX IMPLICATIONS
Section 80TTA allows deduction of upto 10K against
interest earned from your savings account with a bank,
co-operative society, or post office.
Taxable under Capital Gains on maturity.
STCG <12 Months & Tax @ Slab Rate
Taxable under Capital Gains on maturity.
Interest in Savings A/C taxable under 'Other Sources'
Commercial Papers, Treasury Bills:
Certificates of Deposit
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7. FIXED
INCOME
5.75%
AXIS BANK, 5 Year Tenure (FD
below 2 Crore)
Recurring Deposits
Fixed Deposits
Debt Funds
Bonds
PPF/VPF/NSC
PMVVY, SSY, KVP
7.1%
PPF, 15 Year
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8. TAX IMPLICATIONS
Interest is taxable under 'Other Sources'
Sec 80TTB allows deduction upto 50K for Senior Citizens
If PAN Number is not disclosed, tax deducted at source
will be 20%, else 10%
STCG<12 months & Tax @ Slab Rate
LTCG >12 months & Tax @ 10% w/o Indexation
Indexation benefit only available to RBI issued Sovereign
Gold Bonds & Capital Indexed Bonds
Fixed Deposit/Recurring Deposit:
Listed Bonds
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9. TAX IMPLICATIONS
STCG<36 months & Tax @ Slab Rate
LTCG>36 months & Tax @ 20% w/o Indexation
Interest is tax free while STCG and LTCG applicable
PPF, EPF, NSC, SSY, SCSS - all these investments are
eligible for the benefit of tax deduction under Sec 80C
upto 1.50L
Unlisted Bonds:
Tax Free Bonds
Others:
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10. EQUITY
Mutual Funds
Stocks
ETFs
Index Funds
37,33,204 CR
AUM Of MF Industry as on 31 Oct, 2021
1748
Number of listed companies on NSE
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11. TAX IMPLICATIONS
STCG <12 months & Tax @15%
LTCG >12 months & Tax @10%(Exemptions upto CG of 1L)
STCG <24 months & Tax @Slab Rate
LTCG >24 months & Tax @20% with indexation
STCG <12 months & Tax @15%
LTCG >12 months & Tax @10%(Exemptions upto CG of 1L)
Listed Equity Shares:
Unlisted Equity Shares:
Equity Mutual Fund (MF >65% Equity = Equity MF):
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12. TAX IMPLICATIONS
Grandfathering Clause applicable before 31st Jan, 2018
STCG <36 months & Tax @ Slab Rate
LTCG >36 months & Tax @20% with Indexation
Treated Same As Debt MF
Treated Same as Unlisted Equity Shares
Debt Mutual Fund (MF>65% Debt Investments= Debt MF):
International Mutual Fund:
Foreign Equity Shares:
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13. TAX IMPLICATIONS
Four types of funds - Index funds
Index Fund and Sectoral Fund are taxed like equity
investments.
International Fund and Gold ETF are taxed like Debt
Mutual Funds.
Exchange Traded Funds (ETFs):
- Sectoral Funds
- International Funds
- Gold ETFs
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14. REAL
ESTATE
3 LISTED REIT
Embassy REIT, Brookfield REIT,
Mindspace REIT
REITs
InvITs
Apartments,
Land,
Commercial Estate,
Residential Estate,
Industrial Area
3 LISTED INVIT
India Grid Trust(56%), IRB
InvIT(83%), PowerGrid InvIT
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15. TAX IMPLICATIONS
STCG <24 months & Tax @ Slab Rate
LTCG >24 months & Tax @20% with Indexation
Sec 54 EC provides tax exemption upto 50L on sale of
immovable property by reinvesting in 4 eligible bonds
for a period of 5 years within 6 months of sale of
property.
Bonds are NHAI (National Highway Authority of India),
REC (Rural Electrification Corporation Limited), PFC
(Power Finance Corporation Limited) and IRFC (Indian
Railway Finance Corporation Limited).
Land/Property:
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16. TAX IMPLICATIONS
Property Buyer pays TDS @1% if property value >50L.
STCG <36 months & Tax @15%
LTCG >36 months & Tax @10% on gains above 1L
Treated same as Debt Mutual Funds
Listed REITs/InvITs:
REITs MF:
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17. COMMODITIES
BASE METALS
Copper, ZInc, Lead, Nickel, Aluminium
PRECIOUS METALS
Gold, Silver
ENERGY
Natural Gas, Crude Oil
AGRICULTURE
Black Pepper, Cardamom, Castor Seed,
Cotton, Mentha Oil, Crude Palm Oil,
Rubber
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18. TAX IMPLICATIONS
STCG <36 months & Tax @ Slab Rate
LTCG >36 months & Tax @20% with Indexation
Tax Free At Maturity
Pre-Maturity same rule as above applies
Indexation benefit available
HOI-Business Income, Loss C/F 8 years. CTT applicable.
Physical Gold = Digital Gold = Gold ETF = Gold MF:
Sovereign Gold Bonds:
Commodity Trading:
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19. ALTERNATIVE
CRYTPOCURRENCY, NFTs, ALTCoins,
Private Equity, Venture Capital,
Hedge Funds, Startups, etc.
INVESTMENTS
ART, Antiques, Watches,etc.
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20. TAX IMPLICATIONS
Mining and investment may be taxed under 'Other
Sources'. Tax @ Slab Rate.
Exchange for goods/services under 'Business Income'.
Treated the same as Unlisted Equity
Treated the same as MF depending on equity and debt
mix.
Cryptocurrency:
Startups:
Hedge Funds:
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21. TAX IMPLICATIONS
STCG <36 months & Tax @ Slab Rate
LTCG >36 months & Tax @ 20% with indexation
Can be treated the same as Art.
Art, Antiques, Watches:
NFTs:
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22. THANK
YOU!
TAKE A SIMPLE IDEA,
AND TAKE IT
SERIOUSLY.
CHARLIE MUNGER
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