Gain and Tax

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Gain-and-TaxTo earn profit on your investments is called as Capital gain. There are two types of capital gain short term capital gain & long term capital gain. There are three different types such as Cash, Derivatives & Securities. In securities it includes ULIP, Mutual Funds & Bonds)

A)     Cash – It’s a short term capital gain investment with 20% tax.

B)      Derivatives – It’s a short term capital gain investment with 30% tax.

C)      For Securities, it will take more than 8 years to recover the loss in stock market.

Factors affecting on Stock Market

Global market – US market is the Mother Market

Intrest Rate - The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. Interest rates are typically noted on an annual basis, known as the annual percentage rate. Interest is essentially a rental, or leasing charge to the borrower, for the asset’s use. Its also known as Micro Rate. It is frequently changed as per market condition.

CRR –Cash Reserve Ratio is the amount of funds that all Scheduled Commercial Banks,excluding Regional Rural Banks  are required to maintain without any floor or ceiling rate with RBI with reference to their total net Demand and Time Liabilities to ensure the liquidity and solvency of Banks. The current CRR is 4.00% and at present no incremental CRR is required to be maintained by the banks.

PLR – Profit Lending Ratio

 

GDP Growth- Gross domestic product (GDP) measures the value of a country’s overall goods and services at market prices, without including income from abroad. The Gross Domestic Product of a country is its total economic output where all its goods and services created inside its borders within a year are given a corresponding market value. It is a good indicator of the standard of living as it reflects total production, income and consumption. GDP includes all outputs coming from the agriculture, manufacture, services, and extractive industries as well and public and private goods. Ideally, there should be a growth rate of about 6% per year. A proper way to compare GDP data year after year is to factor in inflation, deflation, and population growth.   This way we can compute for real growth in the economy.

A country’s currency is a direct reflection of its GDP.  The total amount of money in a given country is equal to the total amount of its economic production. The higher the GDP, the stronger is the currency and its purchasing power.

Inflation Rate - The inflation rate in India was recorded at 5.79 percent in July of 2013. Inflation Rate in India is reported by the Ministry of Commerce and Industry. India Inflation Rate averaged 7.72 Percent from 1969 until 2013, reaching an all time high of 34.68 Percent in September of 1974 and a record low of -11.31 Percent in May of 1976.

Industrial Growth –Industrial Growth industries are often associated with new or pioneer industries that did not exist in the past and their growth is related to consumer demand for the new products or services offered by the firms within the industry. If companies across an industry exhibit solid earnings and revenue figures, that industry may be showing signs that it is in its growth stage. Growth industries tend to be composed of relatively volatile and risky stocks. Often investors must be willing to accept increased risk in order to take part in the potentially large gains offered by stocks within a particular growth industry.

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