Wednesday, February 28, 2007
Sunday, February 25, 2007
Equities vs Equity Funds: A cost-benefit analysis
India has truly become a tax haven. If you are willing to take market-related risks, you can arrange your affairs in such a fashion that irrespective of the size of your funds, you do not have to pay even one single rupee as tax, legally!
Successive recent finance ministers, with a view to giving a boost to the share market, have doled out many tax concessions to the income from:
(i) Equities traded on a recognised stock exchange in India, and
(ii) Equity-based MF schemes.
Now, all that you have to do is to park all your investible funds in either of these two avenues and relax. The dividends are tax-free, and so are the long-term capital gains. The only question that needs an answer is — which of the two avenues should you choose?
Table 1 above presents a comparative gist of all the currently prevalent structure of equities and equity-based MF schemes.
Successive recent finance ministers, with a view to giving a boost to the share market, have doled out many tax concessions to the income from:
(i) Equities traded on a recognised stock exchange in India, and
(ii) Equity-based MF schemes.
Now, all that you have to do is to park all your investible funds in either of these two avenues and relax. The dividends are tax-free, and so are the long-term capital gains. The only question that needs an answer is — which of the two avenues should you choose?
Table 1 above presents a comparative gist of all the currently prevalent structure of equities and equity-based MF schemes.
Mutual Funds
There are so many definitions for mutual funds some of them are :
These are mutually owned funds invested in diversified securities. Shareholders are issued certificates as evidence of their ownership and participate proportionately in the earnings of the fund.
An investment company that pools money and can invest in a variety of securities, including fixed-income securities and money market instruments.
An investment company that pools the money of many individual investors and uses it to buy a diversified portfolio of securities.
stile there are so many definitions.
These are mutually owned funds invested in diversified securities. Shareholders are issued certificates as evidence of their ownership and participate proportionately in the earnings of the fund.
An investment company that pools money and can invest in a variety of securities, including fixed-income securities and money market instruments.
An investment company that pools the money of many individual investors and uses it to buy a diversified portfolio of securities.
stile there are so many definitions.
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