Investors Knowledge

Is the freshly revamped new tax regime worth your while? The answer depends on your income level and the total deductions you claim. Not surprisingly, those in the highest tax bracket of over Rs 5 crore will stand to benefit the most, thanks to reduction in effective tax rate from 42.74 percent to 39 percent under the new tax regime, at par with those with incomes of between Rs 2-5 crore. So, if your income is Rs 5.5 crore, you will save close to Rs 20.22 lakh every year if you shift to the new, minimal exemptions tax regime, according to EY India's post-Budget calculations. Those in middle-income tax brackets (who claim multiple deductions under section 80C, 80D amounting to at least Rs 3.75 lakh) would do well to stick to the old regime. For instance, if your gross total income is Rs 11 lakh, you will end up paying Rs 18,200 more if you switch to the new regime. This is because your total deductions of Rs 3.75 lakh bring down the taxable income under the old regime. If your incom...

Hello and welcome to Black Castle Investments. Today, we're going to be discussing the pros and cons of investing in gold mutual funds versus investing in gold ETFs. First, let's talk about what a gold mutual fund is. A gold mutual fund is a type of investment that pools money from multiple investors to purchase a basket of securities related to gold, such as stocks of companies involved in gold mining and production. This allows investors to gain exposure to the gold market without having to purchase physical gold. Now, let's compare that to a gold ETF, or exchange-traded fund. A gold ETF is a type of investment that directly tracks the price of gold. This means that when you invest in a gold ETF, you are investing directly in physical gold or other forms of gold bullion. So why would someone choose to invest in a gold mutual fund over a gold ETF? One benefit of a mutual fund is diversification. By investing in a basket of securities related to gold, you are spreading your...

Once an investor has decided to invest in Mutual Funds, he has to make a decision of which scheme to invest in– Fixed Income Fund, Equity Fund or Balanced and which Asset Management Company (AMC) to invest with?  Firstly, discuss freely with your advisor what your objective is, what time period you’re comfortable with, and what your risk appetite is. Decisions on which fund to invest in would be made based on this information. If you have a long term objective – say, retirement planning, and are willing to assume some risk, then an Equity or Balanced Fund would be ideal. If you have a very short term objective – say, money to be kept aside for a couple of months; a Liquid Fund would be ideal. If the idea is to generate regular income, then a Monthly Income Plan or an Income Fund would be recommended. After deciding on the type of fund to invest in, a decision on the specific scheme from an AMC would have to be made. These decisions are usually made after ascertaining the AMC’s trac...

From where do you get the vegetables for dinner? Do you grow them in your backyard, or purchase it from the nearest mandi/supermarket depending on what you need? Growing your own veggies is a great way of eating healthy food, but effort is spent on seed selection, manuring, watering, pest control, etc. The latter option allows you to choose from a wide variety without the hard work. Similarly, you can create wealth by investing directly in shares of good companies or invest in them through Mutual Funds. Wealth can be created when we buy company stocks which use our money to grow their business, creating value for us. Direct investment in shares carries a relatively higher risk element. You need to pick stocks by researching the company and sector. It’s a humongous task to choose few companies from thousands of them listed on the stock exchange. Once done, you need to keep a track of every stock's performance. In Mutual Funds, the stock picking is done by expert fund managers. You n...

Various types of Mutual Fund schemes exist to cater to different needs of different people. Largely there are three types of mutual funds. Equity  or  Growth Funds These invest predominantly in equities i.e., shares of companies The primary objective is  wealth creation  or  capital appreciation . They have the potential to generate higher return and are best for long term investments. Examples would be “Large Cap” funds which invest predominantly in companies that run large established business “ Mid Cap funds ” which invest in mid-sized companies. funds which invest in mid-sized companies. “Small Cap” funds that invest in small sized companies “ Multi Cap ” funds that invest in a mix of large, mid and small sized companies. “Sector” funds that invest in companies that are related to one type of business. For e.g., Technology funds that invest only in technology companies “Thematic” funds that invest in a common theme. For e.g., Infrastructu...

To many people, Mutual Funds can seem complicated or intimidating. We are going to try and simplify it for you at its very basic level. Essentially, the money pooled in by a large number of people (or investors) is what makes up a Mutual Fund. This fund is managed by a professional fund manager. It is a trust that collects money from a number of investors who share a common investment objective. Then, it invests the money in equities, bonds, money market instruments and/or other securities. Each investor owns units, which represent a portion of the holdings of the fund. The income/gains generated from this collective investment is distributed proportionately amongst the investors after deducting certain expenses, by calculating a scheme’s “Net Asset Value or NAV. Simply put, a Mutual Fund is one of the most viable investment options for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.