As per the latest budget tweaks, both LTCG and STCG have increased from 10% and 15% to 12.5% and 20% respectively. While this is a dampener, we have to take these things in our stride because we cannot do anything about them. Death and taxes are few of the certain things in life.
Whether this has induced any changes in investing style, well, in picks where the time period is approaching 1 year mark, it makes sense to allow that period to complete before contemplating selling because quantum of taxes to be paid goes up from 12.5% to 20% which is a big jump of 7.5%. These calculations apply more to the structural stories in the portfolio where the clarity of earnings for next 1-2-3 years is very high.
For stocks where there is short term momentum, worrrying too much about taxes does not help much. Once targets are reached and if then there are signs of exhaustion of trend, it makes sense exit and capture profits rather than see the stock price go at or below your buy price.
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