Portfolio Management & Tax

Taxes can substantially affect investment returns, potentially eroding profitability if not carefully managed. In India, both short-term capital gains (STCG) and long-term capital gains (LTCG) are subject to taxes. The STCG tax rate is currently 15%, while the LTCG tax rate is 10% or 20% for gains above 1 lakh Rupees.

However, dividends of holding companies are credited into the investor’s account, and if the dividend is more than ₹5,000, a 10% TDS (tax deducted at source) is applicable. The dividend received is added to the investor’s income and gets taxed at the investor’s income tax slab rate.
Long-Term Capital Gains (LTCG) on shares and equity-oriented mutual funds in India are taxed at a 10% rate (plus surcharge and cess) if they reach 1 lakh Rupees in a fiscal year.