Team-BHP > Around the Corner > Shifting gears


View Poll Results: Stocks as a percentage of my net assets are -
0 - 25% -- I'm like the most conservative Indians. I love FDs. 247 32.67%
26 - 50% -- I have a few stocks. 334 44.18%
51 - 75% -- I'm an active trader. 121 16.01%
76 - 100% -- Hey, I'm an i-banker!!! 54 7.14%
Voters: 756. You may not vote on this poll

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Old 12th July 2019, 12:08   #4021
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Default Re: Do you play the stock market

I am fairly confident that the interest rates are not going up in the next couple of years given the economy is slowing down. So, it might be a good time to invest in debt funds.
How to choose between dynamic bond funds and Gilt funds? Please advise. Any specific fund recommendation is welcome.
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Old 14th July 2019, 11:32   #4022
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Gilt funds hold only government bonds. The others hold debt instruments issued by corporate entities, and that includes PSUs.
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Old 15th July 2019, 22:33   #4023
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Hi guys.

I am a beginner. Will start investing in stocks this month onwards. Long term only.

1) I am Confused between zerodha and sharekhan - which of these will be better in terms of ease of use, and agents or managers not calling all the time to up-sell their preferred stocks, plans etc.?

2) if I am correct, it is better to have trading + demat account with one broker only?

3) Is it that some brokers have a preference for BSE and some for NSE? Eg. in zerodha one has to specify BSE separately while opening the account. They offer NSE by default. (One bhpian was complaining about this that even after calling and requesting, zerodha was delaying activating the BSE).

Thanks!
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Old 15th July 2019, 23:12   #4024
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Quote:
Originally Posted by sinhead View Post
1) I am Confused between zerodha and sharekhan - which of these will be better in terms of ease of use, and agents or managers not calling all the time to up-sell their preferred stocks, plans etc.?
Zerodha is a 10 out of 10 stock broker. It is no wonder that they have reached No.1 position in something like 4 years.

Once you open an account, you will never get a call from them again. They do not have any "account managers" or sales people on their employee rolls.
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Old 16th July 2019, 07:28   #4025
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Quote:
Originally Posted by sinhead View Post
3) Is it that some brokers have a preference for BSE and some for NSE? Eg. in zerodha one has to specify BSE separately while opening the account. They offer NSE by default. (One bhpian was complaining about this that even after calling and requesting, zerodha was delaying activating the BSE).
People who use Zerodha - is this true?
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Old 16th July 2019, 07:39   #4026
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Quote:
Originally Posted by sinhead View Post
Is it that some brokers have a preference for BSE and some for NSE? Eg. in zerodha one has to specify BSE separately while opening the account. They offer NSE by default. (One bhpian was complaining about this that even after calling and requesting, zerodha was delaying activating the BSE).
Quote:
Originally Posted by carboy View Post
People who use Zerodha - is this true?
All exchange fees are pass-through expenses to customers. So it is unlikely that a broker prefers BSE or NSE.

When you open a new account, you have to specify that you want a BSE account too - but that just involves tick marking the BSE checkbox. Older Zerodha account holders (NSE membership only) had to go through signing up an agreement again for BSE membership. Nobody trades on BSE anyway - they have just 10% marketshare in trading volumes. However, a small number of micro-caps are listed on BSE only. If you want to buy those stocks, you need BSE membership.

<Added> I just recalled that a friend of mine faced account opening issues too

Last edited by SmartCat : 16th July 2019 at 07:48.
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Old 16th July 2019, 08:28   #4027
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Nobody trades on BSE anyway - they have just 10% marketshare in trading volumes.
Around 20% of my buys and sells are at BSE & those are all for stocks which are available on both BSE & NSE. There is minor variance between BSE & NSE rates - so I chose whatever is higher/lower depending on whether I am selling/buying.
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Old 18th July 2019, 14:13   #4028
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If anyone in planning to invest in RBI's Sovereign Gold Bonds - check out buying from the secondary market rather than buying directly from RBI. The older bonds usually trade at a discount to whatever rate the current RBI bonds are offering.

Thats pretty helpful advice as we can have closure maturity as well. I'm considering buying few. Say if we buy this from stock broker like Zerodha in secondary market. Can someone please clarify below stuff?

1) Are we eligible to receive 2.5% interest on this?
2) How is 2.5% interest credit happens? Directly in demat account? Or Savings account linked to demat?
3) Whats the tax treatment to this secondary buy at maturity?
4) Whats the tax treatment to this secondary buy if sold on demat before maturity?


Regards
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Old 18th July 2019, 14:33   #4029
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4) Whats the tax treatment to this secondary buy if sold on demat before maturity?
I can answer the 4th question.
Sovereign Gold Bonds are free from Capital Gain tax if they are redeemed on maturity.
However if you transfer them before maturity, then it will be subject to capital gain tax but you will get the benefit of indexation in case it falls as Long Term Capital Asset.

So even if you sell the bonds purchased from secondary market before maturity, it will be same as above.
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Old 18th July 2019, 14:42   #4030
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Quote:
Originally Posted by speed_edge View Post
1) Are we eligible to receive 2.5% interest on this?
Yes.
Quote:
Originally Posted by speed_edge View Post
2) How is 2.5% interest credit happens? Directly in demat account? Or Savings account linked to demat?
Bank account linked to your trading/demat account.
Quote:
Originally Posted by speed_edge View Post
3) Whats the tax treatment to this secondary buy at maturity?
Don't know
Quote:
Originally Posted by speed_edge View Post
4) Whats the tax treatment to this secondary buy if sold on demat before maturity?
Capital gains


Quote:
Originally Posted by Sherlocked View Post
I can answer the 4th question.
Sovereign Gold Bonds are free from Capital Gain tax if they are redeemed on maturity.
Is this irrespective of whether the Bonds were purchased from original subscription or secondary market?
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Old 18th July 2019, 14:50   #4031
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Is this irrespective of whether the Bonds were purchased from original subscription or secondary market?
This is from the perspective if Bonds were purchased from the original subscription. Not sure how it will be treated in case of secondary market purchase but needless to say even in case of secondary purchase if they are transferred before maturity then they will be liable for cap gain tax.

Last edited by Sherlocked : 18th July 2019 at 14:51.
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Old 18th July 2019, 15:13   #4032
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Quote:
Originally Posted by carboy View Post


Is this irrespective of whether the Bonds were purchased from original subscription or secondary market?
Quote:
Originally Posted by Sherlocked View Post
This is from the perspective if Bonds were purchased from the original subscription. Not sure how it will be treated in case of secondary market purchase but needless to say even in case of secondary purchase if they are transferred before maturity then they will be liable for cap gain tax.

Thanks folks for clarifying. Except #3 rest all are clear.

I looked at RBI below offer page.
https://www.rbi.org.in/Scripts/BS_Pr...spx?prid=47170

17 - Tax treatment

The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long term capital gains arising to any person on transfer of bond.

Its clear that on sell before maturity is capital gain and comes with indexation benefit for long term. Whats not clear is if procured from secondary sales, do we get maturity tax benefit?


Regards
SE.
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Old 20th July 2019, 10:11   #4033
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Does anybody use https://international.schwab.com/pub...l/us_investing ?
Looks interesting. 4.95$ per transaction is not bad. I want to know if there are any other hidden charges. Please let me know if anyone has feedback on them.
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Old 20th July 2019, 11:25   #4034
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Originally Posted by adithya.kp View Post
Does anybody use https://international.schwab.com/pub...l/us_investing ?
Looks interesting. 4.95$ per transaction is not bad. I want to know if there are any other hidden charges. Please let me know if anyone has feedback on them.
All American brokerages accept international customers. But how will you fund your account? RBI/banks do not allow you to use credit/debit cards for foreign equity investments. You need to check with Schwab if they accept wire transfer from Indian banks.
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Old 20th July 2019, 11:39   #4035
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Good point. I think currently RBI allows up to USD 2,50,000 per year.
https://m.rbi.org.in/Scripts/FAQView.aspx?Id=115#Q1

Quote:
Originally Posted by SmartCat View Post
All American brokerages accept international customers. But how will you fund your account? RBI/banks do not allow you to use credit/debit cards for foreign equity investments. You need to check with Schwab if they accept wire transfer from Indian banks.
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