Stock Market of India

Money is nothing but money needs everything. It required to fulfilled the human wants i.e. purchasing, selling of goods ,assets and human needs etc. . Thus it needed to survive in the society. Some people earn money by doing jobs, services, whereas others are doing business, trade and invest etc. from all the earning sources investment play vital role in the context of earning income. Mainly you can invest in mutual fund and Stock Market of India for more return.

Before going to know about stock market we must know about financial market (money market and capital market)

 

Financial Market in India

• Money market

money market is a financial institution where short term trading of debt investment between banks and others financial institution. Ex: Treasury bills, certificate of deposit, Commercial papers repurchase agreement and banker acceptance etc.

• Capital market

Stock Market Meaning

It is market where share and stock are purchase and sell. If you purchase a share means you became the part of the company or member of the company. You can get maximum return from mutual fund and stock market investment. You can earn huge amount of money from invest in share market. No other legal job can give you crores or million or billions of rupees that only stock market investment can give you.

So what is stock and share and stock market?

In order to growth and expand of the business, the company needs more funds. The company raises money from public by issuing company stock and debenture in order to fulfill that extra needy fund.

• Share and Stock– Share are the company own capital which is the part of company. and the person who hold the share are known as share holders etc.

(share and stock meaning same but different is that share is the ownership certificate of particular company where as stock id the ownership certificate of any company.)

• Debenture– A debenture is an written acknowledgement of debt which is the company borrowed capital. and the person who hold the debenture certificate is known as denture holder. 

Ex:

Company needed 17, 00,000 to expand its business. But it has 10, 00,000 available funds and required more 7, 00,000.

What will you get from other investment?  i.e.

From fixed deposit you will get around 7%

Debt fund = around 6%

Real estate = 5%

Gold = 5%

Saving account = 4%

Current account = Nil

Mutual funds = around 12%

And from stock market = Unlimited Return

 

Mutual funds :

    It is a indirect investment. Here a company pools money from many investor and invest the money in securities i.e. share , stock, bonds, and short term bonds. In simple words all investor mutually invest money in securities.

Share market : How many stock market are there in India?

• NSE (National Stock Exchange) – It is the leading stock exchange of India which is situated in Mumbai, Maharashtra. It was established in 1992 and NSE was the first dematerialized electronic exchange in the country. (Dematerialized means DEMAT i.e. moving of physical certificate to electronic form). It is the largest stock market in India.

NIFTY 50 used in NSE India as its main stock indices which represent the weighted average of the top largest 50 Indian company listed in National Stock Exchange .

• BSE (Bombay Stock Exchange) : It is an Indian stock exchange situated on Dalal Street, Mumbai. It is the oldest stock exchange of Asia which is Established in 1875.

SENSEX used in BSE as its main stock indices which represent the top 30 well established Indian company listed in Bombay Stock Exchange.

 

Stock Market Investment:

 It is a direct investment where investor directly invest money in the trading of securities . the people who invest in stock market will get maximum return , still they don’t invest.

If  you investing on 1lakhs share @ rs. 10 per share = Rs. 10 Lakhs

If the share value increase by Rs. 2 after some months,

Then,

 You will get 1 lakhs share @ Rs. 12 per share =  Rs. 12 lakhs

                                                            —————————-

                                                            Profits  = 2 lakhs

That Means, Company Profits = Your Profits

            And Company Loss = Your Loss

 

Why people don not invest in share market ?

Lack of fundamental knowledge

No Dedicated course

No risk taking ability

Frauds

Lack of Awareness

How to invest in share market ?

There are some steps you should follow while investing in share market.

• Hire a Stock broker (you can’t directly buy and sell stock with cash )

1. Angel broking,
2. Zerodha
3. Upstox (RKSV)
4. 5paisa
5. Kotak Securities
6. wisdomcapital
7. TradingBells
8. Achiievers Equities Ltd etc.

• Open a Demat account
• Buying and selling of share

when you should invest?

1. –        After gaining experience of investment
2. –        Deeply research
3. –        Sufficient fundamental knowledge
4. –        Initially invest minimum amount ( play a practice match )
5. –        You should read and stay updated about business news and information

Indian stock market news tomorrow

1. Magazine – business today, Forbes India, business India, business world etc.
2. News app – Money control, CNBC Business news, market watch app, fox app etc.
3. YouTube channel – CNBC- TV 18, ZEE business live, NDTV profit, Bloomberg Quick take
4. News channel – CNN- news 18 (CNN IBN), ET now ,Tradesmartonline
5. Free training app – Aryaamoney( You can check aryaamoney nifty 50 pe for well investment)

 

Stock market live support

You can get support from many YouTube channel like

1. Prabhat trading services
2. Voodoo trading

You can follow them they will give you live support and also you can take their online training courses at minimum prices

Who can help during investing?

1. Broker
2. Mutual fund adviser
3. Independent fund adviser
4. Wealth manager

Income tax on Income from Stock Market in India

Speculative business income- Is Stock Market legal in India?

  Yes, Stock Market in India is Legal. But, Intraday trading is consider as speculative business because purchase of share , equity , commodity happens periodically without the intention of taking of delivery of contact. Speculative losses can be carried forward for 4 year and can be set off only against speculative gain.

Non speculative business income- 

    income from trading of stock future and option is considered as non-speculative business income because these instruments are with the intention of taking of delivery of underlying contract. Non-speculative income can be set off again any income except salary income in the same year. It can be set off against bank interest, capital gains, rental income etc nut in the Same income.

• If your income is from stock trading as stock future or stock option, then you will require to itr-2 to file your income tax return.
• If you are doing intraday trading , then you will required to use itr-3 to file income tax return as intraday trading is treated as speculative business.

As an investor you should classified your income as LTCG or STCG. If you are holding more than one year then it will LTCG and less than one year then it will STCG.

LTCG (long term capital gain) – share held more than one year- 10%

(For LTCG up to one 1 lakh is free)

STCG (short term capital gain)- share held less than one year-  15%

 

Income tax on trading income:-

Speculative and non-speculative business income has to be added to your all other head of income for example income from salary, income from business and profession , income from capital gain, income from other sources etc.

For example:

    Salary- 6, 00,000

    Profit from future and option trading- 1, 20,000

    Intraday trading – 80,000

 

Solution:-

    Salary + business = 6, 00,000 +1, 20,000 + 80,000 = 8, 00,000 (taxable income paid as per income tax slab)

 

0 – 2, 50,000 = nil

2, 50,000 – 5, 00,000 = 5% =12,500

5, 00,000 – 8, 00,000 = 20% = 60,000

 

Hence, total tax = 12500 + 60000 =72500

Now, an additional income which is classified as short term capital gain of  80,000 on which flat 15% tax will be charged.

STCG = 15% of 80,000 = 12,000

So, Total tax = 72,500 + 12,000 = 84,500

 

Conclusion:

    From the above it can be concluded that an Indian can earn huge amount of money by Investing in Stock Market in India.  But income tax can be imposed on that income from share market. it is very easy to invest by hiring a brokerage company i.e. Zerodha, Angel broking, upstox, 5paisa etc. and Money control should be used to know about Share Market Today.

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