Consider MLDs rather than Indexes

In order an NRI who has no different revenue in India aside from my investments, I feel MLDs are an amazing software to assist save on some tax whereas getting you higher returns.

On condition that we will’t make use of the essential exemption towards capital positive factors and MLDs are taxed at slab price, I might successfully pay no tax on them (slab price 0) whereas capital positive factors can be (10-15%) whereas having publicity to the identical Nifty index.

Moreover, MLDs present higher draw back safety incase of a bear market. Some even giving a base return mounted incase the market underperforms whereas some others don’t have this mounted base return however insure that your unique capital will get again to you even when Nifty goes down.

Ideas?

Capital positive factors tax percentages come after you cross revenue limits

Supply: What if not file ITR underneath Capital acquire much less Than taxable revenue – #2 by Roopa .

@Quicko Are you able to verify?

Hey @Kiyoto_Kai @tallerballer,

For NRIs, the essential exemption shouldn’t be accessible on capital positive factors from listed shares and securities and the identical will probably be taxable at a flat 10% in case of long-term and 15% in case of short-term positive factors.

Furthermore, sure, listed MLDs will probably be taxed as per your slab price regardless of the holding interval if bought after 1st April 2023 and the essential exemption of ₹2.5L will probably be accessible on such positive factors.

Hope this helps!

Moreover, MLDs present higher draw back safety incase of a bear market. Some even giving a base return mounted incase the market underperforms whereas some others don’t have this mounted base return however insure that your unique capital will get again to you even when Nifty goes down.

MLDs are inherently extra dangerous then index. Right here you aren’t solely taking fairness threat, but additionally debt threat of some small NBFC, more than likely rated AA or decrease.Folks get all excited studying assured return however who’s guaranteeing it? Almost definitely a small NBFC, which is definitely struggling to borrow from regular channels of markets.

Personally, I don’t see worth in taking this extra threat for saving 10percentof capital positive factors.

Nicely there may be additionally draw back safety. Incase the underlying index goes under your preliminary funding – you get again your capital. So should you make investments 100 rs and nifty goes down 10%, you continue to get again 100 rs. If this was a nifty etf you’d get 90 rs.

All of that is with a giant fats if situation

IF NBFC remains to be financially secure.