[ad_1]
For F&O money element
What are execs and cons of Govt securities ?
For instance 9.20% G.S. 2030 @TradeB2B @Prayag @Rejeesh_Mathew @rupeshmandal @Vij @arunt @pankushri @sachinsp15
I may be improper (please appropriate on this case);
Curiosity on authorities securities is taxable on the individuals slab charge, so for somebody who comes beneath 30% tax bracket, that’s a con.
1 Like
Hello @curiousvi
Earlier than shopping for g sec –
- if shopping for g sec from a recent challenge then %age quoted (in your instance 9.20%) will likely be your yield to maturity
- if shopping for g sec from secondary market, then do try it’s current yield to maturity, excessive probability it could be decrease than than quoted variety of 9.20% (as per your instance). [This can be a cons]
Professionals –
- No credit score danger
- Assured return if held until maturity
Cons –
- Rate of interest fluctuation will influence G sec bond worth. Usually G sec bonds have massive period. Massive period bonds are extra impacted by rate of interest fluctuation. So, if you’re considering of promoting the bond earlier than the maturity then you could get lower cost (if rate of interest begins growing going ahead from now).
- If rate of interest rises, then bond worth might not enhance as per expectation or it could lower additionally. Thus collateral worth thus obtained might also lower. Vice versa can be true, if rate of interest additional decreases then bond worth will enhance at a sooner charge
Taxes –
Please consult with this hyperlink:
https://help.zerodha.com/class/mutual-funds/government-securities/articles/gsecs-taxes#:~:textual content=Itpercent20ispercent20consideredpercent20aspercent20income,perpercent20thepercent20applicablepercent20slabpercent20rate.
Total conclusion – Gsec may be good wager for money element if meant to held until maturity.
1 Like
Rate of interest on govt securities is taxable at private slab charge and capital appreciation is taxed at capital positive factors charge however if you happen to make investments by way of gilt funds than it’s thought-about capital achieve/loss as a result of curiosity is just not paid in to your checking account.
Undecided if that could be a higher path to put money into gsec ? These funds expense ratio will not be a lot.
@sachinsp15 @rupeshmandal
1 Like
[ad_2]
Source link