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swapnilkabra
@caswapnilkabra 5 years, 9 months ago 1127 views

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A small thread to explain the tax implications of dividend of Rs.974 per share declared by #majesco Ltd which is winding up its business🧵👇

1. For starters, Majesco is declaring such huge dividend on account of it selling its US business. But, as an investor, should one think of buying the shares now? Let us find out.

2. The current market price per share of Majesco is Rs.980. This is almost at par with the dividend per share. Now, if you buy shares of Majesco, you will be entitled to dividend of Rs.974 per share.

3. Please keep in mind that dividend income is not exempt in the hands of the shareholders. It will be taxed as per regular slabs.

4. Say you are in highest slab of 30%, you will be taxed at that rate. To simplify you will be getting a net amount of Rs.681 per share (Rs.974- 30% tax).

5. Now, another important thing to keep in mind is the fact that the share price will be adjusted after it goes ex-dividend. Technically, the share price must be adjusted with the amount of dividend.

6. Hence, the price per share after it goes ex-dividend will be negligible. So, the share you bought at Rs.980 today will be at negligible price once it goes ex-dividend.

7. Suppose, the share trades at Rs.10 after it goes ex-dividend and you sell the shares at this level. This will result into short term capital loss of Rs.970. Now, this loss can be set off against short term capital gains.

8. However, by this you will be saving tax at 15% as short term capital gains on shares are taxed at 15%.

9. Hence, in the entire exercise, you will end up paying tax at normal rates (as per your slabs) to save tax of 15%.
So, do not chase this stock purely for dividend income.

10. Also, the company will deduct TDS at 10% before paying you dividend if the amount exceeds Rs.5000.

@gvkreddi, @Dinesh_Sairam, @darshanvmehta1, @finbloggers

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You may bookmark this for further use.

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1. Let us first understand the role of Reserve Bank of India in managing the Indian economy.
There are two major elements of the Indian economy.

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👉 The Households: These are the people who are consumers and they spend the money to buy the goods and services which are sold by the businesses. Any consumer would be happy if the prices of the goods and services are low. Hence, they would be interested in ‘Less Inflation’.

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1. Let us understand everything bit by bit.
Say, Raju is a businessman. Now, like every businessman, Raju is ambitious and curious to know his profit. Hence, he keeps his accounts to calculate his profit.

2. Throughout the year, his total revenue was Rs.10 lakh and his total expenditure was Rs.8 lakh. Hence, Raju is having profit or surplus of Rs.2 lakh.

3. The next year, due to lack of demand, his revenue fell to Rs.7 lakh and his expenses increased to Rs.9 lakh. Hence, Raju is now having loss or deficit of Rs.2 lakh.

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A long thread! Do Bookmark this for patient reading.

#investing #investors #PEratio

1/ PE (Price Earning) ratio is one of the most important metric used by investors to make decisions while picking up stocks. But, more often than not, it is grossly misunderstood.
Let us decode this metric.

2/ Table of contents
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oCase B: Costlier Fresh Apple v/s Cheaper Fresh Apple
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3/ How do you decide, what to buy?
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A simple thread to help all understand ‘Futures and Options’ in an easy way. Though I would personally not recommend new investors to trade in F & O, but it is always good to know things. 👇🧵

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1. What is a ‘Derivative’?
‘Derivative’ simply means a product which is derived or dependent on some asset. This asset is called as ‘underlying asset’.
Let me simplify this by putting this example.

Both ‘Coffee’ and ‘Tea’ require ‘Milk’ for their making (assuming that you drink it that way, of course) . Hence, if the price of ‘Milk’ increases, the prices of ‘Tea’ and ‘Coffee’ will also increase.

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2.‘Tea’ and ‘Coffee’ derive their prices from the price of ‘Milk’. Therefore, these are ‘Derivatives’ of Milk.

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