#Stock #LTCG #Zerodha
Introduction :
In the world of finance, being alert to market movements and making informed investment decisions can prove to be immensely rewarding. This is my personal story about recognizing a unique opportunity, navigating the stock market with confidence, and ultimately saving on taxes while maximizing profits. Through this blog, I aim to shed light on the importance of being proactive, leveraging investment platforms, and understanding tax implications for long-term gains.
The Beginning of a Fortuitous Journey:
One fine day, I noticed a peculiar situation with ICICI Bank stock. Despite no inherent problems, it had experienced a correction of approximately 4-5% due to global cues. With 1.5 lakhs in cash at my disposal, I saw this as an opportune moment to invest. Trusting my instincts, I made a move that would soon prove to be a catalyst for my successful journey.
Riding the Wave of Success:
As the business of ICICI Bank thrived, so did my decision to put my faith in the stock. Over the course of a year, the stock experienced a remarkable growth of more than 25%. This not only provided me with substantial financial gains but also instilled confidence in my investment prowess.
Discovering the Power of Information:
During my investment journey, I stumbled upon a feature offered by Zerodha, an online trading platform. This feature allowed me to determine the age of the stocks I owned. Armed with this knowledge, I realized the potential benefits of long-term investments.
Unraveling Tax Implications:
My curiosity led me to explore the tax implications associated with my investments. I discovered that for long-term capital gains up to 1 lakh, no taxes were applicable. This revelation sparked a realization that I could potentially save a significant amount of money by making a strategic move.
Capitalizing on Tax Benefits:
With the ICICI Bank stock having yielded a profit of 30,000 INR, I made a calculated decision to sell my holdings. By doing so, I avoided paying a hefty 3,000 INR in income tax, which is 10% of the profit made for long term capital gains. The small transaction and related fees incurred while selling the stock were inconsequential compared to the substantial tax savings I achieved.
Strategic Buyback and Compensation:
To further enhance my investment strategy, I noticed that the stock price dipped slightly below the selling price the very next day. Seizing this opportunity, I repurchased the stock, ensuring it was no longer in my Demat account. This strategic move helped compensate for the transaction fees incurred during the initial sale and subsequent buyback.
Conclusion:
My journey as an astute investor demonstrates the importance of seizing opportunities in the stock market and understanding the intricacies of taxation. By recognizing a favorable market correction, leveraging information tools provided by trading platforms, and being aware of tax implications, I was able to maximize my profits and save on significant income tax. My story serves as an inspiration for others to stay vigilant, make informed investment decisions, and explore avenues for optimizing their financial gains.
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Disclaimer: This blog post is intended for informational purposes only and should not be considered as financial advice. Always conduct thorough research and consult with a qualified financial professional before making investment decision.