Capital gains do not always lead to tax liability. Long-term capital gains tax liability can be significantly reduced if one understands the exemption provisions properly. Sections 54, 54EC and 54F of the Income-tax Act provide valuable relief to taxpayers who transfer long-term capital assets and would otherwise be required to pay substantial tax. Let us […]
Sections 54, 54EC and 54F: Relief from LTCG Tax Read More »
In theory, a given currency should carry the same price in different locations/markets. However, market inefficiencies resulting from communication difficulties may result in different prices emerging in different locations at the same time. Arbitrage, takes advantage of these inefficiencies to the benefit of a trader. The process of buying goods/currency in one market and selling
Arbitrage Learning in Business Strategy Read More »
Share capital is the most popular and convenient source of long term finance for companies. The organizations utilise multiple types of issues to raise public funds from the capital market. The IPOs and FPOs are one of those issues through which a company issue (sell-off) financial securities like equity shares for the investors to subscribe.
Tax Treatment of Share Transactions in Income Tax Read More »
The students were settling into the Corporate Finance class, some eagerly taking the front seats while many quietly occupied the back benches. The room buzzed with low conversations as notebooks and laptops came out. The professor stood calmly in front of the smart board, glanced around the classroom, and smiled. He wrote a few key
Equity or Debt? Understanding Financial Breakeven and Indifference Point Read More »
Akash and Mukesh sitting in a college cafeteria after class. Akash looks worried, scrolling through his phone. Mukesh: Why so tense? Akash: I just sold some shares and mutual funds… and now I realise capital gains tax is not as simple as I thought.” Mukes smiles:“Teach me. I always get confused between STCG, LTCG, slabs,
Capital Gains: Basic Concepts and Tax Treatment Read More »
A cross rate is the currency exchange between two currencies where neither are the official currencies of the country in which exchange rate quote is given. It means that cross currency rate is when the currency being mentioned do not belong to domicile. Therefore, a finance Journalist in Japan will refer to EUR/GBP as the
Cross Rate Application in Business Scenarios Read More »
Capital structure refers to the mix of debt, equity, and hybrid securities that a business uses to finance its operations and growth. Debt includes loans and bonds that require repayment, while equity involves raising funds through selling shares that give investors ownership stakes. When we discuss capital structure, the focus is on achieving the optimum
Optimum Capital Structure and Capitalisation Read More »
The professor looks at the students and says, Students, case studies are excellent for understanding concepts in real life.But in corporate finance, true clarity comes only when concepts are tested with numbers. He pauses, scans the classroom, and continues, Stories help you visualize a situation, but figures help you understand the logic behind decisions. Then
Risk–Return Dynamics: A Case Study Discussion Read More »
We all know one basic rule of finance — higher risk demands higher return. But in business, risk does not come from one place. It comes in layers. Let’s know the following terms Business Risk: Base-Level Risk Business risk arises from: It exists even if the company has no debt. Risk–Return Link:A firm with high
Risk–Return Relationship in Corporate Finance Read More »
Before we delve into the computations, let us first understand the various types of house properties and how the income from each is brought to tax under the head ‘Income from House Property’. Income tax classifies the properties in three ways: Self-Occupied House Property Let Out House Property Deemed to be Let Out Property Self-Occupied
Income from House Property: Understanding Different Scenarios Read More »
