Shahid Balwa Reveals: The Dying Investment Havens of Indians
by Dynamix Group WriterThe two
major fields of investment for Indians have been gold and real estate for a
long time now. They are always considered as the safest investment options. While
financial products are gaining ground with investors, real estate and gold
continue to hold strong. In fact, to unlock the value from the physical gold
that many Indians hold and to reduce gold import, the government launched the
Sovereign Gold Bonds and Gold Monetisation Scheme in 2015.
At the
same time, in the past few years, real estate investments have witnessed a
steady decline as capital values have remained stagnant. Although to the
advantage of common people, the government reduced the period after which a
real estate holding is considered a long-term asset—from three years to two
years in 2015. This move by the government will prove to be a game-changer for
the otherwise stagnant real estate market, believes Shahid Usman Balwa, Promoter,
DB Realty.
Ø The Long and Short-Term assets of Gold and
Real Estate:
A
short-term gold asset, as per the latest notification of the government is one
that is for the period of 3 years or less. Hence, all other investments in gold,
that for a period of more than 3 years are considered as long-term gold assets.
Similarly, a short-term real estate asset is one that is for the period of 2
years or less and a long-term asset is one that is for the period of more than
2 years, explains Shahid Usman Balwa.
The
reason behind explaining the meaning of short- and long-term gold and real
estate assets is the difference in the way of taxing the two. While short-term
capital gains from short-term gold assets are taxed per the slab rate of the gain.
The long-term gains from long-term gold assets are taxed at 20.8% (with
indexation).
The case
is same for short-term and long-term capital gains from short-term and
long-term real estate assets. While the former is taxed as per the slab rate,
the latter is taxed at 20.8% (with indexation).
Although both
gold and real estate have always been considered as investment havens by
Indians, yet the investment in the two has either seen a decline (in case of
gold) or been stagnant (in case of real estate).
Hence, two of
the most favourite investment vehicles of Indians are reeling under the fear of
eminent death or devastating stagnation, unless the government takes some
concrete steps to help revive them and encourage common man to invest in them
again.
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Created on Jul 30th 2019 01:06. Viewed 339 times.