Equity as an asset class is an important portion of an investor’s portfolio. However, tax rules vary for different types of equity instruments. For example, capital gains tax is based on the period of holding. So for stocks and equity-oriented mutual funds, long term is defined as more than one year, but for Ulips this parameter doesn’t apply. Taxes reduce the overall returns that can get from a product. Given that different equity assets have different tax rules, an investor must take a careful look at the suitability of an investment in terms of taxes too. Here’s a look at what the various taxes are.
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