SIR,GOOD DAY Pl. TELL ME THE FOLLOWING NO.1,HOW TO CALCULATE MARGIN FOR TRADE? NO.2,HOW TO SAVE LTCG ON SALE OF EQUITIES? IF I TRANSFER SHARES TO MY WIFE,SONS THEN ALSO I WILL HAVE TO PAY LTCG OR TRANSFEREE WILL HAVE TO PAY ANY TAX..

Ans: Here's a breakdown of your questions:

1. Calculating Margin for Trading:

Margin requirements depend on the broker and the type of security you're trading (stocks, futures, etc.). Here's a general idea:

Margin: The minimum amount of your own money you need to invest in a trade. The broker lends you the rest.
Example: If you want to buy Rs. 10,000 worth of stock and the margin requirement is 50%, you need Rs. 5,000 of your own money and the broker lends you Rs. 5,000.
Important Note: Trading on margin involves higher risk.

2. Saving LTCG (Long-Term Capital Gains) on Sale of Equities:

Here are some ways to potentially save LTCG tax on equities held for more than 1 year:

Exemption Limit: Up to Rs. 1 lakh of LTCG from equity sales in a financial year is exempt from tax.
Offsetting Losses: Set off LTCG with short-term capital losses (STCL) or other capital losses to reduce your taxable LTCG.
Long-Term Holding: Holding equities for more than 1 year benefits from a lower LTCG tax rate (compared to STCG).
Transferring Shares to Wife/Sons:

Transferring shares to your wife or minor children is generally not considered a sale and typically incurs no LTCG tax for you. However, your wife/sons will inherit the cost price of the shares from you. When they sell, the LTCG will be calculated based on this inherited cost price.

Remember: Consulting a tax advisor is recommended for specific advice on your situation. Tax laws can be complex and subject to change.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in