How to get Confirm IPO Allotment

 

So you missed IPO of Tatva Chintan, Zomato etc.

These days there is IPO boom and listing gains in most IPO is huge , naturally there is heavy rush to subscribe new IPO, due to this frenzy rush most IPO are many fold oversubscribed. Recent IPO performance has shown quite promising results during the listing gains in which some IPOs have provided with listing gains of as high as 102%. (Example Tatva Chintan )  However most investors are not so lucky to get allotment.

Here are some tips to get more chances of allotment.

 

There are any upcoming IPOs in the line in which you can apply this strategy  and increase your chances to get confirmed allotment.

Some of very good forthcoming IPO are

Devyani International, Krsnna Diagnostic, Windlas, Jana Small Bank, Sri Ram Properties, Adani Wilmar, Paytm,  Rushi Soya, Go First , Star health Insurance etc.

 

How to get Confirm IPO Allotment?

Some basic tips :

1. Apply Single Lot. Applying more than 1 lot does not increase your chance of getting confirmed allotment.

 

2. Apply more than in one Demat Accounts with different PAN number like your , your wife, your kids demat a/c .

 

3. Choose highest band price

 

If price band is say Rs. 110 to Rs. 115 apply at a price of Rs. 115

4. Avoid  Last Minute rush and apply on first or surely on second day after knowing status of over or under subscription

 

 

5. Avoiding Technical Rejections like writing wrong PAN number, Wrong UPI ID , Name spell mistake etc.

 

6. Lastly you can consider Buying  Parent Company Shares

Let’s take an example to understand this trick better, Like if CMPDI is   planning for IPO in which the investors having shares of Coal India Ltd.  can apply for IPO of CMPDI in the shareholder’s category.

 Copy right Reserved@Ajit Kumar Singh

  

Long Term Capital Gains (LTCG) and Tax Treatment

 

How to calculate Long Term Capital Gains (LTCG) and Tax Treatment

 

Long Term Capital Gains (LTCG)  arise out of sale proceed of capital assets held over “long period of time”.

For Listed Equity and Equity Oriented MF “long period of time” means more than12 months

For all other assets like unlisted shares , Land , Flat, residential houses , real estate , Gold etc “long period of time” means more than 24 months.

It is important to calculate LTCG first correctly before Tax effect can be assessed.

LTCG is calculated by a key element called “indexation”

Formula is  (cost of purchase *indexation Value in the year of sale)/Indexation value in the year of purchase

Indexation value is declared by GOI from time to time.

Example

I purchased a flat for Rs. 10L by paying Rs. 1 lakh to broker in  April 2005 and sold   the same in june 2010 by for Rs. 16 lakh by paying 1 lakh to broker . What is my Long Term Capital Gains??

Do not think my capital gain is 5 or 6 lakh

Consider this :

1. My cost of accuisition is Rs.10L + 1L (brokerage)=Rs. 11L
2. My sale proceed is Rs. 16L – 1L (Brokerage)= Rs.  15 L
3. in the year 2005 -2006 (purchase year) Indexation was 117
4. in the year 2010 -11 (sale year) indexation was 167

 

so we have to calculate inflated cost of acquisition

 Formula is  (cost of purchase *indexation Value in the year of sale)/Indexation value in the year of purchase

(1100000*167)/117= Rs.  1570000

LTCG =Rs. 1570000-1500000=Rs. 70000 only

 

Taxability

 

For LTCG covered U/S 112A If income is less than 250000 , one can club  LTCG income to make it Rs. 250000 and pay  tax on balance LTCG

however no rabate will be allowed U/S 80C to 80U in such cases.

Deduction under sections 80C to 80U cannot be claimed from long-term capital gains.

For LTCG covered U/S 112A (sale of listed share or Equity Oriented MF) LTCG upto  Rs. 1 Lakh is not Taxable.

Above 1 L has two options :

1. @20% if  LTCG calculation is done Indexation basis
2. @10% if LTCG calculation is done without Indexation basis

 One can opt whichever is lower.

For LTCG not covered U/S 112A (Land, Flat, Real estate, Gold , unlisted shares etc) full LTCG is Taxed @20% on calculation of LTCG based only on Indexation formula..

Example :

I have got LTCG of Rs. 250000 by sale of shares/Real estate  .I donot have any other income . What is my Tax ?

 

Ans: Since I do not have  any other income and Basic exemption is Rs.250000, I can club the income and hence no Tax is payable by me

I have got LTCG of Rs. 500000 by sale of shares/Real estate  .I also invested Rs. 1.5L in PPF  . . What is my Tax ?

 

Salary Income :           0

LTCG               5,00,000

Total                 5,00,00

Basic exemption = Rs. 250000

Tax on Balance Rs. 2.50L LTCG will be charged and no rebate for PPF will be given U/S 80C to 80U

 

If LTCG is from sale of Listed Equity shares / MF gain upto Rs. 1 L  is exempt so Tax will be calculated @10% on balance Rs. 1.5 L = Rs. 15000 (if no indexation is used) or @20% if Indexation formula was used .

 

If LTCG is from sale of Real estate , unlisted shares, Gold, House/Flat, Land then @20% on Rs. 2.50 L

 

Note :

Basic exemption of Rs. 3L to be taken for Sr Citizen below 80 years   

Basic exemption of Rs. 5L to be taken for Sr Citizen > 80 years

4% cess on Tax to be added in all calculations.

 

Article copyright by Ajit Kumar Singh

 

 

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