Budget 2020 , Benefits and Disadvantages for traders and investors

Hey @nithin , After budget many telling different stories like

  • Liquidbees will have no deductions
  • No tax for dividends

etc , but some saying 43% dividend tax , can you please explain in layman terms, what will benefit investors and day traders.

1 Like

Next week we can more clarity

Now dividend will become a part of your income and you will tax as your slab, max is 42.7%

1 Like

Currently when you invest in liquid bees (liquid ETFs) your returns are in terms of dividends given to you in terms of more units. Until now when you got the dividend, 20% was deducted by AMC as DDT and then you got the units. This is the reason Liquid ETFs weren’t preferred as compared to liquid mutual funds.

Until now if you received the dividends for liquid ETFs the first 10lks didn’t have any tax, you had to pay 10% over and above Rs 10lks of dividend income.

Going forward

When liquid ETFs pay out dividend, they will pay without deducting any Dividend distribution tax. So you would essentially get 20% more returns than what you got before.

But once you receive the money, you have to pay tax on that as per your income tax slab. There is no exemption of first 10 lks or the reduced 10% above Rs 10lks.

This is a populist measure. Someone who is in the lowest tax slab will not only get 20% more as dividends on liquid ETFs, he wouldn’t have to pay any tax also. But it keeps getting worse for people who earn more. The ones in the highest tax bracket today pay 43% with all cess as tax. So they would have to pay 43% on the income generated by investing in liquid ETFs. Until now, if you assumed 20% DDT and even at 10% above 10lks the max the person in the top tax slab was paying was 30%. It now becomes 43% or 30% more taxes.

This is the exact same logic for dividends from equity investments as well. Promoters will now end up paying 30% more taxes to take out dividends, so while retail investor might benefit, promoters might reduce dividend payout itself. Today a promoter pays 25% corporate tax and now this 43% on dividend, so in all quite a bit before taking out any money.


@nithin do you think above was the reason for fall in markets yesterday.
Also if paying dividends might reduce due to this why did stocks of company paying maximum dividend like TCS went up?


Sale now , india sale lelo , lelo , lelo bayya ipo lelo @vishnux @Prakhar_Agrawal lelo

1 Like

Tough to say, US markets had fallen quite a bit on Friday night and everyone is fearing what happens when China opens tomorrow after a long break. So it could have been a combination of everything.

1 Like

This budget has nothing for a derivatives trader…


Don’t care…

Disinvestment is not a matter of joke. Its a strategy to bring the governance in a right track… Government is to run a country not companies.. So disinvestment is to 1 ) get rid of the job of running companies 2) make money to run a country 3) list the company in exchanges for more transparent business.

1 Like

yesterday’s fall should not create panic among experienced investors… it was just a continuation of falling trend started on 20th jan ( clear bearish engulfing candle on daily chart). interesting to note that the fall made the price touch 200 ma on daily chart. same thing happened last year , price started falling few days before the budget ( 5th july) and continued thereafter, fell below 200 ma remained there for some time and suddenly took its flight up on 20th sept ( 600 points in a single day ) and then continued its journey towards new high. market is falling because big boys want to buy it cheaper. however they also want you to see that as if it is falling for this and that reason ( in this case budget). The real market movers do not need to wait for the budget announcement day or any news to come on air for the general public… They are always 10 steps ahead. .

Yes good point i

@R_Gh i already comment about nifty crash 1 month ago , because GDP is not good macro all are not good , market went up because FII try to trap retail trader , i already posted nifty will go below 11 k in the two month period , now totally mismatch of GDP economy and Nifty , its will get each same line together with in two month

i am happy when the market going down slowly i will invest , i waited for long month to see the market below 12k

See bhai disinvestment the Psu all comapny erase the retail wealth in the market , even LIC ipo is coming its will never perform may be for long term the stock will be in coma , currently all psu are behaving like that , I never intrested to invest in PSU , in PSU one are two company perform after they also stuck ,

ok if they sold all the company , after that what will goverment will do , they will put a tax on your head only , its not a good administration , congress build a PSU , BJP selling PSU , first of all we need to clear the corruption in our country , then only any dream trillion to achieved , i am sorry to say that , i am not a politically intrested person
i live in dubai for more than 15 years , in those 15 years no one asked a single rupee BRIBES to me in dubai , even i dont know what is the meaning of bribes in dubai ,so only that country is rich all national are rich
i want to see india also like that , but here you cannot compare those country with india , so only our country need disinvestment

Biggest corruption is going on in PSUs, shamelessly . I have worked with Ongc in India’s oil fields as a mariner . I have seen it… Its is easy to do arm chair criticism from far away. people sitting there at the top and doing it , know it better what to do and where to do , and I can see they are doing it. congress ke jamane se oil fields ke oil adha bech ke kha gaye sab andar ke log . private kar diya to nahi kha payenge…only privatisation can stop such corruption. Running companies is a huge money making tool for corrupted administrators . Again govmnt is to run a country not companies and disinvestment is a powerful method to get rid of this corrupted business of running companies by the government.


yes ,you are right , i do think so , present government is doing right thing.

Any way every body have different opinion , our country GDP is improving means thats beauty to see ,

But GDI not improving …

its will go up slowly after 1 year, we need to wait and see

Is this some kind of greek and latin post :stuck_out_tongue: