Hold for short term but watch markets carefully

Blog meant for 5 June 2017 Monday

Dear friends,

Markets had a steady day on Friday as it closed at another new lifetime high at 9653. It was mainly helped by the positive global cues all over the world. We have to see how the Asian markets open tomorrow and our markets will be dependent on the Asian market cues.

So far in the first 5 months of the year, there have been good chances of making short term profits from many stocks. The returns are clearly much better than what we would have got if we invested in other options such as Bank Deposits (FDs).

In some trades which we enter for short term, we may sometimes face a small loss of 1-2% if the markets suddenly falls or we may lose the amount we paid as brokerage charges. However, overall when you see over a One year period, the profits from short term trades will be good and much better than bank interest.

As per 30 days moving average, Nifty showing Hold signal.
The indications for short term are as follows:


Wait to Sell –   Axis Bank

Just Buy – DIVISLAB (Buy if you have risk appetite and watch markets carefully once you buy).

Don’t Buy –  LUPIN, BHEL, Reliance, ONGC, SBI, Titan

The last few seats of the Stock Market Workshop in Kannada in Bangalore on 10 & 11 June (Sat & Sun). Hurry for registrations by emailing successdigest@gmail.com or call +91 99-000-000-46.


One of our participants has asked the following questions. We are answering it in the blog so that the information is helpful for all.

Question – Long term capital gains tax exemption is after 1 year or is it at the end of a particular financial year? Also, in a Demat account, will they do TDS for the tax due to the Government for profits made on short term trades?

Answer – 

For example, if Mr.Raj purchases 10 shares of Axis Bank at Rs.485 each in June 1, 2016, he has to sell his shares after 365 days or 1 year if it has to apply for long term capital gains. Suppose he sells the shares on or after June 2, 2017, since he has held the shares for more than 1 year, he need not pay any tax on the capital gains earned. 

The rule is not that we can hold it only for that Financial year and then sell to claim long term capital gains. For example, he cannot sell after the end of financial year – 31 March 2017 thinking that he will exempted since that particular financial year is over. 

Only if you have held a stocks for more than 365 days or 1 year, will it be considered long term capital gains and hence exempted from paying tax.

Also, the tax is to be paid by the investor to the Government. The Stock broker has no role or authority to deduct TDS on profits which is liable to the Government. While selling, the Stock broker only deducts his brokerage charges, Securities Transaction tax, Service tax, Stock Exchange fees and other Government fees etc.

At the end of a Financial year, we need to get a statement of all our transactions in that financial year and give it to our Chartered Accountant or Auditor who will calculate and see what is the profit/ loss you have made in that year in short term (less than 1 year) and then based on that you will need to pay tax. If you have made any loss from short term trades, then there is no question of any tax to be paid since you have not made any income from trading shares.

All the best!

Dr.Bharath Chandra

About the author

Dr. Bharath Chandra

Hi there! This is Dr. Bharath Chandra & Rohan, International Trainers & Success Coaches. We have addressed more than a crore people on Stock Market, Personality Development, Wealth Management and Financial Planning over the past 35 years.

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