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Bidding adieu to 2018 đź‘‹

Let’s just admit it--2018 was a year of high-profile weddings. There were more than a handful of them
Bidding adieu to 2018 đź‘‹
By Making smalltalk • Issue #5 • View online
Let’s just admit it–2018 was a year of high-profile weddings. There were more than a handful of them, beginning from the Royal Wedding in the UK to DeepVeer, NickYanka and Ambani-Piramal back home. Nothing else made the news as much as these extravagant functions did. A lot of “monies” went into these “ceremonies” after all.
Pardon the pun, but yes, we can only imagine how great 2018 was for anyone who provided their products and/or services to these celebrity weddings. Their bank accounts would have burgeoned for sure, but what about the rest of us who just followed these weddings on social media? What happened to our personal finances in 2018? Let’s take a look.
Long-term capital gains tax made a comeback
In Budget 2018, long-term capital gains tax on equity and equity-oriented investments was reintroduced. Gains of over Rs 1 lakh in a financial year are now taxed at 10%. Earlier, gains made on equity investments held for over a year were entirely exempt from tax.
This move wasn’t met with welcoming hands–and understandably so. The markets turned volatile post the Budget and saw numerous ups and downs through the year. But, despite this tax, equities remain the best investment to build wealth over the long-term. See study here.
Ban on upfront commissions to fund distributors
SEBI banned the payment of upfront commissions to mutual fund distributors. Earlier, an upfront commission of 1% was paid by AMCs to distributors, which was said to have led to mis-selling of mutual funds. To make sure that doesn’t happen, SEBI has asked AMCs to adopt a full trail model of commissions.
This, in every way, is good news for investors as it will stop distributors from unnecessarily churning their clients’ fund portfolios. Investing should be cheap. It is a well-known fact that investment fees eat into the returns earned. Mutual fund investors anyway pay an expense ratio on a daily basis, which isn’t as cost-effective as paying an only-when-you-transact charge with smallcases.
NPS withdrawal to be entirely tax-free
Upon retirement, 40% of an investor’s NPS corpus is required to be used to purchase annuity. Part of the remaining 60% was earlier taxable. But not anymore. Under the new guidelines, the entire 60% withdrawal will be tax-free.
This is a major boost to people investing for the long-term. There is a paucity of low-cost retirement products available to investors, and the tax treatment on the NPS was not favourable until now. Experts believe that it finally makes sense to make the NPS a part of your tax planning as well as retirement planning.
These were the three major changes to our investment landscape in 2018. Tweet to us with the changes that you would like to see in 2019.
Until then, here’s wishing the new year brings you a ton of things to cheer! 🎉

If you haven’t started investing yet, make sure it’s your New Year Resolution for 2019.
It all begins with the first step
It all begins with the first step
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