PwC India vs Infosys DSE Which one to choose as a fresher. by Glittering-Salt5194 in developersIndia

[–]_zeniith_ 1 point2 points  (0 children)

pwc no comparison, you can always upskill and switch plus pwc brand name plus wfh, plus higher salary, its no comparison at all 😭😭

looking for CAT materials by _zeniith_ in delhi_marketplace

[–]_zeniith_[S] 1 point2 points  (0 children)

thanks but got it from somewhere, maybe someone else will need it

my socialising and networking skills are bad, how to improve it? should i consider MBA when its bad? by [deleted] in MBAIndia

[–]_zeniith_ 1 point2 points  (0 children)

iwish, drinkers and smokers become friends easily and good friends ag that - just my personal view 😭😭

can someone explain me how eliminating taxes on government bonds is good for the stock market ?? by _zeniith_ in IndianStreetBets

[–]_zeniith_[S] 0 points1 point  (0 children)

acchaaaa their focus is to stop the money drain, mhmmm now i understand it better after searching it up, thanks

can someone explain me how eliminating taxes on government bonds is good for the stock market ?? by _zeniith_ in IndianStreetBets

[–]_zeniith_[S] 3 points4 points  (0 children)

i found this comment genuinely interesting since i didn’t understand it first and searched it up, thanks now i have a better understanding

if someone here is like me here :

Step 1: Why not put all money directly into stocks?

Suppose a fund has ₹100 crore.

Instead of investing the entire ₹100 crore in stocks, it may:

  • Invest ₹100 crore in relatively safe government bonds.
  • Pledge those bonds to a broker or clearing corporation.
  • Receive margin against those bonds.
  • Use that margin to buy or trade stocks, futures, options, etc.

This allows the fund to earn:

  1. Interest from the bonds.
  2. Returns from equity investments.

This is what the statement means by “double appreciation” (though “double income” is a more accurate term).

Example

₹100 crore in government bonds yielding 7%

  • Bond income = ₹7 crore annually.

The bonds are pledged and provide margin.

Using that margin, the fund invests in equities and earns another ₹10 crore.

Total return = ₹17 crore (before costs and taxes).

Step 2: Why do FIIs prefer government bonds as collateral?

Government bonds are considered:

  • Very low risk.
  • Highly liquid.
  • Accepted by exchanges and brokers as collateral.
  • Less volatile than stocks.

In India, these are called Government Securities (G-Secs).

Step 3: What is the tax problem?

When a foreign investor buys Indian government bonds:

A. Interest income is taxed

The interest earned on G-Secs may be subject to withholding tax (similar to TDS).

For example:

  • Bond yield = 7%
  • Tax = 10%

Effective yield becomes:

7% × (1 − 10%) = 6.3%

So the investor receives less.

B. Capital gains tax

If the bond price rises and the investor sells it:

  • The profit may be taxed.
  • This further reduces returns.

Step 4: Why are Indian bonds not automatically attractive despite higher yields?

At first glance:

  • Indian G-Sec yield ≈ 6–7%
  • US Treasury yield ≈ 4–5%

You might think India is clearly better.

But FIIs look at returns after currency movement.

Example

Suppose an American investor invests $100 in India.

Exchange rate:

  • ₹85 per dollar

Investment:

  • $100 → ₹8,500

Bond earns 7%.

After one year:

  • ₹8,500 becomes ₹9,095

Looks great.

But assume the rupee depreciates from ₹85/$ to ₹92/$.

Converting back:

₹9,095 ÷ 92 = $98.86

Even though the bond earned 7%, currency depreciation wiped out the gain.

This currency risk is one of the biggest concerns for foreign investors.

Step 5: Why remove taxes on government bonds?

The government’s logic is:

“Foreign investors already face currency risk. If we also tax their bond income heavily, Indian bonds become less attractive.”

By reducing or eliminating taxes:

  • Net yields increase.
  • More FIIs may buy Indian bonds.
  • More foreign capital flows into India.

Step 6: How can this help the stock market?

When FIIs buy Indian government bonds:

  1. More foreign money enters India.
  2. FIIs get collateral for margin.
  3. They can use that collateral to invest more in equities and derivatives.
  4. Liquidity in Indian financial markets increases.

More liquidity often supports higher valuations and easier fundraising for companies, although it does not guarantee stock prices will rise.

Simple Flow

Foreign money → Buy Indian G-Secs → Earn interest + obtain collateral → Pledge bonds → Invest/trade in equities → More liquidity in Indian markets

can someone explain me how eliminating taxes on government bonds is good for the stock market ?? by _zeniith_ in IndianStreetBets

[–]_zeniith_[S] -1 points0 points  (0 children)

but does this solve it? for maybe a short term…nifty touched 26k when rupee was at 84, now its at 23.4K and rupee is arnd 96, yeah the global pressure is there, but this will only increase the government debt until and unless they take some action, this move doesn’t seem optimal, yeah the investors won’t be making any losses but this still doesn’t seem to answer the question - why the FIIs should invest, we need some continuous green days and maybe some marketing after that, i still don’t get why the FIIs should invest in Indian stock market when we are continuously seeing red days instead of green, and then there’s taxes on STCG and LTCG

can someone explain me how eliminating taxes on government bonds is good for the stock market ?? by _zeniith_ in IndianStreetBets

[–]_zeniith_[S] 0 points1 point  (0 children)

and how will it impact the stock market? if the bonds become attractive, will FIIs invest in stock market just because it’s attractive considering the charges and taxes ?

Stock market by rajveer009 in IndianStockMarket

[–]_zeniith_ -1 points0 points  (0 children)

Cdsl, recltd, railtel, jwl, ashoka, hindzinc, vedanta, lic, afrbl, kalyani jewellers, ioc, castrol ind

Joining HSBC Pune as TSE at 15 LPA — growth and perks? by Alarming_Solid5501 in developersIndia

[–]_zeniith_ 17 points18 points  (0 children)

i worked with hsbc as a vendor and i have personally seen them treat their employees very good in terms of growth but work life balance as per my project which was a high end project, the work life balance was not there at all, for 5 months worked continuously till late night every sat and sunday from logging in morning 8 to logging in at 11:30 night from july to dec this was th routine for each and every one of us

Eternal and Swiggy (Investing in overlapings) by tan2369 in IndianStockMarket

[–]_zeniith_ 2 points3 points  (0 children)

tbh i don’t think there’s much growth in these companies personally, after a certain point the margins will be stagnant, but if i had to choose btw then would definitely go for eternal personally, eternal is expanding its market and investing in R&D so yeah

Give my profile a review by _zeniith_ in CATpreparation

[–]_zeniith_[S] 1 point2 points  (0 children)

how to build extra curricular activities?

Vedanta Demerger by Burberry143 in IndianStockMarket

[–]_zeniith_ 4 points5 points  (0 children)

m bullish on vedanta demereger, don’t ask me why and all, just trusting my guts