Budget 2020

New Income Tax Slabs | Income tax rate cut: Budget gives option of lower income tax rates, new tax slabs minus 70 exemptions .

   

Here are all the key highlights from Nirmala Sitharaman's Budget speech: Taxation: * New optional tax slabs: New income tax slabs will be available for those who forgo exemptions. * To simplify the tax system and lower tax rates, around 70 of more than 100 income tax deductions and exemptions have been removed.

As per the proposed amendments, a citizen of India would be deemed to be a resident of India in any financial year, if such individual is not liable to tax in any other country.

As per the existing provisions, an Indian Citizen or Person of Indian Origin, who being outside India, comes on a visit to India in any financial year, would be considered as a resident in India, if such individual stays in India for 182 days or more. The amendment proposed by the budget provides for such an individual to be resident in India in either of the two scenarios – (i) the individual’s stay in India during the financial year is 182 days or more; or (ii) the individual’s stay in India is 120 days or more in the current financial year and 365 days or more in the preceding 4 financial years.

Call/Put

               Call and Put Options

Options are a type of derivatives security. An option is a derivative because it's price is intrinsically linked to the price of something else. If you buy an options contract, it grants you the right, but not the obligation to buy or sell an underlying asset at a set price on or before a certain date.

A call option gives the holder the right to buy a stock and a put option gives the holder the right to sell a Stock. Think of a call option as a down-payment for a future purpose.

                    Long Calls/Puts

The simplest options position is long call (or put) by itself. The position profits if the price of the underlying rises (falls), and your downside is limited to loss of the option premium spent. If you simultaneously buy a call and put option with the same strike and expiration, you've created a straddle.

This position pays off if the underlying price rises or falls dramatically; however, if the price remains relatively stable, you lose premium on both the call and the put. You would enter this strategy if you expect a large move in the stock but are not sure which direction.

Basically, you need the stock to have a move outside of a range. A similar betting on an outsized move in the securities when you expect high volatility is to buy a call and buy a put with different strikes and the same expiration-known as a strangle. A strangle requires larger price moves in either direction to profit but is also less expensive than a straddle. On the other hand, being short either a straddle or a strangle (selling both options) would profit from a market that doesn't move much.