2. INTRODUCTION KEY TERMS
• INVESTMENT: is an act of allocating funds to an Asset or Capital to an endeavor
(a Business, Project ,Real estate etc) with the considaration of time value of
money , Inflation and Risk.
• Risk: is a probability / threat of damage / liability / loss or any other negative
occurance in the investment in future.
• Return : also termed as Profits / gains / income / reward.
• Tax : Every profit or income earned from various sources is taxable . Which is the
source of revenue to the Government
4. TYPES OF INVESTMENTS
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• Securities Investment (Example : Stocks, Bonds, Options etc.)
• Property investment (Example: land, building etc..)
• Tangible personal property investment (Example: Gold , Artwork e
• Short term investment (<1year) and Long term investment (>1yea
• Domestic and Forign Investment.
• Risk Based Investment (Selection of high or low risk).
• Direct or in direct investment.
5. TAXABLE INVESTMENTS
• EQUITY: also known as Equity Stock or Securities issued by Companies to rais funds.
• EQUITY MUTUAL FUNDS : is the type of mutual fund that invests principally in stocks . It is also
known as stock fund.
• DEBT MUTUAL FUND: here the investment is mainly invested in a mix of debt or fixed income
Securities such as treasury bills ,corporate securities ,moneycmarket instruments generally for a
fix maturity and fixed interest rate.
• REAL ESTATE.
• GOLD.
• ZERO COUPON BONDS: it is a bond that is issued at a deep discount to its face value but pays
no interest. Etc..
6. The tax Slabs where Indexation is based on Adjusting cost of the asset based on Cost
Inflation index(CII) issued by Income Tax deptartment
