The Role of the Capital Market

The Role of the Capital Market

The role of the Capital Market

The capital market has a special role to play in advancing and sustaining economic growth. The capital market is a significant and efficient medium and creates a dynamic fund for commercial firms and a fruitful source of financial investment. Capital markets play a key role in transforming the country’s economy into a more efficient, innovative and competitive market.

The diversification of risk in the economy provides a means of risk management during the distribution of my capital market. A balanced capital market to increase the excitement of news to encourage the principle of regulation of commercial enterprises. Thus an honest business environment is created.

From past history we know that the capital market has played a particularly important role for technological advancement and economic development. Cash has a role to play in financing capital-based projects for a long time. Since the Industrial Revolution of the eighteenth century, when we are moving towards the so-called new economy, the role of the cash market has continued.

There is no denying the existence of a strong and extensive capital market to drive the economic growth of our country. An alternative source needs to be created to help trade companies and for that India needs to create its own capital market. This process can make investor deposits more dynamic. The capital market creates a valuable usb of outside money.

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For a long time the Indian market was considered too small to attract attention. But over the past decade, the Indian capital market has seen a surge in international investment. The Indian market is no longer thought to be stagnant or stagnant. The Indian market is now a dynamic market and provides attractive opportunities to the global investor community.

What are capital Markets?

Capital markets are places of transactional efficiency. It helps those who can provide capital and need capital to come to a common place. Those who have capital are retail and institutional investors, while those who are looking for capital are business, people and government.

Capital markets are made up of primary and secondary markets. The stock market and the bond market are common capital markets. Details about the capital market consists of a combination of capital market providers and users of these supplies. Capital markets sell financial products and debt protection. Preliminary market agreements with new equity stock and bond issues, which are sold to investors. Primary market securities are considered as initial offer or initial public offering (IPO). Secondary markets where existing securities are traded, capital markets are crucial for the modern economy as they help to transfer money between those who have them and those who can keep them in productive use. The secondary market is overseen by regulatory bodies such as the Securities and Exchange Commission (SEC). Examples of secondary markets are the New York Stock Exchange (NSY) and the Nasdaq.

What is capital gain? Capital gain is a profit you make on your own assets. In other words, it increases the value of the capital property which gives it a higher value than the purchase price. Capital assets can be an investment or real estate. Etc. Capital gains are not realized until the assets are sold. Capital gains can be short-term or long-term gains. An assessee considers any capital asset for less than one year to be subject to short-term profit. On the other hand, any asset held for more than one year is called under long-term profit. You have to claim capital gains on income tax.

Criteria for Income as Capital Gains No capital gain will be effective if the assets are inherited. It’s just a transfer because there’s no actual ‘sale’. If the inherited person sells these assets, capital gains tax will be applicable as actual ‘sale’. The Income Tax Act explicitly exempts property received as a gift by inheritance or will. Capital gains are taxable in the year that capital assets are transferred or sold.

Please note that capital markets can also refer to investments that are considered capital gains tax. They can also refer to equity markets, debt, bonds, fixed income markets, etc.

So I hope you understand the topic well.

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