{"id":6190,"date":"2023-08-28T15:47:45","date_gmt":"2023-08-28T15:47:45","guid":{"rendered":"\/blog\/?p=6190"},"modified":"2024-10-18T15:42:43","modified_gmt":"2024-10-18T10:12:43","slug":"impact-of-gst-on-mutual-funds-insurances-stocks-and-loans","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/blog\/personal-use-loan\/impact-of-gst-on-mutual-funds-insurances-stocks-and-loans\/","title":{"rendered":"Impact of GST on Mutual Funds, Insurances, Stocks and Loans"},"content":{"rendered":"\n

The country switched to GST on 1st July 2017. And in the financial space, this is currently the single biggest topic of discussion today.<\/p>\n\n\n\n

Know More About Personal Loan<\/a><\/div>\n\n\n\n

GST is replacing several taxes. But\nit will continue to have an effect in our daily lives. So let\u2019s see how GST\nimpact various financial products.<\/p>\n\n\n\n

Broadly speaking, the service tax\nrate on almost all banking, insurance and capital market transactions has\nincreased to 18% from the earlier 15%.<\/p>\n\n\n\n

Impact on Mutual Funds<\/strong><\/p>\n\n\n\n

As there is a rise in tax rate, the\ntotal expense ratio of the mutual fund would go up slightly. Expense\nratio is the annual fee that mutual fund companies collect from investors\nand its expressed as a percentage of assets and deducted each fiscal year (for\ncosts that include but at not limited to fund management fees, administrative\nfees, operating costs, etc.)<\/p>\n\n\n\n

But the total expense ratio will\nremain within the prudential expense limits specified by SEBI.<\/p>\n\n\n\n

Impact on Stock Trading<\/strong><\/p>\n\n\n\n

When you buy stocks, you need to pay\nbrokerage. Now the taxes on brokerage will go up after GST implementation. But\nsince the brokerage component itself is a very small portion of the overall\ntransaction value, it won\u2019t hurt the retail investors much.<\/p>\n\n\n\n

Impact on Insurance Premiums<\/strong><\/p>\n\n\n\n

The overall premiums for all kinds of\ninsurances would go up as tax rates have increased from 15% to 18% after GST.<\/p>\n\n\n\n

Impact on Loans<\/strong><\/p>\n\n\n\n

When you borrow money in form of personal loan<\/a>, housing loan or business loans from the lenders, there is a loan processing fees. Generally around 1-2% of the loan amount plus taxes. Since taxes have gone up, the processing fee (inclusive of revised taxes) would go up too.<\/p>\n\n\n\n

So let’s say you took a loan of Rs 10 lac for which the processing fee was 1%, i.e. Rs 10,000. Now this processing fee earlier would have attracted a tax of 15%, i.e. Rs 1500. But now, this has gone up to 18%, i.e. Rs 1800. As you can see, the impact of GST for retail customers is marginal at best. So slight increase in tax rates shouldn\u2019t be a deciding factor for your financial decisions. <\/p>\n\n\n\n

Apply for Personal Loan<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

The country switched to GST on 1st July 2017. And in the financial space, this is currently the single biggest topic of discussion today.<\/p>\n

Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":6192,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[24],"tags":[],"class_list":["post-6190","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-personal-use-loan"],"yoast_head":"\nImpact of GST on Mutual Funds, Insurances, Stocks and Loans - TATA Capital Blog<\/title>\n<meta name=\"description\" content=\"Know the effects of GST on various financial products, like mutual funds, insurance, stocks, and loans. 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