Want to increase your wealth and become part-owner of major corporations like Tata, Reliance, Infosys, or even Zomato? It’s time then to purchase shares. One of the finest methods to create riches is to invest in the stock market; but, first, you have to grasp the fundamentals before diving in. For Indians wishing to purchase shares, this is a basic, methodical guide.
Definition of Shares
Shareholders are a company’s owners. Purchasing shares enables you to be a shareholder, therefore entitling you to a tiny portion of that firm. Should the business do well, share values rise. Additionally, you can get dividends, which are earnings distributed by the business. The stock exchange hosts the buying and selling of shares.
Step-by-Step: Indian Share Purchase Guidelines
- Create a Demat and Trading Account
- Your shares are held in a Demat account, akin to a digital locker.
- Using a trading account lets you purchase and sell shares.
- Open both under registered stock brokers like Zerodha, Groww, Angel One, ICICI Direct, etc.
- Your shares are held in a Demat account, akin to a digital locker.
- Link Your Bank Account
- Money intended for the purchase of shares is deducted from your bank.
- Here we credit sales revenues and dividends.
- Money intended for the purchase of shares is deducted from your bank.
- Finish KYC—Know Your Customer
- Send PAN, Aadhaar, bank information, and income documentation.
- Starting a trade requires KYC.
- Send PAN, Aadhaar, bank information, and income documentation.
- Enter Your Broker’s Platform Login
- Consult the app or website.
- Look for the business you wish to make investments in.
- Consult the app or website.
- Order Something
- Choose “Buy,” input the share count, then choose a price—market or limit order.
- Verify the sequence; after it’s carried out, the shares will show up in your Demat account.
- Choose “Buy,” input the share count, then choose a price—market or limit order.
Types of Share Orders
- Market Order: Buy at present price according to market order.
- Limit Order: Set your own pricing by limiting order.
- Stop Loss: Selling automatically at a defined price helps you safeguard your losses.
Items to Review Prior to Share Purchases
- Past performance of a company
- Most recent financial statements
- Plans of future expansion
- Value’s comparison with the current stock price
- News from the market and trends
Share Market Tax
- If you sell shares within one year → 15% short-term capital gains tax
- Should you sell after one year and have long-term capital gains exceeding ₹1 lakh → 10% tax liability.
Advice for Novators
- Start modest; even ₹500 is plenty to start.
- Steer clear of hot suggestions; perform your own investigation.
- Calm yourself with fluctuations in the market.
- At the start, invest in reputable, consistent businesses.
- Invest routinely using SIP in equities or mutual funds.
Final Thought
All you need to acquire shares in India is a Demat account, some fundamental understanding, and a long-term outlook. Investing in the stock market, with the correct strategy, will enable you to reach your financial objectives and create riches. Start slowly, pick knowledge methodically, and develop with assurance.