Abstract
In this present world, savings has become the most important aspect of an individual’s life but the medium of nurturing these funds is now the most crucial thought that strikes in their mind. No one wants to keep money idle at their disposal, rather put them in different investment avenues that generate adequate returns. A question right away pops before the investor during the time of undertaking an investment option that whether the risk is viable to undertake for the investor or not. As it goes by the saying that “the more the risk the more the return”, derived from the concept of risk return trade-off, investors who have the means to bear this risk set their eyes at the capital market. Amongst all the other investment mediums,investment in the capital market is the most lucrative option especially for those people who are with the motive to instantly mint money. The financial sphere of India is greatly driven by its capital market due to the fact that this market effectively engages in gathering funds for the formation of capital in the country as well as disburses large proportions of funds for investment purposes. There is a significant influence that the tax structure in India has upon its capital market more precisely upon investor decisions in this market. The Union Budget of 2024-2025 with the hike it brought about upon capital gains tax and on top of which the indexation benefit being no longer available to the investors,has the potential of fueling resentment among the investors.This study has been undertaken with an objective to understand the effect of tax regimes on investor behaviour in the capital market.
Keywords: Capital Market, Investor Behaviour, Tax Structure, The Union Budget, Behavioural finance.