Advance Tax selling till 10th March?

Last instalment of Income Tax Advnace Tax payment is Monday 15th March, by which 100% of tax liability for FY 20-21, has to be paid by all the assesses. This is 4th instalment of 25% tax, but seen always higher, as any shortfall of 75% tax paid till 15th December, has also to be made good. We have been generally seeing selling in the equity market, always ahead of such advance tax instalments, and this time also it will not be different.

Wednesday, 10th March, will be the last day of selling equities, to mobilise funds for advance tax (as Fund pay out will happen on Monday 15th March afternoon, as market is observing Holiday on Thursday 11th March). This may see some volaility for the next 3 days, as HNIs and Corporates even keep Funds parked in the equities or in Funds (which in turn invest in equities), which will get liquidated ahead of tax payment. Due to bullish sentiments seen in equities for last 6 months or so, while last instalment of tax, this time seen to be good (non payment of 1st instalment may be seen getting added in 4th instalment this time), may see selling till Wednesday.

But remember that every action has its reaction. This may show extreme bullish equity market in second half of March, post this selling gets over. Over eating leads to vomit, which then builds up more hunger thereafter. So, remain prepared for a see saw trading in the near term, but big party time, maybe from next Monday, till end of March, as FIIs are also sitting on huge cash, waiting to get deployed by in this FY, while DII selling of this FY seen largely happened.

Keep fingers crossed.

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