Broadly, financial instruments are categorized by investors as ‘asset class’ depending on whether they are equity-based (reflecting ownership of issuing entity) or debt-based. Photo: Pradeep Gaur/MintFinancial instruments are monetary contracts created as a financial asset of one entity and a financial liability of the other. There are various forms of financial instruments available for investors to optimize returns, and it is pertinent to choose the right mix of financial instruments to suit investment goals. Typical forms of financial instruments are:Equity: Investments that grant ownership in a joint stock company for return on investment (RoI). Tax attributes of financial instruments in IndiaExit or disposal of instruments: Taxability of instruments are based on various factors under Indian domestic tax laws.

Source: Mint December 07, 2017 23:26 UTC