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Key Financial and Economic Glossary in news:Pink tax, Realised vs unrealised profits

22 Sep 2025 GS 3 Economy
Key Financial and Economic Glossary in news:Pink tax, Realised vs unrealised profits Click to view full image

Realised vs Unrealised Gains in Mutual Funds

Meaning

  • Unrealised Gain: Profit only on paper, when the value of your investment has gone up but you haven’t sold it yet.
    Example: Bought at ₹100, Net Asset Value (NAV) rises to ₹120 → extra ₹20 is unrealised until sold.

  • Realised Gain: Profit actually booked when you sell the investment.
    Example: Selling at ₹120 → extra ₹20 becomes realised.

Key Differences

  • Unrealised Notional, fluctuates with the market, no tax until sold.

  • RealisedLocked-in, credited to your account, taxable.

Why It Matters

  1. Taxes: Levied only on realised gains.

  2. Market Risk: Unrealised profits can vanish with volatility.

  3. Investment Strategy: Selling too early may reduce compounding; waiting too long may leave only “paper profits.”

  4. Decision Point: Balance between booking profits and allowing growth.

GST 2.0 and the ‘Pink Tax’

What is the Pink Tax?

  • Not a real tax by government.

  • A pricing phenomenon where products marketed to women cost more than men’s variants (e.g., pink razors, women’s deodorants).

  • It’s a marketing practice, not an official levy.

Why GST 2.0 Can’t Reduce It

  • GST is a government tax, while Pink Tax is a private pricing issue.

  • Hence, GST reforms do not apply.



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