Zerodha would like for this STT to be reduced or revoked because this has a material impact on the capital markets and the liquidity in the market.
The last Union Budget from the Modi government is scheduled for the February 1, 2018 and this being his last Budget, we expect most of the reforms coming out of it to be populous.
The upcoming Budget is likely to aid the larger vote bank and not for organisations which we have seen in the near past. I think the expectation of a reduction in corporate tax rate might not come through in this Budget as well, based on the fact that this is the last Budget that they are putting out.
In recent elections, if anything is to go by, BJP might have more to worry about that they had historically. Now, looking at this Budget, there are some things we want to come out as reforms.
Most importantly, it would be the removal of Security Transaction Tax.
STT which has been charged for quite a few years now was initially meant as a way to cover the loss of revenue from the long-term Capital tax being abolished.
We would like for this tax to be reduced or revoked because this has a material impact on the capital markets and the liquidity in the market.
I think what this does is that it makes it hard for retail traders to breakeven on their transaction intraday because this tax is paid irrespective of whether the trader is making or losing money on that individual trading intraday.
We are also looking for the long-term capital gain tax exemption which has been around for a while now to continue.
We would like to see the long-term capital tax rate to remain at zeros so as to encourage long-term investment from the Indian community.
Now, apart from this, we would like to see a separate tax exemption for long-term life insurance which would help the insurance industry immensely.
Increasing the limits on affordable housing, increasing TDS limit for bank interests and pushing UPI and the whole process of online on-boarding even harder, are some of the other reforms that we would like to see with this budget.Disclaimer: The author is Co-founder & Head of Trading, Zerodha. The views and investment tips expressed by brokerage firms on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.