Budget Reactions: Non-event Budget causes DTAA confusion: ING Investment

Ramanathan K
ING Investment

"Overall the Budget was a non-event but for the confusion over the ‘proposal to amend Section 90 and 90A that makes tax residency certificate, a necessary but not sufficient condition for claiming DTAA tax benefits from April 1, 2013’.

This proposal is contradictory to earlier statements that GAAR would be implemented only from 2016.

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The government realizes the need to spur investment demand, however the Budget only had small incremental steps. It realizes the need to focus more on social aspects, however does not have much options to raise resources for the same.

In the short term the market would continue to remain volatile as the recent results season clearly showed that recovery in earnings is some time away.

Positive clarification on Section 90/90A revision would result in some stability returning to the market.”