Investors had a particularly challenging year, with highly volatile stock markets, slashed interest rates and uncertainty hounding investor sentiment.
The market seems to have liked the Budget. The benchmark indices saw a record jump on Budget Day, with the Nifty and Sensex climbing five percent each. The S&P Sensex zoomed 2,314 points and the NSE Nifty 50 gained 646 points.
So what does the Budget offer retail investors?
Investor charter
The finance minister has announced the introduction of a charter that will detail the rights of all investors across all financial products.
Regulation of gold exchanges
The government also proposes to bring gold exchanges under the regulation of the Securities and Exchange Board of India. The idea is to boost the confidence of investors by creating order in the gold market and standardising the warehousing and settlement processes.
Tax benefits on affordable housing home loans
For investors looking to purchase affordable homes as investments, there is an additional tax benefit to be availed of. While home loans offered tax deductions of Rs 1.5 lakh under Section 80C and Rs 2 lakh under Section 24(B), the Budget has proposed an additional tax deduction benefit of Rs 1.5 lakh on affordable home loans.
Changes in rules for advanced tax on dividends
There was a lot of uncertainty about the computation of advance tax due to the unpredictable nature of dividend income. To bring a sense of order, the finance minister has proposed the shifting of the liability to pay advance tax on dividend income only after the declaration or payment of the dividend.
Relief for taxpayers
This Budget saw some significant changes in the tax process. For senior citizens above the age of 75 years who have only pension and interest income, tax filing requirement has been removed. This will reduce the filing requirement from the tax filer perspective and processing requirement from the income-tax department perspective.
A faceless dispute resolution mechanism for small-taxpayers has been proposed in the Budget. This will increase transparency and reduce bribery and fraud. This will also make small assessments more efficient by way of faster processing.
The timeline for re-opening of the tax cases has been reduced from six years to three. This is expected to go a long way in reducing litigation for taxpayers and remove liability related uncertainties.
To ease and encourage income-tax filing, capital gains from listed securities and interest income shall come pre-filled in the income tax returns.
Summing up
Stock markets were euphoric during and after the announcement of the Budget. The finance minister had a tight line to walk since she had to ensure economic growth as well as relief to the people. From an investor’s perspective, the budget seemed to have delivered on several fronts.
(The author is Co-founder and COO, Groww)
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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