Though the capital gains tax is a disappointment and not in-line with market expectations, we don't think it will dramatically alter market dynamics, said Vikas Khemani, Founder, Carnelian Asset Management & Advisors.
Khemani believes that while the tax changes might slightly increase costs, they won't significantly impact investment decisions.
"People invest in equities primarily for returns, not just tax benefits. While the tax changes might slightly increase costs, they won't significantly impact investment decisions. The focus remains on whether equities can generate high returns," he said in an exclusive conversation with Moneycontrol.
Regarding real estate, Khemani noted that the elimination of the indexation benefit is unlikely to influence investment decisions, as real estate investments are typically made with a long-term horizon in mind. He anticipates these tax changes are just the beginning, with more adjustments likely in the future.
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On sectors to watch, Khemani remains positive on infrastructure and manufacturing.
"Although the budget didn’t bring significant changes, sectors such as manufacturing, infrastructure, consumption, and financial services continue to be attractive. The reduction in customs duty on gold might offer a temporary boost to the jewellery sector, but its impact is expected to be short-lived," he added.
Khemani also highlighted his continued interest in PSU stocks, noting their strong performance in terms of asset quality, technology, and governance. While some PSU stocks, particularly in defence, might be overvalued, he believes the growth potential remains robust. Additionally, he sees potential in the insurance sector, both life and general, projecting long-term returns of 15-18 percent.
Disclaimer: The views and investment tips expressed by investment 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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