For the government, loss in revenue on account of LTCG would not be much, but for the markets it would be a big sentiment booster
A lot more could have been done to bring back the confidence and flows to the Indian economy.
Budgets have lately become a non-event except for media and economists and its effect is worn off 2-3 days post the event, but stock-specific action could continue.
Sales value of the unreported transactions was computed at Rs 99,000 crore, while value of the under-reported transactions exceed Rs 4 lakh crore
Given the shortfall in tax collections as well as lower non-tax revenues (on account of shortfall in disinvestment targets), markets are concerned about fiscal slippage in FY20 and FY21.
NPS for the government sector was increased from 12 percent to 14 percent last year - a similar increase is expected for the private sector as well.
The government had introduced LTCG on sale of shares and equity-oriented mutual funds on April 1, 2018, under which investments held for over a year would attract LTCG at a flat rate of 10 percent (plus cess at 4 percent) without the benefit of indexation
The govt will miss fiscal deficit by 50 bps but markets will react more positively to fiscal slippage with expenditure intact than to “creative” fiscal consolidation.
Modi government’s biggest announcement of the corporate tax cut in September 2019 has hinted towards their intention of aggressively attracting new investments and job creation.
Markets have factored in a slip in fiscal deficit and will be comfortable with slippage of around 50 bps, says Pankaj Bobade of Axis Securities.
Definition of ‘long-term’ may also be amended from one to two years, with the government wanting to differentiate between a strategic investor and short-term investor
Agriculture and allied primary activities, infrastructure, banking, and financial services, especially the non-banking sector, and auto are the sectors that may receive attention in the Budget, says Dr Joseph Thomas of Emkay Wealth Management.
The market is heading this Budget with high expectations from the government to boost economic growth as the government is on the path of economic reforms.
Taxpayers must respond online to the notice received and check the status constantly
Carefully preserve the records of your financial transactions relating to the house property, proof of payments, sources of investment etc.
LTCG ITR Filing: LTCG refer to profit generated by the sale of long term capital assets. Click here & understand how to disclose capital gains in your income tax return
The Street was expecting that LTCG would get reduced or rolled back to boost sentiments. The reintroduction of LTCG did not make much of a difference when it comes to tax revenues
Facts and circumstances of each case warrant a detailed examination for taking an informed decision on this aspect.
Lowering the tax rate for large companies will pinch the government and has to be accompanied by strong anti-evasion measures
The standard deduction of Rs.40,000 meant that a pensioner who is at the highest tax bracket of 30% would save Rs.12,000 of taxes.
In 2018 budget, Centre had reintroduced concessional 10 percent on LTCG tax exceeding Rs 1 lakh from sale of shares, subject to payment of Securities Transaction Tax at the time of acquiring the equities
According to a report by rating agency Icra, equity funds, including equity-linked saving schemes saw monthly net inflow of Rs 6,657 crore in March, down from Rs 16,268 crore infusion seen in February.
LTCG Tax is applicable only on equity-oriented mutual funds which hold more than 65% of assets in equities. There is no change in debt fund taxability.
"A 10 percent tax does not take away from any investment decision. A 10 percent vs 0 percent is nothing that bleeds my pocket. “I don’t see this as a technical ceiling,” said Dipen Sheth, Head-Institutional Research at HDFC Securities.
Effective 1 April 2018, long term capital gains arising from transfer of listed equity shares exceeding Rs. 1 lakh will be taxable at 10 percent