‘’As against popular perception prevailing the night before the Budget, FM surprised the investors by taking a bitter pill and introducing 10% LTCG on equity investments. Grandfathering of gains upto 31st
Jan is a welcome move and will prevent any churning or misalignment of investments for tax planning purposes.
The other big impact for investors will be introduction of 10% DDT in Dividend income derived from Equity Funds. This will bring them at par with LTCH and Dividend Tax paid for direct equity holdings and will have a negative impact on MFs.
Attractiveness of Arbitrage Funds as substitute of Liquid/Liquid Plus funds will be diminished owing to 10% DDT on dividend income and 10% LTCG.
Reduction of corporate tax for MSME to 25 percent to turnover of up to Rs 250 crore will be a big positive but for individual tax payer expecting lower of tax or widening of tax brackets increase of cess from 4% to 3% was negative. On the other hand Rs 40,000 Standard deduction only reduces paperwork for claiming local Conveyance and medical exemption as these two heads added to Rs 34,200 earlier as well.
The good parts about the budget was not being too strict on Fiscal Deficit and loosening the strings to support growth.
Maximum focus of this budget was on Agriculture and Rural economy. MSP hikes, allocation to food processing sector and farm development fund, Kisan credit cards, Operation Green, plans of food parks for farm exports are all going to provide a much needed thrust to rural sectors.
Overall I will give this Budget ascroe of 7/10. On rural focus it scores 9/10 and from Salaried Individuals and Financial Investors perspective it’s a 5/10.’’
Nishant Agarwal, Managing Partner and Head - Family Office, ASK Wealth Advisors.