India Budget 2015, What matters most!

I had not built up too many hopes on the FM , for very good reason

Budget 2015 from FM Jaitley, to me has turned out to be a damp squib considering all the pre-elections talk by Mr Jaitley . Cost of life for the middle and lower middle class goes up while the slab rates don’t really change in accordance with inflation and price rise.

Worse the Senior citizens and small investors will suffer the effects of  the TDS and tax scrutiny monster. Just hope that there is no tax inspector raj and small man is not harassed by the taxman in desperate attempt to garner more revenue for the revenue.

FM has indulged in some minor tinkering with exemptions. This is not going to boost personal spending in any way whatsoever.

The FM does not have what it takes to increase tax base by taxing the rural super rich, neither has he made a serious attempt at  taxing the land mafia and the builder mafia many of whom are politicians or politically connected. No wonder he picks on the meak ie salaried class and retirees.

First  the lollypops :-

1. MEDICLAIM u/s 80 D

In view of continuous increase in medical expenditure, it is proposed to increase the limit of deduction under section 80D from Rs. 15,000 to Rs. 25,000. In case of senior citizens, the limit of deduction is proposed to be increased from Rs. 20,000 to Rs. 30,000.

A deduction to the extent of any payment made on account of medical expenditure but restricted to Rs. 30,000 under section 80D, for very senior citizens not covered by Mediclaim. Awaiting the fine print . A  minor surgery costs Rs 50000 or more in a low cost private hospital these days, so this is not going to bring real respite to very senior citizens or to govt run general hospitals which are in a bad shape due to overcrowding and apathy.

ie Mediclaim costs + medical expense limited to Rs 30000.

2.  Increase in limits of deduction under Section 80DD and 80U for disabled person from from Rs. 50,000 to Rs. 75,000. It is further proposed to raise the limit of deduction in respect of a person with severe disability from Rs. 1 lakh to Rs. 1.25 lakhs.  This while hospitals mark up annually at least by 10 to 15 %.

3. Rebates

Overall limit of deductions under Section 80C, 80CCD and 80CCC still capped at Rs. 1.50 lakhs as per existing provisions of Section 80CCE.

Investment in Sukanya Samriddhi Account Scheme to come under Section 80C – Also the interest accruing on deposits in, and withdrawals from this account will be tax exempt.

4.  The limit for contribution to a pension fund u/s 80CCC up  to Rs 150000 from Rs 100000.

5. The FM has attempted to promote the NPS among the upper middle class with more disposable income, by introducing an additional deduction upto Rs. 50000,   in respect of any contributions made by any individual assesse under the NPS. which is still Exempt Exempt Taxable at maturity.

The Good

  • A very basic attempt to simplify and streamline tax system.
  • No more Wealth Tax , but 2% increase in surcharge instead for the super rich earning over a Crore.
  • 10% TDS Introduced For EPF Withdrawal Before 5 Years if amount is above 30,000 (move against tax evasion)
  • Service tax hike of 2.4% for non-economy class air travel
  • Excise duty on mineral water & aerated drinks increased to 18%
  • PAN compulsory for transactions above 1 lakh.
  • Gold monetization scheme (aim to disclose gold holdings + bring gold into the system) ? bound to fail ? time will tell!
  • To provide incentives for debit/credit card transactions (more power to visa and mastercard ?)
  • Exemption of transport allowance doubled to 1,600 from 800. Considering an avg BEST bus or metro ticket cost of Rs 20 per day this is a joke on the salaried taxpayer.
  • TDS on Recurring Deposit implemented (earlier individual had to file tax)
  • Co-operative banks to also deduct TDS now

The Bad

  • Service tax, previously at 12.36% now 14%
  • Excise duties, which were at 12.36% now 12.5%
  • Govt to impose additional swachh bharat cess of 2% on services
  • NREGA still continues….. when the govt revenues are down quite considerably.

and The Ugly :

  • TDS on OVERALL interest earned above 10,000 in a bank and not branch.(That is so ridicuously low, the same as the Section 80TTA Deduction) ( Terrible news for retirees)
  • DDT Increased From 19.99% To 20.36% in FY16

This means , please invest in property or file ur form 15 H and G. or spend on filing your returns and wait patiently for that refund ! Govt finances are a mess and  the small and senior citizens are bound to suffer as govt wants to extract the maximum in TDS from the most week and defenceless.

Imagine if a senior citizen who earns 250000 from FD interest in banks forgets to file form 15 will have to spend approx Rs 1500 to 5000 on an accountant to file his returns to claim his tds in refund.

Imagine you a small investor with 100 Reliance shares, getting a dividend of Rs 950, will pay the same tax as Mukesbhai Ambani whose dividend is in crores .

Sadly his move on increased DDT is pro rich and regressive and will hamper investor culture as the small investor who may be in the 10% tax slab will end up paying @ 38.8% (Tax @25% + ECess @2% + SHEC @1% & DDTax @17% + EduCess @2% + SHEC @1%).

The way he has treated small shareholders of PSUs to balance his budget eg COAL INDIA, GAIL and ONGC was an early indication of things to come.

Mr Jaitleys policy on Taxing a companys  small shareholders is regressive and anti Long term Equity investments culture . Small investors who will be incentivized to exit short term and pay 15 % STCG.

SLAB RATES for your reference :-



INDIVIDUALS: Upto 2,50,000 – Nil

INDIVIDUAL RESIDENTS 60 TO 80 Yrs: Upto 3,00,000 – Nil

INDIVIDUAL RESIDENTS 80 Yrs +: Upto 500,000 – Nil ?


I. Upto 5,00,0000  {10% of the amount exceeding Tax free Income}

II. Upto 10,00,000 –  {I + 20% of the Income over 500000}

III. Above 10,00,000 –  {I + II + 30% of the Income over 1000000}



SHORT TERM EQUITY  1YR – : 15% (after STT)

LONG TERM DEBT  3YR + : 20% (after STT)

Deductions and Rebates

Sec 80 D MEDICLAIM : MAX Rs 25000 / 30000 for Senior Citizens

Section 80 TTA: MAX Rs 10000 on Savings Interest.

80DDB :relating to treatment of chronic diseases :Upto Rs.40,000 / Rs 60000 Senior C :Deduction limit increased to Rs80,000 from Rs60,000 with respect to the medical treatment of certain chronic and protracted diseases such as Cancer, full blown AIDS etc., in case of senior citizen.

Section 80DD and 80U for persons with disability and severe disability: Rs.50,000 (Rs.1,00,000 in case of severe disability) :Additional deduction of Rs25,000 allowed for medical treatment differently abled dependant.

Maximum overall Deductions allowed u/s. 80C, 80CCC & sec.80CCD(1) is Rs. 1,50,000*

Sec 80 C :

 Life Insurance Premia, PF, PPF, NSC, ELSS, Units of Mutual Fund referred to u/s.10(23D), Tuition Fees(max. 2 Children), Repayment of Principal of Housing loan, Bank Fixed Deposit of 5 yrs period, notified Bonds of NABARD, Deposit in an account under Senior Citizens Savings Scheme rules, 5 year time deposit in an account under Post Office Time Deposit Rules, 1981 etc.

Sec 80 CCC : Premium paid towards approved Pension Fund (like LIC’s Jeevan Suraksha) Max Investment. 1.5 lakh.

Sec 80 CCD : NPS  Max Investment now Rs 150000 * + 50000

Sec 80 CCG: Rajiv Gandhi Scheme : 50% of the amount invested subject to a maximum of Rs.25,000 (failed scheme)

The deduction is available to a new resident retail investor whose gross total income does not exceed ten lakh rupees.


Rebate of Rs 2000 for individuals having total income up to Rs 5 lakh

  • Rebate is available only to Resident individuals and not available to Non Residents.
  • Rebate available to both Male and Female assesses
  • If the total tax payable by is less than Rs. 2000/-, rebate is restricted to “total tax payable”.
  • Rebate is allowed before levy of Education Cess, SHE Cess & Surcharge.
  • Rebate benefit is available to all category of Individuals but not to super senior citizen, since he is already fully exempted up to Rs. 5 lakh.

India Budget 2014, What matters most!

New Modi Government, New Ideas and New Vision

Considering that the previous UPA Congress Sonia govt under FM P Chidambaram had run down the economy, the current FM Mr Arun Jaitley will have his hands full with repair and maintenance of the economy for a foreseeable period of time.

Rail budget was ok good, mainly because it was not a bihar or bengal rail budget but a National rail budget . Bullet trains are unviable idea for India considering the tickets will almost match airline costs and political interference for unviable routes. The JNR’s Shinkansen network cost 28 trillion Yen, and its privatization paid only 9.2 trillion yen. Japanese bullet or the German ICE are not very affordable to regular citizens of those countries, though they are great for businessmen, why not improve railways for millions of Mumbai rail commuters who bring immense value to the national GDP , and why not introduce more rajdhani style high speed intercity trains ?

Considering the difficulties faced by the govt, the raising of 80C limit by 50% and more importantly the basic exemption by 25% which directly affect the aam admi is commendable .

All that the govt has to do is focus on curbing INFLATION and streamlining the Supply Side and cutting out the layers of apmc rent seekers and middle men from food and essentials supply chain.



50000 increase in tax free income for Indls and Seniors.

INDIVIDUALS: Upto 2,50,000 – Nil

INDIVIDUAL RESIDENTS 60 TO 80 Yrs: Upto 3,00,000 – Nil

INDIVIDUAL RESIDENTS 80 Yrs +: Upto 500,000 – Nil ?


I. Upto 5,00,0000  {10% of the amount exceeding Tax free Income}

II. Upto 10,00,000 –  {I + 20% of the Income over 500000}

III. Above 10,00,000 –  {I + II + 30% of the Income over 1000000}

1. Education Cess of  3% on Income-tax.

2. Maximum 80C exemption & PPF investment limit, now  Rs 1.5 lakh.

3. Housing loan: Rebate hiked to Rs 2 lakh for self occupied houses.

4. Tax on LTCG on debt funds to 20%, and time moved to 3 years… Bad for u if u own  a debt fund .

5. Single Demat Account for all ur financial assets & Unified KYC

6. E-Visas …to promote tourism

7. REITs policy changes to benefit investors in real estate sector.

8. NSC with Insurance … an attempt to make the small savings more attractive.

9. Im not positive on Sardar Patel Statue fund of 200 Crores, though i am a great fan of leaders like Sardar Patel and Bal Gangadhar Tilak, moneys could be better spent on improving PRIMARY EDUCATION ie better world class CBSE style primary education for all, especially for the deserving economically backward people. We desperately need IIT Styled, high quality primary schools for deserving poor kids !

What costs more ?

Cigarettes, Pan Masala, Gutka, chewing tobacco, Colas with sugar and soda, Radio Taxis.

What costs less ?

Footwear, LED lights,  LCD and LED TV prices below 19 inches to go down.

Reactions and observation :

1. Sonia Gandhi says : Jaitley copied Congress schemes, later says no spending on Social sector. Real estate Shares like DLF up 10% , Vadra will be happy with #Budget2014

2. Praful Patel of NCP , the beedi baron will not be happy with the taxes !

3. Ashutosh AAP : There is not a single big ticket idea which world was expecting. Where is the change in Budget?Just an extension of UPA policies.





India Budget 2013 What matters most!

P Chidambaram budget speech is  known to induce dreams and elevate people to a euphoric state of mind but the fine print in the draft is known to always have a googly and take back more than what he has given…

This budget is insipid and worse it is subtly populist mainly to avoid a ratings downgrade and there is a big risk that the govt will bring in the populist measures like Food security act on the sly once it makes up its mind on going for elections. The budget does not seriously address concerns regarding pathetic growth and stagflation or the twin deficits that the Indian economy currently suffers from. The numbers are also suspect. Read MB , Read BDRead LM

The govt has already taxed us with High INFLATION which is well above 10.0% and Huge increase in Money Supply, both of which have increased price of gold and housing by 4 to 5 times during the current MMS /Sonia Congress/ UPA 1 &2 govt tenure.

This Budget has given a raw deal to the local Investor class. Equity IPOs , Government IPOs FPOs etc have given a huge negative returns . Equity & Debt  Mutual funds and fixed deposits have given negative returns post inflation in 5 yr period.


INDIVIDUALS: Upto 2,00,000 – Nil

INDIVIDUAL RESIDENTS 60 TO 80 Yrs: Upto 2,50,000 – Nil

INDIVIDUAL RESIDENTS 80 Yrs +: Upto 500,000 – Nil


I. Upto 5,00,0000  {10% of the amount exceeding Tax free Income}

II. Upto 10,00,000 –  {I + 20% of the amount over 500000}

III. Above 10,00,000 –  {I + II + 30% of the amount over 1000000}

Tax Credit of Rs 2000 for income upto Rs 500000

Surcharge of 10% on persons with income of over Rs one crore

Dividend Distribution Tax: Surcharge on Dividend Distribution Tax has gone up from 5% to 10%. This has an implication on those is the dividend mode in Debt MF schemes. They will not pay 14.16%, instead of 13.52%. Not much of an implication, though the net dividend would now be lower now.

Securities Transaction Tax The STT on MF/ETF done with the fund houses has been reduced from 0.25% to 0.001%. Similarly the STT on MF/ETF transaction done on the exchange, only the seller will need to pay STT of 0.001%. Again, from an individual investor view point, this may not be very significant as the percentages before and after as both low.

Commodities transaction tax on non-agriculture commodities futures contracts at the same rate as equity futures that is 0.01 per cent of the price of the trade

Investment and Deductions

  • First-time home loans up to Rs.25 lakhs  get extra Rs.1 lakh interest deduction (if not exhausted, the balance limit can be claimed next year)
  • Inflation-indexed Bonds and National Security Certificate to be introduced
  • Investment in RGESS need not be done in 1 year alone but can be done in 3 successive years. Income limit under RGESS raised from Rs.10 lakhs to Rs.12 lakhs
  • Surcharge on Dividend Distribution Tax increased from 5% to 10%. So it may be prudent to consider taking the returns in the form of capital gains if it works out better depending on one’s tax bracket
  • Reduction in STT on equity and MFs
  • Passengers will be allowed to bring in duty free gold jewellery of up to Rs 50,000 in case of men and Rs 1,00,000 in case of women.


What goes up
Cigarettes, Cigars, Cheroots, High-end mobile phones,Imported luxury cars, High-end motor vehicles, Sports Utility Vehicles,Imported yatch and motorboats, Marbles for flooring, Set-top boxes, Dining in air conditioned restaurants, Silk clothes, Homes and flats, Parking fees.

What goes Down
Jewellery, Precious stones, Cotton garments,Branded apparels, Carpets, Textile floor, Agricultural testing procedures, Imported hazel nuts, Dehulled oat grain, Truck chasis, Sabudana, Ships and vessels, Cinema and films, Machinery for manufacturing of leather goods


  • Investment Allowance of 15% for investment in plant & machinery exceeding Rs.100 crore will boost capital expenditure
  • Surcharge increased from 5% to 10% for companies with Rs.10 crore or more taxable income
  • Amnesty Scheme for Service Tax defaulters
  • No change in the peak rate of basic customs duty on non-agriculture products and rates of excise duty and service tax of 12 per cent.

 Inputs from Moneycontrol and ET

India Union Budget 2012/13 What matters most!

Thanks to the total failure of the UPA 2 Govt to govern, the problems i had talked about  in India Budget 2011/12 What matters most! have only worsened.

Fiscal defect is 1.3% higher than estimate… Wow!!  something which will have to be funded by market borrowing. Reduction of Inflation due to base effect offers little relief to the aam admi who is finding the burden unbearable.

Indians are facing deeply entrenched inflation, tight liquidity, high interest rate, industrial slowdown, zero reforms and negative market sentiment that have lead to Stagflation for the last few months, something which will worsen in the coming months if govt doesn’t get its act together.

Pronob is known as the chief troubleshooter and problem fixer of the Congress upa govt …  and this seems to be  reflected in his budget.


Income upto 2 lakhs                          Tax payable   Nil
Income upto 2.5 lakhs                      Tax payable   Nil for Senior citizens 60 yrs and above
Income 2 lakhs to 5 lakhs                Tax payable  10%
Income 5 lakhs to 10 lakhs             Tax payable  20%
Income above 10 lakhs                    Tax payable  30%

Senior Citizens with no biz income freed from advance tax burden

10,000 bank interest tax-free. (Old Sec 80L revived)

Cost of preventive health checkup upto a limit of Rs 5000 permitted U/s 80D.

New Adult Duty free goods limit is Rs 35000/- , for Child upto 10yrs  Rs 15000/-

Sale of residential property exempted from capital gains if invested in equity or equipment of an SME.

Disappointment for lower and middle middle class with income upto 5/6 lakh who face a double whammy of the biggest tax i.e. high Inflation and overall higher prices due to increase in fuel prices, customs duties and service taxes . Increase in the tax free income far to low and should have been at-least Rs 2.5 Lakhs considering inflation. 

Financial Responsibility and Subsidy Reform Proposals

Fiscal deficit in 2011/12 revised to 5.9% of GDP from 4.6% of earlier target.

Fiscal defict 2012/13 to be at 5.1%

FY 13 net market borrowing at Rs 4.8 lakh crores

Gross tax at 10.6% of GDP

GDP expected to grow at 6.9%

Current account defict to be at 3.6%

Economy to grow at 7.6% in 2012/13

Central subsidies to be under 2% of GDP

To bring down subsidy to 1.7 % of GDP in the next 3 years

To roll out computerized scheme for fertilizer subsidy transfer

Direct transfer of subsidy for kerosene initiated

Pay market rate for LPG Cylinder, direct transfer of subsidy for  LPG

Remove bottlenecks in agriculture, energy, transport, coal, power and national highways

To become self sufficient in urea production in next 5 years

How credible are the numbers ? Taking into consideration the pathetic track record of the UPA  can one sincerely believe in the estimates especially on govt borrowings ?  Fuel subsidy allocation not realistic.

All talk and repetition of promises, but no real concrete action on fiscal consolidation or dealing with burgeoning subsidy. No action on dealing with supply side issues only repetition of promises. No vision to change the spending pattern from consumption to investment.

Reform Postponed

DTC implementation deferred for one more year

GST to be operational by August 2012

White paper on Black Money

Capital and Debt Markets Proposals

 STT on delivery cut to 0.1% from 0.25%. 

Rs 30,000 cr divestment target in FY 13

PAN for identification of Investors and tracking evasion.

Central KYC database.

Rajiv Gandhi Equity (Tax Exemption) Savings Scheme with a lock in of 3yrs for new investors investing Rs 50000 on income below 10 Lakhs.

Change in IPO guidelines to promote small town participation

Recapitalization of PSU banks

Rs 10000 crore of tax fee bonds for power sector

Will allow external commercial borrowing for power, housing road construction companies

Govt doubles allocation for tax-free bonds to Rs 60,000 crore for financing infrastructure projects in 2012/13

To allow qualified foreign investors in Indian corporate debt markets

Dull/drab and a major disappointment to market participants,  I doubt if two bit schemes like Rajiv ESS will revive the govt disinvestment program which is in doldrums. All said and done people have to make money out of govt IPOs and tax exemption with a 3 yr lock-in is meaningless .

Fact:  1 yr plus return on govt IPOs: Punjab n Sind bank -31%   SCI FPO -50% SJVN -20% PTC finance -43.5% MOIL -26.5%  Equity / Large cap MFs 1 year return are negative.  Gold ETF has returned +29%  that after the cool off in gold prices.

Indirect Tax Proposals

Service tax,  Excise duty now 12% up 2%

GOLD bar duty doubled, increased to 4% and 10%

Negative list for Service tax introduced .

All services will be taxed except those in a 17-item negative list including  Govt services, school education, renting of residences, public transport, animal husbandry, agri produce. Healthcare, charities, sportsmen, car-parking are exempt.

Cost of everything will go up by 4 to 5% as businesses pass on the hikes…Gold , Cigarettes, bidis, Diamonds, bicycles, luxury items, eating out, white goods like AC and fridges. Even telephone bills are set to get more expensive.

Hiking duties on gold is a desperate attempt by a govt to curb investment in gold. This will make little difference in gold demand or asset price inflation if the govt cant curb its rash spending and resulting inflation expectations especially when EU and US are in low interest rate and QE mode and markets give sustained negative returns and an investor tries to protect his capital. 

All in all this budget hits the lower middle class and is most inflationary especially for the middle to lower middle class single income multiple kids household with an income of 2 lakh who sees no benefit from income tax rebate but has to pay double for his gas cylinder and between 2% to 5% more on every good and service from telephone to food to branded items.

India Budget 2010/11 What matters most!

Whatever the FM says
More spending = More deficit = More inflation

I expect there to be inclusive growth with excessive inflation.
If the govt has to spend on grandiose plans such as NREGA etc without the necessary accountability, then there will be higher deficits and there are no alternatives to inflate money supply, and we are bound to have Inflation, especially when interest rates are forced down and kept artificially low internationally.If the rains are good and la ninia hits things may be better on the supply side, but with the govt following the policy of spend and play to the vote banks the inflation situation wont change.

See Price Rise especially in urban areas, due to the cascading effects of hikes in taxes on oil, excise duties and service taxes.


2 page Saral 2 form for individuals – Will it be that saral ? and will it also include items like share dividends ?
upto 1.6 lakhs Nil
1.6 lakhs to 5 lakhs 10%
5 lakhs to 8 lakhs 20%
above 8 lakhs 30%

Start at 190,000 for women and 240000 for Senior Citizens.

Sec 80C Benefit Continues at 1 lakh + Sec 80cc 20000
Additional Rs 20,000 deduction available for investment in infrastructure bonds.

CGHS contribution comes under sec 80D.

Interest on late payment of tax UP to 18%.

Government to contribute Rs 1,000 per year to each account holder under the new pension scheme.

Surcharge for companies reduced to 7.5%.
Extended scope of presumptive taxes up to Rs 40 lakh.
Minimum Alternate Tax up from 15% to 18% on book profits
Businesses up to Rs 60 lakh and professionals up to Rs 15 lakh to be exempted from auditing obligations of their accounts.

The tax proposals are on expected lines but the slab tinkering can be considered as a precurser to the Direct Tax Code.
There is no real relief for the lower middle classes that have an income below 1.5 to 2 lakhs, or to senior citizens in that catagory. These are the people that are being burnt by the 18% inflation.

Indirect Taxes

What he giveth with one hand he taketh with the other. Partial rollback of stimulus. Peak excise duty hiked from 8% to 10%.

No change in service tax of 10%. More services included under service tax net.

Customs duty UP on crude oil 5 %, on diesel and petrol to 7.5 % and on refined other products to 10 %. Customs duty on Automobiles brought back up to 22%
Excise duty on large cars, SUVs, multi utility vehicles hiked

Structural changes in excise duties of tobacco, propose to extend excise duty.Duties on smoking and non-smoking tobacco products up.

Some of the Proposals

Fiscal deficit at 5.5 %<

FY11 fiscal deficit revised to 6.9%. FY13 fiscal deficit seen at 4.1%. Fiscal deficit seen at 4.8% in FY12.

Draft Food Security Bill will be in public domain soon, says FM.

Goods and Services Tax (GST) and Direct Taxes Code (DTC) from April one, 2011.

Rs 66,1000 crore allocated for rural development in FY11.

NREGS gets Rs 40,100 crore in FY11.

Rs 100 cr for financial inclusion fund.

Rs 48,000 cr for Bharat Nirman plan.

Indira Awas Yojana scheme’s unit cost raised to Rs 45,000 in plain area and Rs 48,500 in hilly areas.

School education outlay for FY11 at Rs 31,000 crore

15% increase in plan expenditure and 6% in non-plan expenditure

The government will raise Rs 25,000 crore from disinvestment of its stake in state-owned firms

Rs 4,500 crore for programme of social justice, senior citizens, backward classes, handicapped.

Rs 66,1000 crore allocated for rural development in FY11.

Real estate sector now gets 5 years for completion instead of 4 years earlier to avail tax break. .

Excise slashed for electric cars.

Budget 2008 – What matters most

Overall this is a very populist budget balancing act- Lots of Waivers, subsidies go up, more things moving out of books. Read the Budget papers.

Personal income tax changes – 🙂 big changes in historical terms. 🙂

  • 150000 to 300000 – 10%
  • 300000 to 500000 – 20%
  • 500000+ 30%

Womens start – Rs 1,80,000 Senior Citizens start – Rs 2,25,000

No change in overall rebate structure or rebates U/s 80c. 😦

Postal Deposits and Senior Citizens Savings Scheme added to 80C rebate basket,. (not very useful until bank fd rates fall below 8%)

Mediclaim relief U/s 80 D – 🙂 for payments made other than in cash to

  • HUF / Individuals for self/ family members or dependents amt to Rs 15000,
  • to Children who pay premium for parents health care amt to Rs 15000 .
  • For Senior citizens above age of 65 it is RS 20000.

Banking transaction tax to be exempted

Nothing on low cost housing in cities which is desperately required – is disappointing. 😦

Markets 😦

ST Capital gains tax U/s 111a for STT paid transactions increased from 10 to 15%. Bad news because it has been done during a period of falling markets.

Nothing for the investor: No change in STT and DDT unchanged at 15%

  • Dividend of subsidiary company will be released from DDT
  • STT to be treated as a business deduction not set off.
  • Service tax on Stock exchanges, Clearing houses and AMC services for ULIP
  • CTT on Commodity transactions on lines of STT .

Expected tinkering in rates, Excise rates pared down from 16% to 14% in certain goods as an attempt to reduce prices of commodities in accounting the wpi index, which is key to inflation accounting.

  • Excise rates on 2 wheelers etc cut to 10%,
  • Cut in duty on small cars and eco cars and buses.
  • Excise duty of Rs 1.35/litre applied on unbranded petrol
  • Excise duty of Rs 4.6/litre applicable on unbranded diesel
  • Set top boxes: 100% exemption
  • 5% cut of customs duty on some bulk drugs
  • Central sales tax: Reduced to 2%

PAN requirement to be extended to all transactions in capital market subject to a threshold.

Announcement of creation of Transmission and distribution fund may be positive for Power Sector.

Massive Farmer loan waiver – to benefit four crore farmers incuring a liability of Rs 60,000 crores. Short to long term negative for PSU Banks as it is still unclear who will pay the bill and when. Overall this will also effect the ability of the banks to get repayment of loans as this step creates indiscipline and incentives es farmers to not pay back their loans or delay the installments.

PDS to get Rs 32,676 as subsidy

Overall i expect inflation might go up due to the grandiose plans, coupled with the recession fears.