Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: Central Excise rule to resale the machines to a new company :: VAT Audit :: due date for vat payment :: cpt :: list of goods taxed at 4% :: articles on VAT and GST in India :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: empanelment :: TDS :: form 3cd :: VAT RATES
« Budget Extravaganza »
 Why advancing the Union Budget date may not make much difference
 Govt keen 2017-18 budget should not clash with polls: Arun Jaitley
 Finance Ministry seeks industry suggestions on taxation for Budget
 Budget should focus on fiscal firm up
 Finance ministry keen to present Budget on February 2 or earlier
 Poor railway performance may mar merged Budget
 Cabinet’s formal nod to be sought for Budget on Feb. 1
 Finance Ministry may talk to EC before finalising Budget date
 Govt starts biggest ever overhaul of Budget
 How does an early budget impact you
 Welcome steps to overhaul the Budget

Good, not great, budget for investors: FundsIndia
February, 26th 2010

By Srikanth Meenakshi and Shankar Bhatt,

We were listening to the budget speech from the perspective of an individual investor in the country. We were looking for measures that would enhance the participation of investors in the capital markets in the country. A budget could do this in many ways simply putting more money in investors pockets by reducing tax, encouraging tax-exempt investment contributions, making the investment process simpler etc.

So, how did this budget measure up along these lines? Lets take a look at what we heard in the budget and what we wished we had heard.

Taxes: On the taxes front, we had wished for two things clarification on the implementation of the direct tax code (DTC), and an intermediate rationalization of tax slabs before DTC becomes effective. On both fronts, we had news early on in the speech, the FM announced the governments commitment to implementing the DTC on its slated start date of April 1, 2011. Although we would have wished to have more clarity on the final shape that the DTC would take, this re-iteration of intent is very welcome.

And, the tax slabs were moderated significantly from where they are now, but still quite a distance from where they would be under DTC. We wish the FM had gone further in this direction. Especially disappointing is the non-movement on the lower end 1.6 lakh limit for zero tax stays as is. However, the intermediate slabs have moved from 3 lakhs to 5 lakhs, and from 5 lakhs to 8 lakhs providing significant relief for the middle class family. An additional Rs. 50,000 in the pocket for a Rs. 10 lakh earner would be very welcome.

80-C deduction: The budget disappointed in this front. While it proposed an additional Rs. 20,000 for specific infrastructure investments, it did not move the basic Rs. 1 lakh limit for all 80-C deductions. This number has stayed static for several years now, through massive increases in prices, especially of housing. Given how well this clause has contributed to increasing capital market participation by individual investors, it is a travesty that it is not getting the increase it merits.

Apex financial body: Although this will not have an immediate impact to the investor community, we note the setup of an apex financial body the Financial Stability and Development Council with interest. This body will have authority to co-ordinate between regulatory bodies to resolve issues. Given the current turf-war between SEBI and IRDA, setting up such a council was in our wish list, and were glad that this is being done. This will help the individual investors in the long run by bringing about more uniformity of regulations across bodies, which in turn will curb mis-selling of financial products to investors.

Other proposals: Among other proposals in the budget of interest to the investors, is the issuing of more banking licenses to increase the reach of banking services to hinterlands. While we are a bit cynical about the stated purpose (we would love to see how many of these licenses go to corporate financial behemoths, and how much they serve the rural areas), increasing competition in the banking sector is most welcome. In another proposal, the government has promised a Rs. 1000 contribution to NPS accounts opened this year with less than Rs. 12,000 annual contribution. While this amount itself is not much, it reiterates the governments commitment to the rather beleagured NPS scheme and its effort to provide financial security cover to the unorganized sector. Finally, the setting up of the Technology Advisory Group (under Nandan Nilekani) to oversee technology infrastructure ramp-up in the financial sector could yield interesting outcomes in how financial services are delivered in the country.

Overall, the budget is not quite a damp squib, nor is it a blockbuster. It takes a moderate step, but the good news is that it is in the right direction.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Work Flow Workflow Software Software Automation Workflow automation Software Design Workflow Design Business Work Flow Workflow automation tools

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions