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: due date for vat payment :: empanelment :: Central Excise rule to resale the machines to a new company :: TDS :: VAT Audit :: cpt :: VAT RATES :: articles on VAT and GST in India :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARD :: form 3cd :: ARTICLES ON INPUT TAX CREDIT IN VAT :: list of goods taxed at 4% :: ACCOUNTING STANDARDS
Budget Extravaganza »
 Budget advancement helps Centre, states start spending early
 Five things that you can expect from the Mumbai civic budget today
 GST all set for July 1 rollout but casts shadow on state budgets
 Income-Tax collection revised in Rajasthan budget
 No new taxes likely in Maharashtra Budget
 H.P. budget devoid of any financial prudence
 GST, demonetisation todecide budget priorities
 Railways to come up with mini-budget tomorrow
 Budget today, but GST kills the tax suspense
 Budget 2017 does little to expand taxpayer base, salaried still bear brunt of taxes
 Six things Finance Minister did not tell you in Budget 2017

No new taxes likely in the budget 2010
February, 25th 2010

What does the Budget have in store for you on the tax front?That will be revealed tomorrow. DNA Money got six experts to give their views on tax-saving instruments and the changes that the Union Budget and the Direct Tax Code (DTC) may bring in. The panelists were KVS Manian, group head - retail liabilities & branch banking, Kotak Mahindra Bank, Krishnan Sitaraman, director, Crisil Fund Services, RS Srinivas Jain, senior vice-president & chief marketing officer, SBI Mutual Fund, Sandeep Shanbhag, director, Wonderland Consultants, Suresh Sadagopan, who runs Ladder7 Financial Advisories and Percy Chhapgar, partner, Deloitte Haskins & Sells. Excerpts:

What is in store for the common man in the Budget?
Shanbhag: With the DTC scheduled to be implemented from April 1, 2011, it is expected that nothing much is going to happen on the direct tax front. The governments focus will be on fiscal handling - whether to cut back stimulus, how to control inflation, raise excise duty, re-introduce service tax to 12%. As usual there are a list of things the government can do to give some succor to the common man like standard deduction for employees, increase in conveyance allowance. However, I dont think those minor things are going to be tinkered in this years Budget.

Will the service tax rates go up?
Chhapgar: The governments plan is to bring GST on the seat. It is planned to be brought in at around 16%. Instead of making that big jump to 16% from the current 10%, I think they will withdraw the stimulus in respect of service tax. It may go back to 12%.

One of the recent entrants to the tax-saving instruments list are the 5-year fixed deposits (FD). Are people taking to it?
Manian: Not too much. It hasnt caught the fancy. I think the five-year period is the dampner. If you look at alternatives, there are tax saving mutual funds (ELSS) that have a three-year lock-in. The last three-five year returns on ELSS have been higher than FDs people dont see the risk and they see a lesser lock-in and so the choice is obvious.

Ironically, tax-saving funds invest majorly in equity
Sitaraman: The governments probable thought process behind giving tax-deduction on savings in equity funds is to enhance investments in capital markets. Somehow the debt funds have never been thought of as investments in capital markets. When you look at the investor base of mutual funds, the retail participation is on the equity side for debt mutual funds, it is primarily corporate and institutional money. This could be the logic of not extending the tax-concession.

Jain: Initially, tax-saving schemes were 10-year closed ended funds. As we moved along, they became open-ended. Now they are three-year funds. At that point, it was to promote equity in the long-run and so they were given tax-breaks. Should it be given for a fixed-income funds is a big debate. But now that banks are allowed to get this benefit and they are typically fixed income in nature, I dont see why fixed-income funds should not be given this benefit.

If Ulips, which invest in both equity and debt, are given tax sops, then why not all MFs?
Manian: It is said that equity may deliver better returns in the long term, but debt funds are not the same. Here the tenure doesnt matter. Debt funds are not an assured-returns option. There is a market risk, which is not there on FDs. I dont see the need to bring debt funds in the tax-saving

Shanbhag: By limiting the tax-deduction to equity funds you are robbing a person who wants tax deduction but cannot take risk of investing in an equity MF. A 50-60-70-year-old man, who would have liked to keep money in a mutual fund for the efficient tax and other things as compared to a bank FD or other avenues cannot do so. From that point of view it is an in-equitable. FD interest is fully taxable, but debt funds are tax efficient.

Chhapgar: If one were to consider the tax relief, than the return on investment goes up tremendously. From the macro, level finance minister is trying to raise resources, but there can be certain anomalies. Debt funds dont help the stock market directly, ELSS help to invest in new issues and all. That is how it helps the economy.

Shanbhag: Why should a tax-saving investment have to help the stock market endowment products, PPF, bank-deposit claim tax-deduction but do not help the stock market. Why not debt mutual funds?

Jain: With equity itself, the penetration is so low. This whole year all the money that has come in is largely into ELSS. Tax break is getting people to invest in mutual funds.

Will FBT come back this year?
Chhapgar: I dont think it will come back because it has just been 1 year. It would look as if they are admitting their fault.

Manian: The pain in implementing that is justified by the revenues it makes. So it is not going to solve any revenue issues.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
SEO Company Search Engine Optimization Company US SEO Local SEO Company Website SEO Company Alabama SEO Company Alaska SEO Company Arizona SEO Company Arkansas SEO Company California SEO Company Colorado SEO Company Connecticut SEO Company Delawa

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