Hike in short-term capital gains tax to impact working class
March, 05th 2008
The Budget has not commented on the extension of the STPI scheme which is not favourable for the IT industry. This will necessitate small and medium enterprises to look for alternatives to manage the onslaught of taxes if the scheme is not reconsidered from next year.
The increase in short-term capital gains tax will impact working class which has been investing in the short-term market.
Reduction in the scope of FBT, especially on guest houses, is a welcome move. Clarity is sought on the impact of service tax on customised software. Bringing this under the service tax net will impact the software development companies.
The impact of this Budget on the rupee remains to be seen. This is a time to hold the rupee at current levels without allowing a further appreciation. There has not been adequate stress on management of inflow of funds into the country.