Members of the Securities and Exchange Board of India have suggested a phased reduction of the securities transaction tax, as part of a package of measures to develop the capital markets that was discussed with Finance Minister Pranab Mukherjee last week.
With all the guessing game and uncertainty now over after the allocation of six key portfolios, the market is expecting the new government to deliver strongly on issues that will help the domestic bourses continue on their uptrend.
Mihir Tanna, Associate Director, S K Patodia & Associates, answers your tax queries.
There have been demands from a section of stakeholders that the long-term capital gains tax on equities be reimposed.
The regulator has sought an increase in the investment limit for tax-saving equity mutual fund schemes to Rs 200,000 from the current Rs 150,000.
While for the consumers, there is some gain and some pain, for India Inc, it's all about compliance, consolidation and parity
Payment in cash for buying goods and services worth more than Rs 2 lakh with the exception of jewellery will attract 1 per cent tax collected at source (TCS) from Wednesday.
Sources said much has been done to ease the tax burden of the middle classes in the last five years, and that such a measure affects only a limited segment of people when the focus should be to put money in rural areas. Archis Mohan reports.
The market players were expecting that if long-term gains are taxed, the STT would go. But this has not happened, says Debashis Basu.
The political-electoral calculus favours spending thousands of crores on vanity projects like Sardar Patel's statue and the Central Vista over building up our military to handle the confrontations and conflicts that loom large, points out Ajai Shukla.
Investors want lower securities tax, tax breaks on equity investments.
The deduction of Securities Transaction Tax on trade in equities will come into force in major bourses from October 1.
The Securities Transaction Tax regime covering shares as well as mutual funds has come into effect from October 1.
Higher levy on dividends earned by individuals also on radar.
The central government is likely to exceed the budgeted tax collection target of Rs 22.2 trillion for the current fiscal year, led by better indirect tax mop-up, compliance measures, and recovery in most sectors following the second wave of the Covid pandemic. Personal income and corporate tax collections (net of refunds) grew 74 per cent to Rs 5.70 trillion in the first half of the current financial year, driven mainly by advance tax and TDS payments. The target for the current fiscal year is Rs 11.08 trillion; higher taxes are paid usually towards the end of a fiscal year.
The proposed tax exemptions and benefits notwithstanding, these new investment instruments would still be 'revenue accretive' for the government in the form of additional taxes.
The aim was to skill 1 crore by 2020.
Some term it as "good for capital market", while others saying it is not "market friendly".
'A total overall of the existing way of working by abolishing taxes and allowing citizens to help themselves without any government bottlenecks and impediments,' observes Rahul Mishra.
Trading in other derivative products in currency, commodities expected to begin soon.
Highlights of the announcements made by Finance Minister Nirmala Sitharaman on the reduction in corporate tax and other fiscal relief measures for the economy to promote growth and investment.
It's not just the archaic tax laws but the anomalies that make the taxpayer's life difficult.
Securities Transaction Tax (STT) reduced on cash delivery transactions by 20 per cent from 0.125 per cent to 0.1 per cent on cash delivery transactions.
FIIs fear short-term capital gains would give rise to tax uncertainty and make their operations difficult, reports Pavan Burugula from Mumbai.
The 0.5 per cent Krishi Kalyan Cess (KKC) on all services increases the total tax chargeable on services to 15 per cent, making it expensive to dine out or travel.
Assocham suggested that the government should create a sovereign fund out of the money collected through Securities Transaction Tax and use the corpus to arrest volatility in the stock market, fuelled especially by FIIs.
The Finance Minister Pranab Mukherjee on Monday tabled the Economic Survey for 2008-09 that prescribes doing away with cess, surcharges on taxes, including Fringe Benefit Tax, and sweeping refroms in areas like petrol pricing and financial sector.
Securities Transaction Tax is applicable on purchase or sale of equity shares, derivatives, equity oriented funds and equity oriented mutual funds.
Brokers said the Securities Transaction Tax regime and high stamp duty charges on share market transactions were the main reasons for the high cost of trading in India. As per the current STT rate structure, a delivery-based cash market transaction is taxed at Rs 12,500 per Rs 1 crore (Rs 10 million), or 0.125 per cent. The tax is levied on both buyers and sellers.
Candidates need to be agile to understand the situation, be receptive to unlearn and learn and adapt accordingly, advises Sanjeev Verma, vice president-HR, STT GDC India.
DDT is levied on dividends that a company pays its shareholders out of its profits. It is currently charged at the rate of 20.55 per cent, including a surcharge and education cess. Government may instead tax the shareholders receiving dividends, in a bid to help improve investor sentiment by addressing the multiplicity of taxes and bring down the effective tax rates for companies.
Among the 30-share basket, 27 stocks led by Bajaj Auto and Bharti Airtel ended with losses.
Net direct tax collections rose 132 per cent to Rs 12,642 crore (Rs 126.42 billion) in the first month of the current fiscal, as against Rs 5,441 crore (Rs 54.41 billion) in the corresponding month of the previous fiscal.
Jaitley's fifth Budget has provided little relief to the middle class.
Sentiments may get impacted as mutual funds have been gaining traction among investors as route to invest in stock markets
Here is a primer to help you understand your tax liabilities in various investments.
