Budget 2024: The Union Budget, the first under the Modi 3.0 government, will be unveiled on July 23, 2024 by Finance Minister Nirmala Sitharaman. Everyone is eagerly awaiting any new initiatives that could help different segments of society, therefore the expectation is strong. Experts like Nithin Kamath, have high expectations for this budget regarding stock market.
Potential Changes in F&O Taxation
Reports suggest that the Indian government is considering a major change in the taxation of F&O trading. Retail traders and investors are hopeful for initiatives that will enhance their knowledge and help them make informed decisions while trading. There is a buzz about the Modi government’s intention to categorize F&O transactions as “speculative income” and tax them at 30%. This has caused a stir among retail traders, who have expressed their concerns on social media.
Cryptocurrency and TDS Rule Concerns
Nithin Kamath, co-founder of Zerodha, recently pointed out an intriguing observation regarding cryptocurrency transactions. Through a post on X (formerly Twitter), Kamath highlighted an inconsistency in the application of the 1% TDS rule on cryptocurrency Futures & Options (F&O) exchanges. He noticed that these platforms do not apply the 1% TDS rule to crypto F&O, unlike regular crypto transactions where 1% of the transaction is deducted as TDS. Kamath urged Finance Minister Nirmala Sitharaman and the Ministry of Finance to address this discrepancy.
Encouraging Entrepreneurship to Tackle Unemployment
Nithin Kamath believes that fostering entrepreneurship can effectively address the issue of structural unemployment among Indian youth. He suggests that the government should amend Section 54F of the Income Tax Act, which currently offers tax exemptions on capital gains from the sale of assets if reinvested in residential property. Kamath proposes that including investments in startups in this exemption could boost startup investing. Despite potential misuse, he believes the benefits would outweigh the risks.
Call for 100% FDI in Multi-Brand Retail
Anand Ramanathan, Partner and Consumer Products and Retail Segment Leader at Deloitte India, has advocated for allowing 100% FDI in multi-brand retail trade, especially for goods manufactured in India. He emphasizes the need for a cohesive national policy to support this move.
Capital Gains Tax: Investors on Alert
Currently, short-term capital gains (STCG) on stocks and equity-oriented mutual funds, booked within one year, are taxed at 15%, while long-term capital gains (LTCG), booked beyond one year, are taxed at 10%. Capital gains tax varies across different asset types, and the upcoming budget might bring changes. Equity investors, particularly the emerging middle-class pressure group, will closely watch for any changes in capital gains tax when Sitharaman presents the Budget 2024-25.
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