Budget 2020 Expectations: Scrap LTCG tax and DDT, this is what stock market wants FM Nirmala Sitharaman to do
Budget 2020 Expectations: Dalal Street is rife with speculation like removal of LTCG Tax, DDT and relaxation in personal income tax slab.
Budget 2020 Expectations: The Modi 2.0 Government is about to present its second Union Budget and the stock market is rife with speculation like removal of LTCG Tax, relaxation in personal income tax, etc. The share market is also expecting some measures from Finance Minister Nirmala Sitharaman to announce measures as to how they will manage the resources for the ambitious infrastructure projects announced earlier.
Speaking on the Budget 2020 Expectations of the stock market Deven Choksey, Managing Director of KRChoksey Investment Managers Private Limited said, "First and foremost demand that stock market is expecting to be met from the Modi 2.0 Government is the removal of LTCG Tax and DDT (Dividend Distribution Tax). When the stock market investor is already paying the Security Transaction Tax (STT) then there is no reason to levy LTCG Tax on long-term equity gains of an investor." Choksey said that LTCG removal will attract small and marginal investors towards equity investments that will increase India's STT at the source that would pare the tax revenue it would lose after the removal of LTCG Tax."
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Choksey said that after the removal of DDT and LTCG Tax, there would be an increase in long-term investments. This will lead to a rise in available liquidity for the system. "In this budget, Nirmala Sitharaman has two major challenges — how to manage funds for the ambitious infra projects the Modi 2.0 Government has already announced. So, it may increase the personal income tax relaxation from Rs 5 lakh to Rs 7.5 lakh. It will help the Modi 2.0 Government increase the purchasing power capacity of the common man leading to an increase in liquidity in the market." However, Choksey said that relaxation in personal income tax won't be enough to generate funds. So, there can be some concrete divestment related announcements and attracting foreign investments from the FIIs.
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