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00:00Ranav, you want to comment on this? Are you impressed by the fact that they have reduced it from 5.1 to 4.9 and for next year sub 4.5
00:09Absolutely, I think that's a great move. They have tasted success over the years because of the great macro management I would feel
00:17and that continuity is very evident. They have not compromised on the fiscal deficit at all. In fact they have improved significantly
00:24So I would think full credit to the government for this through the period particularly also in this budget
00:30Despite all the expectations of welfare measures being higher and so on. So I think it's a great move
00:37Yes of course from the direct taxes side also there are lots of measures. Maybe we can come to that
00:43So let's unpack it one by one. Let's start with the capital markets focused tax changes
00:49So long term capital gains tax, short term capital gains tax, some categories for 2 years, some for 1 year and STT
00:56So let's unpack that portion first
00:58So I would feel that the short term capital gains tax increase from 15 to 20% was something that I wouldn't say was completely unexpected
01:08given that probably they wanted to temper the short term trading a bit and that might have been the provocation as well as raising some revenue
01:16Also some amount of equity in taxation if a salary tax payer, a normal business income, small business earner pays tax at 20-30%
01:25Short term capital gains tax probably they wanted to show some equity as well
01:30So that's something that was pretty expected in some sense by me at least
01:34The long term capital gains tax was a little of a surprise, yes indeed
01:39and I don't know how the market will take it because I don't think the market expected it as well
01:44Not too well so far
01:45Yeah, not 12.5 but I think that looks a little early in stage in terms of implementation
01:54I would have felt that given that there is an STT in place, given that the collections from STT are so robust
02:00given that they want to give a fillip to the domestic capital being invested in risk bearing financial assets
02:08which has been going so well, that's one move that I thought was a little earlier than what I would have expected in the normal course
02:16But certainly I think overall the steps have been good
02:20Another thing which of course one has to see the fine print but it seems that debentures etc also
02:27might probably go into the normal tax rate bracket instead of the 20%
02:33So last year we saw the indexation benefit go away on mutual funds and so on
02:39and now if the concessional tax rate also on that capital gain goes which one has to see the fine print
02:45if it goes into the regular slab rate that might be another big move
02:50But that could be good for deposits
02:52That could be good for fixed deposits and probably that has been the provocation
02:56That seems to be the provocation to bring
03:01Also MLDs is such a small
03:05That's dead already
03:07A couple of years ago
03:10We killed direct access to bond markets now
03:15That extra incentive that you had versus mutual funds
03:18If you go to mutual fund you get taxed as normal in fixed income
03:22But in the bonds if you were listed and you bought
03:26There was a capital gain of listed instead of concessional rate
03:29That's gone
03:30So in some sense it's fair right
03:32Ravi is directly investing and I am investing through mutual fund
03:35Why should he benefit
03:37Why should I not be same as him
03:41So in some sense it's a fair thing to do
03:43And it's for the super smart dudes in this country
03:46The treasury guys
03:47The big quantum of money
03:48The big H&I
03:49This government let's level it all
03:52Sabka saath sabka vikas
03:55Ok Mr. Setha anything else on the tax front
03:58Because there is lot of other stuff
04:00I would feel again abolishing angel tax
04:03Is a big positive especially for entrepreneurs, small businesses, startups
04:09The whole ecosystem
04:11And including for foreign investors who always wanted to enter the private equity and VC fund so to say
04:17So I think that's a great move indeed
04:20The dropping of the foreign companies corporate tax rate from 40 to 35 was again something that was very very welcome
04:27I think it was expected as well because when the corporate tax rate on Indian companies came down
04:32They had not brought the foreign company corporate tax rate down
04:35So I think that again is a good leveling off in terms of both foreign companies as well as Indian companies
04:43Also some of the trust building measures
04:45The TDS rate rationalization etc seems to be a good move, very good move indeed
04:50Again focus from a personal income tax standpoint on the new tax regime
04:56Increased standard deduction and some amount of new tax regime tax reduction
05:01Do you think it brings it on par because the problem was always to move people from old tax to new tax
05:07The new guys are happy to come into new tax
05:09But if you are already used to all those section 80C benefits it's difficult to wean them off
05:14Does this bring more parity on the face of it?
05:17I would feel again those who probably get the allowances of HRA etc
05:22Are going to continue to want to stay in the old regime
05:25But most others I think are slowly moving into the new regime
05:29There are only big allowances which are more in the nature of house rent allowance etc
05:33Which will probably stay out